You’re in the service industry: Discounting services is not a future investment.
Discounting services leads to loss. And loss only leads to more loss.
Although if you’re a gym owner or coach, you have probably experienced a prospect or client, or maybe even a marketing company, who tries to tell you otherwise.
This happened to me recently…
I hosted a teen strength and conditioning camp this fall. In a moment of weakness, I decided to keep the program inexpensive and gave a discount if two people joined from the same family. We just reached the end of the 10-week program, and some of the teens wanted to join regular group classes, including two siblings.
Their parent, then, approached me seeking a significant discount, and ultimately tried to convince me it is a good idea for our business to give kids and teens a discount (He proposed to pay 30 percent per child of what a normal membership is. Yes, he asked for a 70 percent discount!).
His argument: “Their value as clients is not today…but tomorrow, when they become adults with their own jobs and enough discretionary income to pay their own way. …Kids are loss leaders for tomorrow’s profit.”
Kids might be loss leaders for banks, who offer free bank accounts for kids, or for a product-based company. But this is the service industry. Loss leaders cannot be part of the service-based business model, because in our case our coaches would quit getting paid nothing, and the business starts going under.
“Loss leaders” are exactly what’s wrong with the fitness industry today!
Many gyms try loss leaders, and as a result they’re always losing. I can count 20 independent gyms and CrossFit affiliates that I know personally who have had to shut their doors because they couldn’t pay the bills, let alone turn a profit. They’re closing because they gave away too many discounted and free services.
Secondly, very few coaches are able to make a career in the fitness industry (not too many 40 and 50-plus personal trainers out there) for the same reason: Loss leaders leading the way to the ultimate demise of creating professional, career fitness coaches.
On top of this, in this particular case, how absurd is it to consider training teenagers today for a hypothetical profit in the future? The reality is, most teens take off to college or university, often leaving the city. And even if they stay in our city for post secondary education, chances are they’re broke students for a while. So why would I be willing to gamble and charge someone 30 percent of our membership fees with the hope that in 10 years they may pay the full amount? Seems like a perfect recipe for MORE loss.
In the end, all free weeks, free months and discounted memberships do is burn coaches out, prevent them from making a living in the industry, and prevent clients from receiving the proper care they need to keep them healthy and fit. And bankrupt the business in the process…
With all that being said, I am empathetic to people who have two, three or even four members paying dues, and we do offer a 10 percent discount for couples and families, but it needs to be kept reasonable…
Another argument the parent made to me was that for the amount of money he’d have to pay for two kids and himself, he could take his entire family on a month-long vacation this summer.
My first thought was, ‘You’re right. Life is about priorities. My parents prioritized my sister’s and my desire to do gymnastics as children. They paid $300 per child for monthly gymnastics fees and this meant we went camping in the summer if we were lucky, not a month-long trip to Europe.’
The point is, it’s not my job to devalue my service to ensure members can afford their dream vacation. Those who value our services pay for it because they think it’s more important than buying a new car, or a $500 purse, or a trip to Australia.
And I know I’m glad my parents prioritized sports and fitness, because what they were paying for was so much more important than maybe they even realized. They paid for those moments I became so tired I wanted to quit but I didn’t. They paid for those days I didn’t want to go to basketball practice but I did because I understood the meaning of commitment. They paid for me to appreciate my body, to take care of it, and to fuel it for success. They paid for the lessons I learned about being gracious in defeat and humble in success, for teaching me how to set goals, and for helping me build confidence and self-worth. I would take all that over a trip to Mexico any day.
Not everyone will see it that way, and not everyone is going to value the service we offer as fitness professionals, but I know I’m not going to be bullied into devaluing what I have to offer, and I hope the industry as a whole stops devaluing what they have to offer.