Stop the Bleeding! Why Your “Free” Memberships are Costing You a Fortune

Jim Thomas
3 min readFeb 22, 2024

Gym owners, gather ’round! You might think offering free enrollment fees and introductory discounts is attracting a swarm of happy customers, but let me tell you, the truth is scarier than a Halloween squat challenge.

Here’s the brutal reality: those “free” members might be silently draining your wallet. Don’t believe me? Consider this:

  • You charge $0 enrollment, but your new member acquisition cost (MAC) is $100. That means every new member starts you in a $100 hole. How many “free” memberships can you afford before your gym becomes a financial black hole?
  • They pay $50 the first month, but churn out before month two. Sounds familiar? That first month barely covers their acquisition cost, leaving you with zero profit and a lost member. It’s like paying for a gym membership you never use — frustrating, right?

But wait, there’s hope! By understanding two crucial metrics, you can turn the tide:

1. Member Acquisition Cost (MAC): This hidden price tag reveals the true cost of acquiring a new member, including marketing, sales, and onboarding. It’s like a flashlight exposing the hidden price behind every “free” sign-up.

2. Point-of-Sale Profit: This metric goes beyond just membership fees. It tracks the total revenue generated at sign-up, including upsells, introductory offers, and additional services. It’s the difference between a membership treadmill and a profit-generating powerhouse.

Ignoring these metrics is like running a marathon with weights tied to your ankles. You might finish, but it’ll be painful and unsustainable.

Here’s how to break free from the “free” membership trap:

1. Shine a Light on Your MAC: Track every penny spent on attracting new members. Don’t be afraid to dig deep and expose the true cost behind your “free” offers. This number might sting, but it’s the key to unlocking profitability.

2. Focus on Point-of-Sale Value: Instead of discounts, offer value-packed packages that justify the full membership price. Include personalized training sessions, nutritional consultations, or access to exclusive events. Remember, you’re selling a transformative experience, not just gym access.

3. Upsell Like a Pro: Don’t let members walk out with the bare minimum. Become a master of suggestive selling by recommending…

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Jim Thomas

214–629–7223 | Gym Business Expert | Gym Consultant | Outsourced CEO/COO | Gym Broker | Expert Witness | Sales Trainer | Gym Equipment | Gym Financing