The Discount CrossFit?

By Emily Beers

In Affiliation

July 09, 2012

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Emily Beers examines how wildly popular websites Groupon and Living Social can be used to the advantage—and disadvantage—of CrossFit affiliates.

Websites like Groupon and Living Social—which sell coupons for anything from exotic vacations to painting lessons to spa packages—have exploded in the last couple of years.

It seems like a brilliant idea: the buyer saves money, the seller generates awareness and sells a product, and the website hosting the coupon profits from each sale.

Many CrossFit affiliates across North America have eagerly joined this online coupon frenzy, ultimately offering personal training or on-ramp introductory sessions for a fraction of their normal cost.

From Vancouver and Las Vegas to Atlanta and Milwaukee, a dialogue has been forming throughout the CrossFit community about whether Groupon offers are a good idea for the business of CrossFit. In fact, a better way to describe this dialogue might be to call it a lively and polarized debate.

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22 Comments on “The Discount CrossFit?”

1

wrote …

Great article! I am from Germany and have had the pleasure to visit CrossFit Vancouver about a year ago. One thing I have learned over there is that you always got what you pay for. We opened our own CrossFit Box, CrossFit Essen, about 7 months ago and are very strict with our pricing. Here in Germany it is totally uncommon to charge like 100 Euros for a monthly membership but we do and so we got only the people who really want to do CrossFit with great coaches.
Then another Box opened in our area and got this groupon-thing on. They got a lot of people into their gym but a lot of them are allready our new members because they were not satisfied with the coaching and the service.
Be the best coach you can be, care more about the clients you allready have instead of the clients you would like to have and you will do great!
Cheers
Björn

2

Zach Forrest wrote …

We would never do our own Groupon/Living Social deal. However, I love it when the other gyms in the area do it! It actually boosts our business very similar to Emily's experience: Person A goes to Groupon gym and does Intro Course for 80% off, then leaves after that month and signs up with us at regular price.

Bottom line: If you are a legitimate CF Affiliate who is worth the $150+ a month, these people aren't your demographic.

3

wrote …

I think CF Box should market their product in the best way for their situation. Not every Box in the country can be the one that sends 2 people to the games and charges $250 per person to train there. Even within the CF world there are niches and what works in Miami may not in Salt Lake.

One of the problems with some of the people interviewed in this article is that they suggest that all boxes should be structured the same. Some gyms might want to have few elite athletes and price out everyone who's not trying to get into the olympics, while another might more average joes that are more serious about fitness than your normal gym rat.

4

wrote …

As a member of a box that ran a Living Social deal a few months ago, I feel that the coupon-buyers had a positive impact on the enviornment as a whole. The size of classes approximately doubled when the deal took effect. This didn't bother me. It brought more energy, more competition. I didn't resent anyone paying less than I do for a few classes. While some gyms could not handle a sudden jump in members of that magnitude, the owners of CrossFit Aspire are particularly skilled at indoctinating beginners to CrossFit. However, since I am not an owner, I don't know how many of those who purchased coupons stayed after the deal was over. Now I'm curious, though, and I'll have to ask. I know that some of them never returned, but I also know that many are still members today. It is difficult to tell, as a member, since membership continues to grow and now far exceeds the levels that existed during the Living Social deal. Perhaps some left and went to other CrossFit gyms, but in this case I believe that would be the exception. My advice to owners who run these coupon deals is simple common sense: treat them exactly as you would new, full-paying members; those who want progress and lack egos will remain, while the rest will move on.

5

wrote …

I just moved to Kansas City where there are only a handful of boxes. I was debating between two Awesome gyms (Crossfit Matters & Crossfit on 18th) I seriously love Jim Casky @ CFmatters, but CF on 18th offered a groupon that was too good. Basically, 20 sessions, for free. They gave me 110%! I never felt like a second class citizen, I was invited to BBQ's and special fit club events... they hooked me up to a KOOL-AID IV and I'm on the drip, man. No way I'm not joining a gym that says, "We're awesome... here's proof!"

