SFIA Member Spotlight — Gympass
Sean Flynn discusses how Gympass is changing the game for corporate healthcare programs — It’s a tried & true approach to improving the health & well-being of any company’s workforce.
What is Gympass?
Gympass is a platform that empowers companies to engage their workforce in physical activity by providing access to the largest global network of workout facilities. Think of it like an Airbnb, but for gyms and fitness centers. Our network includes over 36,000 gyms, boutique studios, and fitness centers spanning across 14 different countries with over 800 different activities. We offer everything from full-service gyms, yoga, and cycling, to things that you might not think of, like tennis, surfing, and dance classes.
Gympass offers organizations a win-win option to proactively reduce company healthcare costs while allowing employees to choose the fitness plan that best fits their lifestyle. As the fight for talent increases, it’s a powerful talent acquisition and retention tool that increases productivity, reduces absenteeism, and allows employees to choose their plan at a discount of 60–70% off market prices. And gyms like partnering with us because as much as 80% of the people coming through the door are new members. This drives an uplift in revenue with no customer acquisition costs or marketing costs.
How exactly does it work?
We have over 36,000 gyms in our global network, 6,000 of which are in the U.S. There are tiers of membership, which allows employees to pick the package that’s best for them. We offer memberships that span from basic full-service gyms to high-end boutiques and personal trainers. You get access to all the gyms in your chosen tier and can go as often as you like, at any location. The only limitation is you can only go once a day. Other than that, you can visit 30 different gyms in a month or visit the same gym 30 times — it’s completely up to you. Our mission is to defeat inactivity by helping people find an activity that they love. We believe that pleasure beats pressure. The idea is to get people to be active because they found something they enjoy doing.
When was the company created and what is the founding story?
Gympass is six years old. Our Founder and Global CEO, Cesar Carvalho, is a former McKinsey consultant. He was enrolled in Harvard Business School when he had the idea for Gympass. He actually dropped out to return home to Sao Paulo, Brazil to start the company.
As a consultant, he was always on the road for client projects, one month in one city, four months in a different one, and after signing up for three different gym memberships, he thought that there had to be a better way.
He originally used a B2C business model, selling day passes to gyms, and was successful at that, but then he got a call from the head of a major consulting firm who said, “Can I sign up my whole company?” That was his ‘a-ha!’moment.
Corporations are in a unique position to help people become active because of the aggregated benefits. As a win-win for them and their workforce, they’re much more likely to engage it. Today, about 80% of the gyms in Sao Paulo are Gympass partners, and our clients include global enterprise companies like Unilever, Proctor & Gamble, Deloitte, and Ernst & Young. In the past six years, Gympass has expanded across Latin America and Europe. We entered the U.S. market in March 2018.
You can also be a Gympass member as an individual, correct?
No. While we did originally offer a B2C business model, we’ve pivoted to be a B2B corporate wellness benefit. We envision Gympass as a win-win-win for companies, employees, and gyms alike. With B2C, the membership base tends to be people who are already active, which is not aligned with our mission. We’re not about selling day passes to individuals as an alternative to buying a full-time gym membership. Rather, we aim to enable organizations to engage employees who haven’t been active in the past and inspire them to become healthier — and it is working. Our enrollment rates are typically 30%+, about double what memberships tend to be across the country. Ultimately, we’re bringing people into those facilities that are not already active — that’s what makes it work.
What is your background?
Different… I went to West Point and served in the army. I was an Armor Officer (tanks). When I got out, I spent three years in surgical sales before finding my way to IBM. I spent 15 years at IBM, and ended up running global sales for one of their major software brands. I started with Gympass in April, so I am now on month five. I kind of went from a tank…to the OR…to IT, and now I’ve added the fitness industry… so it’s a different background.
Aside from Gympass focusing on B2B, how would you say it differentiates from something like ClassPass?
Most of the gym aggregators come from different DNA. We focus on building long-term client relationships with our corporate clients. We want to know their employees and build a tailored network in their area — it’s about offering flexible options that work for them. Additionally, we work with HR departments over the long term to help them understand how employees using Gympass impacts their company’s overall healthcare costs and increases in organizational productivity.
It’s really interesting, in many organizations roughly 5% of your population comprises over half of healthcare costs. This is largely due to chronic conditions like diabetes, obesity, and heart disease. There are only so many methods employers have at their disposal to solve for that. That’s why preventive care is becoming increasingly important. What attracted me to Gympass, outside of it being a hyper-growth company and a disruptive technology platform, is that, at the end of the day, what we do matters. If we can double the number of active people in the world, as we’ve been able to do in other established regions, we’re helping people lead happier, healthier, and ultimately more productive lives. It is amazing to be part of a mission-driven organization.
Gympass started in Brazil, but is now global — How did the company start that expansion?
We began exploring other Latin American countries where our Brazilian clients had locations or subsidiaries. From there, we expanded to Western Europe, and continued to develop expertise in building long-term B2B relationships. In some of our client accounts, over 60% of their employees are Gympass members. Those learnings gave us the wherewithal to come to the U.S. We now have locations in New York, Atlanta, Chicago, Houston, Los Angeles, and San Francisco.
Is it difficult to establish new relationships every time you expand into a new country? Are many of these gyms global chains with international locations?
Some certainly do, but for the most part it is a matter of building relationships with our gym partners every time we enter a country. It goes back to long-term trust. You have to establish how you can help. It is why we set up a model with all the incentives aligned. It’s not a coupon model where we’re asking gyms to give up some margin — we’re going to bring our gym partners incremental business. For example, I was just down in Sao Paulo visiting the biggest location that we have. We went to a workout at a premium partner in the city. We went with our founder and a couple of leaders from our Brazil office for a 6:00 AM high-intensity workout. The owner of the gym came in to greet us and catch up on business over coffee. Over a five-year period, that relationship has grown stronger as we drive more and more revenue to his gyms. It was terrific to see. And a reminder that relationships get stronger over time if you follow through.
How do you see Gympass evolving in the next 5 years?
The thing that we are most focused on is continuing to deliver value to all of our stakeholders, meaning corporate clients, their employees, and the gyms. This effectively means continuing to expand our network here in the U.S., so that we have complete coverage in every major market. We’re very focused, and we’re going to stay focused on being a physical activity provider. We want to be the best-in-class corporate physical activity provider and deliver on our mission to defeat inactivity.
