Gold's Gym

In this 10 minute segment (download iPod compatible, 51MB), Paul Wright, owner of Gold's Gym, Ann Arbor, discusses his branding strategy and expansion plans over the next 12 months. Paul is working with a marketing firm to develop a message and a brand that will attract all segments. He sees having multiple brands in each facility: Les Mills for classes, Shake This for shakes, and Gold's or another brand for fitness. You might say that Paul is trying to combine name brand products with excellent customer service at an affordable price.

He is focusing his expansion strategy on small to medium size gyms where he finds the strategy of strong brands coupled with excellent customer service to be poorly executed. As we mentioned in a previous segment, landlords find having a gym is good for their other tenants' business, so they are willing to do things like offer attractive lease terms and build-to-suit.

In this four and a half minute segment (download iPod compatible, 22MB), Paul Wright of Gold's Gym, Ann Arbor, discusses how he will evolve his management structure to accommodate planned growth. A major consideration is selecting new managers. He is looking for personable people with creative minds who are not stuck in the small club mind set. Potential managers do not need to be from the industry as that can handicap them with old ideas about how a club should operate, although the familiarity with the basic components of a club would be a plus.

An important consideration for Paul is how to maintain his competitive edge of a friendly, non-intimidating atmosphere as he expands management beyond the current core group. To this end, he is currently documenting all of his processes.

In this 10 minute segment (download iPod compatible, 54MB), Paul Wright begins to describe how he intends to expand into the Michigan gym market. The strategy is essentially an extension of how he penetrated Ann Arbor: offer a a premium facility that meets users needs at an affordable price. He offers more than pure store front facilities at a slightly higher price but less than mega-facilities but also at a substantial savings. Essentially, he is hitting a spot in the market that neither one of these other players can reach.

Paul discusses two new facilities in this segment:

• Saline, MI: This is a store front operation in the 10K square foot range that will open later this year. Paul will orient it toward the quick cardio and weights workout, again with high quality equipment. There will be no child care or class exercise rooms.
• Novi, MI: This facility will be more than three times the size of the current Ann Arbor location with basketball and swimming. He expects that that facility will draw over 1000 workouts per day compared with 400 for the Ann Arbor location.

An interesting feature to the Novi location is that the landlord will build out the facility for him. In addition to the increased rent this service offers, landlords want the kind of high traffic a gym can bring.

The following map illustrates Paul's current location and expansion plans as he lays them out in this segment. In future segments, Paul will talk about longer range plans that include further expansion.

In this 8 minute segment (download iPod compatible, 46MB), Paul Wright lays out the strategy he has pursued at Gold's Gym, Ann Arbor after bootstrapping it in January, 2006 and growing the membership to 1800 currently. It has been a period of constant adaptation as Paul has figured out different segments to target and different services to offer. Significant factors include:

• Determining what the gym's capacity truly is. Currently, there are not lines for workout equipment, and there might not be with even double the membership.
• Targeting and attracting segments. Paul has managed to attract the 20% of the population that actively workout. He would like to broaden his appeal to the sedentary population.
• He may change the branding of his gyms to his own brand to better position himself to attract different populations.

In future segments, Paul will describe in more detail how he is seeking to expand the business under his own brand and the packages of services he intends to offer.

Additional Links

• Paul himself is an elite athlete.
• I first interviewed Paul almost a year ago when he was first opening his gym.

Disclaimer: Paul is a sponsor of the Muscle Ventures web site owned by the author.