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Gym Secrets Exposed
by Justin Leonard
Written on October 17, 2003

How do gyms really make their money? What marketing techniques do they use to get you in the door? Which techniques do they use to sell personal training and gym memberships? What really goes on behind the scenes?

In the following article, I will describe several techniques used by gyms to sell their services to potential customers. I will outline, in detail, how your gym is making money off of you.

Unnecessary Down Payment

Ever wonder why most gyms charge a down payment in order to begin a membership? For example, your basic membership rate is $30, but you have to first pay a $199 down payment or "activation" fee. But why do gyms need it?

The truth is, they don't! It's just that they can pretty much charge anything because they know you're there to workout in a gym with a variety of equipment, and don't want to workout at home with very limited equipment. For those of you who are contemplating getting a gym membership... when you go to sign up, ask them what the down payment is for. I guarantee you it will be a bogus answer.

Personal Trainers or Car Salesmen?

Second to the customers themselves, personal trainers are a gym's largest asset. Many gyms encourage their personal trainers to become what basically amounts to car salesmen who sell personal training services. It's important to note that not all personal trainers fit into this category.

It works like this:

A new customer walks through the door... After signing up for a membership, the customer is turned over to a personal trainer who will in turn offer a "free" consultation or gym familiarization tour. The consultation may include a basic nutrition analysis, workout advice, or bodyfat and measurements. While they are offering you these free services, they are somehow supposed to cleverly sell you personal training services.

It's actually a hard push to sell personal training because often it's the trainer's only way to make money at the gym. They usually make minimum wage plus a commission on the sale of training packages, in addition to a basic "per session" rate (usually about $15 or less).

Why Personal Training Is the #1 Priority At Your Gym

As stated before, a basic gym membership is going to be around $30 per month. A basic personal training package is going to be anywhere from $35 - $60 per session, depending on how many sessions you sign up for. The more you sign up for, the lower the rate. Gyms usually have a minimum number of session that are required in order to be able to receive personal training. Plus, selling the deal as a "package" is more marketable.

For this example, we'll assume that the minimum package deal is $400 ($40 x 10 sessions). If you crunch the numbers, you can see that this personal training package is close to or sometimes even more than a customer will pay in a year for a basic membership. Additionally, clients will usually renew with their trainer at least one time. You can see why many (not all) personal trainers are modified car salesmen.

Supplements and Such

Items such as supplements, weight lifting belts, and t-shirts are basically the equivalent of "upsell" items. It's just like driving to a fast food restaurant. When you finish ordering your meal, they'll ask if you want to upsize your meal or add an apple pie. Upsells are used to bring gross gym sales to their highest potential.

Personal trainers are again key to selling these products to their clients (mainly supplements) because they can always create scenarios that make them more meaningful to their clients. For example, if you're trying to lose weight, your trainer will more than likely suggest a fat burner that is sold by the gym. In larger gyms, upsells account for close to an additional $10,000+ per month.

Gym Membership Contracts

Contracts... Some gyms require them and some don't. But why do you need to sign a legally binding contract just to be able to workout at a gym? What a turnoff! A contract is basically attractive to gym owners because it allows for easier budgeting. Meaning, they can be more accurate in their estimations if they know who's "stuck in a contract" for at least a year or sometimes even longer. They can then financially determine rates such as membership or personal training services. Gyms are required to stay above or meet monthly "goals." Goals are the dollar amounts needed to be able to meet the financial needs of the gym [and wants of the owner/s].

The good news is that virtually all gyms will allow you to get out of your contract early. The bad news is that the small print in the originally signed contract usually says that you must pay any money owed that was not paid as the result of your early termination of that contract. In other words, if your gym membership cost was $300 per year and you canceled at the 6-month point, you'd still be legally required to pay $150 to get out of the contract.

Annual Membership Fee

The annual membership fee is the latest installment in The Book of Stupid and Ridiculous Gym Sales Tactics That Work. In this case, the gym may require an annual membership fee in addition to your monthly fee. If you ask them what it's for, they'll probably try to say it's for "maintenance" or something similarly ridiculous. They may not, and probably won't bother to tell you about the fee when you sign up, for fear of losing business. They'll instead hope and pray that you skim over and miss the key terms in the membership contract.

