Chris Cooper: (00:02)
We don’t have sales at my gym, ever. I’m Chris Cooper. I’m the founder of Two-Brain Business, and today I’m gonna tell you how to beat Black Friday. How to avoid the temptation to cut your own throat, give people big discounts to get them in the door and sign them up. I’m gonna tell you why that doesn’t work, why we don’t do it, why we don’t do discounts, but more importantly, I’m gonna give you five tactics to generate year-end revenue that do not hurt you in the long term. So first I want to start with how to beat Black Friday, but before I get there, an invitation. If you’d like to ask questions about this, if you’d like to talk about this episode, go to GymOwnersUnited.com. That’s our free public group with over 6,000 gym owners in it worldwide. There are CrossFit gyms in there, there are Bootcamp gyms, Pilates gyms, 9Round franchises, other franchisees. There are tons of different gym owners in there. Everybody’s invited and we’ve kicked the bad ones out. So you can ask questions without yourself feeling dumb. There are no bad questions and if you want to talk about this podcast episode, you’ll see it linked there. You can ask questions and we’ll be happy to help.
Chris Cooper: (01:10)
So let’s talk about first how to beat Black Friday. This is a great post from Kaleda Connell, a certified mentor at Two-Brain Business, and she says, We never ever do sales at my gym. And the reason is because I don’t want someone to say, I’ll just wait until you’re having your next sale and then sign up. That’s the same reason that Lululemon doesn’t have a sale rack or why Apple doesn’t run sales or discounts, because when you do those things, people wait until the sale or they go straight to the sale rack and then when they don’t find anything there that they like, they leave and come back another time. Kaleda writes, you can compete in three areas in any business. You can compete on value, you can compete on price, or you can compete on convenience. But we in the micro gym industry can’t compete on price because that puts us on the battle ground with the big funded global gyms.
Chris Cooper: (02:05)
It’s a price war that we can’t win. Their business model is built on PIFs, people who pay in full and then never show up. Their business model is built on a massive spend, like a million to 3 million up front and then doing whatever it takes to get bodies in the door, signing them up for long term contracts and eventually earning positive cash flow. We don’t do that. Our gyms can’t compete on convenience either, unless they have way too many class times or we’re open 24 7 and backselling access. But our clients pay for coaching, not access. So we have to compete in the value arena. That means the people we attract see the value in the price that we charge, they can afford it, and they’re not just out there price shopping. You and your method, whether your method is CrossFit or 9Round, kickboxing or yoga, and your gym are all valuable, you are worth your full price and probably more.
Chris Cooper: (03:03)
In fact, most gyms are dramatically undercharging already. So don’t devalue yourself even further or attract the people that will not allow your coaches to do their best work or will not pay the price that will allow you to pay your coaches what they’re worth by running Black Friday sales. Don’t try to compete with those people who are selling commodities like discount TVs and furniture and long-term gym memberships that they will never use. If you’re trying to get new clients over the holidays, I’m gonna give you five tactics to generate year end revenue, but here’s the little bonus from Kaleda. She calls it gratitude day. And you can start by thanking your best clients, by inviting their friends, family, and coworkers to a fun little challenge on Black Friday. Teach them a little bit about nutrition, put them through an obstacle course or another challenge.
Chris Cooper: (03:53)
Give them a high five and a hug and invite them to sign up. That’s the extra value, the little bonus that they need. It’s not a discount that’s going to harm your gym long-term. So before I get into the five tactics to generate year end revenue, I wanna talk more about why we don’t have sales or discounts or paid-in-full deals or problems. First, you’re not selling a product, you’re selling a service. Your goal is not simply to sell more because your most valuable resource time is finite. Product-based companies wanna sell a high volume because the cost of production decreases as they sell more units, they can buy parts in bulk, they can negotiate volume discounts with suppliers, and they can streamline production. The only thing that we can do is sleep less or cut out our own exercise workouts or eat crappy food.
Chris Cooper: (04:47)
This means that it’s really important for us to sell our service at the rate that will make us profitable, maintain a professional image, and avoid problems that make our business unstable. So here are the reasons that we don’t discount our rates or have sales from both sides of the coin. Number one, discounts attract the wrong people because we don’t have unlimited time and attention. Spending that same time and attention on a client who pays 20% less as the one who’s paying full price is robbing us of what we could earn. At the same time, our rent doesn’t go down 20% when we give a client a discount. So all of the savings that they’re getting come from our profit. Second: sales teach the right people bad habits. Who is most likely to purchase a one year paid in full membership? It’s the client who’s planning to stick around for the year anyway.
