The No-Ads Cinnamon-Roll Secret to Huge Average Revenue Per Member

Mike Warkentin (00:02):
You are getting another batch of secrets on “Run a Profitable Gym.” This time, it’s how gym owners post incredible average revenue per member at their businesses. I’m Mike Warkentin. I talk to the best gym owners in the world every single month. If you want to hear their secrets, please hit “Subscribe.” Now, our December 2023 leaderboard for average revenue per member—that’s ARM or A-R-M—it went from $427 to $798. That’s amazing. It doesn’t mean that every client at the number one gym pays 800 bucks a month. Some might pay more; some might pay less, but on average they’re paying about $800, and they all see incredible value in the services they receive. Michaela Munsterman of Elite Medical Exercise in Austin, Texas made our leaderboard, and she’s here to talk about ARM. Michaela, welcome. How are you today?

Michaela Munsterman (00:45):
I’m doing great. Thank you so much for having me.

Mike Warkentin (00:48):
I am excited because you have an interesting business, and we’re going to dig into that right away, but I want to know first: your ARM number—you’ve made a great leaderboard—how has this number changed over time? Because for me, for example, mine started way down in the 70s, and then when I started working with Two-Brain, it started creeping up into 150. My wife took over the business; it’s higher now, but how has yours changed over time?

Michaela Munsterman (01:07):
Yeah, similar to yours. I’ve been working with Two-Brain for two years with Ashley Mack and Jolene. And you know, what Two-Brain does is helps put a plan, bring clarity—also, you know, you’re able to express what you do. They help bring in that value, and then it’s able to grow over time, which is exactly what ours has done. We’ve done some things differently, but ultimately Two-Brain has had a big guiding hand that has helped.

Mike Warkentin (01:35):
You remember your very early sc—like how long have you been in business?—I guess is the first question I’ll ask on that.

Michaela Munsterman (01:39):
Six years.

Mike Warkentin (01:40):
Do you remember what your average revenue per member might have been six years ago or even two or three years ago?

Michaela Munsterman (01:45):
You know, I was so young that that was probably something I wasn’t even watching, which I should have, but I was about 26 when I started.

Mike Warkentin (01:54):
It’s interesting because I didn’t track that number either. It wasn’t even a thing until I started working with Two-Brain. I was like, “Oh, I should maybe check this.” And then when I looked at it, I was like, “Oh, I probably need to change some things here because this is not going to support my business.” So, when we did that, things started to work much better, and that number changed. I’ve had gym owners on the show where they’ve started at say, you know, where I was down in the 70s or 80s, and then they’ve got up to like $300, $400, and there are some who are in that $700, $800 range, which is incredible. We’re going to get into yours a little bit deeper. What—tell me first of all—what’s the rundown of your business? You—I think you’ve got an interesting model. I want to know exactly what you’re selling there. What are you doing?

Michaela Munsterman (02:29):
Yeah, we do medical exercise. And so, what that means is we work with people who have joint limitations, low chronic pain—discharged from physical therapy. Maybe they’re working with a chiropractor on a restriction, but they need stability, and maybe they’re just also new to exercise and they need a safe, positive, encouraging place to do that. And anybody who comes through the gym has to become a medical exercise specialist. And so that is a certification that is pretty intensive—takes about a year to do. But it was created by Dr. Michael Jones who is a physical therapist and recognized that there was a gap when people got discharged into the fitness world. And so, what he’s done is created this whole material to help us understand shoulder impingement, hip replacement, spinal stenosis and gives us the anatomy, the pathology, and the critical thinking skill to really work with these individuals. And he does it in such a way that you have to think and use your brain, and it’s not just a list of exercises. So, it’s a really special niche. It’s incredible with the people that we get to work with, but it’s such an important certification I think, to understand people’s limitations and be able to help them.

Mike Warkentin (03:40):
Wow, OK. So that’s interesting because a lot of gyms will work with apparently healthy individuals, quote unquote, and they specialize in that where people are, you know, for the most part—they may have a ding or dent from football or something, but they’re in pretty good shape. You are working with people who are leaving, like, a medical setting with a joint replacement or something else and helping them get active again. Have I got that right?

Michaela Munsterman (03:59):
Yes. Yeah. Yeah. Exactly.

Mike Warkentin (04:01):
Oh wow. That’s an amazing thing. Now how did you figure out that you wanted to do this? Was it something that you pursued as a career choice or something you just noticed there was a hole in the market? Or how’d you figure this out?

