5 Questions to Ask Yourself Before Running a Groupon Deal at Your Gym

by Nicole Brazier | July 26, 2018 | Gym Management | 0 Comments

 

To Groupon or not to Groupon?--That is the question. At least it seems to be the question that floats its way through the minds of gym owners and staff as boxes evaluate membership, profitability, and growth.  Groupon deals are marketed to businesses as a tool to grow awareness and increase immediate sales. Groupon's model is marketed to customers as a way to strike a deal on a product or service they otherwise may not have considered - be it for lack of interest or lack of affordability.

But the possibility of attaining a whole crew of new members in a quick minute creates a divisive situation for gym owners ultimately seeking steady and sustainable growth. Gain immediate new members, cash flow, and popularity? Or risk alienating your current membership base by welcoming newbies at a discount, while potentially undervaluing your coaching services? Those are the big questions. It may be easiest to answer them by looking at these 5 smaller questions first:

 

1. What do your immediate business goals (and finances) look like?

There’s a lot to consider in terms of what your gym is in dire need of. And if the answer is money, like NOW, then the groupon model can be pretty enticing. You’re essentially not spending any capital, per-se, if you’re inviting newbies to join classes that are already on the schedule. And you’re making money in the short-term with no long-term commitment to the people walking in your door (maybe a week-long or month-long trial period depending on what your deal is).

 

2. How much are you willing to invest into the Groupon model?

With some extra consideration - attentive coaching and appropriate programming - forays into the Groupon world can be successful. “The first time, we did it right and ran it in a good format and picked up 35 new, monthly members out of the 200 or so that purchased. We still have a bunch of them 5 years later,” says Erik Miller, owner of Charles River CrossFit (est. 2011).

This means follow-up work too. Making sure members are continually engaged in your programming and community, and leveraging resources like data-tracking software so they can keep an eye on their own improvements sets new clients up for success, and makes them want to remain a part of your gym.

 

3. Are you willing to sacrifice your resources to make discounted onboarding work?

With new recruits comes new responsibility. Inexperienced athletes require specific programming, special attention from coaches, and perhaps a full introduction to the world of fitness. Overall, it’s a big effort. For some, it’s a pretty big drain of resources… and an overdelivery for the price. “The reason why I never did it was because I believe in our product and the price that we set. We pour our heart and soul into coaching whether it be a brand new person or a veteran,” says Melinda Metten, owner of CrossFit Bangor (est. 2011). “I feel selling ourselves short on what the value of our product truly is, is bad, and somewhat false advertising. I also feel that people wouldn’t stick with it after the Groupon expired which may mean that someone never truly bought into the amazing program that CrossFit is. It’s a lifestyle. A temporary Groupon price doesn’t showcase our mission which is to guide humans to the best version of themselves, which is a process and lasts a lifetime. We are here to create lifelong health not just a temporary Band Aid.”

 

4. What happens if those potential new clients don’t stick around?

Potential “box-hoppers” who travel wherever the discounts take them are a common concern for gyms hoping their members invest as much in them as they do in their members. “We actually tried Groupon for a while and realized that we were trying to sell a high value service to people looking for the lowest possible cost. We did find some very good people in that, but generally found that we were spending a lot of time working with people that didn't appreciate our value,” says Steven Williams, owner of CrossFit Banshee (est. 2014).

“The second time [we ran a Groupon] there was less excitement,” says Miller, “but I think it’s because the coupon thing got much bigger and it really is just discount hunting now. Could also be the market saturation for fitness got worse… Regardless, we didn’t regret trying it.

 

5. Are you prepared for the post-Groupon deal aftermath? (good or bad?)

“Not regretting it” may best approach the Groupon model overall. Understand the risks associated with it, and give it a shot to see what successes it may bring to your box. The possible downsides - an unsustainable cash flow, a lack of dedication or long-term interest from members, and a general misunderstanding of CrossFit due to the undervaluing of services… may all be worth it for a learning experience and a handful of athletes who decide to stick around for a full membership. Or it may not be worth the time, energy, or side-eyes from full-price-paying-members.

The silver lining here is the realization that in some cases, folks who purchase Groupon deals are sometimes people who otherwise may not have been able to afford the experience. And in the process, they could have picked up some lifelong tips for improving their overall health and wellness. At the end of the day, every time someone steps into a gym it’s a small success for the overall community. So it may be less of a decisive question and more of a situational thought: is it a good idea for your gym to run a Groupon deal at the moment? And what’s the best way to handle the outcome, regardless of its success rate? The answers will vary, but if you’re prepared you likely won’t regret trying it out.

Do you have experience running a Groupon Deal at your gym, or have you been considering it? Share your thoughts in the comments below!

 

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Nicole Brazier