“Will Selling 24-Hour Access Kill My Gym?”

20220303-24-hours-blog

Mike (00:02):

Open gym and 24-hour access. People can do whatever they want whenever they want. Sounds like marketing gold. Right? Well, not if you’re selling coaching. If you’re doing that, open gym will be a disaster. Here’s Chris Cooper with a story and then hard data on selling access and open gym.

Chris (00:22):

Hey guys, it’s Coop here and today I’m gonna talk about selling 24/7 or key card access to your gym. Technology has made this really easy. Now for about 3,500 bucks, you can set up a system that unlocks your door for your members at any time, day or night. But the question remains is this actually a good move for your business after all? Just because something’s easy doesn’t mean it’s smart. So today I’m first gonna tell you my story with selling access when I opened up with maybe a couple of funny little anecdotes, then I’m gonna talk about data because what’s more important than what I did is what the best gyms in the world are doing. And I know that, and I can share it with you. And then also what you might be giving up by adding 24/7 or even gym access. So first my story. In 2005, I opened up Catalyst and we were just a personal training facility.

Chris (01:16):

We were a pretty quiet bunch. We were located above, in the second floor above a greeting card store. We had carpet on the floors. We had wallpaper on the walls and we did one on one training. In around 2006, 2007, we had moved to a bigger spot and we were doing a good business. We had a lot more clients. I was making about 40 to $45,000 per year. And not quite getting by, but still my head was above water. And that’s when we found CrossFit. And we said, OK, we wanna have this second location. We have personal training clients who are athletes, and they need to be doing training with barbells. They need to be doing weightlifting stuff. They need to be doing pull-ups. And we were really intrigued by this new thing called CrossFit that we had just recently found. But most of our clients were coming to see us once or twice a week.

Chris (02:06):

And we would give them homework on a printed sheet, and then they would go to good life or the YMCA or some other globo gym. And they would do their homework there. And I thought, man, we’re missing a ton of revenue here that we could make if we sold access, if we had a gym that they could go to, you know, at certain times or whatever, and just use our equipment. And so I thought, OK, if we open this second location and we sell access and we sell group training like CrossFit, and we sell maybe personal training there too, then we’ve got three winning schemes and one would feed the next. My big belief honestly, was that people would come to open gym time and they would see what an amazing coach I was. And they would wanna sign up for coaching.

Chris (02:54):

They would see and understand the value of coaching if they were around it more. And this is still the same philosophy that leads people to do free trials at their gym. Unfortunately, it doesn’t work. What actually happened is that even when I was doing one on one coaching, the people that I was doing one on one with, they would see other people working out in the gym on their own and they would say, oh, cool. Maybe I’m just gonna do that for a couple months. I’m gonna take this program and I’m gonna do it on my own. And I’ll check in with you from time to time, or maybe they would downgrade their personal training membership and do more things, quote unquote, on their own. What didn’t happen was people joining the gym for access and then upgrading to coaching. In fact, that almost never happened.

Chris (03:37):

Then when we added group training, we were still running an open gym concept at the exact same time. And so people would come in and they would be doing their own workouts and the group would be going on. And the people coming in to do their own workouts would say, wow, that one looks awesome. And they would just start doing their own thing beside the group. And of course, because they were only paying for access, I wasn’t coaching them, but in a 2000 square foot space, it is really, really hard to not coach somebody who’s doing the same thing beside the client that’s paying. And so more and more, the clients who are paying for group training, looked at the people who were just paying for access and said, they’re getting this for a quarter of the price. They’re able to show up whenever they want leave whenever they want, they don’t have to do these stupid warmups that I don’t like.

Chris (04:23):

They don’t make me get into yoga poses that I hate. And they just show up. They’re done in like 30 minutes and Chris runs a class for a whole hour and he hates it when I’m late, why would I not just pay for access? And so when we saw that going on, we said, OK, no more open gym access while the group is happening. But we would still take personal training clients while we were running open gym. And I still thought this is just extra money, right? It’s just people paying me to keep the gym open and let them work out while I’m doing this other thing, personal training that I’d be getting paid for too. What I didn’t understand until much later was that the cost of running access was actually more than I was making for selling access. So I would have to get the gym open on Sunday.

