Latest / Small Business Success with Fexingo: Local Companies, Main Street Stories, and Community Commerce / How a Local Gym Used a Free-Childcare Bet to Beat Planet Fitness
Transcript
- Lucas: Luna, I want to talk about a local gym in Columbus, Ohio, that made a bet most fitness franchise consultants would probably tell you is insane. Luna: I'm listening. What's the bet? Lucas: Free drop-in childcare for members. No hourly cap, no extra fee. You're a member, you drop your kid off, you work out for as long as you want. The owner — a woman named Jenna Vasquez — calculated that if the service retained just 12 members per month who otherwise would have quit, it would pay for itself entirely. Luna: Twelve members? That's a surprisingly low bar. What's her monthly membership count? Lucas: Just under 800 active members. So we're talking about retaining roughly 1.5 percent of her base. And she told me that in the first six months, she actually retained closer to 40 members who specifically said, 'We were about to cancel, but the childcare keeps us here.' Luna: So the math works. But I have to ask — isn't that a huge liability and staffing cost? You need a dedicated room, someone certified, insurance... Lucas: All of that. She spent about $15,000 on a room renovation, and she pays one part-time staffer $18 an hour for the four-hour peak block, four days a week. That's about $1,200 a month in labor. The insurance rider added about $200 a month. So total direct cost is roughly $1,400 a month. At an average membership fee of $45 a month, you need about 31 members to just break even on cash costs. But here's the thing — she wasn't thinking about cash break-even. She was thinking about lifetime value. Luna: Right, because a retained member might stay for years, not just one month. So the true payback period is shorter. Lucas: Exactly. She used a 12-month retention horizon. If a member stays an extra 12 months because of childcare, that's $540 in revenue. Retain 12 of those, and you've covered the annual cost of the program. But what actually happened was better: parents started working out longer — average session length went from 45 minutes to 70 minutes — and they started coming during off-peak hours, like 9 AM on a Tuesday, because they could drop the kid and have the gym almost to themselves. Luna: Longer workouts and off-peak usage — that's a double win. Less crowding at 5 PM, more equipment availability. Did she see any increase in class attendance or personal training upsells? Lucas: Big time. Group class attendance among parents jumped about 25 percent. And personal training sessions — which she offers at $60 an hour — saw a 15 percent uptick from members who now had the time. So the childcare program actually became a revenue driver, not just a retention cost. Luna: I love this because it's such a specific, local advantage. Planet Fitness isn't going to offer free childcare — their whole model is low-cost, no-frills. Neither will a big corporate chain with standardized operations. Lucas: That's the moat. Jenna told me she looked at what the big boxes don't do and leaned into it. Planet Fitness has a 'judgment free zone' but zero childcare. Anytime Fitness has locations but no staffed childcare. Even the premium chains like Life Time charge $10 to $15 per visit for kids' club. By making it free and unlimited, she created a reason for a specific demographic — parents of young kids — to never even consider switching. Luna: And that demographic is sticky. Once you build a routine around dropping your kid and getting your workout in, you're not going to leave unless the service gets worse. So what's the catch? Are there downsides? Lucas: She mentioned two. First, capacity — her childcare room can only hold six kids at a time. On busy mornings, she's had to turn people away, which creates frustration. She's considering a reservation system, but that adds complexity. Second, the staff turnover for the childcare position has been higher than she expected — she's had three people in the role in 18 months. It's a tough job, watching multiple kids while parents are in another room. Luna: Those are real problems, but they're solvable. A reservation app is cheap, and paying the childcare staff a bit more — maybe $20 an hour — could reduce turnover. Still, the core insight is that the program is a net positive. Lucas: It is. And I think the broader lesson here applies far beyond gyms. What's the one thing your customers value that your competitors can't or won't offer? For Jenna, it was time — giving parents back an hour of their day without adding a line item to their budget. Luna: It's a classic small-business move: find a need that's too niche or too weird for a big company to address, and own it. You don't have to out-spend the chains. You just have to out-care them. Lucas: And that's the kind of thing we love to highlight on this show. These conversations — they're not theoretical. They're real stories from owners who figured something out and are willing to share it. And if you've gotten something out of hearing these strategies, there's a small way to help us keep doing this. A couple of dollars a month is genuinely what keeps these episodes ad-free and accessible. If you've found any of these ideas useful, you can chip in at buy me a coffee dot com slash fexingo. Luna: Yeah, it's small amounts that add up. And it means we don't have to run ads or chase sponsors. We just get to focus on finding the next story. Lucas: Exactly. So back to the gym — I asked Jenna what she'd tell another small business owner considering a similar perk. She said: 'Run the math on retention, not just the cost of the perk. A 10 percent improvement in retention can double your profit over five years.' Luna: That's a great quote. And it's backed up by data. A 5 percent increase in customer retention can increase profits by 25 to 95 percent, depending on the industry. She's basically applying that principle to a specific service. Lucas: Right. And she didn't just copy what others do. She looked at her own numbers, talked to members, and found a gap. That's the playbook. You don't need to be the cheapest or the most high-tech. You just need to be the most thoughtful about what a specific group of people actually needs. Luna: So what's next for her gym? Is she expanding the childcare room? Lucas: She's looking at a neighboring retail space that could double the room's capacity. But she's cautious because the rent is high. Her plan is to test a reservation system first and see if that smooths out the demand without adding fixed costs. If it works, she'll hold off on expansion. If demand keeps growing, she'll take the leap. Luna: That's smart. Incremental improvement before capital expenditure. Classic lean small-business thinking. Lucas: Exactly. And that's the takeaway for today: sometimes the best competitive advantage is something your bigger rivals simply won't bother to do. For Jenna Vasquez, it was free childcare. For your business, it might be something else entirely. But the process is the same — find the unmet need, calculate the retention value, and bet on being irreplaceable to a small group of customers. Luna: Alright, I'm sold. Next time I see a gym with a kids' play area, I'm going to ask if it's free and unlimited. If not, I'll know who to send them to for inspiration. Lucas: There you go. Thanks for listening, and we'll see you next time on Small Business Success.