I’m having an increasing amount of conversations about the current and future impact of the cost of living crisis. Here are my thoughts, based on both my experience as MD at Foundry and as a consultant to dozens of training gyms across the UK and Ireland.
The market is tough, no doubt. The cost of living is simultaneously (negatively) affecting both consumer spending and our cost of sale. It’s a bit of a perfect storm, especially after the hard few years we’ve had as operators.
Here’s a few things we’ve thought about to adapt.
- Dial down on the value proposition
Yes, the cost of living crisis is biting: and it is affecting our (current and future) members. BUT people who buy a high-ticket service like SGPT aren’t primarily price driven. They pay for the experience and service that we provide, which is what we need to dial down on. Make people focus on the value proposition, not the price.
- Prioritise retention
Retention has always been a cornerstone of the training gym business, but it’s more important now than ever. Review what you’re doing and ask yourself where you could do more (or different) to drive retention. Simple basics, events, personal touch points, coaching input, new classes, and so on. You may already be doing a great job, but don’t get complacent.
- Review and reduce costs
Most training gym businesses are running pretty lean, especially post-covid. But we need to make sure that we have a keen eye on our costs – both fixed and variable. Be super-diligent with reviewing monthly management reports and review and reduce your fixed costs where you can. And make sure to check yourself before making any significant spending decisions – is this expense going to make a significant difference to your success and the bottom line? What’s the opportunity cost of spending the money when you look at alternatives?
- Improve operational efficiency
Over the last few years, we’ve all learned to do more with less. Look at your business and ask yourself where you can be more efficient. Areas where you may find flex could be the timetable, staff matrix, and customer journey. It might also be an opportunity to modernise, with things such as digital check-in, contactless pay points, and so on.
- Increase customer spend
Whether or not to increase pricing in the current climate is a hot topic – and can only really be considered in the context of the individual business. But now is a good time to consider how else we can increase spend for each of our members, giving them a deeper involvement in the business. Membership up-sells, secondary spend, additional services, events, and so on. Ask yourself how you can make more from people, by doing more for them.
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