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Zogics Blog

Top Reasons Why Gyms Fail

March 03, 2017 By Zogics

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Fitness clubs are not all created or operated equally. Some feature top of the line fitness equipment. Others are positioned in busy city centers with an abundance of prospective customers. Certain gyms are staffed with true fitness gurus who love their jobs. The bottom line is that there are all sorts of nuances that determine whether a gym stands the test of time or folds.

Michael Scott Scudder performed extensive research to pinpoint the top reasons why gyms fail. He studied nearly a full decade worth of data pertaining to more than 8,000 fitness centers. Below, we flesh out the top reasons for gym failure as identified by Mr. Scudder.

1. Insufficient Funding

Too many gym owners make the mistake of funding little, if anything, beyond the necessary month-to-month costs to keep the facility's doors open. Some of these clubs lacked adequate funding to begin with. Others did not do enough to generate revenue streams that could be reinvested in new equipment, talented staff, marketing efforts, renovations etc.

If your gym lacks an effective sales staff or if you do not have a sales staff, the business could succumb to undercapitalization. Do not rely on the frequent offering of specials to recruit members. Hire the sales staff necessary to bolster your membership enrollment, add high-quality equipment on a consistent basis and maintain your focus on building a lasting business. Follow these guidelines and you will maximize revenue, allowing for a substantial reinvestment of profits as time progresses.

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2. The Failure to Establish an Identity

Fitness clubs that attempt to please every type of member almost always fold. It is time to pick an identity. Specialize as a gym that operates in a niche and you will stand a better chance of recruiting new members and retaining existing members. A gym that serves a particular niche almost always ends up with a fiercely loyal member base. The same cannot be said of a gym that attempts to provide universal appeal to the masses. Serve those in your niche and you won't have to resort to constantly lowering membership fees or conducting extensive marketing campaigns to keep the doors open.

3. A Consistent Marketing Message

Part of establishing a clear identity is developing a consistent marketing message and sales strategy. Your marketing efforts play a major role in your identity as a brand. Pick a marketing theme and stick with it so prospective customers remember your gym name, motto, logo and other points of identification.

Key in on the value you offer and communicate it in a clear manner through consistent advertising. This message should be replicated across all marketing channels from traditional outbound routes like TV, radio and newspapers ads to inbound routes like social media, mobile apps and your gym's homepage.

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4. Fierce Competition

Recruiting new members and retaining existing customers has grown increasingly difficult with the rise of massive budget gym chains. These large countrywide club chains are in major cities as well as suburbs and even some markets near rural areas. If your facility's equipment is outdated or if your pricing is significantly higher than your competitors, you will inevitably lose market share. Update your gym equipment, establish a marketable brand identity and hammer home your value proposition. It is the only way to compete with the big boys.

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5. The Lack of a Clear Focus

If management lacks a clear focus, there will be problems. Management should key in on developing and executing a strategy for successful operations and continued growth. The facility should have a well-defined talent development system that promotes hard-workers through the ranks. Job openings should be filled after careful credential reviews. Hastily promoting a lower or mid-level employee to a position after his superior quits or is terminated is a mistake. If you rush to fill an open position, it is almost guaranteed to backfire at some point down the line. Employee performance should be reviewed at least once per year. Reward those who hit specific workplace performance benchmarks with raises, promotions, extra benefits or other forms of positive reinforcement.

The most successful gym management teams have developed a long-term business strategy that employees consider to be realistic. This strategy should be clearly defined, attainable and reinforced with employees at every level of the organization. In the end, a gym with consistent profit margins, a well-compensated staff and satisfied members will stand an excellent chance of reaching its long-terms goals. If your facility is lacking in any of these areas, it is time to review your focus, make the necessary changes and possibly redefine your long-term aims.

FILED UNDER: industry news, management

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