I’ll be blunt:
Don’t slash rates in your gym.
Don’t do it as part of a promotion.
Don’t do it for certain professions.
Don’t do it to generate referrals.
Just don’t do it.
Here are the problems with discounts:
1. Your rates are already too low.
2. You won’t “make it up in volume.” This only works with products, not services.
3. They attract short-term clients.
4. Someone always eats the discount: You either underpay your coaches or lose money on delivery.
5. They mostly get applied to people who are already willing to pay full price (the ones who don’t want a discount, don’t need a discount and would never ask for a discount).
6. They’re an avoidance strategy: Instead of just asking for a referral, you’re hinting expensively.
7. You undermine the value of your service.
Let me provide a simple example:
- You charge $150 a month for group training—which is already too low.
- Your profit margin is 33 percent, which is a solid target for a coaching gym.
- You offer a 40 percent discount to a full-price client who refers a new client, so you are now losing money on an existing membership.
- You double the error and give the referred client a 40 percent discount, so you are losing money there, too.
- You are now charging two people just $90 each a month, which makes your coaching look cheap, when it’s actually a premium service. “Cheap” is not a good way to impress a new client or retain an existing client.
- You could have obtained a referral simply by saying, “Sam, you mentioned your buddy Tim is struggling in rec-league games right now. What if we invited him in to talk about a conditioning plan like the one you’re using? Think he’d go for it?
Top Gyms Don’t Discount
Discounts kill gyms.
But don’t take my word for it. Look at what the best gyms in the world do:
- They don’t discount.
- They charge more than other local gyms.
- They work with 150 clients (or fewer) on purpose.
- They don’t offer incentives or “bribes,” and they don’t play games; they ask for referrals like grownups.
I recently saw a post that recommended the “perfect” plan for referrals. Its premise was to give 40 percent off training to the new person and the referrer for a month.
This is not what the best gyms in the world do.
The “do whatever it takes to get heads in the door” plan is a bad long-term strategy for coaching gyms.
After writing about the coaching business for 15 years, operating the world’s largest mentorship practice for gym owners for almost a decade, working with over 2,500 gyms in our one-on-one program and tracking data from 20,000 gyms worldwide in the largest data set on the planet, I promise you this:
The practice of discounting training is not just dumb but harmful.
Discounting group coaching to get more people into your group doesn’t work. Tens of thousands of former CrossFit affiliates can testify that the model doesn’t work.
Coaching is a high-value service, not a high-volume service. The more people you put in a group class, the higher your churn rate.
But the myth persists because various “biz coaches” want to make a buck instead of making a difference in the industry. Rather than supplying data, proof and tested tactics, they flippantly toss out gimmicks and questionable strategies.
If someone advises you to cut a deep discount into your training rates, you can be sure they aren’t working from a proven model. They’re just guessing.
That means they’re gambling—but they’re not gambling with their own money.
They’re gambling with your money.