Chris Cooper: (05:40)
So why would we give a 20% discount for people who want to buy a one year paid in full membership? A 20% discount for paying up front seems like a great idea in January, all the money! But a discount of 8.5% is equivalent to a free month. A 20% paid in full discount means that your best clients, the ones who are most likely to stick around and pay full price anyway, are attending for free starting on October 15th and continuing for the rest of the year. Worse, it teaches these amazing people, your best clients to wait for another sale before they sign up again. So when you seize this bad habit of sales, they don’t think, Oh, well it was good while it lasted. I was getting a bargain. And instead they think, now I gotta pay 20% more for the same service, when really they were underpaying the whole time.
Chris Cooper: (06:37)
Discounts and limited time sales are a downward spiral. In my original book “Two-Brain Business”, I wrote that the sales spiral would kill Sears. That happened. And it would kill other department stores, and that happened too. And this is- Sears is a product based company that got stuck in the sales, sales, sales cycle and now they’re gone. You’re a service company. And so that cycle is even more deadly. There’s a limit to how many people your gym can train and keep. And so this is point 3. You do not have the ability to service infinite people. Yes, there are people out there, even business coaches who are telling you to just run big group classes and they want you to run this industrial model of, like, put 30 people in a class and do squat therapy as a triage to fix problems. But that’s not the same as giving people real coaching.
Chris Cooper: (07:28)
In real coaching gyms, you have to give people one-on-one attention in a group, every single day, even if it’s only for a minute or two, so that you can help them get to their goals. In a real coaching gym, you have to be able to afford to spend the time doing goal reviews with people. You have to invest the time and energy into doing a No-Sweat Intro or a consultative process at Startup, instead of just pumping people into a group hoping they love your program and stick around. These are the gyms with the big class sizes that also have high churn that run into this downward spiral because just to stay their same size, they have to get like 30 new members every single month. And so they bring in 30 new members and they always wanna learn more marketing because they’re always losing clients and they need to replace them.
Chris Cooper: (08:20)
There’s a limit to how many people you can train and keep in your gym. We help you build a model around 150 clients first and then 200 and then 250 if you want to go to that far. But the point is that you should not just assume that more bodies equals a better, more profitable gym. That’s a completely different model. That’s the global gym model of low-price paid-in-full clients who we don’t want to show up. We wanna run coaching businesses. Toy manufacturers, book sellers, they can offer discounts, they can scale their service to infinity because their cost of production goes down as volume increases. That is not the case in a service based business. Your time and attention are finite. Stop robbing yourself. Now, for most people listening to this podcast, if you’ve been listening for a while, you’ve probably reached this point where you say, You know what?
Chris Cooper: (09:12)
Discounts aren’t actually helping me. They’re not attracting new people, they’re not even appreciated by people who’ve been getting them for a while. But what do I do about it? And so, you know, there’s two parts to change. If you wanna stop giving discounts and if you want to just get rid of the discounts that you have, these are multi-step challenges. You really need a mentor to guide you through this, number one, because it’s hard and most people will just back out of doing it or avoid it. Number two, because having been down this road before, there’s a right way and a wrong way to stop giving discounts and to remove the discounts that you’re giving unnecessarily. So knowing what to do is half the battle. Taking action is what really matters. I’m gonna supply the easiest ways to say no when somebody asks for a discount in your gym.
Chris Cooper: (10:00)
So first, a new person is coming up to the door and they’re like, Hey, I’m a firefighter. I know that every firefighter that goes to these other gyms gets a 20% discount. What’s your discount for firefighters? Your response is simply, we don’t have discounts. And this is my go-to because I don’t have discounts for anybody. It’s easy for me to say that discounts just don’t exist. And that solved our discount problem. You know, 12 years ago, the problem that we were having was we were gonna give a 10% discount to people in the military because some of our original members were in the military and we wanted them to recruit their friends, and we thought that a discount was the best way to recruit their friends. Of course it’s not, but then what would happen is somebody comes in and they’re like, Well, I’m not in the military, but I’m a police officer.
