CrossFit craze changing the fitness industry

By Megan K. Rauch

The fitness industry’s latest craze, CrossFit, advocates high intensity workouts with aerobic, strength and gymnastics training. The fast-growing strength and conditioning program has turned into an international phenomenon — and it’s found an eager audience in the Chicago area.

In 2012 CrossFit generated roughly $20 million in revenue; this year, founder Greg Glassman estimates, revenue will have surged to $100 million.  There are now approximately 7,000 CrossFit gyms in 61 countries, though new openings are raising that figure daily.

Despite the surging revenue growth, some observers believe the CrossFit brand could be generating more.

The company itself doesn’t own the chain: revenues only come from the $3,000 it charges gym owners annually for the right to advertise as CrossFit gyms, and the $1000 it charges trainers to receive a training certification.

Other companies sell products associated with CrossFit, such as supplements and equipment. CrossFit’s growth also caught the eye of Reebok, which in 2010 became the official apparel brand of the sport.

In contrast to conventional gyms, CrossFit doesn’t use fancy marketing strategies to lure athletes into joining local CrossFit outlets,. each of which are independently owned and operated. Word-of-mouth is the primary way new members arrive at a local gym’s doorstep.

Each gym offers its own workouts and programming based on the CrossFit methods taught to trainers at the certification courses.  CrossFit gyms also pride themselves on building strong communities for members, and affiliates rely heavily on the community for building new membership.

To date, CrossFit has thrived in the Chicagoland area. The CrossFit headquarters website shows 109 affiliates in Chicago and the surrounding suburbs.

“The neat stuff about CrossFit is that it’s really about the community and the people in the gym and the people sell the experience for you, so it’s kind of a unique business model,” said Kevin Teborek, owner CrossFit e-town, in Evanston, Ill.

If CrossFit e-town continues to provide the coaching and programs that lie at the center of the program, he said, “the community is going to grow. The athletes will get the results that they want, and they’ll spread the word for us.”

CrossFit e-town, founded in 2011 by Carrie and Kevin Teborek, began without any members and with no additional staff. By the end of the first year, the gym grew to 100 members, which allowed the Teboreks to hire an additional trainer.

Today, CrossFit e-town, which is housed in a 6,000 square-foot warehouse in Evanston, has between 165 and 175 members, Kevin Teborek estimates. The coaching staff has also grown to five employees.

E-town generated between $220,000 and $225,000 in revenue last year, and Teborek expects revenue to grow by between $25,000 and $75,000 (over what period? Annually?)

The growing popularity of CrossFit has made competition in the area extremely fierce. Within six miles of e-town, there are seven other CrossFit gyms and about 35 other kinds of fitness centers.

In such a challenging marketplace, CrossFit gyms must develop their own personality to succeed and attract new members,

Rizina Hakimiyan, an e-town member, said the thing that she likes most about the gym is its community.

“When I first started, it was just a family instantly. They’re there for you and they care about you. So many of them ask me about how I’m doing at school every single day and that means a lot,” she said.

The gym’s community and the fitness results it can offer are two of the main reasons why people are so willing to pay the hefty membership fees, which are typically between $150 and $250 per month.

The video shows what a typical CrossFit workout is like.