Julian Kaufman decided in March 2005 to create a different type of gym -- a gym with private rooms and low-pressure selling techniques -- to appeal to consumers looking to improve their health, not just to look good at the beach.
He founded a branch of Fitness Together, an international franchise with more than 400 locations, on Chattanooga's North Shore, with the philosophy that he could catch more flies with honey than with vinegar.
Kaufman made the decision to avoid popular fitness business techniques that rely on "pain funnels" to make customers feel bad enough to sign a contract, and independent contractors instead of employee trainers.
Now six years later, the corporate entity of Fitness Together has recognized Kaufman's North Shore location as the No. 1 franchise in Tennessee in gross revenues, with the strong possibility that his business also will be No. 1 in the Southeast and make the top 10 nationwide, he said.
"We're clearly looking like we're in the top 10 in the U.S.," he said.
It all started with the idea that customers should be treated like people instead of dollar signs, he said.
"In the fitness industry, it's really based on manipulation, people telling you you're not beautiful enough, you don't fit the image of society, but we think people are already beautiful," Kaufman said. "We focus on improving their health and quality of life, not helping them look good in a bathing suit."
Chattanoogans responded, helping him grow to 165 regular customers, or about 80 percent of his store's capacity.
"I was told by people in the fitness industry that they respected that ethic, but that we wouldn't be successful," he said.
But he grew at a rate of 15 to 20 percent every year, and some of his current customers have been with him since the beginning, he said. His location at the upscale Two North Shore shopping center on Manufacturers Road didn't hurt either, and he grew his team to eight employees and enlarged his space by 50 percent.
Kaufman said he's not a businessman in the traditional sense, at least not when it comes to customers. One way to build trust and keep customers on board, he said, is not to try to oversell potential clients, but instead to be honest and only sell them services he legitimately believes they need.
As an example, he tells a story of an attorney who was already in relatively good shape, was disciplined and who wanted to buy 200 sessions.
"I told him I wouldn't sell him that, because he didn't need it, but I would let him come in once a month and let us help him vary his routine," Kaufman said. "People are smart, and if they have a sense that they're safe, that you're not trying to take advantage of them, they'll trust you."
Kaufman's second key to success is how he treats his employees, according to Kyle Johnston, manager, and Rachel Reeves, assistant manager.
Reeves, who previously owned the Fitness Together on Gunbarrel Road, sold that location to work with Kaufman, she said.
"The Fitness Together systems are great, but the reality is that my revenue at the Gunbarrel Road location went up by 15 grand per month just going back to the fundamentals like Julian says," Reeves said. "And that was in the middle of a bad economy."
For her, it's all about being part of a team and keeping the group united. And the team-building exercises aren't just for building morale at the office, she said. Trainer retention is part of the key to client retention. As clients build a relationship and a rapport with trainers, they become more comfortable. Conversely, if a new face shows up every week, clients are harder to hold onto, she said.
"We're continuing to have that team unity," she said, and as a result "we have the highest level of trainer retention in the nation."
Future keys to success will continue to be multifaceted, Johnston said, noting that there's not one magic bullet.
"People see the value in what they're getting, much like when you go to the store and go shopping," he said. "If they see results, that's as good for them as it is for us."
For marketing, Kaufman has another simple yet elegant philosophy: He writes a handwritten letter once per day to a potential client.
"Most businessmen, they analyze all the metrics, they've got a percentage for everything, and they're constantly analyzing to see what kind of marketing is most effective," Kaufman said. "While they're doing that, I just write another letter."
Contact staff writer Ellis Smith at esmith@timesfree press.com or 423-757-6315.