6

wrote …

"Anyone...can see the value of Crossfit training." True and false. There's no way you can see value in something you don't know anything about or think that you need. Only when you experience that training or that something extra that comes from a group atmosphere can you appreciate the value of it.

I had done Crossfit for a few years in my garage/globo/parks because the membership at a Crossfit gym didn't fit in our budget. Then a few months ago I bought a groupon offered by a Crossfit box about 45 minutes away. I quickly realized what I had been missing out on the last few years. My intensity reached levels I had never experienced before and I felt the trainers and members alike treated me just like another member. I would have joined that gym if it wasn't so far away (I have a family to think about, too.) Instead, just today joined a Crossfit gym just a few minutes from my house and my wife will probably end up joining, too.

In the end you don't know what you don't know until someone who knows shows you.

7

replied to comment from brent crawford

I too began CF on 18th through a Groupon. That was February of last year and I have been hooked since. The coaches there have always been awesome and have pushed me to achieve things I would have never thought possible.

I think if an affiliate is going to use Groupons, they should be prepared for both the positive and negative side effects. There will be people who come and go before you can get to know them. There will be people who show up for one class and then never come back. Then there will be the people who drink it up and bring in new members and just keep coming back for more. They just have to remember that it's hard to know up front which new coupon member will be which and to make sure to treat everyone as a potential new member so as not to lead them somewhere else.

I'm very grateful CF on 18th has such an amazing group of coaches and athletes. And since I don't believe I have had the pleasure of meeting you yet, welcome to the club.

8

replied to comment from Shamus Williams

Totally agree, every member should receive the same coaching treatment. That's usually a sign that you're in a good box! It isn't wise to turn away from your original/full-paying customers. Having solid coaching is key, and if the classes become larger having additional coaches to assist with them really can go a long way for the community. Most Social Living members that I've trained posed some challenges, which is a good thing and it has helped me grow as a coach. There's a small window of opportunity for the groupon and social living experience and the littlest thing could stow them away. It may take longer foundation sessions and Q&A then normal to really allow them to fully grasp the CrossFit experience. Any coach that is truly passionate and inspirational about helping people shouldn't have a problem. Great point Shamus!

9

replied to comment from Zach Forrest

Somewhat disagree dude. I was initially very anti-groupon until our marketing director (who I pay for this kind of advice) pushed for it. I was against it for all the reasons stated in the article and more. We ended up running a deal (structured to make sure we could handle the volume) and it worked out great. Nice injection of capital, and we got some super dedicated members out of the equation. Honestly I was shocked. Some of these people are now our strongest members, bringing in friends, family etc. They have completely and totally swallowed the kool-aid. Of course, not all of them stuck around but if I do this again and get even one more member who adds to the community the way these group on folks did I'll consider it worth every penny.

I do recognize Vegas is a much different market than SD; I can't speak for the people that didn't sign on- maybe they joined another local CF, I dunno. We get plenty of locals who have left some of the other affiliates though, so I feel like we're probably doing something right.

Honestly the only reason I'm not running another one right now is with our class caps/business model we couldn't handle the volume! If I had another 2-3K sq ft I'd do it again in a heart beat. You shouldn't rule it out completely dude. It can work, especially with the facility/coaches you have.

10

wrote …

Basically, the owner of the "non discount" CF is a jerk. Its not your business to get annoyed at what another box does. You're the jerk in the gym day in and out who will do anything for a quick buck and treat those who have nothing to offer you like trash. I see your point and would never do the groupon myself, but for you to get so upset about another gym's overflow is ridiculous, you pathetic drama-queen. I hope you lose clients to better gyms in the future.

11

wrote …

Groupon and group buying sites are not the way to go.... You don’t want to devalue your product / service by greatly discounting your prices. You will end up upsetting current clientele, attract the wrong people just because its cheap and eat away at the revenue generated by your full fee paying clientele.

Want to attract clientele do it by providing a great atmosphere, training, equipment and reasonable pricing for your area and demographic. Word of mouth will be your best free advertising as we all know that new clients bitten by the CrossFit bug don't shut up about it, WODS, their Box and Paleo!