Chris Cooper: (10:48)
Is that close enough? And I would say, Yeah, they’re same value, same service. Of course that’s close enough, you get a discount too. And then a nurse would come in and say, Hey, you know, I’m offering a service too. Like, why do police get a discount but not nurses or firefighters? And so I’d extend it to them and then soon a teacher would come in and in my own head I would think, Well, these people are doing an amazing service too. And before you know it, everybody’s getting a 10% discount. You’re looking for reasons to give a discount and your prices are too low to begin with, so you’re just choking yourself out even faster than you would have. When we stopped doing it, we just started saying we don’t give discounts. Okay? When somebody else is giving a discount, and this is number two, what you should respond with is, we don’t play those games.
Chris Cooper: (11:37)
Okay? And I learned this when I was actually selling a product. I was selling very high priced, high value treadmills, and we were competing against department stores that were selling bargain basement crap. We were selling $5,000 treadmills. They were selling $800 pieces of junk that were straight outta the box and into the yard sale. Because the nature of discounts is subjective, right? It requires a human decision instead of being part of an automated process, it’s always easy to cast a shadow of doubt on the intent of the person giving the discounts. So I saw this in action when I was selling these treadmills, right? So we were always losing the price battle against Sears and other department stores that ran all these sales. So when somebody asked us to match their price or when they would have like a 40% off sale, we would always just say, We don’t play those games.
Chris Cooper: (12:31)
And it worked. You could see a visible shift in the purchaser as he or she became suspicious of the people offering the discount. And it really helped that one of the department stores got sued for advertising a regular price on tires that they would always discount, right? They were always on sale. And sometimes I would even bring that up. So what do you say if somebody asks for a specific discount? So members of some service groups receive discounts from other businesses, so they’re inclined to ask for them everywhere. Here’s your response. We treat all service professionals equally well because we know that our service is critical for your safety. The service that you provide to military or police officers or firefighters, it’s not five bucks off. It’s the service of keeping their butts safe and alive. It’s helping them get home safely at night. You know, remind them gently and use the peer anchor.
Chris Cooper: (13:28)
Hey, nobody else gets a discount and you don’t wanna be different from everybody else, right? So this next one really brings things home for a lot of people. So when somebody asks, why are your rates so much higher than everybody else’s? Or they follow up with, Well, the other gyms give a discount. What you answer with is, this rate is as inexpensive as I can make it for the level of service that we provide. I can’t sell this level of service any more cheaply, right? But first, I’m gonna go back to the original. This rate is as inexpensive as possible for this level of service because you don’t ever wanna say cheap when you’re talking about your own service. If you wanna say cheap in the context of your competition, that’s okay. Like you might wanna say, yeah, I know they offer a cheaper service.
Chris Cooper: (14:18)
I understand that. This rate is as inexpensive as possible for the level of service that we provide. Okay? So you never use the word cheap when you’re talking about your own prices or service, but second, when you use this phrase, you’re sticking a wedge into the conversation. And that wedge is “for this level of service”. And what that’s going to do is prompt an opportunity for more explanation. Because if they follow up, they’re going to say, Well, how is your level of service different? And that’s when you can really get into things. So the big problem that a lot of gym owners have when they’re not offering a discount or they’re taking away a discount, is they project the conversation in their own minds first. So they think like, Okay, if I say this, they’re gonna say that and they strategize, you know, second order thinking and third order thinking.
Chris Cooper: (15:07)
And what if they say this? And then they build up everything in their heads until it’s so stressful that they just avoid it. Instead, what I want you to know is that most people, when you just say, we don’t offer discounts, 90% of the time, they won’t come back with anything. If they come back with anything, it won’t be like, you jerk, you should offer discounts. It will be, why do those other people offer discounts? It’ll be a question, not a confrontation. I’ve given you the responses to the most common questions that people ask. If there actually is a confrontation, and this has never ever happened to me in over 15 years of owning a gym, but if somebody said, Well, the other guys will offer a discount, then you should send that person to the other gym anyway, because if they’re going to complain about money at your first meeting and they’re gonna compare you to everybody else starting from day one, you do not want that person in your gym three months from now. When they find a cheaper price at another gym, they’re gonna ask you to match it or they’re gonna leave anyway, and they’re always going to be comparing you to the other options.
