How to Grow Your Gym in Uncertain Times

Economic uncertainty is coming, but that doesn’t mean your gym has to struggle.

In fact, the best gym owners use challenging times as an opportunity to grow, refine their businesses and come out stronger on the other side.

In today’s episode, Two-Brain founder Chris Cooper lays out the exact steps gym owners can take to thrive during an economic downturn.

Slashing membership rates is the wrong move—Chris shares smarter strategies for growing top-line revenue, from prioritizing high-value services to improving retention by strengthening relationships with existing clients.

He also explains how to cut unnecessary costs before you’re forced to and optimize your sales process to convert more leads.

Tune in to learn how to build resilience, stay ahead of financial challenges and run a profitable gym—no matter what the economy brings.

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Gym Owners United

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01:19 - Go upmarket, not down

05:34 - Market for retention

08:44 - Improve your weakest metric

10:38 - Grow top-line revenue 20%

13:17 - Plan for the worst, hope for the best

16:26 - Cut spending & maximize ROI

19:42 - Lean on your network

Transcript

Speaker 1: 0:02

Economic uncertainty is coming. We don't know how bad it will be, how long it will last, or how it will impact your gym. In fact, you might not even worry about economic uncertainty, but you can be sure that there's going to be some among your clients. And no matter what your level of concern is, if they're concerned about economic uncertainty, that's when they start to pause. Gym memberships. However, we do know one thing. In times of economic uncertainty, the best gyms actually use it as an opportunity to come out stronger with less competition. It's more of a blue ocean on the other side of it, this is run a profitable gym . I'm Chris Cooper, and today I'm gonna tell you how to grow your gym in times of economic uncertainty. This episode is about how to grow in uncertain times, not just survive tread water and hope to fight your way through. So I'm gonna give you some very specific instructions to do. I hope that you take action on these. If you want to talk about them, do that with friendly other gym owners. Go to gym owners united.com. There's over 10,000 gym owners in that group. We talk about these podcasts, we talk about our blog posts all the time, answer questions and make sure that you've got the tools and knowledge to move your gym ahead. So the first strategy is the biggest one, and that's go up market , not down the knee-Jerk reaction in an economic downturn or times of uncertainty is to drop your prices or add low cost services. Oh man, my clients can't afford this anymore, and that's the wrong move. Instead, you need to focus on higher value clients and services that are resilient. I can remember back in 2008 and you know, a lot of you haven't been in the, in the business that long, but this type of thing is cyclical. And in 2008 there was a massive market downturn led by the subprime mortgage crisis. And at the same time, the tech bubble was bursting. And I had this , uh, stockbroker as a client, her name was Jennifer, and she said, Chris , when this market crashes, we go into a recession. You are done buddy. You better start looking for another job because the first thing everybody's gonna cancel is their gym membership. Now, even at that time I was doing personal training only and a couple of CrossFit classes at night. I wasn't selling gym memberships at all, and Jennifer was right about one thing. A lot of people paused their gym memberships, but very few people stopped doing personal training because they were higher value clients who were less affected by rising commodity prices or even inflation. They didn't worry about a one to 2% rise in their mortgage rates because either they didn't even have a mortgage anymore or that amount of money really didn't scare them. It's the people who are unfortunately, like on the financial bottom, who usually get stung the most and have to make the biggest changes in their life. And a gym membership might be one of the things that gets cut. So in times of economic crisis, you really wanna focus on your highest value clients, your highest value services, instead of dropping your prices, offering access only to the budget conscious, because that's not gonna save them. You know, my motto is always make lots of money and give it away. The best way to help the people who are on the bottom is to serve the people who are on the top, make money from them. And then you can afford to donate to the people who are on the bottom. So here's some examples. If you've got a lot of people who are doing personal training, but they're starting to say like, I can't afford this, offer a semi-private option, right? Do not offer a discount membership. If you've got people who are , uh, doing group classes, for example, and they're coming four times a week or paying for unlimited, but they can't do it anymore, offer a three times a week, you know, package or whatever, don't give them a discount. The thing is, once you start discounting your