“Our area is saturated” is a testable claim. Almost nobody tests it.
A school owner emailed me this week about a back to school night. Local businesses set up tables, parents walk through, you talk to families. Good event.
Other martial arts schools were already on the vendor list. He counted seven or eight inside a five mile radius and told me the area is saturated. He also doesn’t run after school pickup and some of them do.
His question was whether it was worth going.
Both of his reasons were irrelevant, and his saturation number was wrong by a factor I’ll show you in a minute.
The thinking behind that email is going to cost him more this year than every table at every event he’ll ever set up.
If you’re weighing an event right now, go. Then come back and read the rest, because the event was never the problem.
It isn’t different, and that’s the problem. Gymnastics, dance, and t-ball want the same kid in the same 4:30 slot out of the same household budget. Your brain filed the martial arts table as a threat before you ran any analysis, then handed you the analysis afterward so the decision would feel like strategy. Threat detection is fast. It is also wrong most of the time.
He never would’ve asked if the vendor list read gymnastics, dance, and t-ball. Those programs want the same kid, the same 4:30 slot, the same money out of the same household budget. Every one of them is competing with you for a family with exactly one open afternoon.
The word “karate” on somebody else’s table set something off that “ballet” didn’t.
Threat detection fired first, and it fires before analysis gets a vote.
Richard Lazarus and Susan Folkman described this as two steps. First you decide whether something matters to you, then you decide whether you can handle it (Lazarus & Folkman, 1984). Jim Blascovich and Wendy Berry Mendes made it measurable. Judge your resources as equal to the demand and you get a challenge state. Judge the demand as bigger than your resources and you get a threat state (Blascovich et al., 2003).
Same event. Same table. Two completely different bodies walking into that room, and two completely different decisions coming back out.
Those states aren’t personality. Research reviewing the model in high pressure work calls challenge and threat “not fixed and dichotomous, but rather malleable states” on a continuum, and challenge beat threat on performance in surgery, athletic seasons, flight simulation, and negotiations (Kelley, Siegel & Wormwood, 2019).
Malleable. Meaning you can move it, on purpose, before you walk in.
Every buying decision runs Event, then Cognitive Assessment, then Emotion, then Behavior. That’s the engine inside your enrollment conference, and you win or lose at the assessment layer, never at the close. Point the same sequence at the owner and it runs identically. A vendor list becomes “we’ll get buried,” which becomes dread, which becomes staying home. He obeyed a feeling he never examined.
Here’s how it runs on a parent standing in your lobby.
The Event is the tour. The Cognitive Assessment is her brain asking what this means for her kid. The Emotion is hope, or doubt, depending on how that assessment landed. The Behavior is signing or leaving.
You win or lose at the Cognitive Assessment layer. Not at the close. A “no” at the close is almost always a reframe you missed forty minutes earlier.
Now run it on the owner.
The Event is a vendor list with other schools on it. The Cognitive Assessment is “the area’s saturated and we’ve got nothing to counter transportation.” The Emotion is dread. The Behavior is staying home.
He didn’t make a marketing decision. He made an unexamined assessment and then obeyed the feeling it produced.
The golden rule is: the feeling follows the belief, never the other way around. You already sell on this. Now apply it to the guy in the mirror.
Almost certainly not, and it takes four minutes to prove on your own zip codes. Saturation means the people who want it already have it. In 2023, 6.61 million Americans age 6 and up practiced martial arts at all, out of roughly 314 million. That’s 2.1 percent. Count only the committed students and it drops to one percent. Ninety-eight out of a hundred people near you train nowhere.
The Sports and Fitness Industry Association surveys 18,000 Americans a year. In 2023, 6.61 million Americans ages 6 and up practiced martial arts at all, casual included, up 4.0% over the prior year (SFIA, 2024 Topline Participation Report).
The US population ages 6 and up that year was about 314 million (US Census, NC-EST2024).
That’s 2.1%. Count only the committed students, the ones training 13 or more times a year, and it’s 3.13 million. One percent.
Ninety-eight out of a hundred people in your five mile radius aren’t in anyone’s school. Not yours. Not the seven guys he’s worried about.
Now run it on your own circle.
Pull the population inside your radius. Multiply by 2.1%. That’s every human near you who trains anywhere at all. Then add up the real student counts of all eight schools, yours included, and compare the two numbers.
Say those eight schools average 150 students. That’s 1,200 total. For 1,200 to actually saturate a market at a 2.1% participation rate, your five mile radius would have to hold about 57,000 people. Most suburban five mile radiuses hold two to five times that.
That market isn’t saturated. It’s barely touched, and eight of you are working the same corner of it.
Run that math this week before you cut one more price or skip one more event.
