Tip #6: After The Trauma Ends, It Is Going To Be All About Trust

covid reopen May 16, 2020

Originally published May 5, 2020

There is hope in this industry and there is always opportunity in chaos. Gyms moving beyond the shutdowns will be positioned to attack, and those survivors will probably have the best September-May run in recent fitness industry history.

30% of the gyms now closed will not reopen

First the bad news. I believe if we stay closed until the end of June, we will lose at least thirty percent of the gyms currently operating in the U.S. It costs at least sixty percent of your operating costs to sit dark and there will be a large number of operators unable to come up with the cash needed to keep going forward.

There will be some bailout money for the chains, but the amount needed to save them will be staggering and slow to come. When they do reopen, or better said if they do reopen, most will come out of the relaunch slowly, requiring months of time to re-staff and regroup.

If they do stay closed for at least three months, they will also have a destroyed membership base to contend with and it will be as if they are starting over again from their first days, although now you are reopening with older physical plants and clients who will not necessarily be standing in line to get back in.

Most owners don't understand that the members who weren't coming in before the shutdown are going to destroy their post shutdown economics. For example, if you have sixty percent of your clients who did not use your gym eight times or more per month prior to your closure, and their contracts are cancelled by your billing company, you should not expect these clients to automatically reappear when you reopen. They were not using the gym prior to closing and now have a pass out of their membership so it is doubtful they will return.

Gym owners with single units or small groups will recover the fastest

Multiple gym owners will especially be hard hit. They will be using managers to rebuild a business where trust is low and the competition is keen to keep you closed, although if we do lose thirty percent, there will be new clients drifting in the market again with no home.

Franchises will also stumble out of the reopening. It will be the rare franchise that can take a model based upon a supposed consistency and be strong enough to modify it to fit what is next in the industry. The old rule of what made you successful years ago is the very thing that could kill your business now and especially applies to franchise groups who do not move fast enough to take advantage of new market conditions.

Two types of members will emerge

The membership will split into two distinct components: the under thirty-six age consumer, the ones who stood on the beaches in Florida during the virus believing they are bullet proof, and the over thirty five consumer who wants a gym, but whose concept of what a gym has to be to get his business has changed. Here is what the next consumer will want from us:

What members want in their new normal

Trust. It is not going to be about the best workout, the most equipment or the most classes, it will be about whether or not I trust my health to you and your team.

One on one and small group, meaning up to four, will be hot again. The gym will have to feel individualized for these people. For example, I have been teaching a pod system for a number of years where we have gyms within gyms, meaning we set up three hundred-foot spaces where up to four people can train together without having to be manipulated around a full gym.

In other words, they do not need to share equipment with anyone, something which will be strong selling point in the future. I come in, got to my designated space, and the equipment there has been cleaned and is ready to go. I do not as a client want to wait for someone else to use whatever they are using finish, then I immediately pick it up and start using it, which is disgusting in today’s environment. I do my thing, using equipment only I, or a small group, have touched.

The team/boot camp approach is not dead, but it will be damaged. You would have to a fairly out of touch human to want to work out with thirty people in an eighteen- hundred-foot gym sweating for an hour and sharing equipment.
Yes, there will be those who do not care, but there will also be an entire generation of clients that doubt this is what they want from their gym today. The team players will have to find a way to create space among the clients, individualize tools and keep the equipment clean between sessions. For example, you may need to invest in three months’ worth of non-latex gloves to give every client with stations in the gym where I peel them off when done and sanitize.

Clean, sparse, sterile, almost an/sep/c will sell the client. The old cluttered gym from the 1980s packed full of equipment in every corner is dead. I walked into a restaurant I frequently visit to pick up take out and while I was standing there, I noticed their front counter/workspace. It was cluttered, with everything from take-out menus to gifts the clients have left, to a bowl of candy for the patrons to take home as they leave... and it was disgusting. I stood wondering how you could ever clean that space with all that accumulated junk from all the years they had been opened, and then realized you could not ever clean that space adequately.
This problem is what most every gym in America has, too much stuff accumulated over time and we stop seeing it, but the client will hate this clutter because your gym can never be cleaned, sanitized or kept safe due to the layers of accumulation.

The clients will need spacing to feel safe. Too much equipment is too much. If you look at a typical chain, where treadmills touch each other, can you imagine any client is going to want to stand a less than two feet away from the next sweating human breathing hard in his space?

Start thinking of the eight-foot center rule. Take a tape measure and place the end in the center of a seat if you have fixed equipment then measure eight feet out in a circle. The nearest seat center needs to be eight feet or more away.

Your front door is an obstacle. I walk up to enter and stand staring at a door handle touched by a hundred other people that day. I walk in and there should be a hand sanitizer unit on a pole right inside the door, and one by each pod or workout area, and one in the bathroom along with the soap. People will be wary, and you need to anticipate all contact areas where the client might cringe.

