You don’t sell access. You sell coaching.
On the far left of the fitness-business spectrum are the big chain gyms full of bodybuilding equipment.
Their business model: Get a big space and a big loan. Buy the basic equipment and a few standout pieces that will attract attention. Sell enough memberships to cover the monthly loan payment. Everything on top is profit.
That means burning cash until you hit the magic number and then keeping every dollar past that point. Getting started is expensive and risky, but scalability is almost infinite if you can survive losing money at first.
That’s why you see $9-per-month memberships: If the city is big enough, the gym can get enough $9 contracts to make money. And because people who pay $9 per month to exercise rarely show up for long, you can sell a nearly infinite number of memberships without filling your gym.
Are these gyms providing value? Sure: They’re selling access. If access is what the clients value most, then the gym is providing fantastic value.
The problem is that most exercisers don’t understand what they need. Access is not the problem. The real problems: lack a clear plan and lack of knowledge, accountability and motivation.
And gyms selling access don’t sell those things.
Open Gym: The “Coaching Killer”?
Now, I screwed up: In 2012, I wrote my bestselling book “Two-Brain Business.” At the time, I was selling “open gym” as an add-on to a CrossFit membership. But over the following few years, I slowly killed the option.
This was my experience, echoed by dozens of gym owners who followed the same path:
1. “Open gym” is introduced as a valuable add-on for coaching clients to do their homework and practice skills.
2. Open gym is used by clients to make up missed workouts and do “extra work.”
3. Open gym is used by clients to do random workouts they found online.
4. Open gym users recruit other coaching clients to do crazy workouts with them. Many of these recruiters are coaches.
5. Clients follow their friends out of classes and into open gym. They receive less coaching and choose the craziest workouts they find online. Injury rates go up, equipment breakage goes up, and average revenue per member (ARM) and length of engagement (LEG) go down. Cliques form around the “better than them” concept. Elite exercisers begin to believe they need “extra” work and stick around the gym for three hours per day, doing their lifting plus super secret squirrel programming.
6. Clients begrudge paying for the coaching they’re not using and ask to pay for only open gym.
7. Clients leave to find the cheapest open-gym access because they “don’t need coaching” anyway.
I started selling an open-gym membership in the mistaken belief that clients would sign up for a low-barrier offer, watch my classes in action and then sign up for coaching.
What happened was actually the opposite: My clients saw open gym as the next step after they’d learned enough. So they all wanted to pay a quarter of the price and just do their workouts between classes. I had people showing up during class time and waiting for my coaching to end so they could do their workouts. My ARM dropped, my LEG went way down, and I found myself competing against the $12-per-month gym up the street. Wrong direction!
Luckily, my personal training studio—the service at the opposite end of the spectrum—was earning enough to pay my bills.
Metrics: Truth in Data
New technology allows microgyms to sell 24/7 access to their clients. Some gyms in Two-Brain choose this path.
My question is this: Does adding 24/7 access actually move your gym in the right direction?
Does it improve your ARM, LEG, profit or any other metric that matters?
For many of us, it’s been a slippery slope in the opposite direction.