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Running a CrossFit Facility Tips and guidance on how to open and operate a CrossFit gym.

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Old 10-12-2011, 12:24 PM   #1
Jason B Cox
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Current take on Groupon/LivingSocial etc.

I understand that the Groupon model is pretty broken and they will likely fail.

I also understand that in the long-term they are not a way to to effectively seek the clientele that you really want, because what you really want is not bargain-shoppers. However, I am little bit hung up on the idea that it is good for exposure, and it might be a good way, if only for a new box, provided you set it up properly.

I am thinking of the way that Rick from Alamo Crossfit did it in his box, which he talks about in his book. They did it just for the Foundations program, and even one visit made the coupon fully redeemed, so that people couldn't ask for a refund if they didn't like Crossfit. And they made a new class just to handle these Group-ies, so that they didn't overrun the existing members.

I would consider doing it that way, provided that the wisdom of folks here didn't tell me not to. Also, it would not be Groupon, but a competitor that allows more immediate payment (I believe Groupon makes you wait 60 days)

Our situation is that we have recently moved into more physical capacity and we could use a boost to the tribe in order to get referrals going. As long as we're able to throttle the Groupon traffic and deliver a good experience to everyone involved, it could work, right? As a one-time thing?

I'd love to hear experiences. I am fully aware that ultimately the best strategy is to actively seek out the clientele that you really want, and get them to pay you the price you want to charge. I am looking at this as a one-time boost to get numbers up. I am not talking about discounting the brand or cut-rate CrossFit. I am talking about a coupon applied to a specific Foundations-type program that will get people into the gym to experience a taste of CrossFit .
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Old 10-12-2011, 03:11 PM   #2
Casey Connor
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Re: Current take on Groupon/LivingSocial etc.

As a former regular grouponer I can assure you that 90%+ of the grouponers out there only use/buy the goods/services because they are at a discount. These are people who make a game out of seeing how much they can get for as little as possible. Its highly unlikely that they are willing to spend $150+/mo when they can get free classes for a week at most globos. If you chose to do it I highly suggesting putting a cap as to how many people can purchase it and then make them reserve class space in weekly or biweekly blocks (depending on how much of an on ramp you do).
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Old 10-13-2011, 09:05 AM   #3
Brad Gerbrandt
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Re: Current take on Groupon/LivingSocial etc.

We did one where we sold our on ramp for $75. Fairly expensive for the average deal so we only sold about 30. Of those, only 16 redeemed. Of those 16 only 2 stuck around. So no it's not a great way to attract members but it was a great way to fill up the On ramps and a quick source of cash. Plus it was great for exposure. We had 2 people come in and pay full price because they hear of us through the deal but didn't get around to buying it.
Crossfit might not be the thing for the person taking the class, but they talk to people and they tell others about it...
We didn't go with Groupon but with a competitor as well (one that took a much smaller cut). We are thinking about doing it again.
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Old 10-13-2011, 09:16 AM   #4
Jason B Cox
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Re: Current take on Groupon/LivingSocial etc.

Casey, thanks much. I'd definitely have it capped pretty low so that it doesn't overrun the gym and set it up so that it expires quickly and if you take even one class the coupon is redeemed.

Brad, that is exactly what I was thinking of doing - kinda structuring it so it is clear that we are offering a groupon on the foundations program only, not on regular classes, and make it really clear that this is "just a taste" of what the gym actually offers. I would expect the bulk to not stick around, but a handful might like the taste and stick around. Maybe even do a simpler version of Foundations (i.e. no rowers) designed to minimize wear and tear on the gym. Ultimately I think it's the atmosphere and the coaching and the team feeling that get people into it, so if you could find a way to expose a decent chunk of people to that ....
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Old 10-13-2011, 04:02 PM   #5
Aushion Chatman
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Re: Current take on Groupon/LivingSocial etc.

We did it at Crossfit San Diego partnered with Crossfit Univ of San Diego.

We sold 47 to our location, of that 42 have been redeemed (the deal ran in July)

To date we still have 9 people that stuck around! I was hoping for 5-10% we are sitting at 20%.

To me that was well worth it, and there was definitely exposure..but our deal was through NBC so we got to shoot a 90 sec promo that aired on TV...I'm guessing we had more exposure than a GROUPON deal but I'm not sure.
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Old 10-13-2011, 08:04 PM   #6
Matt Thomas
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Re: Current take on Groupon/LivingSocial etc.