Chris (05:10):

For example, we opened for five hours on Sunday because people who were paying for access said, why can’t I come in on the weekend? And then I’d have to stay open later on Friday night because people who were paying for access said, why can’t I come in on Friday night? And what happened was that I was putting myself in competition with the globo gyms. These people who opened up with a three and a half to 5 million budget who had low paid, $15 an hour, probably $10 an hour back then front desk staff to just stand there and not instruct. And I was trying to compete with them, which is a losing battle. Instead, I should have focused on high value clients who wanted to be coached, which was my business. So eventually what would happen is I would run open gym around my class times and for a few hours on the weekend and people could just buy open gym for, I think it was about 45 bucks a month.

Chris (06:03):

And so people would come in and they would, they would get interested in CrossFit or they would want to talk about personal training and quickly, the question became how many personal training sessions do I have to do before I’m allowed to just do open gym. They wanted to downgrade as soon as they could. Taking CrossFit classes, doing personal training, that just became the barrier to entry for my lowest value service that I was selling for 45 bucks a month. And in fact, what would happen is somebody who had maybe done classes for a while and knew what they were doing. They would downgrade open gym and then they would refer their friend and their friend would come in and the original member would say, just do open gym. I’ll coach you, I’ll tell you what to do. Worst of all is you would start to form these cliques.

Chris (06:49):

So you’d have somebody who was doing CrossFit at the time and they wanted to compete for example. And so they would say, well, I need to do this harder programming. And so they would downgrade to open gym. The people who needed the most coaching were getting the least, they were also causing the most problems. The people who were coming to open gym were by far the messiest. They complained the most. They were roughest on equipment. I can remember this one example where I had this guy and he was like an OG CrossFitter. He was doing it in his basement before I even opened up my gym, great guy. Right. But he wanted to do what he saw on crossfit.com and that include dropping barbells. And I only had maybe five or six barbells at the time. I was absolutely broke. I couldn’t afford to replace any.

Chris (07:35):

And so this guy would be doing workouts with an empty barbell. And he would drop an empty barbell. Now, every coach, the 12,000 people who listen to this podcast every week, I think you all just cringed, like dropping an empty barbell. Oh. But this is what was happening back in 2008. And so, you know, I’d have to give this guy a warning and I would be coaching a one-on-one client. And I would be so distracted watching this guy doing open gym, that my one on one client wasn’t getting great value. And so I’d eventually have to interrupt and go talk to this guy. But meanwhile, the person that’s paying me $75 an hour is like, what’s he doing? Worst of all the people who were paying me $75 an hour would look around the gym at the people who were doing open gym.

Chris (08:20):

And they would say either I wanna do that. Or I think I’m gonna switch. Because the first people that you attract when you start selling 24/7 access or open gym are the people who’ve been kicked out of every other gym in town. And I didn’t realize that. And so I had this one guy he’d been booted from the Y. Great, big stinky dude, and he’d wanna spend three hours a day in the gym cuz he had nothing else to do. He didn’t have a job. Right. Working out was just all he did. And so he would show up in his beat up old truck and he’d start warming up. And you know, he would take up a ton of equipment. He’d chalk up, spread chalk all over the place. And eventually some of my higher value clients said, you know, Chris, like, I don’t wanna be here

Chris (09:01):

when that guy’s here. He stinks. Right. He swears, he makes a lot of noise. He’s intimidating. And I know that he’s been kicked out of every other gym in town. And so then I had to approach this guy, imagine this conversation and say, I don’t want you here. Like I don’t even have a good reason to kick you out, except that I made the mistake of letting you in. The other big mistake that would happen is you would run open gym times in between classes. And so you’d get people again who maybe had a little bit of experience or some coaching and they’d say, OK, I’m on a budget. OK. I wanna downgrade. I’m just gonna pay for open gym. And I can clearly remember this example, this guy, David, fantastic, fantastic guy. He downgraded to just open gym. And of course the coaches were all like, oh, what?