Michaela Munsterman (04:09):
That’s a great question. You know, I got really lucky because I probably would’ve ended up in the CrossFit world, which is wonderful because I was a powerlifter and a big athlete. But I hurt, I hurt when I played, and I went to school and understood different anatomy strength training, but I never understood joint restrictions. And so, when I graduated, I went and did this internship in Katy, Texas at Medical Fitness Pros, and I got to work closely with them and Dr. Michael Jones, the creator of the MES cert, and it just rocked my world. It just totally changed how I thought about exercise, how I programmed about exercise. And then I started to see results and just fell in love. And then as the years went on, there’s—you know, we’re not really well known. And so, I wanted to open up my own gym and make a dent and help these individuals who really could benefit from medical exercise.

Mike Warkentin (05:02):
Wow. So, you have to have special credentials to work at your gym as a trainer? Correct?

Michaela Munsterman (05:07):
You don’t necessarily have to come on, but you do have a certain window you have to get your certification within to take on and especially work with high-level medical-based conditions.

Mike Warkentin (05:20):
OK. And nuts and bolts here. Like how many staff people have you got? How much space have you got? What kind of stuff are you looking at? I see your gym in the background looks incredible. Yeah,

Michaela Munsterman (05:26):
Thank you. Thank you. We’re 1,000 square feet. There’s a total of me and two other trainers, and so I’m the owner. And then we got some incredible trainers that are—one’s almost about to be an MES, and one’s about to start the program.

Mike Warkentin (05:40):
OK. So, 1,000 square feet, which is great because you can work with people in that, but it’s, I imagine—I don’t know about real estate in Austin; I think it’s a little pricey, if I’m not mistaken. That doesn’t create a huge overhead; am I right?

Michaela Munsterman (05:50):
It’s still a little bit of a large amount, but it’s manageable because Austin is an inexpensive market.

Mike Warkentin (05:57):
That’s—I do remember hearing that somewhere from one of our other gym owners, but 1,000 square feet and Chris Cooper’s talked about this, where you can do really well in a smaller space. I went the other way, and I thought I needed 6,000 square feet for a giant functional fitness gym. And I never filled it properly and eventually realized that scaling down was a good thing. My wife now trains people just out of the space that’s about the size of a two-car garage, which is about 500 square feet. So, we’re on a similar path there. She—my wife does small groups, very small groups. You are just personal training, or did I hear small groups as well?

Michaela Munsterman (06:28):
Oh, we kind of have a system of what we do. Basically we have a consult, and then if we move forward, we have an assessment and from that we’ll do an exercise prescription that includes maybe one-on-one for 50 minutes, one-on-one for 30 minutes, semi-private or group classes as well.

Mike Warkentin (06:45):
OK. And what’s your max group size?

Michaela Munsterman (06:46):
Eight. We won’t do more than eight.

Mike Warkentin (06:48):
Yep, that sounds about right. For a space like that; that sounds just perfect. And I want to ask you about where you find these clients, but first of all, you said you do a consultation process, I imagine with people who are leaving a medical setting and getting into exercise, there’s probably a lot of nerves, there’s probably a lot of restrictions, there’s probably a lot of issues and maybe even a note from the doctor. How does that go?

Michaela Munsterman (07:06):
Yeah, that’s such a great question. So absolutely, that’s one of the reasons we have a complimentary consult in the first place is one: to make sure that they’re in our scope of practice because we are not physical therapy. So sometimes we’ll have people come in and we’re like, “You know, you’re not quite ready for us. You need to go back to physical therapy.” So that’s a big part. But also understanding their goals and their needs. And then if we pursue forward, then we also get to connect with their PT, their doctor, to kind of understand where they’re coming from, and then we’ll do our assessment where we look at their joints from head to toe, passive range of motion, active range of motion. And that helps us kind of get really a roadmap and so we can make a correct exercise prescription versus a guess of, “Oh, just come twice a week just because. No, we have really an understanding of how long it’s going to take to help maybe decrease pain, improve function. And that’s what we’ll do through our assessment process.

Mike Warkentin (08:02):
These medical care providers as you just mentioned, what is their reaction to you? Like how do they—do they accept you? Do they just like right away, “Oh, thank God you exist”? Like what is their reaction to giving their patients to you?

