Can Your Gym Become an Essential Business?

This fall, Planet Fitness made news when four locations in California owned by the same franchisee reopened under the designation of an “essential” business. Their tactic? Pay for a membership in the Medical Fitness Association and follow its phased reopening guidelines, while directly contacting local health officials for permission to open. 

The gyms petitioned their Public Health Services department citing adherence to reopening guidelines published by MFA and vetted through the CDC. The MFA guidelines, in some cases, are stricter than the CDC’s published work: expanding social distancing recommendations based on a population’s health risk and the type of exercise. 

The effort worked for Planet Fitness and, since then, more than 500 gyms have sought membership in the North Carolina-based nonprofit, according to their membership experience director Jayson Aslanian.

The former PGA professional expressed awe at the surge of interest but wants to clarify a specific point: Membership in the MFA does not guarantee your business will be deemed essential by your local government. 

Fortunately or unfortunately, that decision is made by local and state officials, and each state varies widely on which businesses are considered “essential.” 

The 29-year-old organization, instead, provides a wealth of ongoing educational programs, conferences and seminars to individuals in the fitness industry, is the leading certification agency for organizations wishing to become accredited within the medical fitness arena, and provides access to industry research and trends. 

Membership in the MFA delivers education and resources to health club owners but does not convey certification. Certification by the MFA as a medical fitness facility is a costly multi-year process that formally recognizes your center’s actions incorporating exercise-based therapies into client recovery programs. The accreditation comprehensively reviews your gym’s adherence to expected standards for medical fitness centers, including active physician oversight and licensed staff. However, even a full MFA certification does not automatically categorize your gym as “essential.”

There are over 940 medically integrated facilities nationwide, according to MFA’s research, but only 45 MFA-certified facilities in the United States. For more information on building relationships within the healthcare community, see our August blog, “Healthcare & Health Clubs.”

What’s Next on the Road to Becoming Essential?

Lobby and prepare, from the information out there. Every state is at a different point in opening, and the continued uncertainty swirling around increases in COVID-19 cases makes decisions difficult to pin down. However, a good offense is the best defense. By implementing the MFA’s guidelines and keeping up with the CDC your gym will be ready when your state flips the switch. If there seems to be wiggle room in your community, go to the local public health services department and keep asking questions until you find the person with the best answer. 

Arm yourself with relevant state and local rules that apply to each of your business’s physical locations. Review them and determine if your business falls within any exceptions to the industry shutdown. If there is any question as to whether you are an essential business, prove to the county you’re a community resource with a dedicated group of clients who need and rely on you for their physical wellbeing. Or ask an attorney to do the talking for you.

Keep your chin up and your hands clean, and soon your company will be stronger, better informed, and ready to run burpees around the competition.

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Turning Gym Cancellations into Cash

What if I told you there was $500 in monthly gym memberships sitting in your computer? As an owner of a studio, would you search for it? Well, it’s right there — in the cancelled customer column. Let’s look at how we can bring these old friends back into the fold.  

Make a Plan to Contact 

Everyone knows turnover is high in the gym business, and lately that number’s crawled upwards. However cancelled and frozen accounts are a golden opportunity. These customers signed up once. They know your club. Now it’s up to you and your sales team to rekindle their interest. 

By challenging your sales team and giving them generous parameters within which to re-sign customers, you’ll bring in money without having to expend precious marketing dollars. After all, even if they sign at 50 percent off the monthly rate, that’s still cash in the drawer. 

Rally Your Sales Reps

1. Engage the sales team by exerting controlled pressure: Ask them to call in at least once a day with total gross sales and EFT’s sold. The accountability will get them off social media and thinking about how they can report a number.

2. Give them monthly sales goals broken into daily targets. One method to determine goals is to fix the number at their highest historic sales plus 20 percent. 

3. Provide access to the cancellation list — which should include membership terms and pricing — and ask the sales rep to make a specific number of calls per hour.  Work this figure out based on the sales representative’s other responsibilities. 

4. Instruct sales reps to keep notes on each conversation.

Build a Strategy

Statistical research says about 46 percent of gym members quit due to price. However, nearly 50 percent stay at a gym because of location. Mingled in the middle are all the other reasons people quit. By asking sales reps to call former customers, you can get to the bottom of this mystery while offering them an outstanding deal to re-sign today.

