NOTE: Before you go crazy looking for it… this post is NOT a negative or positive about specific exercise protocol — or anything about exercise at all.  No dirt or gossip here…  It’s about marketing and business models.  

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Common Business

I love using my past music business experience as a comparison for things I see happening in the fitness business.  It gives me perspective.

The two professions are incredibly similar…!

Here’s what I mean.

Fast Growth & Super Popular

You’d need to have your head in the sand to not notice the incredible rapid growth and popularity of CrossFit.  And, mind you, it has been totally grass-roots with no major advertising campaigns in the trade publications or anywhere for that matter.

From a pure marketing perspective, it’s easy to see why CrossFit has grown so successfully..

• They are very well defined – they know who they are and do NOT attempt to be all things to all people.

• The CrossFit protocol could be labeled as “extreme” and appeals to a very narrow niche of what is often considered extreme fitness enthusiasts.

Back to the 80’s

In the 80’s when I served as VP Marketing for Guitar Center, we saw all kinds of guitar players.  There were guys who played jazz.  Some played blues.  Others who played country.

But, then, there were the “shred metal” guys.  From Eddie Van Halen to Yngwie Malmsteen, you knew they were shredders as soon as you saw them.

And, man, could they play!  

String stretching, speed picking, finger tapping and whammy bar virtuosity… all played at 11!  (ie: Spinal Tap).

Shredders would often come into the Hollywood Guitar Center, plug into a Marshall stack and just wail… (we always let them pull down a guitar and plug-in).   If the doors were open and the amps were loud enough, they’d almost always draw a crowd into the store —  right off the street! (Sunset Boulevard.)

They’d Rather Do This Than Anything Else

Here’s what’s common about both the CrossFit enthusiast and the shred metal guitarist.

They absolutely love what they do!

CrossFitters understand that they often put their bodies at risk.  They understand they could be seriously injured by pushing themselves beyond the current physical limitations of their bodies.  But, they love it!

Shred metal guitarists take a different risk.  They will spend their rent and food money on guitars, guitar accessories, new pedals, etc.  So, they constantly put themselves at financial risk.  But they love it!

Why Am I Telling You This..?

As a business owner, you could not ask for a more loyal customer base.  This is one reason why CrossFit is so successful.  Their customer/member base is incredibly loyal.  Proud to be a CrossFitter.  It means something. 

That’s good news if you’re a CrossFit owner!

The same thing was true at Guitar Center.  Who wouldn’t want a customer so dedicated to their craft that they would choose to spend their money on guitars and accessories rather than pay their rent or buy groceries..!

It’s Great for a While, But Then…

The problem with this scenario, from a business owner’s perspective, is even though this is a great customer, it’s NOT the customer who is really going to help drive your business over the long haul.

Despite the shred metal guitarist’s devotion and willingness to spend money…. the fact is, he rarely HAD any money.  (unless they “made it” like Van Halen, Malmsteen, Vai, etc)

Also, since shred metal seems to be more of a “young man’s sport” as they aged, many shred guitarists simply moved on to rock or jazz or a genre where they could make a more consistent living (wedding bands, cover bands, etc.).

I can’t prove it, but, I’d be willing to bet that due to time restraints, growing families, jobs, etc., that CrossFit members have a limited time span, also.   While I know there are some, I don’t see very many 50-year old people at CrossFit boxes.

Just as shred guitarists tend to moderate, so too, will the CrossFit enthusiast begin to moderate.   And, CrossFit’s growth will eventually plateau.   That’s just how business cycles tend to go.

“Reality” is Where Successful Businesses Live

If you attend fitness marketing seminars or conferences, one of the subjects they talk about is “knowing your numbers!”  Why?  Because numbers are your reality.

Remember, business takes no prisoners.  You’re either making money or you’re not (breaking even is NOT making money).

Beyond the Glitz

Here’s why knowing and understanding your numbers is so important.

One of the interesting things I determined at Guitar Center, was this.  While the shredders got the most attention, they spent the least amount of money.  I discovered that local musicians playing at the Holiday Inn for 5 nights a week made more frequent and larger purchases.

Same was true of musicians who played on cruise ships.  In fact, almost any musician with a steady gig was spending way more money with us than the “high profile” shredders.  The numbers proved it.

Go Where the Money Is…

The famous criminal Willie Sutton was once asked why he robbed banks, and his response was simple: “Because that’s where the money is.”

To that end, growing fitness clubs, studios and independents need to determine “where the money is” in their market area.

While I continue to hear about growth among the high profile trends like CrossFit, MMA, YogaFit and others, I will argue the real money is not there for most fitness business owners who intend to grow their businesses over the long term (there are always exceptions).

And, please don’t misunderstand me.  I have absolutely nothing against CrossFit or shred guitarists.  Some are incredibly successful.  They have a following.   But, in both cases, it’s a “niche.”

 Where’s Your “Sweet Spot”

The major point of this post is about generating long-term, consistent revenue.  Day after day.  Month after month.  Year after year.

When I crunch the numbers consisting of clubs, studios and trainers —  and then, cross reference against both primary and secondary research of the fitness industry as well as consumer trends, I am absolutely confident of the “sweet spot” for our company — and perhaps your company, too.

• The money in U.S. is with men and women between the ages of 40 and 65.

• They are affluent and reside in affluent zip codes.

• They have more discretionary income than any other population segment.

• They also have more free time or control of their time than other segments.

• They are well-educated and typically have a college degree or higher.

• They are legitimately concerned about their weight, energy and overall health.

• They are more focused on physical health and energy than on body image.

• They have high expectations of customer service and are willing to pay for it.

• They respond to hands-on, instructional approach as opposed to being left on their own.

There are about 150 more bullet points that really go into the “weeds” of this demographic, but I’m pretty sure you get the idea.

It’s Not Very Sexy…

The fitness business is trendy.  And, it’s wildly competitive because there’s no real barrier to entry.  Anyone with enough money can start a fitness business (as opposed to opening a medical clinic, law firm or manufacturing plant).

Just 10 years ago you never heard much, if anything, about CrossFit or Planet Fitness.  But, they are both viable business models for what they do.  One built on culture and the other on price.  As a result, they grew quickly.  But, eventually, they will plateau the same way some of the bootcamp franchises have dwindled.

Meanwhile, there are hundreds of clubs, studios and spas that have been around for more than 25 years.  Some, more than 50 years.  Think about that.  A money generating machine that continues to churn out a steady cash flow and continued growth for 50 years!

Under the Radar and Smart

And how do they do it?   Well, first off they’re smart operators.  But, they also know where the money is.  And, they cater to that demographic with dedicated focus.

They know their members’ names.  They consistently over deliver on all their services. They introduce new programs, contests and events to make sure their members never get bored.  They remodel their facilities and upgrade their equipment.  They compensate their staff fairly, communicate with them regularly and provide opportunities for advancement.

Again, I could go on forever about the attributes of a “long-term” financially successful fitness business.  But that’s not the point.

Who Are You..?

Here are the two points I hope YOU glean from this post.

• It’s not enough to just open your doors and be a club, studio, spa or independent trainer.   You really need to decide WHO YOU ARE.   If your goal is to build your business for 5-10 years and then sell it, by all means, go “niche.”  And do everything in your power to continually and consistently define yourself and project that message and make sure to exit before your business hits a plateau.

• If your goal is build a long-term, sustained growth business that you might even pass down to your kids, then go where the money is!

Of course, if you are a CrossFit owner — or a Luthier for Shred Guitarists… well, you already know who you are...  Carry on!

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