Michaela Munsterman (08:13):
Yeah, we kind of get a broad spectrum, but a lot of times because we are a new career path, they’re like, “Oh, this exists?” And we’re like, “Yes, yes, absolutely it does.” And so, we’ll go in and educate what we do and how we’re a really good fit to be within the medical community and not only for them to refer to us, but also getting acquainted with them so we can have a good referral back. And that way we really advocate for the client to have this amazing wellness community on the same page.

Mike Warkentin (08:47):
OK. So, we’re going to dig into that now because I’m going to ask you where you find these high-value clients, and I think it’s going to lead into some talk about referrals and networking. So, tell me, where do you find these amazing people who want to leave a medical setting and get healthy and fit with you?

Michaela Munsterman (09:00):
Yeah, well, one, I’m blessed. Like that’s just part of it. I’m just blessed because I have amazing clients, and I’m so lucky. It’s so fun. So that’s one. But two: We work with the older population, 55 and above, typically because they’re dealing with some form of medical based condition, but they recognize the chapter of life that they’re in. And so, they’re motivated because they want to live life without limitations. So, they’re very motivated and so they’re so fun to work with. And so that’s one: The quality of clients that we have is: These people want to get better, and it’s not a fad for them. And then because they are really into getting better and they come here and they really feel those results, they’re eager also to tell their friends and family that this is a safe place. You’re going to improve function; you’re going to decrease pain within our scope of practice.

Michaela Munsterman (09:54):
And so they’re eager to tell their friends and family, and they’re awesome people. So, their friends and family are awesome. So that’s one way through affinity marketing, which Two-Brain has also really helped hone in that system for me, so we can capitalize on getting more high-quality clients. And the other part that we do is we try to get out in the community of the medical world and let them know we want to be the next step in the medical profession. And so, I have a little bit of aversion to social media, and so I’ll go boots-to-ground and introduce myself to these doctors, these PTs, these chiros. But I’ll also do something to try to make their bellies happy, so I’ll make homemade salsa, sourdough cinnamon rolls and drop this off so I can introduce myself, make them happy, but also educate on this next step and what we can be—a wonderful next step for their patients and our clients. And then we’re really bringing, bringing in this unified front for them because it’s not usually just one entity. They need all these things. And so, if we can come together, it really creates a positive result. And so, that’s what I’ll do as well as part of my marketing, and that brings in really high-end quality clients as well.

Mike Warkentin (11:07):
OK. So, I’m going to ask you the obvious question in just a sec, but what an inspiring thing. Like I’ve worked with older adults; we had a Legends program, we called it, and we were with like 55 plus, mostly retirees or a few people in the late stages of their careers. What an amazing group. Like you’ve noticed that for sure. They want to work out. They’re very different from their peers. A lot of their peers are just like sitting on the couch, retired, don’t want to do anything, or they’re complaining about injuries and things like that. These are highly motivated people who want us. They’re vibrant. They want to keep living; they want to keep doing stuff. They want to play with grandkids and travel. I’m guessing your clients were much like mine. Am I right?

Michaela Munsterman (11:39):
Yes, yes. They’re fabulous.

Mike Warkentin (11:41):
Serving what is like a huge market—a market that has some money to spend and has some time to do it and wants to get healthy. Like what a great market. Now I’ve got to ask this one: So, you just show up at a doctor’s office with amazing smelling food, and tell me how this goes.

Michaela Munsterman (11:56):
Well, a lot of times it’s with the front desk where you introduce yourself, and sometimes you know, you don’t get in, but sometimes you do. And so, you have your elevator pitch of what you do, and then you just follow up with like, “Hey, I hope you enjoyed the salsa. Let me know when I can come by and do a Lunch-and-Learn.” And so, you have your foot in the window to expand into that relationship.

Mike Warkentin (12:20):
Wow. So how often do you end up speaking to the first point of contact at the door? And how often do you get to speak to one of the, you know, we’ll call them care providers, whether it’s a doctor or a therapist or whatever?

Michaela Munsterman (12:31):
It depends on the entity actually. So, with PT, a lot of times you are able to communicate directly to the director, the chiro. A medical doctor, a lot of times you actually have—you would—at least in Texas, you are required to buy the whole floor lunch or breakfast or something, and then you can actually speak to the doctor directly.

Mike Warkentin (12:53):
OK, sure.

