If you use free trials at your gym, I have a challenge for you.
Here’s my position: You should stop doing free trials and use free consultations instead.
But I’ll never ask you to trust me. If you’re skeptical, you’re exactly like me. I don’t take assertions and opinions at face value, either.
So here’s your challenge if you’re convinced free trials are the best way to get clients into your gym:
1. I want you to track your close rate for free trials for the next 90 days. Of all the people who come in for free trials for the next quarter, how many sign up? What’s the percentage?
2. I want you to start tracking length of engagement (LEG). On average, how long do free trial conversions stay at your gym?
When you have those numbers, I want you to compare them to mine. Then we’ll know exactly what you should do at your gym to make it more profitable.
Hard Numbers
Data Set
I’m going to lay out my data for you now. As I said, I’m not asking you to trust me. I want you to grill me, analyze the numbers and come to your own conclusions.
My numbers come from this huge data set:
- We work with 1,000 gym owners at a time, and we track every key performance indicator in these gyms. We know their average revenue per member (ARM), length of engagement (LEG) and profit margin, and we know how many leads they get, how many prospective clients come to free consultations, and how many people purchase services.
- We have an alumi network of about 1,500 gyms, whose data we collected and analyzed over a period of years.
- We collect data from about 15,000 gyms in our annual “State of the Industry” report. (Get it here.)
Close Rate
Here’s a critical number:
In gyms that track their data—far too many do not—free trials produce a close rate below 30 percent.
In simpler terms, if 10 people come to a gym and do a free trial, fewer than three sign up.
This is a very bad number, but it’s easy to miss that fact if you aren’t tracking your close rate. Without hard data, it’s easy to say, “Free trials work for me,” or, “I get new clients every month.”
In Two-Brain gyms, we train gym owners to close at 70-80 percent using free consultations (as sales expert and mentor Nick Habich said on a recent episode of “Run a Profitable Gym,” if your close rate is above 80 percent, your prices might be too low!).
So top gyms using consultations sell to seven or eight of the 10 people who show up for appointments, and free-trial gyms sell to fewer than three of the 10 who show up for trial workouts.
Length of Engagement
Here are your next critical numbers:
Data from across the industry shows that free trials produce an average LEG of 7.8 months.
We track LEG very closely in Two-Brain gyms, so we know that free consultations produce an average LEG of 23 months.
Clients who come in by consultation stay almost three times as long as those who come in via free trial.
It’s worth saying that 3X LEG doesn’t just produce better financial metrics for gyms; it also produces better results for the clients. We both know you can’t do a lot for a person in seven months. But you can change a life in two years.
I’ve heard “experts” say that free trials are a good idea because they are a low barrier to entry.
These stats prove they are actually a very low barrier to exit.
Origins of the Free Trial Myth
My argument in favor of consultations is based on numbers. Compare your data to mine and let’s discuss.
With that out of the way, I’ll just tell you where the free-trial myth came from. The concept was not founded on data.
The free-trial myth came from the martial-arts world in the mid-‘80s, when “The Karate Kid” was a hit and business was booming. The best way to handle the flood of people was to throw them all in a free class, have them launch a few Chuck Norris kicks and sign them up. So many people were coming through the funnel that all you had to do was say, “Try it. If you like it, sign up. If you don’t, don’t sign up.”
This thought process worked its way into CrossFit culture around 2006, when a business consultant named John Burch—who was coming from the martial-arts field—presented it as the way to onboard people when speaking at a CrossFit affiliate gathering.
The problem: No one had any data to prove this approach was working or that it was the best approach. But it found fertile ground in the minds of coaches who didn’t want to sell and had been taught that “free markets reward excellence.” Translation: Be a good coach and you’ll get lots of clients. (This is not true.)
The trial mentality spread from CrossFit to other franchises, but, still, no one can produce data that proves trials are better than consultations.
Here’s the reality: Free trials work if you have unlimited lead flow. If you’re in a new market with a new product and you don’t have any competitors, you’ll have a lot of leads. These leads are called “early adopters,” but every market has a finite number.
I burned through them at my gym in the early days, and then I realized that I was closing one of 10 people in my group-coaching gym with trials and nine out of 10 in my PT gym with consultations.
After I started business coaching, I really dug into the data to verify my personal experience. Here’s the truth:
Free trials work very rarely for a very short period for gyms that are the first to market.
Everybody else should use a consultative process.
I’m going to tell you exactly what that process looks like in the follow-up post.
But for now, I’ll just restate my challenge if you’re not convinced:
1. Track your close rate for free trials for the next 90 days. Is it above 70 percent?
2. Track your LEG. Is it at least 23 months?
If you can’t beat my numbers, here’s the good news: Your gym business can switch to free consultations today, and your metrics are going to skyrocket.
If you don’t want to wait for my follow-up post on free consultations, click here to talk to an expert about improving your gym immediately.