Chris (09:50):

He’s a good athlete. But like he needs a coach, right? Everybody here needs a coach. Why is he going to open gym? But course he did. And one day he decided he wanted to do a half marathon row. And so he started his row and he was doing pretty well. He was on track and he got, you know, he’s trying to do like a 20 K row and it’s four o’clock. And so our groups are ready to start and the gym rules were at four o’clock open gym is over. Like, you have to be packed up and you have to get out. And that was super hard to enforce. Like every coach felt like a jerk because every single day they would have to tell somebody like you gotta pack up and go. It just bred these really bad feelings between the coach.

Chris (10:30):

A lot of the coaches wouldn’t wanna do it. And so it would always come down to me to enforce that rule. Right. And at like five to, I’d have to walk around and give everybody a warning. And we even had this like chime system where if we were streaming music on my old iPod, it would chime at five minutes to the hour to say, like start cleaning up if you’re doing open gym, it just created these bad feelings. Anyway, David was doing this half marathon row and at five minutes to four, I said, OK, David time to pack it up. And David had two kilometers to go in his half marathon row. And he said, I just wanna finish. And I said you better sprint. Like, you’re gonna have to hit a world record here to finish these two kilometers in five minutes.

Chris (11:14):

And he thought, OK, well I’m just gonna go. And at four o’clock I said, David, you’re done. And he said, no I only have like, you know, a thousand meters to go. I’m only gonna be another five minutes. Let me finish. And I said, no. He packed up his stuff. He slammed things around. He left and he never came back. So worse than me being unable to help this really awesome guy was that everybody who was in the group class saw this blowout. It was super awkward for them. They were embarrassed. I was embarrassed. This guy was embarrassed. And what they saw was, you know, just awkward. It didn’t reinforce anything that I wanted them to feel about the gym, about community and people first and getting fit. And so finally we decided that, you know, looking at our client list, number one, it cost us more to have open gym than we were making from it.

Chris (12:10):

Number two, it pulled really great clients into making mistakes because they needed coaching. And they were choosing the budget option instead of just doing it themselves. And third, it attracted the people who were no longer a fit like these were people who wanted to compete in the CrossFit Games. All of these people would say, I need less coaching and more access and they would buy the access. OK. So eventually we realized this was a problem. And when we got rid of open gym at Catalyst, a couple things happened, number one, three or four people upgraded, number two, about 12 people quit, but that’s fine because the people who upgraded more than paid for those 12 people and number three, and this was huge, my cleaning problems went away. 95% of the complaints that we had in the gym went away because they were either coming from or caused by the people who were paying for open gym.

Chris (13:02):

Number three, my gym was a brighter, happier place because the attitude of the people who just wanted to compete was different than the people who wanted to be coached. Now don’t take my word for it. You know, the N equals one examples of here’s what happened to Chris? I mean, those were great 10 years ago, but now you wanna know what the best gyms in the world are doing. And so I went to the top gyms in the world for ARM and for revenue. And I said, do any of you offer 24/7 open gym access? And all of them said no. So these are people with diverse revenue streams. These are people who are doing personal training. They’re doing group classes, they’re doing nutrition coaching. Some are even doing online coaching, but they drew the line at selling access. And so I asked them why.

Chris (13:52):

And they said, if we sold open gym, or if we sold access, we would be less able to sell personal training. We’d be less able to sell nutrition coaching. We’d be less able to sell our premium programs because everybody defaults to the minimum they think they need instead of what they should actually be choosing. And our job as coaches is to guide people to the right choice, even when that’s not the cheapest choice. Maybe, especially when it’s not the cheapest choice. That’s our job. Is access what you wanna sell? Maybe. One of the top 10 for ARM said, I would sell access, but if I priced it higher than personal training and made it available only to the people who are selling personal training. There is a model for this where you’re combining personal training with open gym access. And I think OPEX publicized it, but it’s been around longer than OPEX has.

