WHY THE COMMERCIAL GYM MODEL IS SO F@CKED UP - PART 2.
In the past 25 years, we witnessed this model take over everything from Curves to CrossFit and then watched as the marketing companies came in to tear away at the CrossFit carcass with one get-rich scheme after another. Remember the free 6-week challenge, the New You and the Couch to CrossFit marketing shenanigans? They existed solely to bring bodies into an already failed gym model.
If the traditional gym model had worked for the long haul, none of these companies would have existed.
How the Model Works for the Client and the Coach:
To generate revenue fast here’s what happens:
- Bring a ton of clients in quickly to generate revenue.
- New clients go right into a big group class with little care about their actual needs to get fit and stay fit.
- Real coaching is non-existent.
- Paid per hour or per class or per head in a class (this one is especially catastrophic)
- Receive a percentage of revenue for upsells in some cases (aka PT packages, supplements, other swag)
- A few days, or a few weeks, of in-house training OR
- Attend a hodgepodge of weekend technical courses or seminars.
There’s a reason it’s done this way: The system is simple to understand, simple to learn and simple to execute.
Secondly, it allows gyms to handle a lot of people in a short time (some of the current franchises using this model pre-sell as many as 500 memberships before they even open their doors to people they know nothing about). In this sense, it succeeds in making money fast initially and looks great on paper to someone who does not understand the long-term financial ramifications.
This perception is ESSENTIAL to selling new franchises.
BUT……….Here’s what happens to clients and coaches in these short-term minded models:
- Annual churn rates are 70 percent and higher - the great majority of clients last nine months or less. Why this happens is further explained here
The churn rate is approximate 2x client churn - most coaches last between nine and 18 months.
Pay huge upfront costs and extremely high rent and are vulnerable to a crash after five to seven years.
So after just a few years, here’s what you end up with:
- Enough people churn out to create a negative reputation
- Enough coaches churn out to create a negative reputation
- The local market has been scraped of potential clients and coaches
- Marketing loses effectiveness
- The equipment is not as shiny as it once was
- Facilities suffer from normal wear and tear
Clients move on. Coaches move on. Investors are out, and the gym owner is left holding the bag. The fitness industry plunges another rung deeper in society’s respect ladder.
Definitely unsustainable and arguably Unethical.
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