The fitness industry has been flooded with low cost gyms in recent years.
You know the ones: the ‘£10-£20 a month, cancel any time’ model.
They work in terms of a business model if you are one of the BIG players, as they lease a ton of kit, pay low wages and have low overheads.
See this news articles from one of the leaders in the UK – The Gym Group:
They have a total of 169 gyms and that number is growing every month.
The problem I’ve seen over the recent year is this.
Many low-cost independent gym owners, who’ve been around 5+ years and are priced in the market at £30-50 a month and have been comfortable, suddenly see a rapid decline in members.
Well a BIG low-cost operator moves in and starts charging £20 a month.
They have bigger facilities, new training kit and 24-hour access, so it’s a NO brainer.
The independent gym owner then starts to panic.
They start rolling out boring offers like…
‘Pay for 12 months / get 2 free’, etc.
And guess what occurs?
The market does not respond.
The independent gym owner thinks it’s a marketing problem so throws more money at it.
They even drop their prices to match the BIG corporate operator.
But it’s not a marketing problem.
It’s not an offer problem, a pricing problem and a business model problem all rolled into one.
It’s extremely tough to compete against the BIG boys who are backed financially.
If a treadmill breaks, they buy a new one.
If a staff members leaves, they have an instant replacement.
If a clients leaves (as they all do) they have mass marketing budget to bring more clients in.
But here’s something to think about and I quote all the time: It’s much easier to have fewer clients paying you more money.
Would you prefer:
500 clients paying £30 each, equalling £15,000
75 clients paying £200 each, equalling £15,000?
The second option WINS every time.
The BIG question is can you find 75 people in your marketplace to pay £200 a month?
And the answer is…
A few factors to consider…
– Is your service good / results enough?
If you think you can charge £200 and just issue a membership card and tell them to get on with it, you’ll fail.
But if you provide a 5-star service, accountability, guidance, tracking, meetings, and many touch points, the value builds and people get better results.
– Is your marketing good enough?
Will your marketing hit people emotionally so they take action and pay the rates you want to charge?
In most cases the fitness industry sucks at marketing, so the answer is ‘no’.
But FMA members will tell you another story.
That it is possible to charge premium prices and offer a premium service.
That it is possible to have fewer clients and charge them more money.
That you don’t have to compete with the big boys and sometimes your business model needs to shift.
In simple terms – innovate or die.
P.S. Do you own a big gym with hundreds, even thousands, of members?
If so, watch these two case studies from FMA members, then book a call to speak.
Established 1,600 Low Cost Membership Gym Joins FMA & Adds 40 High Priced Group Personal Trainer Members Adding £7,500 In Recurring Revenue
530 Member Gym Invests €500 In Marketing Spend & Returns €5-6,000!