Chris (14:54):

And basically the model goes like this, you pay this flat rate per month. It’s a higher value rate. Like let’s call it 350 bucks a month. And that gets you personal training sessions. And it also gets you open gym access. And so you can come in, you can work out around other people, but you’re not all doing the same workout. And the philosophy is that everybody needs a different program, but everybody can benefit from kind of a community culture. Right? The problem with that is that as the gym owner, you are committing yourself to providing access, which means that you or somebody has to be at the gym from five, 6:00 AM until eight, nine at night. And the model does not price itself high enough to be able to pay somebody to sit there that whole time. Now the alternative, which brings me back to my original question, the alternative is can tech make selling access easy and profitable for you?

Chris (15:52):

And the answer is yes, you no longer have to pay somebody minimum wage to hang around your gym. The cons of that though, are that there’s nobody hanging around your gym. There’s nobody that’s checking memberships. There’s nobody that’s enforcing rules or tidying up after people. There’s nobody who is looking at your bathrooms. And so the people who have added 24/7 access frequently come back to me and say, Hey, Chris, how do I get rid of this thing? Because now my coaches that are coaching my morning class have to show up an hour earlier and clean up the mess from the people who are in through the night. So not only does it erode the value perception or the value of the service that you’re selling, but it also creates extra work for the staff who, you know, just signed up to coach or who work during your normal hours.

Chris (16:40):

It also creates extra liability. And it also creates a lot of extra stress for you. Think about, you know, maybe somewhere in your gym, you’ve got like some cash, right? And at 1:00 AM, somebody’s in with a key card and maybe you can even tell who that is, but maybe a former member comes in and knocks on the door. Is your current client really going to police your policies and not open the door for them? It’s not their job to check whether the other person’s membership is valid. So of course they open the door and then the former member who thinks you owe them a refund, goes into your office, takes 300 bucks outta your cash drawer and takes off. How are you ever going to prosecute them? What happens? And this is the question that prompted the question. What happens when somebody accessing your gym at 1:00 AM, does some damage, who pays for that?

Chris (17:30):

Is it you? Or is it them? The example was somebody was doing thrusters. I think in the end of a barbell hit, like a container of some sort and it spilled water all over this person’s desk. Right? Of course you wouldn’t think that would happen. But of course it does. There’s nobody supervising. There’s nobody coaching. The other risk that you run here is injuries. You know, one example that we had come up in the group was a member was just paying for access and they were in, and it was like 4:00 AM and they had a heart attack. And luckily another member just happened to show up at like 4:15 and found that person. And they survived. They got them to the hospital in time, but let’s face it. If that person hadn’t shown up, nobody would’ve even known. And the owner would’ve shown up to the gym to find unfortunately, a deceased member in the morning.

Chris (18:24):

So there’s a lot of cons to doing this. If you’re really, really tempted as I was to run open gym access or even 24/7 key card access. Here’s what I would do. I would pull out your P and L or just a spreadsheet or a napkin. And I would say, how much more money will this make me, OK. So if 10% of your members paid extra for this access, how much more money would that? I would write that number somewhere on my wall, you know, on my desktop. And I would say, is there a better way for me to make this same amount of money? So if the extra money that you could make from selling access is 2000 bucks a month, there are easier, better ways to make 2000 bucks that don’t erode your future potential, that establish a higher value among your clients and make them more fit.

Chris (19:16):

Final note here. There’s a reason that globo gyms sell thousands of memberships. And that reason is that most people don’t use those memberships. Your members, the people at a coaching gym, will use those memberships, they will show up. They will do hard workouts, uncoached. You have instilled in them a passion and an intensity, a drive to better themselves. But that is not necessarily a great thing in an access based system. The globo gyms survived cause people pay their memberships and then they never come back. That is not your clients. And that’s why this model is probably not for you.

Mike (19:58):

Two-Brian Radio airs twice a week with tips, tactics, and stories from real gym owners who are building amazing businesses. Make sure you subscribe so you get it all. And now here’s Chris one more time.

Chris (20:10):

Thanks for listening to Two-Brain Radio. If you aren’t in the Gym Owners United group on Facebook, this is my personal invitation to join. It’s the only public Facebook group that I participate in. And I’m there all the time with tips, tactics, and free resources. I’d love to network with you and help you grow your business. Join Gym Owners United on Facebook.

 

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