LA JOLLA, CA — As the membership manager of The Sporting Club in La Jolla, CA, Kelly Tobey has heard her fair share of sales pitches. One sales pitch she received last year left her skeptical. A company called Groupon cold-called her at the club and asked if she'd be interested in a promotion in which prospective members would pay $29 for 29 visits.
Keep in mind that The Sporting Club is an exclusive, 50,000-square-foot club in suburban San Diego in which a one-day pass alone is $25. Fitness memberships are $104 a month, and exclusive memberships — with all the trimmings that include a separate locker room, private lockers and even shoe shine availability — are $185 a month.
But with the economy the way it has been for more than a year, no company is immune, so Tobey and her club gave it a shot. The result? Of the 272 people who redeemed the promotion on the company's Web site, www.groupon.com, 23 turned into memberships, with a revenue boost of about $16,000.
Tobey admits to being concerned about the caliber of person the club would attract by promoting such a low price.
“To our surprise, we might have had a couple of people that weren't good prospects, but most everybody else was a legitimate lead,” she says. “My sales reps have never been so happy.”
In fact, the number of leads generated last September at The Sporting Club rivaled the number the club generated in January 2009.
Groupon, which offers discounts to other businesses, including nightclubs and bars, has been a hit with other fitness facilities. Chelsea Piers, New York, initially offered a $40 two-week access pass to its complex through Groupon. Since their first collaboration last May, Chelsea Piers and Groupon have teamed up several more times, including two membership offers and three specialty class program offers, resulting in more than 3,500 Groupon packages.
“We've been very impressed with them,” says Dana Thayer, senior vice president, director of marketing and sponsorship with Chelsea Piers. “More importantly, we're impressed with the people walking through the door. For a club like Chelsea Piers, which is not a traditional health club and has a lot of specialty sports, Groupon has allowed us to communicate that we are more than a gym.”
Mind-BodyFitness, Washington, DC, has used Groupon for two campaigns, says owner Karla Adams. The company initially offered a discounted package of five classes valued at $75. The next time around, Mind-BodyFitness offered a choice among three packages — with a value of $140 — for only $50. The first campaign netted 98 packages; the second one sold 203.
“I definitely was able to reach a clientele that included men that wouldn't have tried it had they not seen it on Groupon,” Adams says.
Other fitness facilities around the country have taken advantage of Groupon's discounted rates, according to the company. Body Endeavors Pilates in Chicago sold 12 classes for $66. SomaFit in Washington, DC, sold five 50-minute classes for $35. TRX Training Center in San Francisco sold three suspension training classes for $20.
Groupon advertised the promotion for The Sporting Club on its Web site for only one day. Through word-of-mouth and forwarded e-mails, the promotion soon garnered some attention.
The 23 new members generated from Groupon at The Sporting Club each signed six-month contracts. The normal enrollment fee of $500 was waived for these members, although there is a $200 fee if the memberships are cancelled before they expire.
Most of the 2,500 members at The Sporting Club didn't seem to mind having new people in their club, Tobey says, even though they paid far less for the discounted memberships than the current members.
“Some members made comments, but they understood it was for a short period of time,” she says.
On Dec. 22, for another Groupon campaign, The Sporting Club sold 869 passes for the same $29 for 29 visits rate, and almost 400 of those passes were activated. Tobey says she expects to have more membership conversions over the next two months.
“It was a very risky thing,” Tobey says of using Groupon for the first time. “However, in the times that we're in, you really need to think outside of the box.”