A few months ago, I was speaking in Montreal, Quebec. It was a split seminar: other speakers took Saturday’s presentation, and I followed on Sunday. We have very different ideas on business, so I was glad to go second. During the first day, one attendee volunteered that he wanted to earn $100,000 per year (net). He shared his rates (which were low, but not grievously so). The speaker did some quick math and told him, “You need 374 members. Go get them.” Never mind additional revenue streams. Forget about hiring other coaches to help with the workload. For 374 members, this guy could buy himself a job. 374 recurring memberships is a high number to reach (where will they all fit? How many bars will you need? How will you coach that many people?) There are a handful of gyms doing it, but next to none have a decent profit margin (33% or above). I’ve written about all of these problems at length. The simple number “374” hides a deadly trap, though. What the speaker meant was that the owner needed to get and keep 374 members, averaging that number forever, to make a good living as a gym owner. We track retention data through surveys, monthly accountability calls and our Gym Checkup. I first wrote about retention data in the CrossFit Journal in 2009. This is the number we watch most closely, because in the service industry, client acquisition is very time-expensive. Let’s say you have a 95% monthly retention rate. If you have a small gym of 50 members, you’re probably slightly higher. But as your gym grows, you have weaker connections to each member. That’s one reason retention rates tend to drop in larger gyms. 95% monthly retention in gyms over 300 members is very, very rare. People quit because they don’t like it; they quit because they don’t like you; they quit because they move. Even at a 95% retention rate, a gym with ...
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