rates, you can never take that discount away again because you've now set a lower bar for the value of your service. And people are gonna say, well, I was paying 20 bucks more last month, or 20 bucks less last month. Why am I paying 20 bucks more for the exact same service? Now , it's almost impossible to go up in price and offer the same service. Once you start going down, it's this ratchet effect and it creates this downward spiral to nowhere. The next thing that you can do is add nutrition and accountability coaching instead of cutting rates. So this might seem foreign to you, like, oh, why am I adding more services? Why am I adding higher value prices? Because the higher value clients that will carry your gym through this crisis, that's what they want. And now is the time to really start doing that. If you're not adding or offering a premium service right now, like high-touch personal training or a specialty program, now is actually the time to do that so that you can start building a little bit of a buffer before the price conscious , uh, clients that you have start really looking at gas prices, eggs, milk, can I really afford this anymore? The last thing that you want to do is say, give up your daily Starbucks habit for the price of one Starbucks. You could pay for fitness. Nobody wants to choose between you and Starbucks. You don't want people choosing between you and Starbucks. And so like, don't play that game. Instead, focus on higher value, move up market , okay? Identify your most profitable engaged clients and build offers for them, not bargain hunters. So the first thing is move up market in times of financial crisis, not down focus on those people who are least affected by inflation or rising commodity prices. Your second strategy is to market smarter use , uh, market marketing that affects your retention. Okay? So in tough times, retention becomes even more important than marketing. You know, if you look at the state of the industry report that we publish every year, you'll see that the average gym is getting maybe about six new clients a month and losing three in times of economic downturn. Getting those six is tougher and tougher, but that's what most gyms focus on. Instead, you should be focusing on losing fewer than three, bringing your churn rate down to two, down to one, et cetera. And so your marketing should not just bring in new clients, but it should also strengthen the relationships that you have with your current clients. And so the best marketing strategies now are going to be telling clients success stories, making them famous, doing a blog post, doing a podcast interview with them, telling their stories, sharing it on social, but also sharing it on your website. Second, introducing your clients to each other. Don't just assume that people will meet each other in class and become friends on their own. Community is not about one client's relationship with the other hundred in the group. Community is built one relationship at a time. It's all about my relationship with that one person in my class and my relationship with that other person in the class, not my relationship with the class as a whole. That's the way that we think about community is quite often wrong. We think about a hundred people all in a group, and it should really be a hundred one-on-one relationships. And the more of those relationships that you can foster, the stronger your community will actually be. But it's done one on one , one relationship at a time, not introducing people to a hundred new people all at once. The next thing is booking goal reviews . To keep people committed, you wanna be in front of their decision. You wanna be talking to them about the next three months before they've made up their mind to quit. Because if you're just trying to talk them out of quitting, that's kind of an uphill battle. If you're talking to them before they decide to quit, you'll make a plan for the next three months and they'll say, okay, well I'll stick with it for three months, and then think about it. And then you meet them again and you make another plan for three months. Okay, well I'll finish out this plan. If they can see a future, see the next step, they're way more likely to stay. And before you know it, things have turned around, we're through the crisis, and you know, you don't really have to worry about it as much anymore, but you'll probably stick with goal reviews anyway. So here's your action plan. In times of economic crisis, focus a little bit less on your paid ads funnel and more on referrals, more on content and engagement strategies. So the marketing that you're doing is also boosting your retention. You can't stop marketing in an economic crisis. You can't stop marketing ever. And if you're not doing any formal planned strategic marketing yet, starting it when the economic crisis starts is too late, you need to start now. Build up some momentum. But if you're doing content and engagement strategies with your current clients that increase retention while also attracting like-minded people, then you'll be ahead of the game and you'll be really well set up for the other side of this too. The third most important thing to growing your