Gold's Gym Operators Take on Low-Price Competitor

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goldsgymmilwaukeegroupex-400.gifSometimes, your mistakes can turn out to be a blessing. That's what Lori and Jeremy Lowell found out when they opened their Gold's Gym franchise in December 2010 in downtown Milwaukee.

Having only operated suburban clubs where child care areas are a necessity, the two determined that their downtown facility also needed child care, but a month after the club opened, only two children had used the child care area. It turns out that the club members at this location were coming in after work and before they drove home to the suburbs and their children.

So, what to do with the 2,500 square feet they had allotted to the child care area? Well, that unused space would soon come in handy when a Planet Fitness opened across the street.

“Although I'm well-versed in what is happening across the country with these low-cost models popping up, nobody in any of our markets had ever come and just smeared it in our face,” Lori says. “I got really concerned and very proactive. I knew they would not be able to match our design and amenities, but still, when you have a club opening across the street brand-spanking new, it's unnerving. So we became very proactive and said, ‘We're going to go neck-and-neck with these guys.'”

That's where the empty child care area came into play. The Lowells took out the kids area, rebuilt the space with equipment in it and called the area their low-price space. Their advertising began to not only promote the many amenities of their club but also that people could buy a $10-per-month membership to use just the low-price area.

The Lowells found that people who shopped the Planet Fitness across the street also stopped into their Gold's facility to see what they had to offer. After showing the prospects the low-price workout area, the Gold's staff showed them the rest of the club. The award-winning design of the five-story former bank building that overlooks the Milwaukee River proved to be an easy sell for the Lowells. Many of the people who came in for the $10-per-month deal ended up buying a full membership so they could use all the amenities in the club, which include valet parking, executive locker rooms, a saltwater pool, a basketball court, group exercise rooms, a cardio theater and a juice bar.

Sixteen months after opening, the Gold's location has 4,000 members and is hopping, especially on weekdays between 5 p.m. and 7 p.m., Lori says.

Concerning her fear that the Planet Fitness would steal away members and prospects, Lori says, “I just refused to sit back and watch it happen. Strategizing really helped, and it helps me with all my fears. I don't have to fear like I used to.”

And she also is not afraid to admit a mistake, such as putting a child care area in an urban location, especially when it may have turned out to be one of the best mistakes she ever made.

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