• Devise short-term re-sign offers, and give your reps the freedom to make deals based on guidelines. Even 50 reactivated accounts at $10 each is $500 in the till.

• Group text message your cancellations with super low reactivation offers.

• Get creative. If a customer says they only use the gym a couple of times of month, offer a Loyalty Membership that restricts visits. That way, they’ll payless per month but still have the chance to visit as often as they would normally. Give away a one-month Loyalty Membership with a membership re-sign — the right gym tour might sell their friend, too.

• Evaluate the terms your company encourages. Prepaid memberships are a cancer to gyms. Why re-sell the same customer over and over? However, month-to-month fees with no-notice cancellation policies are popular with many clients who profess to prefer cash. This is a great strategy, but require a credit card on file, just in case they’re running late one month. This way, control of the account is in their hands, but you’re protected from an automatic, end-of-the-month cancellation. 

Know What You Don’t Know

Many gym owners suffer from sign-up fever — they are constantly running after new business without truly understanding where their gym is failing. If you can’t identify the leak, how can you plug the hole? They see the cancellations, but they haven’t accessed the information to understand just why and how clients are leaving. In many cases, their gym management software simply does not provide the details needed for a studio owner to really see which areas need improvement.

With Gym Insight software, owners view all their sales information in real time. Its Location Performance report provides comprehensive, up-to-date metrics on every facet of your company, from total accounts, new accounts, and cancelled accounts, to such granular data as retention rates, dues breakdowns, and month-to-day comparisons. Shown across any selection of months and years, you can track and evaluate your gym’s progress, developing a full picture of your company’s strengths and weaknesses. 

Easy-to-use management software that puts the power back in your hands is available for as little as $175 per-month – with no hidden fees or charges. For an interesting podcast on how one owner used our Location Performance Report to recharge his business, go to https://www.youtube.com/watch?v=4tDLSK8fHNk. The software looks different since this 2016 video but the ease-of-use has gotten even better!

41 New Fitness & Gym Membership Statistics for 2020 [Infographic]

https://www.ihrsa.org/about/media-center/press-releases/the-2020-ihrsa-global-report-clubs-post-record-numbers-in-2019

Fitness Market Size, Demographics & Revenue 2020 [+ Research Report]

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How to make Money with a Digital Business Model

Within a year, online fitness has become an industry staple for nearly every gym, boutique, or trainer. The question, of course, is can you make money at virtual fitness and, if so, how do you recoup the investment?

Online classes are, by their nature, a volume business. You’re going to have to sell more classes or train more people to make the same money as you would with an in-person experience. Why? Because you’re now promoting a lower-cost service while investing in new tools and novel marketing techniques.

And, unlike selling a physical product, your concept is vulnerable to market whims and perceived value. How much worth can be ascribed to your staff’s professionalism, industry expertise, or your own time? Those are hard ideas to wrap a number around. 

So how much can you charge for virtual memberships and services? The fees vary considerably based on the quality of the offerings and a gym’s target clientele. 

Making a Profit

A quick Internet search* suggests pricing ranges from $35 per month to as low as $10 per month. In all these cases, digital classes were stand-alone business models supplementing either an IRL studio or a fully online company. 

To determine the right pricing strategy for your business, take a few tips from the experts.

First of All – Know How Much to Charge — Pricing 101

Step One – Use cost-plus pricing to analyze your investment. This standard method compiles all the direct, indirect, and fixed costs associated with providing the service, and then adds a desired profit point to secure a final number. These costs include materials, labor, and overhead. 

Step Two – Research competitors’ pricing.  Although it is not often a good idea to compete on price alone, it is best to know competitors’ charges for similar services to a comparable customer base. Once you know this number, it is also important to understand the professed value of your service to the end user, as here is where pricing becomes an art form — that little wiggle space between too expensive and not expensive enough. 

Step Three – Determine a fair market profit. You need to make money, but you can’t overcharge either, especially in a down market or one as prospectively saturated as online fitness. Experts suggest looking at industry resources for net profit margins. Digital fitness companies have exploded in the COVID-19 era but the concept went live a few years ago – long enough to establish a track record. Anecdotal online articles suggest the estimated gross profit margin for virtual classes hovers at 40%.

Payment Models

There are innumerable ways to charge customers for your services but here are the most common methods. 

