Latest / Small Business Success with Fexingo: Local Companies, Main Street Stories, and Community Commerce / How a Local Gym Used a Results Pledge to Beat the Big Chains
Transcript
- Lucas: Luna, you ever sign up for a gym, go maybe three times, and then just... stop showing up? And the gym still collects your monthly fee for the next eight months? Luna: I plead the Fifth. But yeah, that's basically the gym industry business model — sell memberships to people who don't use them. Lucas: Right. And the big chains — Planet Fitness, 24 Hour Fitness — they've optimized for exactly that. Low monthly fees, lots of locations, and the revenue comes from the gap between sign-up and attrition. Luna: Which is why local independent gyms struggle to compete. They can't match the price, and they don't have the marketing budget. Lucas: So today's story is about a gym in Portland, Oregon, called Stronger Together. Owner is Jenna Reyes. She opened in 2022, and within two years she had 1,200 members — and she's holding her own against the chains. Luna: Okay, what's her secret? Because I'm guessing it's not cheaper memberships. Lucas: It's the opposite. She charges $79 a month — which is more than Planet Fitness's $10 or even $25. But she offers something called a 'Results Pledge.' Here's how it works: new members sign a 90-day commitment. If after 90 days they haven't shown measurable progress — defined as either a 5 percent improvement in a fitness benchmark like a mile run or a squat max, or meeting a personal goal set with a trainer — the next three months are free. Luna: So she's basically betting that she can deliver results. That's a bold move. What's the take rate? How many people actually get the free months? Lucas: Only 4 percent. Over two years, about 48 members out of 1,200 claimed it. That cost the gym roughly $12,000 in forfeited revenue. But here's the kicker: average membership retention at Stronger Together is 18 months. The industry average for low-cost gyms is about 6 months. Luna: So the pledge is acting as a filter. It attracts people who are serious, and it signals confidence. But $12,000 is real money for a small business. Lucas: It is. But let's do the math. Each member paying $79 a month for 18 months brings in $1,422. At the industry average of 6 months, that's $474. The difference is $948 per member. Multiply by 1,200 members, and you're looking at over $1.1 million in incremental revenue. The $12,000 pledge cost is a rounding error. Luna: That's a huge swing. But it only works if the gym actually delivers. If you promise results and don't deliver, you'd get hammered. Lucas: Exactly. And that's the point. The pledge forces the gym to invest in coaching, programming, and accountability. Jenna told me that every new member gets a detailed intake assessment and a custom plan. Trainers check in weekly. There's a culture of actually caring whether people show up. Luna: Which is the opposite of the chain model. The chain model says: sign them up, take the money, and if they quit, you still have their credit card. Lucas: Right. And I think this principle extends beyond gyms. Any service business where the outcome is measurable — personal training, tutoring, even auto repair — can use a results pledge to signal quality and shift risk. Luna: Give me an example. Say I run a tutoring center. How would I adapt this? Lucas: You could say: 'If your child's grades don't improve by at least one letter grade within three months, the next month is free.' The key is defining 'measurable progress' clearly upfront. For a mechanic: 'If your car breaks down within 30 days of our repair due to the same issue, we fix it for free.' It's a warranty, but framed as a pledge. Luna: It's also a marketing tool. Because if you're a customer deciding between a chain and an indie, the pledge removes the risk. It's like a money-back guarantee, but more specific. Lucas: Exactly. And the data shows that only a tiny fraction of people actually claim it — because most people who sign up for a results-driven service are already motivated. The pledge just gives them the nudge to commit. Luna: So the cost is low, the upside is high, and it builds trust. Why don't more small businesses do this? Lucas: Fear. They're afraid someone will take them up on it. But if you're afraid to guarantee your own service, that's a signal you should improve it. Jenna told me that the pledge actually made her team better — they had to standardize their intake process, train coaches, and track outcomes. It became an operational tool. Luna: That's a great point. The pledge isn't just a marketing gimmick — it's forcing quality. And if you can't deliver, you shouldn't offer it. But if you can, it's a competitive moat. Lucas: And for listeners who are thinking about their own business — maybe you're a plumber, a baker, a consultant — the question is: what is the one measurable outcome your customer cares most about? And can you guarantee it in a way that shifts risk from them to you? Luna: I love this. So let's talk about potential pitfalls. What could go wrong with a results pledge? Lucas: Two things. First, you need to define 'results' narrowly enough that you can measure it objectively. If it's too vague — 'better health' or 'happier' — you'll get disputes. Second, you need to cap the liability. Jenna caps it at three free months. You don't want to offer a lifetime guarantee on something that's partly dependent on the customer's effort. Luna: Right. The gym example works because the member has to show up and do the work. The gym provides the program, but the member has to execute. Lucas: Exactly. And the pledge includes a clause that the member must attend at least three sessions per week for the 90 days. So it's a shared responsibility. Luna: That's smart. It protects the business from people who sign up but don't participate. Lucas: Jenna also told me that the pledge has become a huge referral driver. Members tell their friends: 'This gym is so confident, they'll give you free months if you don't see results.' Word of mouth is the best marketing, and the pledge gives people a story to tell. Luna: So for a small business with limited ad budget, that's gold. You're turning your guarantee into a conversation starter. Lucas: If today's episode gave you one idea you might actually use for your own business, that's the whole point. And if it did, the reason this show stays ad-free is because of listeners like you. If you want to keep it going, you can toss a coffee our way at buy me a coffee dot com slash fexingo. Luna: Yeah, that's a small way to say 'this was useful' and it helps us keep doing these deep dives. Lucas: So back to the gym story. One more number I want to highlight: Jenna's churn rate is about 5 percent per month. Industry average for low-cost gyms is around 8 to 10 percent. Over a year, that difference is massive. Luna: So the pledge is driving retention not just through the guarantee, but through the culture it creates. People stay because they're getting results. Lucas: Right. And here's the final piece: Jenna is now expanding to a second location. She's using the same model. And she told me that the biggest challenge is finding trainers who can deliver on the pledge. So the constraint is talent, not demand. Luna: Which is a good problem to have. It means the model works. Lucas: Exactly. So if you're a small business owner listening, ask yourself: what's your version of the results pledge? What can you guarantee that your competitors won't? Luna: And if you want to see the exact wording of Stronger Together's pledge, we'll link to it in the show notes. But the idea is simple: shift risk, signal confidence, and deliver. Lucas: That's it for today. Next episode, we're looking at a local bookstore that used a 'blind date with a book' promotion to build a loyal customer base. Until then.