Please make sure you're aware of all charges that accompany your membership. You might even consider asking if you can take the contract home to think it over. This, of course, will probably make the gym nervous.

Techniques to Get You to Join

Gym membership rates may be negotiable, even though they make it look like everyone gets charged the same rate. In fact, very few get charged the same rate. If you ask the person on the machine next to you how much they're paying, the chances are one in a million that he or she will not be paying the same rate.

This next example describes another clever technique that may be used to get potential members to join a gym.

A new customer walks through the door and asks about membership rates. They are quoted, lets' say, $40 per month. The customer may say, "Well that's too high. I'll look around for a lower gym membership rate." The salesperson may say, "Wait a minute... We really want you to become a member of our gym. If I can get your membership rate lowered to $35, would you join today?" The customer will say, "Uh... yeah, at that rate I can probably join." The sales person will say, "Great, let me go talk to my boss to see if we can possibly lower your rate."

The salesperson actually knows that he or she has been given preapproved authority to charge any price for a membership, but just not to ever go below the preset rate: in this case, $35. In other words, the boss and the employee have a secret system that they use to make the customer look like they're getting a good deal.

They'll basically go in a back office and talk to each other; not about your membership rate, but about yesterday's game. After about 3 - 5 minutes, the salesperson will come out and say, "I have good news..."

Personal trainers may also use the same technique to sell personal training packages.

How You May Be Able to Dictate Membership Rates

As previously mentioned, you may be able dictate your own membership rate. What I mean is that you can first call around to other local gyms in your area to find the lowest rate... You can then use the low rate as a negotiating tool. You could say for example, "Such and such gym offered me this rate... If you can beat that rate, I'll workout here."

The gym will more than likely try to tell you that you're not getting as much at the other gyms or that their gym offers more commodities, benefits, or convenience. They'll find something to try to discourage you from choosing another gym.

"Many gyms encourage their personal trainers to become what basically amounts to car salesmen who sell personal training services."

- Justin Leonard, ISSA CFT

Be prepared and have a good comeback plan for everything they throw at you to try and justify why their gym is so much better than everyone else's. It doesn't hurt to be a good negotiator.

How Gyms Make Money From Existing Gym Members

Sometimes the main focus isn't always on the prospective new gym member, but instead the existing one. That's right. Even members who have worked out at the gym for years may even be a potential target used to boost gym sales.

What they may do in this case is literally become telemarketers and begin calling your house to sell you other services (sometimes they'll mail you flyers/coupons). The telemarketers I'm referring to can be anyone that works at the gym. This includes front desk salesmen, personal trainers, or even the managers themselves. The phone conversation will usually start off like this:

"We're glad to have you as a member of our gym and we'd like to see how your training is going, and if there's anyway we can help."

At least half the people they call will describe physical appearance goals that they haven't been able to achieve. This is the staff member's opportunity to offer more services to you: and it's usually going to be in the form of personal training because that's where the gym will make the most money. Additionally, sales attendants and personal trainers are particularly interested in selling training packages because it means more money for them in commission: and to the trainer, new potential clients.

After you've described your physical appearance goals on the phone, the salesperson will say, "Okay, well if you want I can schedule you for a free consultation with one of our trainers." You say, "Okay, that sounds great." They'll then get you into the gym and turn you over to a personal trainer. At that point, you're just a brand new customer in the eyes of that trainer. Their ultimate goal will be to try to offer personal training services.

Conclusion

What I have told you in this article is pretty much everything you need to know about ways your gym is making money off you.

What may be surprising is that I'm not completely opposed to the ways gyms make their money. I believe that they have every right to make money any way they choose. They have to get paid too, right? I do, however, have a problem with the questionable fees such as the down payment, annual, or maintenence fees.

I fully support healthy living and I don't think you can put a price on good health. Who cares if there's a big push for personal training or a 1-year membership contract to sign? I actually think it's a good idea for everyone to join a gym and hire a personal trainer. The world's best athletes [whom you think wouldn't need help] have personal trainers, and many have more than one. If you think about it, getting fit is ultimately going to lower your risk of getting hurt, sick, or even dying prematurely.

But I also feel it's important to protect you, the consumer. And that's what counts.

You are now armed with the knowledge needed to protect yourself and avoid getting ripped off or talked into something you don't need. Hopefully, my gym secret revelations will aid in your decision-making process the next time you enter into a gym.

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