Posted by: Sales Makers | August 1, 2017

Addendum to X-Selling at Membership Sales – page 11

In 1997 a Club called McFit was launched by Rainer Schaller and a few co-founders in Germany. It was what has since been branded a “budget” Club.                                               The original price was €16.90 a month, with no contract, 24 hours a day, with only equipment – in approximately 20,000 sq ft. Normally, there was only 1 staff person on the premises.  There was no gym staff, no PT’s, no aerobics classes, no support – basically; what you see is what you get.                                                                                                                              You also needed to pay 50 cents to get five minutes of hot water in the showers.   (NOTE: They’ve since raised the price to €19.90 and hot water is included.)

Years ago in the US – there were quite a few clubs that charged cheap; European Health Spa, Vic Tanney, Jack LaLanne, (eventually bought by Chicago Health & Tennis > which became Bally’s), 24 Hour Nautilus, Family Fitness etc. Some of them (not all) had questionable business models. A couple of them had sold Lifetime memberships for about $2,000 (and then closed the clubs), they then sold memberships that cost about the same (when Lifetime were made illegal on a Federal level) but with a $1 to $10 A YEAR renewal fee.                                                                                                                  Their concept: get as much money out of everybody and don’t care – make it a great deal and if the member needs to wait forty-five minutes to use a treadmill or can’t get into a class – so what…what are they gonna do – quit? And this was in the 70’s, 80’s and 90’s (in America only.)

As I stated earlier – in the eighties we introduced the Enrolment Fee / monthly dues concept which was much more expensive and made it very difficult for us to complete with this approach. You could, but it was difficult because of the price differential.

Which reminds me of a story:                                                                                 Supposedly, one of these chains had a club (lets’ say for conversation sake, in Las Vegas.)  They were charging $299 a year.                                                                                    A competitor (let’s say for conversation sake, Gold’s Gym) opened across the street and started selling for $199.                                                                                                     This p’d off the owner (who had VERY deep pockets.)                                                      His reaction was to begin selling his memberships for $1 a YEAR!                                 He didn’t care, he didn’t need the money, he wanted to prove to the competition that you didn’t get into a price war with him.                                                                            The Gold’s Gym closed in six months and the next day he went back to selling at $299 a year.

Not too many Club owners had pockets that deep or resorted to that aggressive positioning.                                                                                                                                You needed to differentiate your offering and position your club to be able to succeed.                                                                                                                                            (I learned quite a lot in those years about positioning your brand; the importance and the value.)

The difference between these two budget concepts is huge. Being deceptive in your business tactics is the key.                                                                                                Needless to say; I had a major problem with the Clubs that sold cheap and didn’t care – but McFit; truth in advertising, (what you see is what you get  – for a cheap price.)

I don’t have a problem with that.

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