12

wrote …

"Focus on running excellent classes." - Glassman.

We did what Glassman said and we're now one of the largest and most successful affiliates in the world with an incredible community of people that are deeply faithful to our mission: to make people fit beyond expectation.

We offer discounts and free memberships to established members of our community who experience financial distress from a job loss, medical bills, or otherwise. I do not understand the logic of offering deeply discounted access to the same service for which our incredible community pays full price.

Groupon (and the rest) seem counter-intuitive and insulting to our community. Fortunately, all of the local affiliates in our area feel the same.

13

wrote …

I have to disagree with the anti Deal crowd. As someone who developed a Groupon/Living Social clone that was very successful, I've seen lots and lots of deals go across my desk and the sales figures, revenue streams and other aggregate data to go along with these sites.


A CrossFit box is EXACTLY the right type of business that usually does well, sometimes very well with these deal sites as it's all service based, fixed location, fixed cost, etc.


It's all about doing your homework, cost analysis, thinking just outside the box. Nobody is telling you, you have to offer a month's membership for $20. You make the deal, you make the rules, you set the price and negotiate the deal site's percentage.


If it was me, off the top of my head (not knowing the ins and outs of an affiliates cost structure) I would do something like $25 for 4 introductory workouts or maybe 3 plus a nutrition workshop. I gather most affiliates offer the 1st workout for free. So the deal would essentially be, 3 hour sessions for $17.50 (lets assume $7.50 or 30% goes to deal site). Maybe restrict to certain class times (less busy, later, weekly, etc) and to a student ratio that your box/coaches can accomodate. Lets say 15 per class/hour. That's $262.50/hr. to essentially give your pitch.


Something like that would keep the gym-hoppers away. Caters to the CrossFit curious. Give your affiliate and coaches 4 hours to administer the Kool-Aid injection instead of 1 and your making money not going in the red for your deal.


Also, not to be overlooked. You can't afford the amount of advertising this will provide your box. The reach of these deal sites is phenomenal. Even if they don't buy this "deal", this contributes to word-of-mouth, "I heard of a Crossfit gym close by..." etc.


Point is, you don't have to be the "discount" Crossfit box just because you offer a deal. You can offer a deal to get in targeted, potential clients without devaluing your product.


reach me at shark.byte.usa at gmail.com

14

replied to comment from GARRETT DAVIS

I meant $262.50/per group not per hr.

15

wrote …

This article has shocked me, and not for the author's intended reasons. The whole article reeks of elitism and again, whilst there is absolutely nothing wrong with striving to be better, stronger and faster, it's for all the wrong reasons. If anything the article reflects badly on the coaches rather than people that understandably want to try before they commit to a full membership. If you can't sway a "groupon" attendee to the benefits or crossfit in a month then you need to evaluate your reasons for running a box in the first place. No need to even mention the utter lack of professionalism in giving the clients anything less than 100% when they turn up for class. After all, the box's mentioned in the article put the groupon offers out there to intice new blood into their struggling establishments. I've had the pleasure of training at several box's in the uk, and KCF - a crossfit affiliate in Kandahar, Afghanistan. Above everything else the thing I enjoyed most was the sense of family at the box/padre gardens whether you were a top finisher or did your ring dips with a box and a band. Having looked at crossfit Vancouver's site and read the words straight from the author's own hand, I would never train there. The monthly membership price is OUTRAGEOUS. Yes you pay for quality but you have to draw a line somewhere. The fact that they don't offer a drop in session even for people that are experienced crossfiter's says enough to me about the attitude and the atmosphere of the people that operate out of there. They make cut 2 minutes off my fran time or add 40lb's to my snatch PB, but I'll stick to my box where crossfit comes before money, ability or ego's.

If you're in in Scotland, checkout Clan Crossfit - drop in's welcome. Anyone is welcome.

16

wrote …

Ipad & sausage finger Typo - *in the box/pad regardless of whether you were a top finisher*...

