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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 06-13-2012, 12:25 AM   #1
Andrew Bolliger
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Affiliate membership pricing/tips

Hey all, just trying to offer a few words of advice for the newer affiliates and any box trying a variety of things to increase membership and revenue. I see membership pricing and discount campaigns as a big issue for a lot of affiliates... you know how to train people, but how much should you charge and what if that seems like a roadblock for some potential clients??? Here is what I have learned in the last 4 years growing a box from nothing to 200+ members in a low income town of about of 150,000 people with an average household income of about $35-$40k/year.

1. Discounting the value of your service will not work in the long run! If you price too low you run into many hurdles. The first is not being able to properly support your membership base (ie buying gear, space, trainers, etc). Trying to undercut the other affiliates in town by 10% just makes you look cheap and will attract deal-seekers to you (who generally are flaky clients). People know the generally price reflects quality, a Lexus costs more than a Toyota for a reason! Don't be impatient, charge what you are worth and people will respect that! Overall, do the math and make sure you can properly support your business and family on the prices you charge!

2. In general, don't do "specials". Groupons, and other such discounted marketing campaigns appeal to people that are motivated to try things because it is a lower price, when the price goes back up most will quit (and your training time is wasted because they don't get sweet abs and don't tell all their friends about your box). Discounted specials also insult your regular clients because they are paying full price, it just cheapens your service! Discounts also give the impression that you are charging more than you are worth (the old mark it up and mark it down game). If people miss one discount they will wait until the next one comes around.... be consistent!

There are ways to have "incentives" that reward positive behavior instead of deal seekers. We ran a very successful challenge where current clients that wanted to participate had to bring in a new member, if both people completed 3 days per week minimum for 2 months then the current member got a small credit ($30 in our case).... and the new person got a discounted rate for the two months. This was based on using the membership, the reward should be for hard work. We gained about 20 new members and most stayed... and then brought in other people, snowball effect!!

3. Have options. Have an option for any situation. So a client says they travel a lot.... have a punch card that doesn't expire. So they are only able to train a couple days a week.... have a two day option that is lower price! Make sure you have a program or option for literally every excuse, if you don't... make one and call them back! My last resort is free Saturdays, everyone can afford that and once they drink the kool-aid, well you know! Also, couple discount should be huge, we charge only $50/mo. for dependents... you want the whole family crossfitting and that won't happen if they all pay full rate.

4. Share goals with your members, they want to help you! I would tell people my membership goals for the month/year... they always ask how we are doing and constantly bring in new people to help!

5. Be careful about "exceptions" and "trades". I learned the hard way that these only work if the client is a full paying member first and establishes that they are reliable and into Crossfit 100%. I tell all potential trainers and people seeking trades they need to be a client for 4-6 months before we approach that subject, that has worked!

6. Be nice. This means, don't charge the military guy on leave for a few weeks very much, you owe him! When someone wants to upgrade on the 20th of the month, give them the 10 days free and start charging the new rate on the 1st. These little things go a long way and will establish in your community a solid reputation for treating people as you want to be treated. Basically, don't do anything like a globo gym (no impersonal swipe cards, stupid fees, etc.)

Hope this helps, and I am sure they are a ton more tips but these things help in our market. Thanks for reading, if you have other idea's please comment!

Andy
CrossFit Salem, OR
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Old 06-13-2012, 08:27 AM   #2
Eric McKinley
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Re: Affiliate membership pricing/tips

Just to follow up here's a good article from pcworld about why Groupon isn't so good for small businesses... Andrew hit all the high points well, but I've seen these similar points made on a variety of sites regarding Groupon.

http://www.pcworld.com/businesscente...usinesses.html (SFW)
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Old 06-13-2012, 10:21 AM   #3
Mark Pieciak
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Re: Affiliate membership pricing/tips

This is great. Really good tips.
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Old 06-13-2012, 01:14 PM   #4
Zack Quilici
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Re: Affiliate membership pricing/tips

Freakin awesome tips ! thanks going to definitely use this advice!

had a question about your software on your website? looks awesome! just figuring out what I want to use for my website!
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Old 06-15-2012, 05:37 PM   #5
David Wisniewski
 
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Re: Affiliate membership pricing/tips

I disagree with your "don't do specials". My box ran a Ru La La promotion and got at least 20 new members from it.
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Old 06-15-2012, 05:48 PM   #6
Eric Montgomery
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Re: Affiliate membership pricing/tips

And how many of them were still there 6 months later?

