“You’re a fitness coach? How much do you bench?”
This was the top question I got as a new trainer back in the ’90s. Today, we all know that strength is a correlate of fitness—but it isn’t the only measure.
“You have a gym? How many clients do you have?”
When I was a new gym owner, this was the way people measured your success. Today, the top gyms know that client headcount is a correlate—but it isn’t the only measure of business success.
This week, we’re celebrating the Two-Brain gyms with the most clients.
These numbers are impressive. But what’s more impressive is that these gyms also have high client value and great retention.
ARM (average revenue per member per month) is a measure of client value. Your clients must pay enough to make your gym profitable. If you have 300 clients with low ARM, that means you’re trying to compete on price—and losing to brands like F45, Nike, Revel and the next gym to offer an $89-a-month deal for group classes.
LEG (length of engagement) is a measure of client retention. Your clients must stick around long enough to make meaningful improvements and change their lives. If you have 300 clients in big groups, that can mean more than just high churn: Clients in big groups often don’t stick around long enough to see impressive results, make big changes or refer their friends.
Clients is a measure of headcount. Even if you have high ARM and LEG numbers, you can’t make a living off one client. If you have too few clients, your business is fragile: One family moves away and you’re in serious trouble. This is the challenge faced by many so-called “high ticket” programs: They sell a client a $2,000 program once, and then the client leaves. Uh oh.
To have a good business, you must have strong metrics for all three elements. It’s not a matter of balance: You want all three numbers to be high. According to our data—the best in the industry, by far—the baseline for a good business is 150 clients at $205 ARM and 13-month LEG.
That’s still not ideal, but it’s enough to pay you $100,000 per year, ensure you work fewer than 45 hours per week, and allow you to pay another full-time coach and half-time helper.
After you achieve $205 ARM and 13-month LEG with 150 clients, then add more clients. That’s what the gym owners on our leaderboard have done. I’m proud of them not because they have a lot of clients but because they have 300 of the right clients.
Congrats to all on a job well done!