Chris Cooper (00:02):
Most gyms don’t have a marketing problem. They have a retention problem, and they have a value problem. I’m Chris Cooper. This is “Run a Profitable Gym,” and today I’m so fired up to share our leaderboard of the gyms providing the most value. We measure value provided by ARM, average revenue per member—what people are paying in reciprocation for the value they receive at a gym. That’s what ARM is. If you want to earn more money per client, you provide more value, and then you charge appropriately. Obviously, a lot of gyms are providing more value than they charge, and this is something that we help them work out in our mentorship program and correct that problem, so they are charging what they’re worth. These gyms are the gyms that are worth the most to their clients worldwide. Let’s start from number 10. Now, average revenue per member per month is the average across all of their members divided into their revenue.
Chris Cooper (00:55):
So if you’re making a thousand bucks a month in revenue and you’ve got 10 members, then your ARM is a hundred. These gyms are doing a lot more than a hundred dollars per member per month. While the industry average is still low, it’s still around 145—maybe even slightly less in some places in the U.S.—these gyms are all over $400 per member per month. Now these are U.S. dollars, and these are all people who are providing great value to their clients. Their clients are happy to pay that much, and they’re keeping those clients around too. Let’s start at number 10. This gym is from the U.K. and their ARM, average revenue per member per month, from the last three months—this is a three-month average—is $427.06. Amazing. Imagine if every member at your gym was paying half of that—OK, 214 bucks per month: What kind of impact would that have on your business?
Chris Cooper (01:48):
Incredible. Number nine, coming in ninth, this is a U.S.-based gym, and their ARM is $432.12 per month. Congratulations. You are obviously providing a ton of value, and you’re worth the value that you receive in return. In eighth place: an ARM over the last three months of $440.45. This is also a U.S.-based gym. So, again, all these numbers are in U.S. dollars. They’re an average of the last three months. We don’t want to just like take an average from the last single month. So, you know, these are consistent, that this gym is operating well, and there are things that we can learn from these gyms. I’m going to share those in a moment. (Number seven was a U.S. gym with an ARM of 452.84). In sixth place—oh, this one’s great because I’ve been watching this gym for a long time, and I just realized who it is. Their ARM: $523.87.
Chris Cooper (02:38):
Congratulations. That is so amazing. This gym’s in Colorado, by the way. In fifth place: an ARM of $528.88. Imagine having an ARM of over $500 per client. Incredible. You’d have to deliver so much value so well to earn that. I’m so impressed this one. The next one in fourth place: $548.29. This one is really, really interesting because these guys work primarily with medical practitioners as a referral source. Next in third place, also from the U.S.: an ARM of $556.94 per month. Now, just remember that when we’ve had a gym on this leaderboard, and they’re not inside the U.S., we still calculate their ARM in U.S. dollars so that we’re comparing apples to apples. And of course, by reading the blog post, you can see this; you don’t have to stop your car and pull over.
Chris Cooper (03:32):
There are two gyms left on our leaderboard, second place and first place. The second-place gym for ARM this month—or December 2023—is from Canada. Awesome. And their U.S.-dollar ARM average was $673.94. Can you even imagine your clients paying that much? How did they get to an ARM of almost $700 per month? We’re going to tell you in a moment. The last gym—the top of our leaderboard worldwide, out of 1,000 Two-Brain gyms around the world—the top ARM last month was $797.99. This was a U.S.-based gym. This was in a locale where a lot of people say, “I can’t charge more. My local market won’t support it.” These guys just obliterate that feeling, that sense, that myth that you’re telling yourself that you can’t charge more. Their ARM is almost $800. They might be the first gym to crack that three-month $800 ARM average.
Chris Cooper (04:33):
And I can’t wait till they do; I can’t wait till somebody beats that. So, the top ARM last month in Two-Brain was $797.99. That’s what they get per client per month at one location. That’s their average over the last three months. So, they’ve been doing this for a while. They’re keeping their clients; their clients love it, and nobody is fighting them over the price because they produce so much value. Now, the part you’ve been waiting for is: How in the heck did they do that? Let me get to that. So, the reason that we compile these leaderboards is so that I can identify who is doing the best at something and then ask their advice and then share that with you. You have to start with measurement. You have to know who’s actually doing the best because if not, you know what happens.