Chris Cooper: (16:11)
That means they’ll always have one foot in and one foot out of your community. You’re better off just letting them pick the cheaper price. One other little bonus tip here, a lot of people who choose the cheaper price will always choose the cheaper price. And so this leads to this downward spiral of pricing. You know, I once heard from a CrossFit affiliate in Atlanta that it was impossible to charge more than $79 a month for CrossFit in Atlanta. That was only about four years ago. And since then, the successful CrossFit affiliates in Atlanta have really had to work hard to overcome that downward trajectory. But they did. And I can point you to Rick Thompson, Miles Davis, people who are charging dramatically more now, well over $200 a month because they had to reverse engineer, How can I make this work? But they did, and they’re really saving that brand in Atlanta if you ask me.
Chris Cooper: (17:03)
So I got a couple of other points for you. When you’re dealing with clients who are asking about discounts, number one, don’t overexplain, right? So all the responses that I gave you consisted of one sentence. The more words you use, the more handholds you give the person who’s trying to argue with you, okay? They can pick apart your argument, but they have a harder time picking it apart if it’s short, okay? Second, keep it black and white. If you give a discount for one person in your gym, you’re ripping off everybody else, okay? My nightmare would be to have two people standing side by side getting the same excellent coaching, using the same excellent equipment, the same clean bathrooms, getting the same high quality programming and high quality personal attention, and one starts talking to the other and finds out that they’re paying less.
Chris Cooper: (17:53)
That is my nightmare because that’s not fair. The next thing I need you to remember is that your primary duty is to your current clients. Scrambling to recruit new clients with discounts your current clients don’t get. That’s a breach of trust to me. What you’re saying is that new stranger is more important to me than you are, and that’s why I’m willing to give up or cut my price to get them. Fourth, don’t run through all these scenarios in your head before the conversation starts, right? You’ll be trying to remember lines and overcome objections instead of just giving honest answers, which should come naturally, especially if you use response number one. Communication is easy and transparent. We don’t give discounts. If they go and say, I’m gonna go join the cheaper gym. Good. You don’t want everybody, don’t pour your knowledge and your care into fickle clients who are only after the cheapest rate.
Chris Cooper: (18:49)
And finally, don’t presume that anyone wants a discount. This is the number one error that business owners make. We project our budgets onto other people, even if we’re broke, they’re not. Lower prices require more clients. Years ago when my gym opened, I was desperate for cash flow. So I started offering discounts for teachers and military and spouses and everybody else. It was a pretty long list and it got longer all the time. In that discounting mindset, I would actually try to find a reason to give people a discount without a client even asking. My mind would race to find a way to make an exception for them. So soon I had this gym full of members, a 15 hour workday and a bank account that was constantly declining until I couldn’t afford my own groceries. That really happened. Every time you give a 20% discount, you increase the number of clients that you need to reach your perfect day.
Chris Cooper: (19:45)
You weaken your business and you impoverish your family. You know why nobody has asked me for a discount in six years? Because we don’t give any. Now, that’s enough of that rant. I wanna give you five ways that you can actually generate revenue between now and the end of the year that don’t require you cutting your own throat by giving a discount to people. So first, I’ve got a link to another podcast episode called “Top Five Tactics to Generate Year End Revenue”. You can listen to the whole thing, it’s only 12 minutes long, but I’m gonna break ’em down for you right now. So what do you tell your clients about the last few weeks of the year? You don’t tell ’em, ah, forget it. Eat all the crap you want. Skip your workouts, We’ll start fresh in January. No way. You teach them to take advantage of those last few weeks to keep working on their fitness and start the new year on a roll, right?
Chris Cooper: (20:35)
Well, the same concept applies to revenue in your gym. Just because the holidays are upon us and the end of the year looms near doesn’t mean that your 2023 earning potential is capped, right? It’s not over. Try any one of these five tactics to bring in extra revenue before you close the books at the end of December. First, the retail pre-sale, I love this. This comes from Forever Fierce, great partners of Two-Brain for the last six years. What you can do is set up a pre-order form for maybe hoodies for Christmas or hoodies and hats or hoodies, hats and socks, t-shirts, whatever you want. You can have clients fill in their pre-order information. You can set up a pre-order, send it to Forever Fierce. Forever Fierce will print your stuff for you. Meanwhile, you’re holding the money, you’re not paying for inventory, you’re not putting out extra cash that you don’t have.
