Part 3 of 3-part series “Digital Handcuffs”
Ready for gym software? Here are the five best questions to ask to make sure you install the right gym software – the first time. In our 3-part series on “digital handcuffs,” we profile how software firms and payment processors often sell expensive, overreaching technology. In this final piece, we give you the inside scoop on making a better, more informed decision.
#1 Question: Ask the gym software company, “Am I in a contract?” many, many times!
The best software companies will not force you to use their product. Most software is sold on a month-to-month basis. Yet contracts are common in the gym management software industry.
We urge you, when in discussions with a gym software vendor, to confirm unequivocally you will not be held to a contract. Our experience has been that you need to ask many times to ensure it is truly a month-to-month agreement.
Even then, the companies may come back with a contract, sliding it in without known consent. So, stay aware!
How gyms get tricked into contracts.
Recently, a new prospect came to us from a large, well-known software firm. The owner thought their contract ran month-to-month.
Unfortunately, at some point, the gym owner had received an email, “updating the terms” and asking for his/her signature. Unknowingly he signed a contract, which he did not realize until he tried to switch gym software companies.
Suddenly they were in a contract requiring notice for leaving the company, as well as an additional 90-day notice to retrieve data. What should have been simple, just became a real hassle.
Key Takeaway:
Stay cautious – contracts aren’t needed, but many gym software companies may pressure you to sign one.
#2 Question: What is the process for leaving your gym software firm?
Typically, it should require a 30-day notice.
Data transfers can be scary but they should not hold you back from changing software firms.
Unfortunately fear of losing their data causes many gym owners stick with outdated software, holding them back from their full potential.
#3 Question: When I leave, how is my member and payment information provided to me?
These two data sets should be available to you on a single report. If they require you to reach out to the payment processor for your credit card data, you might be in for a wild ride.
Frequently, the software firm releases client data quickly and easily upon request. Then they point you to a payment processor* for your member credit card data. It is here that switching software stalls. Why? Let’s look at how the two industries support each other.
The software vendor/payment processor relationship comes in three forms:
- Many gym management software providers are also independent sales organizations (ISO). In addition to providing gym software, ISO’s partner with a merchant processor.
- In another strategy, the software vendors partner with an ISO to provide merchant processing. In this case, the ISO provides a “kickback” to the software vendor for the referral. Meaning your gym is paying an even higher percentage than if you were working with a software vendor who is also an ISO.
- Finally, some gym software companies are also the payment processors or payment facilitators. In these cases, the company began as a merchant provider and eventually added gym software. They make money from processing your charges, as well as on the gym software on your computer.
In each case, the software company acts as your processor — adding excessive fees taken directly from your cash flow. This setup makes it difficult to determine exactly how much money your gym generates each month and is very profitable for the ISO. Unfortunately, merchant processors do not directly solicit business accounts, so most companies end up working through an ISO. There is another option, though.
Key takeaway:
Software companies are frequently also the payment processor or maintain a financial arrangement with the merchant provider. This drives up the number of fees a gym owner pays and masks your true cash flow.
#4 Question: Can I set up a wholesale merchant account?
The answer is “yes!” A responsible independent software vendor will encourage you to set up your own wholesale merchant account. Often, they provide a list of companies they’ve found helpful or who offer lower rates upon referral. You then establish your own merchant account, and the gym software firm never touches your cash flow. That’s more money in your pocket. Most importantly, you know exactly how much money your gym takes in each day and how much the merchant provider and credit card companies charge. It’s still a hit, but it’s an established, known fee – no hidden, unexpected third-party charges.
Key takeaway:
Choosing your own merchant provider eliminates excessive fees paid to third party companies and gives you full control over your club’s money.
#5 Question: Will you provide a demo of your software?
This should be an easy “yes” on the part of the software firm. Yet many gym software companies hesitate, offering only 15-minute, perfect-world scenarios. Instead, you should expect an hour-long deep dive into the software, illustrating an average day — with all its ups and downs.
Conclusion
Picking the wrong software can be a game changer. It may cost you too much money and never work correctly, stalling your growth and potential. By educating yourself on how the industry works, you can sidestep mistakes and stay away from the digital handcuffs keeping so many gyms tied to their software vendor.
Ok, we’ve got to tell you about Gym Insight, right?
At Gym Insight — we are none of these things. We are not an international conglomerate. We don’t even discuss contracts. You choose your merchant provider. And we never touch your bank account — that’s your business, bro!
Instead, we are a team of solid technology creatives and energetic sales reps, led by a single owner with a computer software background and history of owning gyms. In fact, our custom software grew out of our owner’s frustration with his gyms’ software. Unlike many of the best-known gym software firms, we are constantly updating our software, improving its features and responding to client requests.
We don’t need contracts. Our clients stay because they love our software and make more money because of it.
Gym Insight
Thank you for following our three-part series on payment processors and their digital handcuffs. We are an independently owned gym management software company established in 2008. We offer automated fully integrated gym and staff management solutions, tablet-based sales, 24/7 digital keytag access, robust reporting capabilities, and a free Member’s App for communicating safely and legally with members.
For more information, call 855-367-9967 and ask for a demonstration of our amazing and affordable gym software.
*Payment/merchant processors provide the technology platform for authorizing credit card information.