It’s certain that economic uncertainty is coming.
We don’t know how bad it will be, how long it will last or how it will impact your gym. But the world is a turbulent place right now, and even if you’re not worried, some of your clients are stressed.
When clients are stressed, that’s when they start to pause or cancel gym memberships.
Here’s something I’ve learned over the last five years: The best gyms use tough times as opportunities to improve and evolve. Instead of trying not to drown, they find ways to swim further faster.
And when the tough times end, these gyms thrive.
Today, I’m going to tell you how to grow in uncertain times.
1. Go Up Market
When the economy looks sour, the knee-jerk reaction is to drop prices and add low-cost services. That’s the wrong move. Instead, focus on higher-value clients and services.
In 2008, the subprime crisis created a massive market downturn. A stockbroker client of mine said, “Chris, when this market crashes, we go into a recession. You better start looking for another job because everybody’s gonna cancel their gym membership right away.”
At that time, I was doing personal training only and a couple of CrossFit classes at night. I wasn’t selling gym memberships. While a lot of people around town did pause gym memberships, very few people stopped doing personal training because they were high-value clients who were less affected by market chaos.
So in times of economic crisis, focus on your highest-value clients and your highest-value services instead of dropping your prices or catering to the budget-conscious crowd.
Do not offer discounts. Once you start discounting your rates, you can never take that discount away again because you’ve now set a lower bar for the value of your services.
You have better options. For example:
- If personal-training clients are saying, “I can’t afford this,” offer a semi-private option.
- If group members are paying for unlimited classes but can’t do it anymore, offer a three-times-a-week package.
You can also add services, such as PT, nutrition and accountability coaching.
Why would you add higher-value services in a storm? Because higher-value clients will carry your gym through the crisis, and that’s the stuff they want. Identify your best clients—the ones who pay you the most and make you smile most often—and build offers for them. Do not devalue your services to try and retain bargain hunters.
If you want to work through an exercise with me to find your very best clients, check out this video:
2. Focus on Retention
In tough times, retention becomes even more important than marketing. When the economy is in the toilet, it becomes harder to acquire new clients, so focus first on reducing churn as much as possible.
To do that—and acquire some new clients, too—strengthen your relationships with existing clients in your marketing. Now is the time to tell success stories, make people famous, and celebrate members on your website and social platforms.
Next, introduce your clients to each other. Don’t just assume people will meet each other in class and become friends. Actively work to create connections between members so they have more reasons to stay. Example: “Phil, I don’t think I’ve introduced you to Tim. Did you know you work in the same building?”
Part 3 of the retention plan: Book Goal Review Sessions. Talk to your clients about the next three months before they’ve decided to quit. If they can see a future and have a plan in place, they’re more likely to stay. If they aren’t working toward anything, it’s easy to say, “See ya.”
The final part: Ask for referrals. If Erica the lawyer is getting great results and isn’t concerned about the economy, her partners at the firm won’t be rattled, either. Her friends are warm leads who will enter your gym with a connection already in place. And if Erica brings in a friend, she becomes much more likely to stay because she’s invested in that person’s success.
Yes, referrals improve retention!
3. Address Lagging Metrics
If you have fewer leads coming in at the top of the funnel in bad times, every lead becomes more valuable. Analyze your funnel and address weak links—fast.
- If you aren’t getting leads, post more to social media, ask for more referrals and optimize your ads.
- If leads aren’t booking appointments, respond to leads faster, call them until they say “no,” and make sure your call to action is dialed in.
- If people are booking appointments but not showing up, add automated messaging and call people to confirm appointments. Then remind them of the upcoming appointments.
- If people are coming in but aren’t signing up, role-play sales conversations, refine your script and focus on value-based selling with the Prescriptive Model.
When times are tough, you can’t afford to have any leaks in your funnel. Run your numbers and address the weakest metric right away.
4. Grow Top-Line Revenue
You’re going to need a revenue buffer to navigate economic uncertainty. But instead of cutting costs, focus on increasing revenue first, and target a 20 percent boost.
Here are a few tactics:
- Raise your rates (with a mentor’s help). Why? Remember, we are focusing on high-value clients who aren’t rate sensitive. But you can skip this one if it makes you nervous.
- Add high-value services. I mentioned this above, but I’ll reiterate it here. You can boost revenue by upselling existing members. I bet 10 percent of the people in your gym right now want more and are waiting for you to offer PT, habits coaching, semi-private training, etc.
- Start selling supplements or run a retail presale.
- Offer a specialty program.
Two-Brain clients work with a mentor to determine exactly which tactic to use. They just say, “Which tactic first and what’s my deadline?” The mentor supplies the plan, the resources and the accountability. But if you don’t work with us yet, I have a guide with 20 tactics you can use to boost revenue. DM me on social to request it!
5. Get Lean: Plan for the Worst, Hope for the Best
Here’s the reality with tough times: The strong gyms will survive and have a huge advantage on the other side. So take swift action right now to improve your business before you’re forced to do anything.
Dig into your P&L, audit your expenses, make cuts where needed, and make plans to generate more ROI.
That messy staff lounge? Get rid of it and sublease the space to a massage therapist. Your badly attended 10-a.m. class? Blow it out and take a PT client in that time instead. That old apparel? Sell it at cost to recover your cash, then switch to pre-sales so you never have to sit on inventory.
The flip side: Double-down on stuff that’s working.
For example, if you’re getting a good return on ad spend, this is not the time to shut off the tap “to save money.” In fact, you might consider investing more. If a specialty program always sells out year after year, consider offering it more often. And so on.
The point: Make smart, calculated moves immediately and you’ll be in better shape if the worst-case scenario comes to pass. And if it doesn’t, you’ll be that much further ahead.
6. Lean on Your Network
The best gym owners support each other. If you’re struggling, don’t pull back and wallow in negative thoughts on your own little island. Engage with your community of like-minded peers to find solutions.
For Two-Brain clients in our Growth Phase, we’re providing extra support through mentor calls and office hours with experts.
If you’re not in Two-Brain, join Gym Owners United and start sharing more in that group. Ask questions. Answer questions if you can. Give someone a high five and get one in return when you need it. The group has 10,000-plus gym owners in it, and it’s there for you to find solutions. I post tactics, data and advice there every day.
Outside of hiring a mentor, Gym Owners United is the best place on the web to get help.
Act Now!
I want you to win in 2025, and you can do that even if the next months are as turbulent as the first quarter was.
Stay focused, control what you can control, refine the story you’re telling, improve the services you’re offering, serve your clients better, master your metrics, and be a good leader. Level up personally to raise the ceiling for your business.
Remember, your clients need you to succeed.
Here’s what I want you to do today: Pick one thing from the list above to implement this week. Everything I’ve listed will make your business more resilient. That means it will be able to take a few hits without falling over.
And if you work fast and buy yourself a little bit more time, you can implement the next thing that I’ve suggested. Then the next thing and the next thing after that.
Any stressful business climate can be a blessing in the long run if it forces you out of complacency and motivates you to act. If you use these strategies, you will run a leaner, tighter gym.
That’s a good thing if the economy tanks or recovers quickly.
If you want to go further and get a personalized plan to grow your gym even if 2025 is chaotic, book a call here.