gym in an economic crisis is to improve your weakest metrics. So when fewer leads are coming in at the top of the funnel, every lead matters more. And that means there are three key areas to optimize. First is lead generation. So if your leads that you're getting are lower right now, increase your lead gen efforts, do more ads, start working harder on referrals, asking for more, start getting really consistent on your social media. Start posting more , more content. Build all four of the funnels that we teach you how to do in tube , right ? So improve lead gen, yes, but more important is that you need to improve your lead nurture. So if people are booking a no sweat intro but not showing up, that's your show rate. And you need to tighten up your follow up sequences. You need to use automated texting and you need to call people, make sure they're coming in, add more personal touches. And finally, if people are coming in but they're not signing up, if your close rates are low, then you need to be role-playing more sales conversations. You need to refine your script and focus on value-based selling a prescriptive model. If you're not doing any kind of consultative sales process and you're just doing like a free trial, those are gonna go away in an economic downturn. And now is the time to pivot to a one-on-one consultative sales process. And of course, we help you do all of this, including the role play , including the setting your rates, including having the conversations, including handling the objections in the two brain mentorship program. The action step here is to audit everything in your sales process. A lot of people will say, coop , I just need more leads. And that's just because they don't know the difference between a lead and a client. And so you have to break down that funnel. Is leads really the problem is conversion. Your problem is sales your problem, and then you identify the weakest one, you fix that and that's gonna fix everything. A lot of the times getting more leads is the hard part, and there's a much easier solution to getting more clients. The fourth thing you need to do to grow your gym in times of economic uncertainty is to ask yourself, how can I grow my top line revenue by 20%? So you're not saying, how do I get more clients, right? Like that's, that's a red herring. You wanna ask yourself, how can I grow my top line revenue by 20%? You're gonna need an economic , uh, uh, revenue buffer here to navigate economic uncertainty. You're gonna need a little bit of cash in the bank. So instead of starting by cutting costs, focus on increasing revenue first. There's a few ways that you can quickly boost your revenue by 20%. The first is by raising rates. Now, a lot of you're gonna be nervous hearing that because you're like, well, if things are gonna get tighter for people, why am I raising rates? Again, it's not gonna affect the people who are your highest value clients, okay? But if you're nervous, that's okay, you can go to number two. The second is add high value services like accountability services , uh, semi-private training or small group training, adding nutrition. This is a good time to do that. Add valuable services and charge more for them now to build up a little bit of buffer just in case things get rough. Look, the the worst position you wanna be in right now is just breaking even, because that means you're really fragile. And a five to 10% swing in revenue is gonna be catastrophic for you. You need to get profitable by 10 to 20% for at least a few months before the big effects of an economic downturn hit so that you've got a little bit of a buffer there and you're not fragile if you're breaking even right now, or if you're losing money. A a 10% downturn is gonna mean the end of your gym. You do not have time to wait and hope that things turn around on their own. The next thing you wanna do to improve revenue is to upsell to existing members instead of chasing new ones. There's probably 10% of people in your gym right now who want more and they're waiting for you to offer it. They want more t-shirts. They want you to tell 'em what supplements to buy. They wanna do a one-on-one session with you every week, every month they want to have nutrition coaching from you. They wanna have more. They don't know what to ask for. That's up to you to tell 'em because you're their coach. It should be up to you to know what they need and say, here it is. And so what I want you to do right now is to write down three ways that you could increase revenue by 20% and then just commit to one. Go out there and just take action on it. You know, if you're in Tube brain , this is gonna be really simple. Hey, mentor, which one of these things do I do first? What's my deadline? And it's done. If you're in gym owners united.com, you can look for the free guides, follow those to the best of your ability, take action, and it will work if you do the work, right? Obviously, everything's easier with coaching. I don't have to tell you that because you're a coach. The number five thing to prepare you for times of economic uncertainty is to plan for the worst, but hope for the best during the CO lockdowns, which were in between two weeks and