“My husband and I have been enjoying free memberships at other gyms for the past three months.” This is Exhibit A – evidence of why the practice of giving away for free doesn’t work out, literally and figuratively. This was an unsolicited statement from a customer to our manager after she and her husband decided to return to X Fitness after three months of free fitness elsewhere. It’s only one example of the countless case studies in our 15 years of research that provide compelling evidence of a Top Five Blunder I committed when I opened X Fitness from scratch as an independent start-up gym over 15 years go. The real-life David versus Goliath fight to survive is tough enough without entrepreneurial sabotage. Giving away for free ranked in the top five practices of my entrepreneurial sabotage that almost killed our gym. We solved the problem just in time to prevent X Fitness from increasing the mortality rate of startup fitness businesses.
Giving things away for free was the second worst mistake I made when I started X Fitness in 2001. Giving away free trial memberships, free coaching, and free intellectual property online threatened the survival of X Fitness until we investigated ourselves and solved the problem – we stopped giving away anything for free based on empirical evidence resulting from our internal investigation. Giving away for free had a cost. We paid a steep price. Giving away for free cost us a fortune.
Our research showed that giving away for free was killing our gym for the following reasons:
1. Giving away for free is an act of desperation.
2. It conditioned customers to expect free.
3. It devalued our gym and fitness in general.
4. Our gym was branded as a charity.
5. The lost income was never recovered.
6. There was no positive relationship between giving things away for free and increased sales.
7. Conversely, there was a direct relationship between our no free give-away policy and increased sales.
8. Free trial membership is a security risk. Those who don’t buy a membership cannot be trusted in a gym. Non-paying members ‘”trying out the gym” are a liability.
9. Free is the easy way out of marketing and selling. It’s the painless substitute for doing your job.
10. Our no free give-away policy saved X Fitness. The moment we stopped giving away free trial memberships, free coaching, and free intellectual property, X Fitness turned around.
I wrote an e-book called Freedom or Free Dumb explaining our internal research findings – the harm by giving away for free and the benefits of stopping it. In Freedom or Free Dumb, I explained the struggle to balance the need for the freedom of inner peace through altruism – the need to be generous, to the need to make an impact by volunteering to coach student-athletes – with the need for business survival in the fitness business, the need to not be free dumb in a business that is as tough as there is.
In Freedom or Free Dumb, I calculated the potential millions of dollars I’ve lost by giving away free football coaching, free strength coaching, free trial memberships, and free intellectual property online for 40 years. The freedom has been the #peace of helping countless student-athletes reach the next level but the staggering investment brought bare minimum return to X Fitness. Free coaching, free memberships, and free intellectual property directly threatened X Fitness. It was irresponsible to my family and business to give away incalculable income while my business suffered.
Since X Fitness opened 15 years ago, several new gyms have opened in our area. Social media exploded three years after X Fitness opened. I mistakenly believed that our main competition was other gyms. I learned that it wasn’t true then and it is not true today. Other gyms are not our main competition. Never has been and never will be. Our in-house research shows that other gyms are not even in our Top Ten main competitors. Last month, I wrote that our main competitor is inflation including, but not limited to, skyrocketing hydro bills that are contributing to nearly unaffordable living in Ontario. Our second toughest competitor is the fitness industry’s compulsion to give away for free.
No industry gives away more for free. Social media is flooded with free fitness intellectual property. No industry comes close to giving away value the way the fitness industry does. Every time a new gym opens, we have to fight the free give-aways by new gyms where no one gets paid for months. Not them, not us. There is no way to fight free. Everyone loses. No one generates income when gyms give away weeks and months for free.
Free coaching is destroying the coaching industry in fitness and all of sports. I have been blessed with dream jobs including policing and college teaching. No one asked me to work for free. No one expected me to work for free. Any hint of working for free was strongly criticized by unions for killing job opportunities.
Here’s Real-Life Lesson #1,199 that I’ve learned in 15 years as a gym owner – desperation is the worst condition you can suffer in the David versus Goliath fight to survive and thrive in the independent start-up gym economy. Desperation makes you lose – yourself, your rationality, your common sense, income, and eventually your business. Desperation is your worst enemy as a gym owner. Left unchecked, desperation is the biggest obstacle to short-term and long-term planning. Desperation leads to chaos – chaotic leadership, chaotic marketing, chaotic branding, and chaotic selling.
The good news is there are proactive and reactive solutions to prevent desperation and cure it when you suffer it. Proactive measures are the key to preventing desperation. In reality, you have to combine both proactive and reactive measures but it is easy to ignore the proactive approach and become exclusively a responder. Proactivity in any profession is tougher than being a responder. Our in-house research has revealed a proactive methodology that has been essential to our independent gym survival for 15 years. Some of that methodology will be explained in future articles.
The fitness industry is a tough business. Never stop learning. Stop learning, stop earning. Be a life-long learner. Commit to continuing education. Read, watch, listen. The intellectual pump is as important as the physical pump. X Fitness is committed to lift through Blunt Talk Podcast. We have had a number of fitness professionals as guests. Each episode is free, permanently archived. Each guest is a soul-lifter.
Please visit Blunt Talk Podcast compliments of X Fitness at: www.ginoarcaro.com or www.xfitness.ca or http://blunttalk.libsyn.com/
X Fitness and Blunt Talk Podcast are committed to lift. There’s enough depressing news. We won’t contribute to it. Our 135 guests are guaranteed to lift.
Blessings & all good things.
Mill Pond Publishing Inc.
30 Mill Pond Drive
Georgetown, ON L7G 4S6