Chris Cooper: (21:27)
The stuff comes in, you give it to people, they’re thrilled. You can also share the order form because let’s face it, if you’ve got somebody in the family who’s super duper into fitness and you are not, then you don’t know what to buy them. But if you see the order form for t-shirts from their favorite gym, problem solved. And so you can really expand your retail pre-order without any risk, without putting out a dollar, without storing any inventory at all, just by following this strategy. Next, you can write a blog post called Top Gifts for CrossFitters or Top Gifts for Kickboxers or Top Gifts for yoga practitioners and just publish that. And people from your gym will share it with their friends and family who don’t know what to buy them. You wanna have links in that article to things on Amazon that they can buy for the person who loves CrossFit or yoga, whatever.
Chris Cooper: (22:21)
You also wanna have links to your pre-order for supplements, your pre-order for shirts, gift cards for personal training at your gym, gift cards for nutrition coaching, the option to prepay a few months worth of membership at full price. Of course, all of these things you can put in that blog post and that’s gonna generate sales. We do it every year. Next, you can run a “save your spot for January” promotion. So everybody knows that gyms get busier in January. This isn’t as true in the coaching space as it is in the big global gym space, but most non-gym-goers don’t know that. And so what you can say is like, we get really full in January, we only have 12 spots. Click here to sign up for our January On-ramp program. Reserve your spot. That way you can go through the holidays knowing that your fitness journey is due to start in January and you’ve already made that decision.
Chris Cooper: (23:17)
You can write a compelling post or 12 compelling posts about this, I’m sure, but that save your spot preorder here. That works great. And again, you don’t need to discount on this stuff. The next is to host a “bring a friend” holiday party. So this is tactic number four. This is a great one and you can do this around workouts if you want to or you can do it around just a party. And we’ve always done one every year called The Gift where people in our gym adopt local families who need help buying presents for their families, up to 50 bucks for a present. And then we host a potluck and everybody comes in. If you go on YouTube and you look for “Catalyst Fitness The Gift” you’ll see a short video documentary about it that some local media made. It’s incredible.
Chris Cooper: (24:00)
I think I cry every year. But people sometimes invite their friends to this and incredibly, it’s in the gym and their friends show up and they’re like, what is this? Like we’re not exercising. Everybody’s here. We’re giving out these massive gifts. There are social workers here picking up the gifts and delivering them, and I don’t really get it, but if I’m gonna join any gym in January, this is the one that I wanna be part of. It’s super duper hard to sell the concept of community, but immersing people in something like this can work. Better is to have a bring a buddy holiday workout or, like, a wine and WOD where you’re telling people to bring a friend with them. You do a very uncomplicated, simple workout, a challenge that lets everybody win, and then you sign people up for the new year.
Chris Cooper: (24:49)
The fifth is to run a January kickstart. So a lot of us just take for granted that we’re gonna overeat during the holidays. And I’m not even sure that that’s bad. A lot of us will say, I’m gonna miss workouts because I’m visiting family or traveling or whatever. But if they know that there’s a kickstart program coming up in January, even if it’s like six weeks long or whatever, we’ll sign up for that in advance. And so this appeals to your current clients who just wanna buckle down and dial in their nutrition again in January. It works for former clients who are looking for an easy way to get back into the gym. And it works for people who are not your clients yet, who are looking for some kind of short term commitment, knowing that this is not gonna transform their lives, but it’s gonna really reboot their fitness and get them started as quickly as possible.
Chris Cooper: (25:40)
So top five tactics to generate year end revenue. A retail presale, a top gifts for… blog post that you promote at least a dozen times, a save your spot for January promotion, a bring a friend holiday party, or a January kickstart. I’ve got the step by step instructions linked in the show notes here to all those things. You can listen to them, you can do them yourself right now. Get yourself set up and avoid the trap of discounting. To sum up: discounting is not gonna attract you new members. It will not build retention. It will not build loyalty in your existing members. It will attract the wrong people and deny you and your coaches the opportunity to serve the people who can actually pay what they need to earn. And you need to earn. Don’t do discounts ever. I’m Chris Cooper. If you wanna talk about this, join GymOwnersUnited.com. The discussion is always ongoing. I’m sure this will be a great conversation and I hope to see you in.
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