Michaela Munsterman (12:54):
So there’s actually a little bit of different systems, but with the PTs and the chiros, they’ve always been really friendly and really open to hear—especially when we represent the medical exercise like we represent and we’re professional, and we’re not just some Joe Schmo in sweats coming in.

Mike Warkentin (13:10):
And you’re offering—I mean, we’ll say this in a funny way, but it’s not like you’re coming in, you’re saying, “I want your clients.” You’re saying, “I can help your clients take the next step.” And so, if these care providers want to get their people active and moving again, you are a great service because they’re not personal trainers; they’re therapists. And so, helping their clients and giving them the next step probably solves a huge problem for them.

Michaela Munsterman (13:30):
Yeah. Yeah. Absolutely. We’re not necessarily saying, “We’re here to take clients” by any means. “We’re here to be a unit with you, so we can understand what you’ve been working on, and we can build on their success.” And then also, if we have a hiccup, we can go back to it. But because of insurance, we’re also running into a lot of clients that—or their patients—but insurance is going to say, “I’m going to pay for 20 sessions, and that’s it.” And the PT knows that they need more, and they don’t have an option. And so, we’re trying to educate them: We’re that option, so they don’t have to feel defeated when insurance stops.

Mike Warkentin (14:07):
So do you have a local network now of care providers who are just like—they know who you are, they know what you do, and they’ll just tell their clients, “Go see Michaela?” Is that happening?

Michaela Munsterman (14:16):
That’s, that’s the goal. It’s starting. It’s starting.

Mike Warkentin (14:20):
OK. So, when you do the—and what’s the, how does the relationship go? Like, is it kind of a back and forth where you stay in contact? Like Chris Cooper talked about how he created a relationship with a local chiropractor, and they would go back and forth, and he started referring clients to this chiropractor, which was a great deal for the chiropractor. The chiropractor sent back, and it was all about helping the client both ways. Are you seeing that kind of thing develop in your experience?

Michaela Munsterman (14:43):
I believe so. It’s all kind of client-based and experience-based, and ultimately, it’s advocating for the client and what they need. So that’s what we’re really after, and that’s what will create the umbrella effect. But it’s all client dependent-based.

Mike Warkentin (14:58):
OK. Now so, you mentioned affinity marketing, which for listeners, if you don’t know that term, that is basically using your current clients to get to their friends and family so you can help them too. And there is an exact system that Two-Brain has—very effective—to help you find those clients, the friends and family of those clients, because they are warm leads. They already know, like, and trust you to some degree because they know their family member is already working with you. There is a system for this. Referrals don’t just happen. You have to ask for them. And there is a system. You also mentioned working with local providers. So, you’re actively going out in the community. Chris has often talked about just grabbing, you know, a pot of coffee and heading to the business next door and saying, “Hey, I run the gym over there, how are you doing?”

Mike Warkentin (15:36):
And just have a natural conversation. You don’t have to sell them anything, but they might just all of a sudden know that you’re a great person, and they like coffee, right? And then all of a sudden, they start talking. You can actually formalize things where there’s other gyms that have said, “OK, I’m going to work with a hairstylist, and that hairstylist is for weddings—is going to refer the wedding crew to a personal training package to get ready for the wedding,” or something like that. There are all these ways to formalize things. Do you do any marketing in terms of paid advertising or anything like that?

Michaela Munsterman (16:02):
No, I don’t.

Mike Warkentin (16:02):
OK. So that’s fascinating. So, you’re building a business purely on word-of-mouth and local networking, which is pretty cool.

Michaela Munsterman (16:09):
Yeah, despite some of the advice I’ve given, but that’s truly how I want to grow business and how I want to do it. I work with the older individual because I’m an old soul, so a handshake means a lot to me. So that’s how I want to do business. And it did—it has worked. And so, we’re not necessarily entrepreneurs, so we do everything like how everybody else does. And so, I wanted to find a way that feels authentic and represents me, and that’s what I’ve gone after. And so far, we’re seeing a consistent steady growth, which is what we can handle and what we’re going after.

Mike Warkentin (16:43):
OK. So that’s really neat. Do you know exactly how many clients you want? Do you have that number in mind? And you don’t have to tell me what it’s, but I’m just curious: Do you have that mapped out already?

Michaela Munsterman (16:50):
We do. By this time next year, we hope to double.