I found the CF gym I go to through groupon...I'm glad I did.
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Old 10-13-2011, 11:09 PM   #7
Lisbeth Darsh
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Re: Current take on Groupon/LivingSocial etc.

Lots of discussion on Groupon by affiliate owners here: http://www.crossfit.com/cf-affiliate...ay_110917.html

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Old 10-14-2011, 12:02 AM   #8
Aushion Chatman
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Re: Current take on Groupon/LivingSocial etc.

Quote:
Originally Posted by Casey Connor View Post
As a former regular grouponer I can assure you that 90%+ of the grouponers out there only use/buy the goods/services because they are at a discount. These are people who make a game out of seeing how much they can get for as little as possible. Its highly unlikely that they are willing to spend $150+/mo when they can get free classes for a week at most globos. If you chose to do it I highly suggesting putting a cap as to how many people can purchase it and then make them reserve class space in weekly or biweekly blocks (depending on how much of an on ramp you do).
I don't deny there are always folks who just want a "deal" but your 90+% number is in direct contrast to the 20% that we still have sticking around...Breaking it down further the 20% accounts for 9 of the 47, we had 1 girl leave us because she decided to enlist in the Marine Corps, we had one girl who fell in love with Crossfit and now goes to an affiliate much closer to her home, she moved about 30 mins away. We have another who I"m not counting because she is currently underway in the Navy, she is a member, but I was trying to be conservative with my numbers. But if you count all of those we had 12 of 47 (really 42) sign up with us for at least 2 months of membership.

The other great thing is that many of these folks were friends/family of our members who had been trying to get them to come for months. Just the joy it brought to some of our long-term members to finally get so-and-so off his butt and into the gym was enough for me to say it was worth it.

Lastly I'll say we knew what we were doing it for. Simply for marketing at a time when it made sense for us. It has paid dividends for us, we were approached by Google soon after to do one with them and we turned it down because it didn't make sense at that time. If the timing works again for another marketing event such as that deal, we'll do it again. Bottom line, we lost NOTHING running that deal, it did not devalue our service...In fact we have continued to grow and will be raising rates again in two months.
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Old 10-10-2012, 07:39 PM   #9
Bryan Hood
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Re: Current take on Groupon/LivingSocial etc.

What are the other options besides Groupon? A few of you mentioned others that paid quicker and/or took a smaller cut. I'm thinking about doing that for my intro class. We are currently in 4000 sq/ft and will be moving into 8000 sq/ft in a month. I'm mainly interested in the cash up front to purchase more equipment for my steady members. BUT!!! The exposure and potential new members are a super plus.
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Old 10-11-2012, 01:21 AM   #10
Kenneth Cheung
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Re: Current take on Groupon/LivingSocial etc.

(disclaimer - i'm a professional marketer, specializing in online marketing, Groupon (UK, then Mycitydeals) once offered me a job, which i declined, just before the (failed) IPO)


Groupon is like steroids, it'll give you massive boosts but at huge cost, and once you stop doing it, the residual gain is limited.

IMO, as a marketer, how i would use Groupon for a crossfit gym is as follows -

1. free or heavily discount intro class.
2. at the end of the intro-class, a moderately discounted on-ramp class.
3. full price 'normal' classes.

to incorporate groupon, what you need to do is find out the 'conversion rate' of each of the above 3 stages, conversion rate being the number (as a %) of people who transition up each stage of the ladder.

you than use these conversion rates to stagger your pricing, costs and number of people per class so that you, at the very least, break even.

next i would use this as a 'tactical marketing tool' by this i mean, not doing it all the time, but only during key periods, when i know the probability of first timers and people who want to try are likely to be greater, i.e. Post-Xmas, and in the run up to summer.

what i'd be aiming for is a small boot in profits, awareness of my box and hopefully a handful of new members. so my pricing would mean that my 'groupon-classes' have a built in margin that already takes into consideration the fact that those attending are a little 'poor quality'


what i would also avoid, is making the classes absolutely free, big discount is ok, 2 for 1 is ok, free protein shake after workout is ok, but everyone still needs to pay something.


lastly, when negotiating with groupon, i'd get them to do a long term deal, such as i'd do this campaign 2/3 times a year if they reduce my overall margin-cost that i pay to them.
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