Retention, not saturation. Casual participation grew about 75 percent between 2018 and 2023, while core students, the 13-plus-times-a-year people who are actually your business, fell 18 percent. More people are trying martial arts than ever and fewer of them are staying. That’s a conversion problem, and it’s a far better complaint than saturation because it’s true and because you can fix it.
I don’t cite research I haven’t read, so here’s the part the saturation crowd should be using instead.
In that same SFIA data, casual martial arts participation went from 1.99 million in 2018 to 3.48 million in 2023, up about 75%. Core participation, the 13-plus-times-a-year students who are actually your business, went the other way. From 3.83 million down to 3.13 million. Down 18% in five years.
More people are touching martial arts than ever. Fewer are staying.
That is a conversion and retention problem, and it’s a much better complaint than saturation because it’s true and because you can do something about it. The trial pool is growing. The number of schools converting trials into committed students is not keeping up.
Which is another way of saying the guy with seven competitors and a growing casual pool has more raw material than he’s ever had. He’s reading it as a threat.
Because density is a demand signal. The eighth school doesn’t open in a dead market, and businesses that require you to walk in and look around cluster deliberately. Research on the lodging industry found that concentration cuts the buyer’s search cost and raises the odds they actually purchase. The finding that should stop you cold: independents and smaller operators gained the most from being surrounded by bigger ones.
The eighth martial arts school doesn’t open in a dead market. Density means somebody already proved the demand and paid for the proof.
Chung and Kalnins tested this on the Texas lodging industry and published it in the Strategic Management Journal. They found that when consumers need to personally inspect what they’re buying, “sellers can reduce consumers’ search costs by spatially concentrating,” which raises the likelihood of visitation and purchase versus if those firms had located apart (Chung & Kalnins, 2001).
The result that should stop you: independent and smaller operators gained the most. Independents did better in markets populated by more chains. Small operators’ revenue went UP when surrounded by larger ones. The authors note this means fears about the category killers are largely misplaced.
Substitute the big franchise school that opened down the road from you and read that paragraph again.
Broader work on agglomeration finds establishments near an anchor firm show 15 to 18% higher employment in that anchor’s industry (Bolter & Robey, 2020, W.E. Upjohn Institute). Density correlates with more activity, not less.
Parents in your area already know martial arts exists, already drive past three signs for it, and already have friends whose kids train. Seven schools spent money teaching your market that this is a normal thing to do.
You didn’t pay for any of that.
It taxes your bandwidth. Scarcity grabs attention, pins it to the shortage, and leaves less capacity for planning and self control, all while you feel perfectly reasonable, which is why you can’t spot it from the inside. The expensive symptom is tunneling: intense focus on the immediate problem that crowds out the longer horizon even when the longer horizon pays better.
Sendhil Mullainathan and Eldar Shafir call it a bandwidth tax. Scarcity grabs your attention, holds it on the shortage, and leaves less capacity for planning and self control (Mullainathan & Shafir, Scarcity). Their experimental work found that prompting financial worry dropped cognitive performance among people who were poor, and that the same farmers scored worse before harvest than after (Mani, Mullainathan, Shafir & Zhao, 2013, Science).
Fair warning on that one. It took a serious methodological hit and the authors published a rebuttal defending it with continuous rather than split income (Wicherts & Zand Scholten, 2013, Science). The mechanism holds up better than that single result. Treat it as a well supported model, not gravity.
The expensive part is tunneling. Intense focus on the immediate shortage, which crowds out the longer horizon obligations even when those carry the bigger payoff (Journal of the Association for Consumer Research, 2020).
Read that with your calendar open.
Tunneling is why an owner worried about THIS month’s enrollment quietly stops doing the work that fills next spring. The event is next spring. The worry is this month, and the worry takes the calendar.
Three places. Forces that trigger threat, forces that generate scarcity that is real or merely imagined, and anything that shuts down deliberation. Every one of them was sitting in that email. The middle one is where you get to intervene, because imagined scarcity is measurable and it usually collapses the moment you measure it. Zero-sum belief then produces two symptoms that cost exactly the same.
Shai Davidai and Stephanie Tepper reviewed the research on zero sum beliefs, meaning the conviction that your gain has to come out of somebody else’s hide regardless of how resources are actually distributed. They name three channels that produce it: forces that trigger threat, forces that generate real or imagined scarcity, and forces that shut down deliberation (Davidai & Tepper, 2023, Nature Reviews Psychology).
Imagined is carrying a lot of weight in that sentence. We just measured it. Two percent.
Zero sum belief produces two behaviors that look like opposites and cost you the same. It raises willingness to fight dirty, and it raises the tendency to avoid the competition entirely (Andrews Fearon & Götz, 2024, Journal of Personality and Social Psychology).
He wasn’t planning to fight anybody. He was planning to not show up, which is the same belief running quietly enough that nobody calls it what it is.