Mike Warkentin (16:53):
OK. So that’s cool. So, you have your numbers in place, and you are seeing growth organically. Well, I won’t say organically. You are actively, you know, growing this thing, but you’re not paying a marketing agency. So, you are—do you think you’re on track to hit that number just by asking for referrals and connecting with local providers?

Michaela Munsterman (17:10):
It’s going to be hard. It ain’t going to be easy, but yes.

Mike Warkentin (17:13):
That’s super neat. Would you ever advertise, or is that something that’s completely off the table for you?

Michaela Munsterman (17:17):
I’m not going to say I would never, but to the point, maybe if I have somebody else managing that would be an opportunity to grow. But I also really like the uniqueness and the quality of clients. And so, I think the way that we’re doing it is creating a community versus an open net. And we’re so happy to have everybody, but what we’re creating is something really special. When somebody comes through the door, and they light up because they see their friend in passing. And so, we are doubling that over and over the way that we’ve structured our business and it’s—Austin’s a big town, but it feels like we have a small town in our gym, and I just love that, and that’s the way I want to keep going.

Mike Warkentin (17:57):
And it’d be interesting too, if you ever do get into advertising. I mean, that’s an interesting one because you’d have to figure out the way to do it as authentically as you can because you’re not looking to, you know, capitalize on injuries and misery and so forth. Obviously, you’re looking to connect with people who are really wanting to be active and move through that. So, you would have to kind of place yourself very inter—it’d be an interesting kind of experiment to play with. I’m sure you’ve thought about this at some point.

Michaela Munsterman (18:20):
Yeah. Yeah. We’re definitely—you know, as you grow you’ve got to keep expanding and keep your eyes open, and things toward what’s going to benefit you and what’s going to serve everybody as a whole. So that’s an avenue that we might go down eventually.

Mike Warkentin (18:34):
OK. So, let me ask you a couple other questions here. Do you charge for a consultation, or is it you’re membership-based, or is it by session, or how do your packages, how are they structured?

Michaela Munsterman (18:45):
Right. Our consult’s complimentary. Our assessment is just the assessment, and then from there we will prescribe a package that typically rounds out to be a monthly, or there’s a small discount if you go ahead and commit to monthly. And so, but every package that we do is kind of structured out to a monthly thing, so that can help us understand and manage our numbers and understand where we’re going and what we need to improve or keep doing.

Mike Warkentin (19:16):
And then that’s going to be predominantly PT with maybe a little bit of group or some version of that. Those are the two main pillars of the revenue, correct?

Michaela Munsterman (19:22):
Right. We have one-on-one, semi-privates, groups, and corporate accounts; that has also really helped our ARM is getting two corporate accounts and that we also want to keep expanding on.

Mike Warkentin (19:32):
What—how do those corporate accounts work? What’s involved there?

Michaela Munsterman (19:35):
Yeah, so we do—since we work with older individuals and we have that specialty and that education and knowledge to work with these individuals, we go to independent living facilities and educate them on what we can do with exercise. And so that’s how we’ve gotten these two accounts is we go over there, and what we run into in our industry is our hour rate is so much. Well, these corporate accounts—we are traveling, we’re working with a large sum of people, so we’ve been able to increase our hour rate. So that has also helped the ARM where we are able to make a little more within our limited day.

Mike Warkentin (20:14):
Yeah. And how did you connect with those corporate accounts? Was that another, you know, fresh salsa situation or something else?

Michaela Munsterman (20:20):

You know, again, blessed, blessed a lot. Kind of just getting connected to the right people. But a lot of it starts with a cold call, and so that’s how we’re continuing to progress our research is a cold call and hopefully get in front of the right person, and you pitch your idea and roll with it.

Mike Warkentin (20:40):
Yeah. You know, even if you’re blessed or lucky, I know that people who have great success, it’s because they’re doing something right. And you obviously created a service that people want to know about and talk about. So, I think you’re earning the blessing if you’ll put it that way. Do you have anything else that you sell there? Do you have any supplements or T-shirts or anything else or any little things that you tack onto ARM?

