Top Ten Worst Tricks of the Fitness Industry

By The Fit Advocate, Craig Pepin-Donat, International Fitness Expert and Author of "The Big Fat Health and Fitness Lie"

Is joining a fitness center right for you? This is a choice that you will have to make for yourself, but all of my experience tells me that if you have the right mindset and focus on changing your lifestyle, a quality fitness center probably provides the best opportunity to achieve lasting results—with one small caveat…you have to use it.

You could say that I am biased because of my background, but in a quality club (which varies widely) you have several advantages that you do not get with weight loss centers, diet programs and books, home equipment, exercise videos and other alternative health and fitness programs. Provided that the club is convenient to your home or work and you have no problems getting there in a very short period of time, a quality club will provide you with a wide range of state-of-the-art equipment, classes, amenities and services along with trained and certified staff members to help guide you. Most quality clubs today also provide weight loss or weight management programs. But before you visit your local club, here are some tips to prepare you for the sales gimmicks and marketing tricks that you will need to maneuver through.

1. Prepare To Be Sold — Looking back on the thousands of fitness salespeople I have trained over 25 years, the one lesson I always imparted was that if you want to be successful, you cannot just focus on making money. Instead, the motivation of a fitness salesperson has to be based on a genuine desire to help people improve their lifestyle and achieve their goals. Every person that you are able to help translates into financial reward. In other words, help people make decisions that will improve their life and the money will follow. Unfortunately, many fitness salespeople do not care about you or your goals. They only care about the mantra of the fitness industry, “Get the Gross” (meaning gross revenue or cash) so that they can get paid. The best club organizations in the world have commissioned sales people who are in competition with each other to sell the highest amount of gross revenue so they can maximize their paycheck or to win a sales contest. Unfortunately, this structure creates an environment where the sales and management staff may not necessarily have your best interests at heart. Although there are those in the minority who are truly concerned with helping people, the information I am providing you will help to protect you from the rest.

2. Membership Specials — Most clubs offer many different types of membership plans (prices) available based on your individual needs. The truth is that clubs need enough membership plans available to rotate various specials, promotions and discounts each month. These membership discounts are used to create an urgency to enroll with a close-out. Clubs can obtain as much as 25 percent or more of their monthly sales during the last few days of a close-out. This is when advertised specials, promotions and in-club sales contests for the staff culminate into huge revenues and profits.

With multiple membership types, clubs can create enough promotions so they can change the specials each month to keep the local consumer agencies happy, keep the sales staff excited about new offers and contests, and keep you thinking that if you join this month you will get a better deal than next month. Most of these specials are just not that special and should not be the reason that you join a club. If you compare membership pricing in a given club from month to month, you will find them to be almost identical throughout the entire year. New specials and promotions provide the sales staff with the ultimate weapon—the close-out with an impending price increase.

Just remember that membership specials, promotions and discounts are created to increase inquiries and entice potential members. It is the same with all products and services sold around the world. Understanding the process should save you a lot of time and enable you to make an intelligent decision without getting caught up in all the hype.

3. Hold Over Specials — This little trick is when the sales staff tells you that there is a special promotion that is ending on a given day in order to get you to enroll, only to come back the next day and tell you that the special was held over due to popular demand. The club industry routinely holds over specials to milk a good promotion. Membership specials supported by in-club signs, banners and flyers that read: “final days” or “last day” will typically be held over at least for a few days into the next month to give the management time to get the sales staff prepared for the next special. If you happen to wait for the new promotion to start, you will likely find that the “new price” will not be far off from the prior month’s promotion.

4. Month-to-Month Contracts — In the early stages of the fitness industry, it was common that club memberships were prepaid for a specific term. Rogue club operators would sell lifetime memberships prepaid in advance only to go out of business, leaving the consumer ripped off with no recourse. Consumer advocates and lawmakers pushed for legislation to control the club industry and contract terms in most states were reduced. In some states, even the amount of money that can be prepaid has been limited.

As a result, many clubs have opted out of the prepaid business model and moved to month-to-month memberships. Sounds great, right? Wrong! The lie is that monthly memberships can also be based on a contractual term, meaning you can pay it monthly, but you are obligated to do so for a fixed time frame anywhere from one to three years. Additionally, any initiation fees, enrollment fees, joining fees or processing fees paid at the point of enrollment are legally earned by the club when you join. If there is a refund provision in the membership agreement, it will typically state that you will only be refunded a prorated portion of the prepaid dues, not the upfront fees. The only way you will see that money again is if you cancel in writing within three days of the date of enrollment. Even then, you may experience delayed refunds because once the club has your money, they are not motivated to give it back.

5. Long Term Contracts — Be wary of any club that doesn’t offer a month-to-month membership option, which provides you with the ability to cancel your membership if you are not using it even if you may not get your enrollment fee back. The biggest industry offender in this regard is BallySM Total Fitness. Numerous complaints and bad public relations resulting from their advertising and high-pressure sales tactics has taken the company to the brink of financial disaster. The problem is that the original business model for Bally Total Fitness was designed more like a finance company than a fitness company. It was based on selling long-term contractual memberships with high interest rates and few options for getting out of the contract. Memberships are advertised with extremely low enrollment and monthly dues. A typical promotion for Bally Total Fitness is something like $5 Gets you Started. The catch is that the affordable enrollment and monthly dues are based on a long-term contract (typically 36 months) that generates big profits from huge interest rates.
The sales staff is notorious for not fully explaining the terms of the agreement, bending the truth or flat out lying to the consumer to get them to join. In 2004, a settlement was reached with the New York State Attorney General’s office in which Bally Total Fitness received a large fine, and was forced to change both their advertising and sales practices. The lawsuit followed hundreds of consumer complaints that deceptive ads and high-pressure sales tactics tricked them into signing long-term contracts and misrepresented the total price of the memberships.

