Many gyms have begun offering ClassPass as a way to cater to consumers who can’t quite commit to one location or business. Jarod Cogswell, the founder of Enterprise Athlete, Inc. and a managing partner of FIT Academy, thinks this could be a mistake.
Here, Cogswell offers a few things to keep in mind before plunging into a ClassPass partnership.
CS: Why do you think ClassPass is a negative for the industry?
JC: While ClassPass is deemed “consumer-centric,” it negatively impacts the number-one factor for any successful value-driven club or gym, and that is our culture. You can’t maximize relationships with these guests and in general, they don’t gel with your everyday members and clients. They’re visitors and our business models are not based on heavily discounted guest revenue. Are these discounts fair to our full-priced, committed clients? Furthermore, instead of joining our facilities, these savvy fitness enthusiasts jump around from gym to gym. They use us a few times a month on the cheap, they don’t commit to an on-going relationship and they don’t join. Why would they?
In addition, as ClassPass expands its network of facilities, it creates more competition for short-term guest revenue. The participating facilities in a specific market are forced to compete for those guest fees, so now you lose out on a potential member and guest fee revenue.
CS: Say a club is considering partnering with ClassPass. What are the top things they need to consider?
JC: To be upfront, I was fooled by ClassPass. As a high-end, startup facility, I thought they would bring us potential memberships, inject energy into our classes and provide some additional revenue. Then when I asked a member of theirs whether or not they were going to join, she said, “Why should I? It’s cheaper using ClassPass and I can go almost anywhere I want.”
After hearing that very answer and considering our loyal members and business plan, I immediately decided to trade in the guest fees and quit. What most owners don’t realize is that they are shooting themselves in the feet and damaging the future of all brick-and-mortar owners by participating in ClassPass and helping them grow. Clubs are getting a quick discounted buck now, but unknowingly weakening their business and consistent income away. Many don’t see or feel it now, but they will.
CS: What else would you like other club operators to know about ClassPass?
JC: Remember your purpose as a fitness professional. We change lives through education, motivation and inspiration. Get back in the trenches and do everything possible to protect your business, its culture and move it forward without [ClassPass]. It is the new Groupon. Let’s think big picture, stay strong and hungry for continued success, and “just say no.” We didn’t need ClassPass yesterday — why do we need them now?
Stay ahead in the fitness industry with exclusive updates!
Rachel Zabonick-Chonko is the editor-in-chief of Club Solutions Magazine. She can be reached at rachel@peakemedia.com.
We’ve gained quite a few members and personal training clients from classpass at our facility. I think the fact that this guy couldn’t answer the question “why should I?” Is his downfall. If you offer great services and an experience they can’t find elsewhere, many people WILL join so they can come more than 3x per month. There will always be some customers that are looking for a deal rather than an experience, but since you can restrict the number of classpass users to each class I don’t see how having every space filled with a few cheaper customers rather than 5-10 empty spots is a problem. We’ve had some classes that had such poor attendance before classpass that we were gonna drop them, but we’ve been able to completely fill them now and that means an instructor can keep teaching and getting paid. There will always be competition and new cheaper options for customers, but one thing that will never go out of style is offering great service and a great experience. Focus on that and I don’t think you’ll struggle as much to convert clients.
Jose… When you say “quite a few”, how many are you honestly converting per month?
To answer “Why should I?”… The woman stated that she “loved” our gym, but her point was that we were a more expensive option than ClassPass and she preferred to visit the variety of facilities that accommodate a larger variety of programming and amenities vs. one facility.
Answer this for me… If everyone was on ClassPass would your business be as financially successful as it today? Dig deep on that one.
I don’t have an exact number of conversions because they don’t always tell us, but we’ve converted at least 27 in 7 months plus 6 personal training clients. So roughly 5 per month. We have several I am aware of with dual memberships because they want to come to our facility several times per week but occasionally visit others. Your question “if everyone was on classpass would my facility be as successful financially” doesn’t require “digging deep” to answer that’s a no brainer with a simple answer, “of course not!” But it assumes two highly unlikely scenarios. A) most customers will only want to come to my facility 2-3x per month, and B) most people prefer a classpass type membership. If people are really ok with coming to your facility only a couple times per month then they don’t really “love it” as your example customer indicated. They only like it as much as other places. I used to struggle with answering the same question from personal training clients early in my career and found it difficult to keep clients longer than a month or two. Once I learned to answer that question why they needed me more than a class or another trainer my client loyalty exploded and turnover dramatically reduced. That was a question that required me to “dig deep.” I’ll let you have the last word since I really wasn’t looking for an argument, merely wanted to offer a counterpoint to your opinion. I will say we’ve taken some classes off of classpass listing because they got too full on their own, and this is a reality recently presented in a New York Times article where classpass customers are beginning to complain about lack of access to desired classes. Can classpass survive that reality in the long run? I don’t know the answer to that, but in the meantime I’ll keep taking advantage of the huge exposure we gain and the modest extra revenue stream. By FAR a better resource than groupon.
PS, so there’s no misunderstanding, I highly respect you and anyone else out there who is in this struggle with us to make a successful small business in light of ALL the challenges we face so I wish you nothing but the best.