Michaela Munsterman (20:58):
Yeah, one other service that we provide is what we call “Troubleshoot.” And so, if we have a client that is twice a week, but they come to us and say, “Hey, I have a vacation planned in Japan in a month; I want to make sure I’m prepared.” We would classify that as a Troubleshoot and say, “OK, great, let’s add another day in the week, so we can help make sure we achieve this goal.” Or it can be a little pain restriction that has popped up and so it needs a little bit more intention and so we’ll add an extra day or an extra couple of sessions to work on these areas of Troubleshoot. And the way I could see that working in CrossFit is if a client is in a group class, and they’re doing a clean, and you can recognize that the form isn’t just quite right, but it’s sometimes hard to give that one attention in the group, pulling that client aside and saying, “Hey, you look really great in class. I’m noticing these mechanics within your clean. I want to help you so you can really maximize. I’m going to do this in three sessions. Can I book you on Tuesday? And we knock this out.” And so that’s a little Troubleshoot and just those little sessions add up at the end and they kind of tip the scales on the revenue, which is helpful.

Mike Warkentin (22:09):
When you say it like that, it doesn’t sound like a sales pitch to me at all. It sounds like a no-brainer.

Michaela Munsterman (22:14):
And that’s exactly—because what we try to do in our whole basis of our industry and what I tell my other trainers to think of is we are pro—if you see a need, provide an opportunity, and you’re providing a solution, and it’s up to them if that’s going to fit for them or not, but at least that’s part of our job is to provide solutions. And so, if you go with it like that, it’s not sales, you are helping.

Mike Warkentin (22:38):

Chris Cooper wrote the book, “Help First.” I’ll put a link in the show notes to it if you want to read more about that concept. But Michaela is living it, and it’s not selling if you’re just saying, “I can help you accomplish this goal faster with less pain; do you want help?” “Yes.” The answer is yes. And “Here’s the price.” We’re done. You know, it’s an easy conversation, and that’s a really key part of the Two-Brain protocol is that Help First concept. We’re not selling and forcing things, we’re actually just helping people out. I love that you’re kind of doing it like that. That’s such an interesting way, like I love the Troubleshoot in your business versus like in a functional fitness gym, CrossFit, whatever, just saying, “Hey, I noticed that you’re really bad at double-unders, but it’s a simple fix if we spend 45 minutes together twice a week. Would you want to do that for a week?” “Yeah.” Done. $80 or whatever it is. You know, it’s such a—I love that you’re doing that. Anything else that clients can purchase there? Is it add-on or anything like that?

Michaela Munsterman (23:26):
I think that’s kind of our main services that we provide. Yes.

Mike Warkentin (23:30):
So, let me ask you this. So, you’ve created this really like, I just—I haven’t spoken to someone that’s doing what you’re doing, so I really appreciate your insight into this. It’s fascinating. What would you say to someone out there—because there are people out there saying, “I could never charge $400 or $500 a month per client.” What would you tell that person as some small steps—thinking as a six-year gym owner now—to get them from say, under $100 to even $150 or $205, which is a great first goal?

Michaela Munsterman (23:55):
Yeah, that’s a great question. I think a couple of things that you can go at it is one: As you’re looking to maybe raise prices or go to that level, really write down your value of what you do and kind of reframe what if you don’t charge your value. Especially if you’ve worked really hard with your schooling, your education, your experience, and you’re not charging for that value. You know, are you really doing yourself a service? And so, seeing what you can write down that you do provide and then reframing how you’re—when you potentially think of a client like, “Oh, they’re not going to like me,” or “Oh, it’s going to be too much,” reframe to saying, if the client’s like, “Oh yes, this is great. I’m so happy for you.” And being able to practice living that in that space. And it’s surprising how you can kind of try those jeans on, and they start to feel pretty good, and then your confidence builds up with that. But ultimately, you know, we’re doing the—if you don’t charge really what you’re worth and your value, especially if you’ve worked so hard for it as an industry as a whole, we’re doing a little bit of a disservice. And so being able to remember that.

Mike Warkentin (25:05):
That’s a great piece of advice. And I’ll get on the soapbox here a little bit and just say that if you don’t charge what you’re worth, your family is ultimately going to suffer. Your staff members are probably ultimately going to suffer, and eventually clients are probably going to suffer because you’re not going to be able to stay in business. That’s just a fact. And like I went down that path where I thought I had to charge these low rates, and I thought that was my value. Eventually the gym is in financial trouble. And what happens next? Well, I think about leaving the industry, and all my clients lose, and my staff members lose. That’s not a good thing for anyone. So, gym owners, a great first target for ARM: $205. And it doesn’t have to be—you know, it can be a combination of things. A lot of gym owners will say a group membership or whatever it is, plus a personal training session a month, maybe that’s $225 in total.