1. Cost included in the membership fee. In this method, customers select from a tiered payment model based on their personal needs, and can choose the option that includes online classes. Frequently, this fee increases their monthly charge by about $10. Some companies include app access in base pricing and even showcase free classes on social media. 

2. Add-on options. This a-la-carte selection style averages 5%–10% of a membership fee and works well within marketing plans. Common promotions give away two weeks or a month’s access to classes, then switch users to are recurring payment plan. This approach allows exercise enthusiasts to build or maintain relationships with favored instructors while training on their schedule from home.

3. Fully remote memberships. Pricing for this type of serviceis estimated at 1/3 the cost of a regular membership. These plans strive to keep clients who have moved, become injured, or for some reason do not feel comfortable at a gym. 

4. Remote live streaming membership. Pricing for this type of class depends heavily on the quality of the content. The better a product you can provide, the more you can charge. Current industry averages are 1/3 to 1/2 of an average membership. 

5. Remote private training.  This number varies. Pricing ranges from 25%–50% of an average hourly rate. Flat fees per client vary between $50–$100 per month. 6. Remote boot camps. These virtual group sessions typically charge 25%–40% of an in-person class. 

Online fitness introduces more people to healthy lifestyle choices. That’s got to be a good thing for the industry and for your business. It’s an exploding market that complements a traditionally brick-and-mortar industry perfectly. With a careful balance of price to investment, you should come out ahead. 

Virtual Personal Training – Bringing Your Fitness Business Online

https://www.forbes.com/sites/yolarobert1/2020/04/29/is-the-online-fitness-boom-here-to-stay/#634b2b2e7080

http://members.tabatabootcamp.com/sites/default/files/nutrition-guide/Pricing%20Your%20Virtual%20Bootcamps.pdf

https://www.inc.com/guides/price-your-services.html

• Companies researched included Crunch, Planet Fitness, CampTampa2go,  Melissa Wood Health, Alo Moves, P.volve, The Sculpt Society

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Gym Management Software — The Hidden Truth Behind That Low Monthly Fee

Choosing the right club management software is one of the most important decisions you’ll make as an owner. Whether you run a single-location Muay Thai studio or a multi-site full-service gym, controlling costs, managing employees, and tracking clients are the cornerstones to your success. If you don’t know how much money you’re spending – or making – then your very job is at risk.

Ironically, many fitness companies who sign-up with well-known, heavily-advertised gym software products are forced into that very position. Like a wrestler flat on the mat, they concede control of their business to a third party by signing contracts without fully understanding the agreement. The result? They take completely unexpected risks.

Hidden Fees

Nearly all gym management software is designed, built, and sold by billing companies – not health club specialists. Because of this, they’ve mastered the art of hidden fees. When evaluating software, watch out for these common extra costs:

• Merchant Accounts – The software company takes a percentage of every sale you make, either by forcing you to choose from their list of merchant providers, which offer higher rates, or by acting as the processor itself. The software system is tied into the company that processes your payments – imagine if you were buying a car and the dealership told you that you had to choose their finance company at 10 percent when you qualify for a much lower percentage with any other bank.

• Features & App Fees – Just because a company promises a fully automated experience does not mean every service is included in the base monthly fee. Instead, separate costs are often tucked into member use of online calendars, online membership sign-up portals, unexpected tech support requests, and external app use. 

• Delinquent or Rejected Payments – These billing companies often impose a delinquent late fee, keeping a percentage if collected. Additionally, when a card or payment is declined, a normal cost is about 30 cents, but some companies are known to charge upwards of a few dollars.

• Unlimited Users – How many users may have access to the system and are they able to log in at the same time?  Some companies’ monthly agreements restrict the number of users, allowing only one to be logged into the system at a time.

Hidden Challenges

Steve Jobs once said most product problems stem from bad design, and the same can be said for gym management software. Third-party software integration, clumsy report generation, and complex on boarding all lead to more headaches for owners and less time to do what you love.

• 24/7 Access – Ask about who controls your door system – you might be surprised at the answer. Most gym software companies do not manage their own door access systems. Instead, they outsource the software to third-party companies, whose systems experience a 20-percent failure rate due to the complexity of integrating their door-system software into your gym software. Text messaging and calendar software are also commonly subcontracted programs – a practice that can make managing marketing and training employees more complicated and expensive. 