Chris Cooper (05:17):
You’re in the microgym industry; you start getting people who really aren’t doing that well giving you advice. You got gyms who are doing $15,000 in revenue a month telling you how to get more clients. They don’t even know that’s their biggest problem. And you can’t even figure out what your biggest problem is until you look at your metrics, and you don’t even know if you’ve got a problem until you look at the best in the world and say, “How do I compare?” That’s why we prepare these leaderboards every month. But my favorite part of this process—even though I love the math—my favorite part is talking to these top 10 gyms and saying, “What are you doing? How are you delivering that much value? How is your ARM that high?” And then telling you their answers. So here they are: First, Michaela Munsterman is on the leaderboard, and she’s doing this amazing, amazing marketing with cinnamon rolls.
Chris Cooper (06:06):
I know, you heard me right. OK, so here’s what she does: She bakes cinnamon rolls, and she takes them to medical professionals in her town, and she introduces herself—“Have a cinnamon roll. Let’s talk about what I do.” And of course, nobody slams the door in her face. Nobody says, “You’re crazy. Get out of here. Stop soliciting me with these delicious cinnamon rolls.” I mean, if you’ve ever visited me at the Two-Brain workshop, you know, Tuesday is cinnamon roll day here, and the cafe is baking, and the whole place just smells like cinnamon rolls, and I really have to fight that—the temptation to have one. If you’re a medical professional and somebody shows up and you’ve got this nice, warm homemade cinnamon roll, you are going to sit and listen to what they have to say. And even if you decide, “I’m not going to refer people to you,” you’re still going to love them, right?
Chris Cooper (06:52):
Because you’ve got this cinnamon roll and probably a coffee to go with it. It’s not just cinnamon rolls. Michaela does this with a variety of food and coffee. And what she’s basically doing is just showing up with a coffee and some curiosity and saying, “Tell me about your practice. What do you do? How do you help people?” And then of course, they ask her the same question, and she says, “Here’s what I do.” You can hear our full interview with Michaela on the podcast. I’ll link to that below (Michaela’s episode airs on February 8th). Kelly Lorenz is not using paid ads to drive her ARM. She did a rate increase last year, which drove her ARM up $10 across the board. She added kids’ classes; she added more personal training and small group personal training. And she does amazing with her kids’ program.
Chris Cooper (07:37):
She said, “We created a group called Mini-Roadrunners where mothers and their kids, usually mothers and daughters, basically go out running with us. So, we do a loop around town, and of course that generates more business, as well as getting kids moving through the pandemic. We had a lot of contacts because we were the ones who were really talking about that. And we went all in on building up our kids’ programs. We became renowned as the local expert. A lot of our parents,” she said, “a lot of our members are parents who had kids, and with the right affinity marketing that Two-Brain encourages us to do, we go to our clients and say, ‘Who else in your family can benefit from this? Who else do you know that can benefit from moving their bodies regularly?’ And so, I had parents calling me or texting me or emailing me and asking me because right now, in our area, there’s a break for organized sports.”
Chris Cooper (08:30):
So, end quote. Kelly is really, really smart at identifying opportunities and aligning those with her passions. Obviously, she’s not running a kids’ program just because it makes a lot of money or boosts her ARM. She’s doing it because she loves kids and sees a real opportunity to help kids in her community. She started it during COVID. Then she said, “What if I could get moms and daughters running together?” and started their roadrunners club. And as those kids traveled around town, they started bringing their friends, and other people started seeing them. And that is the best type of marketing there is. It’s identifying a place where you can clearly help solve a problem, then solving that problem, and that’s what attracts new people. But that’s also what builds value. You don’t build value by telling people, “I’m going to correct your squat technique.” You build value by solving the problem that they want to solve.
