I took some Economics courses in college, and one of the economic theories that fascinated me the most was the concept of basic supply and demand, and how adjusting the price of a product or service had an inverse effect on the demand of that item. But again, how does this apply to a gym?
Well think of it like this ... Supply is how many members you can fit in your gym - taking the the physical limitations into account (square footage / equipment / parking lot size, etc.). Look around your club, can you fit more members? What capacity is your gym at during peak season? If you aren't at near 100% capacity during peak season, there are going to be tumbleweeds blowing through in the summer months. But are your expenses any lower in the summer? If your gym is like mine, its just the opposite - because of the increased energy costs of keeping the place cool, summer is actually the most expensive season. OK, so that's supply. How many members can you fit? Let's say its 1000.
Now let's talk about demand. Would you agree that there are only so many people that are going to join a gym in your geographic area? So how do you get the demand to equal supply? Well there are many ways, but one of the most simple ways is to apply the laws of supply and demand, and lower your price.So here it is - the answer to getting supply and demand to equal each other: adjust your prices! That's right, take a cue from Planet Fitness, one of the few gym chains that's actually thriving during the current economic situation. LOWER YOUR PRICES!
In my next post, I'll tell you why most gym owners aren't willing to do what it takes to fill up their clubs. I think the answer will surprise you!