We ran a Groupon-type promotion at CFSD when I was coaching there last year, and I think only about 25% stuck around after the month special ran out. I completely agree that bargain prices will mainly attract flaky clients and will alienate your existing clients who are still playing full price.
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Old 06-17-2012, 01:52 AM   #7
Aushion Chatman
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Re: Affiliate membership pricing/tips

Quote:
Originally Posted by Eric Montgomery View Post
And how many of them were still there 6 months later?

We ran a Groupon-type promotion at CFSD when I was coaching there last year, and I think only about 25% stuck around after the month special ran out. I completely agree that bargain prices will mainly attract flaky clients and will alienate your existing clients who are still playing full price.
This is moot without a contract system. We didn't have contracts back then so our stick around numbers could've been higher or lower with a contract system.

You also want to consider what numbers you are looking for, 25% may or may not be bad...

I can't say for certain the Groupon thing we ran jump started memberships increasing at CFSD, I'll just say it coincided with the turn-around.
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Old 06-17-2012, 08:02 AM   #8
Brendan McNamar
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Re: Affiliate membership pricing/tips

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Originally Posted by Andrew Bolliger View Post
Thanks for reading, if you have other idea's please comment!
So my question would be how is your profitability?

You have a lot of people but is there anything left over at the end of the month?

What are the % break down of your memberships by type?

How many hours a week are you working?

This is not an attack or an argument for higher prices. I had a big box open 1 mile from me with a slightly different membership plan. I'm trying to understand if I need to change my offering and if so how. I think these questions help us to understand if your 200 folks are worth it.

Thanks
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Old 06-17-2012, 08:53 AM   #9
Jim Pascucci
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Re: Affiliate membership pricing/tips

Brandon. Thanks for the thoughtful post.
Suggesting that the people who purchase a Groupon discount will not continue with you, while people who come in for a free Saturday WOD will, is logically inconsistent.
Having a discount program for every possible situation seems to be the same as "discounting", that you suggest won't work.
We did a Living Social deal and it worked out fine. There are changes I'll make to the next one we offer, having learned from this one. We informed our members of the offering--we got a much bigger response than we thought we would--and not one was concerned about it.
We stopped offering "free" workouts on Saturday, instead we did the Living Social and charge people to try us out. We're increasing the cost to try us.
We have two membership options and discounts on those for multiple people from the same family, employer, bar...yep a drinking buddy discount!
We allow our members to bring in a friend for free to our Saturday members only class.
I really like your idea of making sure your members know what the membership goal is and how they can help.
Thanks Again
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Old 06-17-2012, 09:25 PM   #10
Julian Gaylor
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Re: Affiliate membership pricing/tips

I'm just curious as to how these "free saturdays" work. I assume the are very basic otherwise it opens the door to many issues. How do you screen for competency of lifts/fitness levels or ability due to past injuries before throwing them into the session? Letting untrained people jump into sessions with complex motions seems like a recipie for disaster and some of the reason why CF has a bad name among some circles.

I am new to the CF world from a business sense and I do love it but am well aware of the negative images out there. Many of the respected boxes ive spoken to in australia dont let people participate before showing they can complete the movemesnts well or at least comepleted a funtamentals class. I cant help but feel that allowing people to just turn up and train isnt going to help the image.

just my 2c as a succesful business owner looking into CF
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