Chris Cooper (09:18):
And so, their problem is probably not, “I want to move better.” Their problem is probably not, “I want to get better at CrossFit.” Their problem is, “I’m bored with my current workout, and I want to try something new.” Or their problem is, “My friend’s been coming here three nights a week, and I don’t see them anymore.” Or their problem is, “I don’t feel good about my body. I don’t want to take my shirt off at the beach.” If you are the one who can solve that problem, you will not have a problem establishing value with your clients, and they will not have a problem paying for that value either. Kelly added, “We decided to do a 10-week program for seventh and eighth graders and then for ninth graders, and we charged $408 for the 10 weeks, and then those kids come twice a week. And that just really helped boost our ARM.” End quote.
Chris Cooper (10:07):
There’s another great lesson here, and that is: We can do an amazing service for kids that a lot of us are overlooking. If you think about—if you have kids and you think about them in sports, and you think about what you pay to put them in sports, think about the reasons that you’re willing to pay that. You know, why am I willing to pay $600 a month for cheer lessons, gymnastics, music lessons? Why am I willing to pay $7,000 a year to put them on a traveling basketball team or to put them in the off-season baseball academy? Well, it’s because your kid loves it, and you want to encourage them, and if there is a small chance that this goes on to become their career, like you don’t want to be the barrier to that. And so, you’ll do anything to support your kids.
Chris Cooper (10:50):
But the reality is that only the tiny, tiny minority of kids are involved in sports. And so, the best thing that you can do is help parents help their kids find something they love. I remember a couple years ago, a Phys. Ed. teacher had this real epiphany, and he was telling me about it, and he said, “Coop, like, I don’t need to teach these kids how to play dodgeball. I don’t need to teach them how to play volleyball. They will never do those things after they graduate high school, but if I can help them find one thing they love enough to continue it on their own, I’ve changed their life.” And so now he teaches CrossFit and he has them doing weightlifting meets, and he teaches them powerlifting and running and rowing and all kinds of different things. And a lot of these kids go on to join gyms, or they go on to pursue their passion on their own.
Chris Cooper (11:34):
I can name probably a dozen of these kids who have bought a rig and stuck it in their garage after high school. That’s amazing. And that’s what I mean by value. What we’re really trying to do, if you want to boost up ARM, is hone in on your clients and find places where you can improve your value to them. For example, nutrition programs work the exact same way. If a client is working out really, really hard, but she’s not losing any weight, the best value you can provide her is a very clear nutrition program with accountability to do the work—even if that comes down to like writing up a sample meal plan or something. That is how you provide value. And of course, you should be open to receiving. Bob Burg, in his book “The Go-Giver,” talked about: There’s a yin and a yang to giving.
Chris Cooper (12:21):
If you want to be good at giving, you have to also be good at receiving. That means you have to open up yourself to the possibility that your gift is worth something and be willing to receive it, right? Nobody likes a bad receiver who will just say no to your gift, who won’t accept your gift, won’t accept your help. Nobody likes that person, and nobody, also, likes to feel indebted. And so, when you offer something of enormous value, people are usually willing to pay it. What stops most gym owners? It’s right here; it’s in between their heads. They look at their budget; they look at their empty wallet, and they say, “I’m broke. I couldn’t pay more for nutrition coaching so nobody can,” or “I already know all that stuff. Everybody knows that stuff. Nobody will pay for that.” And of course they will. The key to building great ARM is identifying the problem that your client is trying to solve, determining which of those problems you can’t solve because you can’t solve them all, offering to solve those problems for them, and then doing it—getting them the result, solving the problem.
Chris Cooper (13:21):
When you do that, not only will they pay more, they’ll be happy to do it. I’m Chris Cooper. This is “Run a Profitable Gym,” and this is our leaderboard show. If you were one of the top 10 gyms in the world for average revenue per member, congratulations, you’re an inspiration to the rest of us, and thank you for sharing your lessons with everybody else. If you want to talk more about these leaderboards, or what these stats mean or how to improve your ARM, the best bet is to go to gymownersunited.com. That’s our free group where I’m in there, my mentor team is in there. We’re answering questions. We’re sharing free information. We’re giving out guides. We’re giving you tactical advice every single day for free because it is our mission to help your gym succeed. Thank you for your service.