There’s a well documented cognitive failure among business owners here, and it isn’t the one you’d guess. Colin Camerer and Dan Lovallo demonstrated that people entering competitive markets attend to their own ability and neglect the strength of the field around them, a pattern they named reference group neglect (Camerer & Lovallo, 1999, American Economic Review). Owners misread the competitive field because they anchor on themselves instead of the data.
That runs in both directions. Some owners enter a market they should’ve measured. Others refuse a market they never measured at all.
Four standard thinking errors, all named in the clinical literature sixty years ago, all fixable in about ten minutes. Fortune telling, mind reading, discounting the positive, and all-or-nothing grading. The direction matters more than the labels. The thought arrives first and the dread follows it downstream, which means changing the sentence changes the feeling attached to it.
Aaron Beck named the original set in 1963 from clinical observation, and his central claim was about direction: “the affective disturbance may be secondary to the thinking disorder” (Beck, 1963, Archives of General Psychiatry). The thought comes first. The dread is downstream. David Burns later expanded it into the ten most people know (Burns, Feeling Good).
Four of them were in that email. Translated:
“Our area is saturated” = I have a feeling about my market and I’ve never once put a number on it.
“They’ll get the good prospects” = I’m predicting the future and presenting it as data.
“Parents want the school with transportation” = I’m reading the minds of hundreds of people who haven’t thought about martial arts yet this year.
“We can’t compete on that” = I made a list of what I don’t have and never made the other list.
“It’s not worth going” = I’m grading an event pass/fail when it’s actually scored in appointments.
I’ve been at plenty of these events with other schools present, and the overwhelming majority run their table badly. A banner, a bowl of candy, a clipboard, and a staff member looking at a phone. That’s not competition. That’s a booth shaped absence.
Whether they run it well isn’t the variable. YOU are, and you’re the only name on that list you control.
Because avoidance is what keeps the belief alive. Skip the event and you don’t get a neutral result, you get a worse one, because the fear was never disproven and now it has a full year of unchallenged residence in your head. Safety-seeking behavior blocks the correction by preventing the disconfirmation. Saturation is the belief that makes itself true if you let it.
This is the most useful thing the clinical literature has to say about your situation, and it isn’t obvious.
Paul Salkovskis showed that safety seeking behavior, which includes deciding in advance not to go, blocks the correction. Protect yourself from a feared outcome and you never collect the evidence that it wasn’t coming. His words: by preventing disconfirmation of threat related thoughts, safety behavior is “a crucial factor in the maintenance” of the anxiety itself (Salkovskis, 1991, Behavioural and Cognitive Psychotherapy). Later work on inhibitory learning adds the mechanism. Safety behavior shrinks the gap between what you predicted and what actually happened, and that gap is the only place learning lives (Psychology Tools clinical summary).
On the ground it means this.
Skip the event and you don’t get a neutral result. You get a WORSE one, because “our area is saturated” now has a full year of unchallenged residence in your head, and it’ll be quoted back to you next August with more confidence and better grammar.
Saturation is the belief that makes itself true. Believe it, and you stop marketing, stop showing up, and start discounting. Do that for two years and you’ll have all the evidence you need.
Avoidance isn’t a conservative choice purchase. You’re paying for it with next year’s version of the same fear.
I’ve talked myself out of marketing for reasons like this. For example, I had an opportunity to do a local marathon and I figured “that’s not my demographic. Who’s going to bring their kids to a marathon and marathon people already have a fitness activity… none of those guys will want to come!” And guess what, the news story that covered it wasn’t the runners but it was about the “Kids Zone” that was overflowing with families and kids. Not the first time I let “logic” make a decision. Every time, I was wrong about what would’ve happened.
Look, I am not saying if you try some marketing activity and test it out, and if you try to fix it, and if you get help on how to make it better… and it still doesn’t work? Learn the lesson and ditch it! But often either we give up too early or we come up with “reasons” why it won’t work and don’t do it in the first place.
That’s the whole problem with this particular mistake. Every year I sat out taught me nothing at all. One year I showed up and got results.
Two moves, in this order. Write the automatic thought down, list the evidence for and against it, and build the balanced version. Ten minutes at your desk. Then go run the real test, because the real test is the only one that changes anything: predict a number before you walk in, work the event properly, and count what actually happened. The forecast never survives the count.
Move one, ten minutes at your desk. Christine Padesky’s seven column thought record was the first to include evidence columns and a balanced thought column (Padesky, 1983), and it anchors the sequence in Mind Over Mood: name the automatic thought, ask where the evidence is, build the alternative (Greenberger & Padesky, 2016).
Run it on the real sentence.
Automatic thought: our area is saturated, we’ll get buried. Evidence for: seven other schools exist. Evidence against: 98% of the people in your radius train nowhere, the casual pool grew 75% in five years, you’ve never measured a single competitor’s booth, and you have no data showing one prior event failed because of them. Balanced thought: my result at this event is a function of how I run my table.