two years depending where you were in the world, but the gyms that survived came out way stronger. And in an economic downturn, no matter how bad it is, if it's just tiny or if it's really, really deep, the same thing's gonna happen. The strong gyms will survive and have a huge advantage on the other side. So the goal isn't to get scared or worried or follow the social media accounts or try to decipher who's telling the truth or watch the stock market. Even the goal is prepare for it. Even if it doesn't happen, doing these steps will make you a stronger gym, right? So what this means in practice is ensuring that you have enough cash flow . You know, look at your profit and loss statement every month. If you're scared of looking at your business financials or you just don't even know what to look at, we'll help you do that in two brain mentorship because we wanna make you stronger, more resilient entrepreneurs who understand your financials so that you can take control of your business. That's the first thing. The second thing is to make smart cuts before you're forced to. Now, this doesn't mean you fire all your staff, you start selling your equipment on eBay. What it does mean is that you do an audit, you take a day or even a morning and you say, which of these classes do I not need? Which of these classes are losing me money? Look around your gym. Hey, there's 300 square feet right there that I've been calling the coaches Crash zone. It's always a mess. The couches are stinky. Why am I paying rent on that? That costs me $700 a month to provide that there . Nobody's using it. You know, do I actually need to invest right now in cold plunge? No. You know, do I really need all this space or can I sublease some of it to a massage therapist or whatever, right? You know, I've got two staff who are only like trading for two classes a month. If I break down what they're pay getting paid for those classes against their membership, like am I overpaying them? Should I be putting other people during times of economic crisis? I wanna always get smaller but better with my staff, with my operations, with my space, with my equipment. And of course, making these smart cuts before you're forced to, it helps you long term too, because every game that you make there compounds, right? So you need to stay focused on the long game. Any economic cycle is not permanent, whether it's good times or bad things go up and down. But if you review your finances regularly and you create a contingency plan for worst case scenarios, you're prepared and you're ready to go. Because I'll tell you something, after every economic downturn, there's always a correction that means a surge. That's what we called it after Covid. The couple of months right after covid, a lot of gyms saw their membership increase by up to 40%. And if you make these changes now, you'll be ready for that. Even if the economic downturn is mild, even if it goes away after a week or two and people feel confident again and they're ready to buy, you'll be better prepared by taking these steps and ready to welcome these, these new clients in and make more revenue. You'll be running a leader , a leaner, better gym . The sixth thing that you need to do in an economic downturn is get lean and get focused. So cut wasteful spending, but invest heavier where you're getting a good ROI. So for example, let's say that you know, you're, you're paying too much in rent and there's an opportunity to sublease some of your space to a jiujitsu school, like now is a great time to do that and then take that money. And if you're already profitable, invest that in something that makes you more money, right? Invest it in marketing, invest it in mentorship, invest it in a , uh, an accountant that's gonna save you taxes, that kind of thing. You want to take money away from places where it's not giving you a good return and put it in places where it is giving you a good return. Okay? So if something's working double down, the last thing you wanna do is cut your marketing budget in bad times because now you've lost your engine to create new revenue, right? It's like, I'm gonna sell the gas in my tank , uh, so that my car will go faster. That doesn't make any sense. You want to , um, double down on your marketing spend when something's working. If something's not working, either fix it fast or cut it. You wanna double down on mentorship when times get tough. Coaching and strategy are way more valuable because you just can't afford to make mistakes and you can't afford to waste time. You wanna look at your high traffic gym areas, right? Where are your members naturally gathering, optimize those places for engagement and sales opportunities. This is a great time to implement a banner program. All of your clients who own businesses are going through this same conversation right now, like, we need to only talk to the best clients. We can't afford to be running 30 grand a month in Facebook ads for our car dealership, but if there's anybody who's gonna buy an Audi, it's the people at my gym. Let's pay to put a banner up there and take, pull money from something that's not working and invest it somewhere that it is. So a banner a year, if