Mike Warkentin (25:45):
That’s a great first target. And remember, not everyone pays $205. Some pay more, some pay less, and that meets in the middle. Think about that. If your ARM is low, you might need to raise it through a rate increase. We have a template for that. You can sell additional things. There’s T-shirts, supplements; Chris Cooper has hundreds of ideas that you can use to tack on revenue. The Intramural Open is another good one that’s coming up right now shortly. You can get that guide in the Gym Owners United forum if you want. But the idea, I love it—what you said, just write it down: how valuable you are. And like for you, did you have a moment? Like did you always know how valuable you were, or did you have a moment where you had to do that exercise for yourself?

Michaela Munsterman (26:19):
Oh, I speak from experience. Yeah, I speak from experience, you know. I absolutely lived in that space. But with Two-Brain and having a coach with me, being able to help kind of guide that process and also be in my corner through the process, and it has—it’s served the business tenfold where we’re able to grow. I am not stressed out to the max. And when you are able to operate in that space, your service overall is better; your culture is better. You know, it doesn’t—coming from an environment that’s less than doesn’t produce the fruit that most likely you’re looking for.

Mike Warkentin (26:54):
When you did that exercise, did you look at what you wrote down and say, “Whoa, this is pretty incredible what I’m doing. This rate is more than fair”?

Michaela Munsterman (27:02):
Yeah. Yeah, I did.

Mike Warkentin (27:02):
Yeah. That’s pretty neat. Have you ever had to raise your rates?

Michaela Munsterman (27:04):
Yes.

Mike Warkentin (27:05):
How’d that go?

Michaela Munsterman (27:06):
For the most part, it was fine. It was totally fine. There was hardly any pushback. And a lot of times, because of the value and people want us to stay around, they’re happy; they’re happy for us. And there might be a little grunge, you know, but you know, people, they’ve got to do that. You know, they’ve got to, they’ve got to push back a little bit. They’ve got to give you a hard time. But at the end of the day, they’re going to stay because they recognize the value and how hard you work because this is no small feat to do by any means. And so, I think they’re really happy to support you. And there’s also present—if there is pushback, present different options. There’s always another path that people can go on. And coming from that place as well is knowing like, if this isn’t going to work for somebody anymore, cool; I’ve got this option that probably will.

Mike Warkentin (27:57):
Yeah. And the reason I ask is because when I was looking at my average revenue per member, our rates were too low. And I knew that in 2013, and I should have raised them then, but I didn’t until like, I think it was 2018 or 19, and the business was in trouble at that point. So, if you’re listening, gym owners, and you’re thinking about raising rates, I would recommend that you talk to a mentor. There is an exact template that helps you do this and minimizes all the risk and helps you create a healthy, sustainable business that keeps serving your clients. I want to thank you for all this. This is a really cool conversation about something that I didn’t know much about, and this is such an interesting—I love that you are doing it without advertising, purely through affinity marketing and creating a local referral network. I think if Chris Cooper were here, he would probably give you a big high five.

Michaela Munsterman (28:37):
Well, yeah, and if anybody’s interested in medical exercise, it’s a great program. A lot of times we’re working with individuals that have a joint restriction. So, I have no discount code or anything like that. I just believe in the entity. I believe in the career opportunities. And so Medical Exercise Training Institute is where to go. It’s an awesome certification.

Mike Warkentin (29:00):
If more people can get moving and, you know, pain free and staying active and rehabilitating, what a great service that is. Thank you so much for your time and sharing your story. I appreciate it.

Michaela Munsterman (29:09):
Oh, absolutely. Thanks for having me.

Mike Warkentin (29:11):
You’re very welcome. That was Michaela Munsterman, and this is “Run a Profitable Gym.” Thanks for watching and listening. Please subscribe wherever you are for more episodes. And now, here’s Chris Cooper with a final message.

Chris Cooper (29:21):
Hey, it’s Two-Brain founder Chris Cooper with a quick note. We created the Gym Owners United Facebook group to help you run a profitable gym. Thousands of gym owners, just like you, have already joined in the group. We share sound advice about the business of fitness every day. I answer questions, I run free webinars and I give away all kinds of great resources to help you grow your gym. I’d love to have you in that group. It’s Gym Owners United on Facebook, or go to gymownersunited.com to join. Do it today.

Thanks for listening!

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