Move two does the heavy lifting. James Bennett-Levy compared the two directly. Thought records work the logical system, behavioral experiments hit the emotional one, and practitioners rated experiments as “more powerful and compelling” for producing actual belief change (Bennett-Levy, 2003). The standard clinical reference calls behavioral experiments “one of the central and most powerful methods of intervention in cognitive therapy” (Bennett-Levy et al., 2004, Oxford Guide to Behavioural Experiments in Cognitive Therapy).
The event IS the experiment. Set it up like one.
Before you go, write the prediction down with a number in it. “Because the area is saturated, I’ll book fewer than three appointments.” Then go, run your table properly, and count. Now you own data instead of a forecast, and the forecast never survives the count.
DON’T do this: set out a banner, put out a candy bowl, collect names on a clipboard, and call it a good event because the bowl emptied.
DO this: run the wheel, talk to every family that walks past, and book appointments on the spot with a date and a time attached.
Leads are what you collect when you’re hoping. Appointments are what you collect when you’re working.
Yes, and it has been tested on business owners specifically, not students and not patients. A meta analysis of 36 experimental studies covering 2,847 participants found a medium-to-large effect, with cognitive-behavioral programs consistently outperforming every other type of intervention. A World Bank randomized trial ran five weeks of it with SME owners and the gains kept growing at three-month follow up.
A meta analysis covering 36 experimental studies, 55 interventions, and 2,847 participants found an overall effect of d = 0.526, which is medium to large, and reported that “cognitive-behavioral programs consistently produced larger effects than other types of interventions” (Richardson & Rothstein, 2008, Journal of Occupational Health Psychology). One more finding in that paper deserves your attention. Adding extra components REDUCED the effect. Simpler beat more.
A World Bank randomized trial ran five weeks of group cognitive behavioral training with SME owners, not students and not patients. The treatment group showed significant drops in depression and anxiety and higher wellbeing, and the effects grew at three month follow up, strongest in the mild to moderate cases (Saraf, Rahman & Jamison, 2019, World Bank).
Separate research on irrational beliefs at work found they predict distress and burnout independently of the actual working conditions (Popov & Popov, 2013, Journal of Rational-Emotive & Cognitive-Behavior Therapy).
Your conditions aren’t the whole story. What you believe about your conditions is carrying its own weight, and it bills separately.
Because scarcity counts competitors and opportunity counts doors. He meant seven or eight martial arts rivals inside five miles. I meant elementary schools, middle schools, Montessori programs, charters, private and religious schools, preschools, daycares, after-school programs, and every PTO with a fall fundraiser. In most suburban five-mile radiuses that number lands north of forty. Eight have a competitor behind them. Nobody is knocking on the other forty.
When he wrote “seven or eight schools in a five mile radius,” he meant seven or eight martial arts competitors.
When I read it, I heard buildings full of kids.
Same word. Two completely different maps of the same town, and the map you’re holding decides where you spend next month.
His map has eight pins in it and every pin is a problem.
Mine has the elementary schools. The middle schools. The Montessori programs. The charters. The private schools. The religious schools. The preschools. The daycares. The after school programs. The scout troops. The rec league sign up nights. Every PTO with a fall fundraiser and a chair who needs a vendor.
In most suburban five mile radiuses that number lands north of forty, and behind every one of those doors is a room full of the families you want, run by an administrator who needs programming, needs safety content, and needs something useful to hand parents in September.
Eight of those doors have a competitor behind them. The other forty are wide open, and not one of your competitors is knocking.
Scarcity counted the competitors. It never once counted the doors.
Go to the event. Go to the next one. Go to the one after that. Before you walk in, run two numbers: the population inside your radius multiplied by 2.1 percent, and the real student count of every school near you. Put both on one page and look at the distance between them. That gap is your market, and it has been sitting there the whole time.
Before you go, run the two numbers. Population in your radius times 2.1%. Then the actual student count of every school near you. Put both on one page and look at the gap. That gap is your market, and it has been sitting there the whole time.
The other schools aren’t the variable. Transportation isn’t the variable. Your table, your conversation, your staffing, and the number of appointments you write down are the variables, and every one of them belongs to you.
Then do the harder thing. Catch the thought next time it shows up, because it won’t introduce itself as a thinking error. It’ll show up dressed as prudence, sounding reasonable, carrying a market analysis it never actually ran.
Write the prediction down. Go anyway. Count what happened.
Then put the count next to the prediction and keep both, because that page is the only thing that will win this argument with you next August.
Want this running on your team, meaning the booth system, the appointment language, the staffing, and the thinking that has to change before any of it works? That’s a conversation worth having. Reach out and let’s get these guys.
Chief Master Greg Moody, Ph.D.
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