17

wrote …

I could not agree more with Ben's comments. Emily, you make a point of quoting Glassman's advice to focus on excellence and not money; however, you are not following that advice. Your arguments against the groupon model stem from your conviction that you won't make any money on the deal, which is not true. Further, you equate the level of service offered to clients by other gyms with how much money the client has paid, which is also patently wrong. At our gym, we treat everyone the same level of respect, regardless of whether they are participating on a special promotion or are a veteran member. Our commitment as affiliate owners and coaches is to offer a superior quality of service to everyone who walks through our doors.

Groupon/LivingSocial/Bloombspot, etc are all excellent ways of promoting your affiliate; however as with any marketing tool, you need to develop a sound strategy to use them effectively. At CrossFit West Petaluma, we have had a lot of success with using discount sites to grow our CrossFit family. If executed correctly, with an emphasis on providing a quality training program and excellent customer service you can increase the awareness and size of your gym. If anyone needs any advice on how to successfully employ this strategy, I would be happy to help - please feel free to contact me: http://crossfitwestpetaluma.com/contact.html.

18

wrote …

1.Do what works in your community.
2.Don't piss off all the surrounding CrossFit Affiliate Community and ostracize yourself as an affiliate from the local community at large. As an owner communicate with your affiliate community.
Ex:If running a deal pisses off the majority of your affiliate community then don't run it. The small profit and large influx of "grouponites" is not worth being shunned by the local community at large. You reputation is worth more than any quick profit.
3. Be involved and in good standing with your local CrossFit affiliate community at large and you won't need a "deal".
4. Most importantly!!! Vote against Obamacare because I can't afford to pay for all of your healthcare and my kids. Hey maybe Obama could run a healthcare groupon.... oh wait, groupon socialism doesn't even work in a society with imperfect people.

Glad all these comments turned into personal soapboxes. Hope you enjoyed mine.

Have a nice day.

If you agree with me you are obviously awesome and possibly a ninja.
If you disagree you are obviously a douche and your opinion doesn't matter to me.


19

wrote …

We ran a deal and were fortunate enough to choose our own price. We sold our on ramp program for $75 (they took 30%)... more than most deals you see, but we didn't want 100 buys we wanted about 35. We got 30. About 15 came in and only 2 are still with us. In my mind it was perfect, a quick influx of cash when we needed it and not too much hastle. We have since looked into another one and now they are more stingent on their pricing sceme. They want us to sell it for $19 and would take %50. We said no and haven't looked back. It was good the way we did it but not for that price.

20

wrote …

The real issue we see with Groupon has nothing to do with client experience or classes or graduation rates

although all suffer in the whole

the real issue is this

If you as a busines owner have over 70% of your gross revenue coming from group classes.....

You will most likely get burnt out, your coaches will get burnt out and your affiliate will suffer.

21

Chris Sinagoga wrote …

Craig, could you expand on that a little more? I'm opening an affiliate here in Madison Heights, MI and I would like to hear any input you may have.

I personally enjoy group sessions of 8+ people more than smaller sessions of 1-2 people.

22

wrote …

Hi Chris

What we are finding (from roughly 100 affiliates) is:
For the fundaments portion of the training( PT, onramp, fundaments class etc)

The more sessions to get into group, lower the ratio of coach to student, more money charged upfront the better the numbers come back for

student retention, student referral, $/coach, $/hr coach burnout, owner burnout

I get asked all the time....."How many members do you have?" it iis the wrong question to ask

The right questions to ask are.....What is your gross revenue, your coach's net revenue per month, hours worked per week per coach % of revenue from PT, group classes, speciality progrtams

If your coaches can make $80-$100k and work less than 25hrs per week then you have a great shot at having long term continuity and professionalizing the fitness industry.

A gret CF box breaks down as follows gross revenue from group classes =50%, fundamentals and speciality programs = 50%

We see a lot of affiliates who are unsuccessful, not from a lack of clients or gross revenue, but from being burnt out

They pay their coaches by the hour, then lose their coches (and clients) often and the cycle goes on and on. these boxes typically have low barriers to entry, rely on group classes for over 85% of their revenue


Give me an e-mail if you waant to chat more

patty@crossfit.ca

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