by Dave Thomas
Over the past six years of operations in the absurdly competitive Southern California fitness market, we’ve repeatedly tested, measured, and assessed the importance of every aspect of our business. We’ve had some major successes and some disasters, and it’s allowed us to see what works, what doesn’t, and what gets you into trouble real fast.
Here are ten sneaky, seemingly harmless mistakes that if continuously violated can produce a cumulative effect that can ultimately bleed you out slowly.
1. You Overvalue Your Advanced Athletes
The reality is that most of your members don’t care about your competitors, nor do they care about becoming elite at fitness. They are there to look better naked and improve their life in some capacity that doesn’t relate to elitism. High-end performers are extremely important for a business, they establish proof of concept, build credibility, and they are inspiring, but they make up an incredibly small percentage of your overall membership and revenue. Your advanced athletes might build brand prestige, but your general population comprises the bulk of revenue breakdown and who keeps your doors open. Never forget that. Always engage them.
Do not make the mistake of tailoring everything you do towards your more serious crowd.
History Lesson: Back when we opened in 2011 and were insecure about people taking us seriously, we felt the need to blast every major accomplishment we had. The result was an internet presence that looked like seven high end athletes trained at our gym and no one else. No one gets stoked for that.
Audit: Is your branding content, class behavior and membership presence dominated by this group? Or is it inclusive across all levels?
2. You Lack Self Awareness
Don’t fix what you aren’t. Go all in on it and let it shine in everything that you do. At the same token, you must be self aware enough to know that you’re not perfect and you must have someone who can compliment your shortcomings as an owner. Whether it’s someone on your staff or your business partner, you must surround yourself with people who fill in your holes, not widen them.
History Lesson: Unbeknownst to us, the best decision Bryan and I made was to become business partners in 2011. We were college friends, roommates, and teammates and we had no idea our professional marriage would turn out to be as rock solid as it has been. He is the yin to my yang in every measurable way, and I serve that same role right back at him. I am a creative left brain, and Bryan is an analytical right brain. The result is a well-rounded point of view in nearly every decision we make.
Audit: Do you decide everything that goes on in your business? Do you have anyone in the position to challenge you?
3. You’re Just Another Starbucks
Starbucks used to be the best coffee and the coolest place to go when you wanted to work away from the office. They had ambiance, they had market differentiation, and they had first adoption on their side. They were, “The third space”. Now, coffee shops are everywhere and Starbucks no longer has uniqueness on their side. So, you’re seeing them move more into the high-end experience with their Reserve Stores slated for 2017, where they will display their roasting techniques in an attempt to feel boutique and craft experience again. It doesn’t take a genius to connect the dots with my analogy, here.
Functional fitness, CrossFit, and strength and conditioning facilities used to be the hot new thing. Now it’s just how fitness is done. Are you like every other box, powerlifting gym, kettlebell, or yoga studio?
History Lesson: When we opened, we went all in on our differentiation and it lead to 300 members in 18 months and a 95% retention rate. Then, we left different for safe and we operated more towards the mean of what strength and conditioning gyms were doing. We plateaued very quickly and saw our retention rate dip to 92% as we attracted customers who didn’t share our brand values. Thankfully, we course corrected and when we went all in on being us once more, we jumped right back up, cleaned up retention rates, and now in year six we have both the highest membership (613) and retention rates (96%) we’ve ever had. You must find what makes you unique and areas where you are stronger.
Audit: Do you do anything inherently different than your competition? Do you tell a story in a different way? When you open doors, does any aspect of your business stand out in the market in any meaningful way?
4. Your Branding is Confusing
Every single outward image, video, statement and message should follow consistent visual, language, graphics, and tone. Your branding should tell a consistent story about your gym, the people within it, and what unites your members regardless of their goals.
History Lesson: Around 2012, after being open for about a year, we pushed all of our chips towards our story, and the “Become More” mentality went from something that was a part of our unspoken daily culture, to something integrated into our spoken brand. People dug it and it’s still the story that we love to tell six years later, because it’s true and authentic and a part of what made us. Few things that we ever do as a brand strays from that.
Audit: Can someone go to your website and social media and see the same overall tone to your brand? When they show up to your gym, does the in-person experience match up to what you sold? Will they be able to feel differently about your gym versus the gym doing the exact same thing as you one to two miles down the road? Will they know what inspires you or why the hell you’re even open?
Simon Sinek, author of my favorite book, “Start With Why” is famous for his saying, “People don’t buy what you do, they buy why you do it.” Discover why you do what you do, and tell the world.
5. You Overvalue Yourself
I believe Performance360 to be a $200+ per month gym based on what we provide. Easily. So why do we price it at $99 – $149? Simple. Because we’re willing to lose dollars up front to keep them long term. Value is king for us and nothing ever challenges its throne. As a result, we lose under 0.05% of our members to local competition and keep 96% of our membership every month.
Value reigns eternal, and it’s far easier to keep current customers than it is to find new ones.
History Lesson: When we started out we offered 50% off the first month for joining. We were aware that we were potentially damaging the brand’s reputation by pricing so low, but we didn’t care because we knew that of the people who came in, we would deliver exceptional value and quality, and those people would become loyal ambassadors of the gym. Who cares what people who didn’t join thought of the gym?
Did it sting like hell to charge someone sixty bucks their first month? Hell yes it did. If we got so caught up what we perceived the value of the business to be, we would have never grown at the sustainable rate that we did.