• Controlling Information – How easy is it to change member information in your system? Some companies require near complete control, turning you into a de facto employee – even refunding a customer requires a call to the software company. 
• Retrieving Reports – How much access do you have to your daily numbers, or current monthly dues? Can you deep dive into every transaction every day and know exactly how much money your company has brought in at any time? 

Hidden Risks

• Member Data – Sometimes relationships don’t work out. If you leave your membership sales software company, can you keep your data, including payment information? As bizarre as it sounds, some companies place digital handcuffs on their clients by not releasing encrypted payment information, or through charging an extraordinarily high penalty for record retrieval.

• Transparent Reports – Gym software companies whose systems are entwined into your payment processes prefer you not know how much they’re taking each month, which is one of the reasons drilling down to specific transactions can be very difficult for the average gym owner. This opaque approach to management may not hurt you right away, but in the long run it opens you up to a systemic company-killer – employee theft, as staff quickly learn you can’t access every detail of every transaction.

Closing Thoughts​

So how much is that $99 software management fee really costing you? In today’s business culture where so much of our data comes through the Internet — and much of that bought and sold by the very companies we are researching — it can be remarkably difficult to make good decisions. 

Yet, a lot is riding on that choice. Most gym owners are handcuffed to their businesses, unable to leave often, vacation, grow locations, or cede control as it is too difficult to run the management side and too challenging and/or complicated for most employees to assume responsibility. 

So Here’s Our Elevator Speech

Gym Insight’s software is built by gym owners for gym owners. We use no third-party integrators – every piece of software running on our system is built by our programmers. You choose your merchant provider and our software links to it – nothing more, nothing less. All reports are transparent, drill-down is uncomplicated, and we are constantly improving and adding services, such as paperless document design, I-Pad sign-in technology, and user-friendly calendar sign-up designs. 

Most importantly, our fee is completely transparent. You pay one monthly rate based on the number of members, and everything else is yours to keep.  No hidden fees. No games. No silliness. Just good software that runs well, every day.

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Inventing a Gym Without a Roof

There are plenty of good reasons to coax your health club members outside – autumn weather is perfect, they can benefit from the shot of vitamin D, and their participation supports their favorite gym as it regains footing after the COVID-19 shutdown.  Regardless of the motivations, creating this “gym without a roof” concept is an excellent option for every club at this time. These impulsive opportunities to pack in 10 pushups or swing across extra-wide monkey bars build stamina, muscle […]

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Build Your Gym’s Niche With High-Quality Personal Trainers

There are two types of clubs growing in our economy: boutique centers, and low-cost, bare bones gyms. Many of those in the middle – think Gold’s Gym, 24-Hour Fitness, New York Sports Club, and Town Sports – found refuge in the bankruptcy courts as COVID-19’s shutdown ravaged their business models.  So what can you do to ensure your gym’s future in […]

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Recovery Equipment – Is It Worth It?

Recovery fitness is the phrase of the day for health clubs, boutique gyms, and personal trainers. The equipment used by athletes today ranges from foam rollers to cryotherapy tanks and every idea in between. The rage reminds me of a former health club catering to professional and elite level athletes. There, next to the pull-up bars and heavy ropes, was an automated massage […]

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COVID – 19 Clean — What’s Next For Gyms?

By this time, most everyone knows the basics of keeping their gyms and health clubs COVID-19 clean. Since we’ve figured out the basics, now is good time to consider the chemicals, techniques and emerging technologies that may make the difference in keeping your gym healthy and safe. Disinfectants When choosing cleaning products for your gym, consider that every product approved against SARS-CoV-2 (COVID-19) includes an EPA registration number […]

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Back in the Day Gyms Rocked!

Remember when fitness was an exploding rocket, taking off like a firebrand in everyone’s consciousness? The future seemed endless with new innovations blending technology and health, fun and funky athletic trends, and a swath of boutique and health club options catering to every age, income, and preference. The future will be “virtual, gamified, and totally immersive,”claimed a January […]

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Who’s Training in Your Gym?

Everyone, it seems. From teens to octogenarians, we’re all pumping iron and taking classes to stay in shape. Thanks to medicine and technology, we are both living longer and more aware of how habits impact our health. And because of that, gyms are no longer the realm of young,  beautiful adults. Today, your gym can attract everyone from […]

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