Minnesota Startup GymPhone Is Dialing Up The Dollars

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gymphonePeople with a workout itch call a gym because they are looking for a place to burn calories and run around, not because they’re looking to get the runaround.

But for smaller fitness clubs and franchise locations working on limited payroll budgets, providing the kind of service callers expect and demand is a strenuous challenge.

Too often, potential leads go straight to voicemail. And that, according to local entrepreneur Todd Huna, is a “worst-case scenario.”

He and Chad Capp are the founders behind GymPhone, a company whose name succinctly explains its basis. The product is, in essence, an overflow call center for fitness clubs of various sizes and specializations. But the key advantage is that GymPhone couples with parent company Vosseo, a local VoiceIP provider operating in the same space as Vonage and others, for an integrated phone/answering service. Two birds with one stone, as it were.

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Capp and Huna are longtime friends who both worked in the fitness world following some joint real estate ventures in the early 2000s. They know the pain points of the industry well, especially for 24-hour keycard access clubs that rely on low staffing expenses to get by. Their business concept is a flexible one with many theoretical applications, but they’re starting with fitness because, well, it fits.

Not only does the ability of GymPhone to function as a phone company enable customers to consolidate their expenses, it also provides access to unique insights that reinforce the product’s value.

“We handle about 40 percent of calls that come to venues that we work with, over 150,000 last year alone,” says Capp. “All those calls would’ve gone to voicemail and the only reason we know that is because we’re the telephone company.”

So the benefit is twofold. First, there are the tangible perks – prospective customers who would’ve hung up on voicemail and moved onto the next gym now sign up for a membership. Huna says internal calculations based on customer feedback suggest a GymPhone subscription pays for itself five times over, though he admits it’s not completely scientific data.

Secondly, the fitness club is offering vastly better customer service. Everyone who calls talks to a real live person – not a robot, not an answering machine. GymPhone employs about 20 full-time reps in its own phone bank, and they all understand the vertical well.

“That’s the difference between us and a Verizon call center,” Capp explains. “We win when the customer just assumes we’re sitting behind the desk in a sports bra and yoga pants.”

This engaging interaction opens the door to new sales as well as upsells and cross-sells, a frontier of monetization that may represent this startup’s most promising growth channel. Right now, they’re only scratching the surface with a simple subscription pricing model based on volume.

“It’s like an old school cell phone plan,” says Huna. “You have a certain amount of minutes, and if you go over, then we’ve got to charge you for it.”

Within this trajectory, GymPhone has captured about 1 percent of the market, and they feel they have a realistic path to 15 percent, which translates to $20 million in annual revenue. Current customers include many fitness franchisees under recognizable brand names like Anytime, Snap and Orange Theory.

But once they start digging into different verticals, and exploring the potential for evolution to a full-fledged sales platform? There could be a much larger opportunity here. However, answering that call will likely require Capp and Huna to expand their executive team – right now it’s just those two – and seek some outside capital, which they haven’t done, yet.

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