With a strong brand you can still pre-qualify good customers, even at a lower initial price that infers lesser quality. And listen closely to this one, because it’s important. Without customers paying your bills, there will be no brand left to manage. We did not have the luxury of affiliation. We were indie artists, and revenue was king in our first year.
Audit: What value are you providing to justify your prices? Simply writing down a workout on the board and having a coach read it to your class is no longer worth $150 – $200 a month. People aren’t stupid, they will figure that out if they haven’t already. Do you give anything away? Or, do you nickel and dime everything?
6. You Don’t Actually Care
Your coaches need to eat, sleep, and breathe your culture and the members within it. They need to train at your gym. They need to be a part of the community fabric and care deeply about what goes on within it. Don’t ever bring in coaches simply because they have impressive initials at the end of their name. Knowledge can be taught, but caring can’t be faked. The success of your gym is based much more on the trust the members have with your coaches and the belief they are one of them, than it is the impressive resumes that you stock.
Community is everything to your success and that starts from the top down. No one cares about how much you know until they know how much you care. If your coaches are there to simply clock in and clock out, members will see that and that ambivalence will seep into your membership like a cancer.
History Lesson: One of our first hires was a non-member with an impressive background with whom we ultimately had to part ways. No amount of forcing, faking, or trying to adopt our culture was ultimately sufficient because ultimately, they were an outsider and the passion was not there. We were trying to jam a square peg into a round hole.
We hired our first members as coaches in 2012 and haven’t looked back. Since then, we’ve authored a near 300 page P360 Fully Certified Coach (FCC) Manual and have a thorough certification program. This started by going all in our culture and has since blossomed into something that trains some of the best coaches in the industry.
Audit: Can your coach address every person in their class by first name?
Culture, culture, culture.
7. You’re Misusing Social Media
Guys, it’s 2017. If you’re not leveraging the hell out of social media by now then you’re leaving a wonderfully effective, free tool on the table. Used properly, social media helps build great community and tells the story of the people within it, provides education, and offers public recognition for member achievement.
Community creates a sense of home and belonging for your members. Education helps people buy-in with what you are asking of them. Recognition creates member satisfaction and a belief their efforts are noticed and appreciated.
History Lesson: Listen to these words. “MIX. IT. UP.” Perception is reality when it comes to your membership and how you use social media. About a year ago, we got a complaint from a some members for posting too much of the same people. We audited this complaint, and over the course of the last sixty eight posts made, sixty were of different individuals. The claim wasn’t factually true, but that didn’t matter. It’s all about perception. Since then, we are very careful about making sure we focus on diversity in our social media posts. While I find the notion of this personally absurd, clearly certain folks do not and it’s my job to adjust, not theirs. (You can follow us and observe our behaviors.)
Audit: Are you active on social media? Do your posts serve a purpose? Do they build up your members, or are they self serving? Go back and look at your last 50 posts. Are there any content themes that are overwhelming?
8. You Don’t Know Your Numbers
What’s the churn rate at your gym? How about your trial show rate? Conversion rate? What’s your average class size? How many trials do you get per week, on average? What day is your busiest for trials? What percentage of new members are from current member referrals? What percentage are from outside advertising? What’s your show rate on new trials? How long does the average member stay? What portion of your membership played college athletics?
History Lesson: We were operating blindly our first year of business. We were fortunate enough to be successful from the starting gun, so we thought that meant we didn’t need to focus on any details. Well, as the business began to grow we quickly learned we were financially blind, so we began meticulously collecting and tracking every data point we could. Business improved. Now, we have a firm grasp on all of our numbers at any given time.
Audit: What percentage of these questions could you answer off the top of your head? Real talk here for a minute? I realized I have slipped and could only nail 80% of those while writing this article, so guess what I will be doing later this week?
9. Your Gym is Too Hard to Try
Understand you have a lot of competition. If you’re impossible to try and join, you won’t last very long. A clearly outlined and organized trial process is the single most important thing you can do to establish yourself in your market. You must have the ability for your prospects to be driven to your website, clearly see where they can register for a trial class and a regimented process for their conversion when they show up. Simply throwing up a website and saying, “Schedule your free consultation” doesn’t really accomplish much.
History Lesson: Integrating a submission form where a prospect can select, register and confirm a trial class on a single page of our website is arguably the single most impactful thing we’ve ever done for our business from an operations perspective.
Audit: Can you explain to someone in one sentence how they find, try and join your gym? Or, is it a run-on ramble where you have to clarify every step along the way?
10. Your Leadership is Visibly Disconnected
As the owner of your gym, you are the face of operations whether you like or not. Externally to your customers and internally to your staff, and as the face, you must be in the trenches for everything that goes on in your gym. Follow the programming you write for your members. Lead your staff from a position as their equal. Be blue collar in every sense of the word when it comes to leadership. Your hands should be the dirtiest. This needs to happen for a minimum of five years. Of course you cannot always be there to run every aspect of the business, but you need to establish culture, process, and protocol.
Audit: Do you ask your staff to perform duties you haven’t performed yourself? Or wouldn’t still do?
If you don’t like the answers to a lot of these questions, it’s okay. The good news is that all of this can be fixed, and fixed rather quickly. Roll up your sleeves, get to work, and remember that we’re here to help.
Dave Thomas has lead Performance360 to a thriving gym business with multiple locations in Southern California. He is co-owner of The Business of Lifting Weights, a consulting business that helps small gyms grow.