Owner operators, not investors, will win

The next years in the gym business will belong to the training gym that can individualize the workout process. I go to your gym, get my workout in an exceptionally clean environment, and can control my contact with the other members. If I feel good about team or boxing, I can do it, but if I am uncomfortable, then I have options too, something the chains and most franchises will not be able to adapt to quick enough.

Also, the big issue staring at us is the growth of the industry. For the last several years, growth for the chains has been driven by easy money from the private equity groups. This growth is fueled by the need to invest, not triggered from a surge of demand from memberships. The mainstream segment is growing too fast and there is an overbuilding in that segment for the under $39 gym.

Training gyms do not have this issue. Most are started in markets where the trainer has a base, or knows the market, and only needs a few hundred clients to be successful, versus a chain that might need three thousand clients to make the business plan work. Growth fueled by client need is sustainable. Growth fueled by investment money over saturating a market will always peak, then crash, as it has going back to the 1960’s in this industry and the original Bally’s days.

The economy is also a worry, but there is hope there too. This recession is self-induced, meaning the government put the brakes on the growth as it has been for the last twelve years. This is not the same situation as the Great Recession in the earlier part of this century that was market induced.

Gym operators will come out the other side of this with less competition, a different consumer, and a model that fits what people will want going forward. The economy will stagger a little, but we should be raging in the fitness industry in the fall and the January- May window might be a time of records for us.

Think of your reopening in three phases

  1. What are you going to do now to get ready before given permission to open? 

  2. You will probably have about two weeks to a month’s notice when you can open again. What is your plan during those two weeks? 

  3. What will the first three months look like once you are open?

The consumer will be different and expect your gym to change to meet their new needs.

  • You will have to offer a controlled environment where the consumer is part of the socialization but can be more isolated during their workouts.

 

  • One on one will rise again, but most gyms no longer have the ability to offer this service. These clients will not want to share equipment or be dragged through a gym waiting to share equipment.

 

  • Team will suffer in many markets. You will have to learn to offer alternatives to team that isolate the client more into smaller groups. Yes, those in the 24-36 age group that believe they will live forever will not be affected, but many of the traditional group clients will want different options.

 

  • Small group, limited to four and done in pods, or smaller individual gyms within a gym, will be a strong offering.

 

  • The gyms should be redesigned during the down period adding more isolated training spaces. Think minimalistic when it comes to gym design when you reopen. Stark counters, nothing on the walls in the offices, no exposed storage, sanitizing stations throughout the gyms and clutter free gyms are a must. How does the client even get into the front door without touching the handle? Think it through, but you cannot open the same gym you had when you shutdown.

 

  • Programming will be secondary to the trust factor. If the client believes you are clean, he or she will come back. If you had cleanliness issues prior to closing, you will hurt reopening. Paint the entire gym, get rid of anything that can be tossed, replace worn equipment if you can, and let the clients see a modern, lean and clean gym.

 

  • You will have two weeks to a month notice to reopen. This is your marketing phase. You need to reopen with a fully launched marketing plan, a plan to reach out to all clients during this last few weeks, and a plan to reach out to all former clients who may now be without a gym.

 

  • Everything should be done now second phase. Snail mail letters should be ready to go to current members, former members going back to 2018, and missed memberships going back to the start of 2019. People will be shopping for a new gym and you need to be top of mind.

 

  • If you are cleaning and remodeling in this last two-week time period, you are too late. This should be about last minute staff training, marketing and getting stocked again to open.

 

  • The first ninety days will be about the basics. This is where you will also see the second wave of club failures. Gym owners expecting their entire membership to walk back in will be disappointed. If you did not do the work while you were closed, there is not much you can do once you are opened. You are basically starting all over again minus your non- usage clients. Your rent will reappear, payroll starts again, and you will need a fresh three- months of operating capital to get back on your feet.

 

  • Many of you that stumbled during the closure probably now know the need for reserve capital, membership contracts and why team training alone will not be as effective going forward.

 

  • When you reopen, go back to the basics of the business. You are getting a second chance and most of what I have been teaching during the last several years is more important now than it ever has been.

 

  • Online training saved us while we were closed but will not save you while you are open. Most of you found online training takes as much, if not more, work than being closed. The client needs and want socialization, which is why they still connected with you and why online parties and training works. The client is not with you for the training, but for the contact and guidance, preferably done in person in your gym.

 

  • The gym as a social center in the community will never be more important than it will be in the next year or so. Clients want more than a session and to go home. They want to belong to a community, something most owners only discovered once they were shut down.

 

  • Getting together with healthy people in a safe environment is what will sell to the client. Socialization in a controlled, beyond clean environment three or four times a week is what we are really selling the client, not results and certainly not programming.

 

Do not just sit and wait for this to pass through. This is your chance to reset now and open stronger than you closed, but you, and your gym, have to be different to capitalize on the client who will standing at your door in the fall.

Close

50% Complete

Get Your Free Copy.

Live Your Dreams

* AFTER YOU CLICK SUBMIT, CHECK YOUR EMAIL AND CONFIRM YOUR SELECTION. THE PDF WILL DOWNLOAD AFTER YOUR CONFIRM  *