Many in the high-stakes poker community see the changes as an attack on the company’s most loyal players, and for some, it’s being framed in a way that makes it seem PokerStars has broken some mythical nonaggression pact it had signed with its top customers.
But is this really a case of the industry being at odds with its consumers? Or, is it something else entirely?
Interestingly, I’ve seen a similar scenario unfold in a wholly different industry. The current situation between high-volume players and PokerStars reminds me of a fight that occurred within the health club industry dating back some 15 to 20 years between hardcore weightlifters and gym owners – a battle I experienced firsthand.
Here’s something you probably don’t know about me (why would you?). I worked in health clubs off and on from 1995 to about 2008. I started off as desk help, became a personal trainer, and later managed a couple facilities. When I first started working in the industry, the change had just begun (it took a good five years to really catch on), so I had an up close and personal view of the situation.
In the 1980’s and into the early to mid 1990’s, most gyms had a similar business model to that of online poker sites from 2006 to 2011, as they catered to their most loyal customers: bodybuilders, power lifters, and other gym rats. I’ll simply refer to this diverse group as hardcore lifters from here on out.
Basically hardcore lifters were the Supernova Elites of the health club industry. They were high-value customers, and like Supernova Elites, they were astutely aware of this and felt they deserved preferential treatment.
After all, they bought all of their supplements, lifting gear, protein drinks, workout clothes, and other items from the health club. They also spent money on tanning and other services offered. And they were there every day, promoting the gym.
At one of the gyms where I worked, the monthly revenue generated by the top one percent of customers was easily ten times a typical member.
It seems like a huge difference, but consider that the typical gym member’s only contribution to the facility’s revenue was a membership fee and maybe the occasional bottle of water.
On the other hand, a hardcore lifter was paying the same membership fee, buying a daily pre- and post-workout drink, and spending even more money on marked up supplements, supplies, and services. If a typical gym member was worth a $30 membership fee per month, a hardcore lifter was worth that $30, plus another $250 per month from the drinks they bought five times a week, and another $100 to $200 in supplements, tanning, and such.
Like Supernova Elites, hardcore lifters also harbored the belief that they inspired others to greatness. There was also a pervasive theory in the gym world that these muscle-bound men attracted females to the gyms. I never believed this theory to be true, and I’ve never seen any evidence it was.
As the theory went, these females would in turn attract other men to the facility (this is very true), and these “average” male gym members would be motivated by the hardcore lifters and aspire to be one of them (by and large this is untrue).
So, for a very long time, gyms catered to hardcore lifters. They cut them deals on memberships, offered discounted prices on supplements, would let them run tabs, and might even let them buy a case of their typical pre-workout drink at wholesale. They were seen as valuable members, and they were. But they were also overvalued.
As much as they may have spent, hardcore lifters also possessed a lot of negative qualities.
Because of their loyalty and strength, they abused the equipment, so on average they cost more in maintenance and upkeep.
They used chalk and other messy items, and are much dirtier than a typical member, as they viewed the gym as their own personal gym.
They intimidated new members, monopolized equipment, and made a lot of noise.
Perhaps worst of all, they complained about everything they didn’t like – such as the gym replacing treadmills that would be used by 100 members instead of buying the new power rack they and five other people wanted – and they constantly threatened to leave for greener pastures if they didn’t get their way, upping the ante by saying they would take their crew of four training partners with them.
In the mid- to late-90’s, a lot of gyms started to experiment with contrarian casual lifter-friendly business models. Some health clubs already occupied this niche, but by the late 1990’s it was an industry-wide movement. Part of this was weightlifting and gyms catching on with the general public; another part was the ability of hardcore lifters to order their supplements and supplies online instead of paying the markup to the gym, causing the gym to lose a major revenue source that happened to be one of the main reasons hardcore lifters had so much value.
For most gyms that decided to undertake the changeover it started relatively small, with the banning of chalk. This sent the few powerlifters packing to some real hole in the wall gym that they probably still love to this day – the leakier the roof the better for some. With most of the powerlifters gone, gyms started prohibiting powerlifting exercises altogether, and then it was on to shrinking free weight areas and replacing squat racks with more cardio and weight training machines. Some places even banned tank tops and other clothing, which sent bodybuilders into a tizzy.
I learned the quickest way to get rid of heavy lifters was to simply max the dumbbells at 100 pounds. So, if you’re looking to join a gym, the easiest way to discover what kind of gym you’re thinking about joining is to go down to the free-weight area and see how high the dumbbells go, and how banged up they are.
When most of the hardcore lifters left, they guaranteed the gym would be closed in a year, since the gyms were alienating their best, and most loyal, customers.
Interestingly, despite their doomsday warnings, the gyms that went casual-friendly tended to survive, while most of the gyms that welcomed hardcore lifters with open arms have since folded. You’ll still find some, because there are still old school hardcore lifters that “need” to use chalk and slap themselves in the face before each set. But by and large, these people have found it easier to play by the new rules and fit in at these “wimpy” gyms.
If you re-read what I’ve written above, and substitute hardcore lifters for Supernova Elites, the parallels are very striking. In both industries there are high-volume customers who rely in large part on a gym or online poker site to provide them with a place to exercise or play poker.
Both groups also feel they have a higher worth as well as some immeasurable inspirational quality. This causes them to expect preferential treatment and ask for the world, and when they get the world they usually ask for more.
What hardcore lifters discovered, and what online poker players seem to be missing, is that while their value may be higher than other customers, they also possess harmful qualities. Additionally, their value is offset by their lack of numbers.
Gyms discovered they could attract hundreds of low value customers by pushing away 20 or so high-value members. And keep in mind not all of the hardcore lifters left; some understood the new direction the gyms were taking, and the reasons behind it, and conformed.
These new customers may not buy drinks and supplements (most of them rarely show up at all), but they also don’t beat up the equipment (and commercial gym equipment is ridiculously expensive) or create an intimidating atmosphere. In the end, the low value customers have become the high value customers.