you Google two brain business a banner year, you'll get the step-by-step guide to doing that program, and it's, it's a great win for everybody involved. So the action step here is to audit your expenses and reallocate spending to your highest areas of return on investment. Okay? I'll give you one more tip here. Look, if you're working with a mentor, there's a difference between return on investment and return on commitment. Investment is the payment that you make, okay? You're committed to that commitment, is you actually doing the work? Now, these are off often independent. Like once you sign up for a mentorship program or software or uh , rent a lease, you're making that payment no matter what. Commitment means that you're gonna make the most of that investment. You know, it's often that you see people commit to a lease, they don't maximize that space, and then they complain about paying the lease every month. Well, that's not the landlord's fault. It's not the bank's fault. It's not the government's fault. It's your fault. You've made a good investment, but you haven't made good commitment to using that space. We see that in mentorship. You're gonna see that in software. I'm overpaying for this thing. While you're paying $400 a month, are you using the features to get a good return? You're making the investment, are you making the commitment to using it? And that's a really good audit to make. Look at your p and l. Look at every place that you're investing money. Are you actually committing to using that thing? You should if you're making that investment. Okay . Finally, lean on your network. You're not alone here. The best gym owners support each other. If you're struggling, don't isolate. Don't pull back, don't put yourself on a little island. Engage with your community of like-minded peers. So through this, the next six weeks , uh, in our growth phase of mentorship, two Brain is providing extra support through mentor calls and office hours. You should take advantage of it. If you're not in Two Brain and you're in gym owners United, start sharing more in that group. Start asking questions. That that group has 10,000 gym owners in it. It's not there for you to vent or cry. It's there for you to find solutions. And so turn to your spouse, turn to your best friend. Things are bad, have a good cry. Get it outta your system if you want to. And then you go into Jim Owners United and you say, let's fix this. Let's find the solution. And that, that group is where you're gonna find it short of hiring a mentor who's gonna find it really fast and tell you exactly what to do. Look, we all want you to win. Starting with me. The mentors at Two Brain , the gym owners in two Brain , the gym owners in the free group, gym owners united.com , we all want you to be successful here. The only way out though is through you've, you're gonna have to go through this whether you like it or not. Even if you don't think there is an economic downturn, perception is reality. And if your clients start thinking that way, they're gonna get scared unless you take control of the conversation right now. So stay focused on what you can control, the story you're telling, the services you're offering, the people you're focused on. Stay focused on learning your finances. Be a good leader by knowing these things. Being a good leader in your gym doesn't mean being a better coach than all the other coaches. It means doing the stuff, even the stuff you don't want to do, even the stuff that scares you, that creates sustainability so they don't lose their jobs, and your clients don't lose their home. It is your duty as a gym owner to be familiar with your finances. It's your duty as a gym owner to make hard decisions about your coaching staff, your space, your expenses. It's your duty as a gym owner to find the answer. If you don't know it, and finding the answer probably means investing in mentorship. It's your duty as a gym owner to stop guessing and do the thing that's gonna actually work. Whether you're not comfortable with it or it's new or acquires change or growth. Internally, growing your gym almost always means growing yourself first. Okay? Here's what I want you to do. Pick one thing from the list to implement this week. Doing anything that I've mentioned in this show will make you more resilient. And while it's not like full bulletproof armor, at least, it'll mean that you can take the first hit and react and you're not gonna get knocked out in the first round. And if you buy yourself a little bit more time, you can implement the next thing that I've suggested. The next thing and the next thing. Whether you're thinking about an economic downturn or not, if you implement these strategies, you will run a leaner, tighter, faster growing gym because you wanna have all the baggage. That's why sometimes an economic downturn or you know, any other financial crisis can be a blessing in the long run because it forces you to take action in the short term that you know that you probably should do. Anyway, I'm Chris Cooper. This is Run a Profitable Gym. And if you wanna talk more about this, just go to gym owners united.com, join that group. It's free, and we'll talk more there.