6. Verbal Contract — When questions are asked about the terms of your membership that place the sale in jeopardy, some sales people will bend the truth while others flat out lie to make the sale. Keep in mind that if you cancel within three days, the sales person does not get paid. If you are able to cancel for any reason beyond three days, it will not affect the sales commission. With a commission and possibly winning a contest at stake, the integrity of the sales person is put to task and you just may be getting answers that the sales person thinks you want to hear. When a dispute arises, it will be enough to say, “That is what the salesperson told me.” All membership contracts have the following words clearly outlined: “This agreement contains the entire agreement and replaces any verbal or other written agreement.” If you listen to your salesperson without understanding the terms for which you are signing, you have no one to blame but yourself. Issues related to contractual misunderstandings and verbal promises made by the sales person that cannot be delivered are amongst the top member complaints.

7. Low Annual Renewals — Extremely low renewal rates are a great way to entice you to prepay your membership. Statistics prove that when you prepay your membership, you will not likely still be using the club when your membership expires, so the renewal fee is insignificant compared to the initial enrollment. That does not mean that prepaying your membership is a bad thing. If you are willing to prepay your membership for a discount or for some free membership time plus a highly reduced renewal fee, clearly you will get a better value, if you use it.

Prepaid memberships are always based on a term contract and in most cases you will not get any of your money back if you try to cancel. There are limited exceptions that provide you with the right to cancel or receive a refund such as if you move a specific distance from any company club location or for medical reasons substantiated by a physician. But you should be prepared to provide a lot of proof. Also, if you buy a one-year membership and get the second year free as an enticement to join, you will not get a penny back once the initial year is over since the second year is considered free.

8. Electronic Funds Transfer (EFT) — As the industry and banking technology has progressed, the concept of EFT was born which gave clubs a new opportunity for guaranteed revolving revenue. These dues are the foundation for any successful club business.

The truth about membership dues is that there are a significant number of members that do not use the club and who also do not check their bank or credit card statements. They actually forget they are paying for a membership. Unbelievably, a large number of people come back to get a refund on dues from years earlier after realizing their account was being tapped for monthly dues. If you are one of those people, you can forget about a refund. Unless you provided a written cancellation within 30 days of your dues draft and you can prove it, you will not be see a refund check from the club coming your way in this lifetime. Those who find themselves in this situation use the same argument that “The club data base will show that I never used it,” but that makes no difference. You owned the membership and therefore had the ability to use it. If you opted not to use it, that is your problem; not the club’s.

There is nothing wrong with paying for your membership dues automatically with EFT, just make sure you are checking your monthly statements. Mistakes with electronic drafts happen all the time and member accounts can be double billed, or over billed, and cancelled memberships can sometimes continue to be billed. If you do not take the time to check your own bank or credit card statements to make sure they are correct, I can assure that the club will not contact you with a refund notification.

9. Trial Membership Bait and Switch — Depending on where you live, typically, you will have a variety of clubs to choose from. If you have the opportunity, you should take your time, be picky and join the best club to meet your needs. Above all, realize that if you are not comfortable with the environment in the club or the people who work there, you won’t use it. The last thing you want to do is walk into the first club you visit and sign a long-term contract only to find that you absolutely hate the club environment or the staff.

There are few clubs that will not allow you to use the club for a trial period before enrolling. The trick about guest passes and trial memberships is that clubs will often give you an incentive for enrolling in place of using the trial period. If you have done your homework on other clubs and after using the club once you are satisfied, cash in your trial period and take the incentive. If you are tentative and unsure, use the trial period. From the club’s standpoint, a trial is not the optimal solution since they know that the more you think about joining, the more reasons you will come up with not to join. It is a valid concern for clubs since they do not make money until you enroll. No club has come up with a way to make money on guests who want to think about it.

10. Closing the Sale — Club operators are always particularly concerned with the closing ratio, or how many presentations are given versus those who enroll. When operating multiple clubs, statistical tracking is a large part of the basis for how the sales staff and club management are evaluated. The enrollment is so important that quite often, if the salesperson has difficulty making the sale, they will call in the manager, assistant manager or another more experienced salesperson to do what is called a turn over (T.O.). This is also known as a higher-authority close and is based on the idea that someone in authority can do things or make offers that the salesperson cannot. This is a total fabrication. The truth is that there are usually certain membership specials always available to prospective members, but are purposely held back by the salesperson so they can be used as a closing tool during the T.O. Anytime another person enters the office during your presentation, you know you are in the process of witnessing a T.O. in progress.

Remember one thing when visiting a club—no matter what your reason for not joining, most clubs have trained their salespeople to learn verbatim rebuttals to your objections. The rules of the game are set up to place extreme performance pressure on the salesperson to enroll guests, which translates into a high-pressure sales environment. The club industry is full of young, hungry, commissioned salespeople who are in competition with each other every month to achieve their sales targets. Your cash is their bull’s-eye.

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