Chris Cooper (00:00):
Money is an echo of value. Which gyms provide the most value to their clients. I’m Chris Cooper. This is “Run a Profitable Gym.” Every month we produce leaderboards for six key metrics for gyms around the world. These metrics are how many clients they have, how much revenue they make per client, how long they keep the clients, and more. Then, after we publish these leaderboards for you, we interview the best and we share what they’re doing so that you can learn and apply it to your gym, too. Then we build courses for our Two-Brain Business Mentorship Program to teach these best tactics. Today, I’m gonna talk about which gyms had the best average revenue per member in February. Average revenue per member, or ARM, is a massive opportunity that most gym owners miss. They think that to grow their revenue they just have to get more clients, when really they should be focused on providing the best value to clients and attracting the most valuable clients for their gym.
Chris Cooper (00:58):
And if they can do that, they can make a great living on just 150 members per year. We’ve got a free guide for that in gymownersunited.com, and if you want more info and support, just head over to gymownersunited.com to join a group with thousands of the world’s top business entrepreneurs. Let’s get to the leaderboard. Now, I’m gonna share some numbers with you. I’m gonna reveal what the top gyms in the world are doing for ARM—that’s average revenue per member. Now, these aren’t always the gyms with the most members, but often there’s a correlation between the gyms that are making the most revenue and the gyms who have the highest ARM. So here we go. First off this, this month, the ARM category was almost completely dominated by U.S. gyms. That doesn’t mean that you can’t charge a high ARM if you live in France, for example.
Chris Cooper (01:46):
I can remember my first seminars in France happened about four years ago, and when we talked about ARM, it was like we threw a hand grenade into the audience. A lot of these gyms were CrossFit gyms, and even though we don’t exclusively work with CrossFit gyms, we are invited frequently to speak at CrossFit affiliate events. And so when I talked about having an ARM over $200 US per month, in the words of the CrossFit legal person who was there at the time, she said it looked like a bomb went off in the room. When you talk to people about how much they’re actually worth and actually charging that and actually having clients pay that, sometimes it’s a shock to them, but they quickly warm to the idea, and that’s why we publish these leaderboards to show that it is true that people are making this much per client.
Chris Cooper (02:32):
So let’s start off with Number 10. The average revenue per member at our Number 10 gym in the world is $377 per month. Now, just imagine for a minute that every client in your gym was paying an average of $377 per month. I’m gonna tell you how they did it in a moment, but first I want you to realize they’re not charging a $377 all-access group-class membership to make that. No way. And they’re not charging the same rate to everybody. What they are doing is charging fair rates for the service that they provide to every client in their gym. And when some clients want more, they make those services available. That doesn’t mean that one client is buying five different services. It means that one client is choosing to train one-on-one over group, or they’re choosing semi-private over group, or they’re choosing to add nutrition coaching, right? Maybe one or two extra things that will help them get to their goals faster.
Chris Cooper (03:23):
Now, I’m gonna let you hear from the winners in a moment, but first, Number 9 on our ARM leaderboard. This is in U.S. dollars, but this is a Canadian gym. Their ARM was $379 per month. So congrats. This is a friend of mine in Ontario. I’m so proud that he’s on this leaderboard. Next, back to the U.S., this gym did $383 ARM per month. The Number 7 gym on our leaderboard did $387 per month in ARM. The Number 6 gym did $393. The Number 5 gym did $408 ARM per client per month. Now imagine every client in your gym paying you slightly over $400 per month to be there. What kind of difference would that make to you as the owner, to the type of careers that you could provide to your staff, and to the type of experience you could provide to your community?
Chris Cooper (04:25):
I’ll give you another tip here before I get into how these guys did it. Clients with a higher ARM, who are paying more for your service, they actually stick around longer, too. They’re actually more invested in your service. So there’s a strong correlation between people who pay more and people who stay longer. ARM and LEG—length of engagement—are correlates. So Number 5 on our leaderboard, $408 per client per month average. Amazing. But here’s where it really jumps. So now Number 4 reached $490 in ARM per client. That’s average revenue per member per month. In February, our Number 3 gym had $512 ARM. Number 2, $519. And Number 1, which is gonna just blow your socks off, this gym was from the States. Their average revenue per member per month was $812. Now, that’s beyond the scope of what most of us even think is possible, but that’s why we publish these leaderboards. Because while we’re not all at the top of these leaderboards, we’re all mountain climbers. Even though we’re not summiting Everest, I want you to see what’s possible.
Chris Cooper (05:32):
So if you’re looking at your ARM and that’s like a hundred dollars a month, I don’t want you to feel bad. I just want you to see what’s actually possible out there. And we published these leaderboards because when I was a struggling gym owner, I had no idea what was even realistic. And so I was charging, I think it was like $135 a month for an unlimited pass to my CrossFit gym back in 2009 because I had no idea what the scope was. And that’s why we publish these leaderboards. So I want to quickly jump to the advice from our top five. We went to each one of them and said, “What are you doing differently that you would like to share with all the other gym owners, the thousands who are listening to this podcast, the thousands who are watching this on YouTube?”
Chris Cooper (06:14):
And because generosity/help first is part of our core ethos at Two-Brain business, they all shared. You’re gonna love this. Now I’m gonna read these to you verbatim so that you can hear in their own words how they increased client ARM in their gym2. So the first one said, “We focused on client programming and crafting results as the key to frequency. I’ve really been hammering home the idea that clients show up when they have a strong ‘why’ to be at the gym. And I’ve been coaching my staff on this weekly, over the past three months. What this has resulted in is us tracking the utilization rate weekly and monthly. What’s the percentage of sessions compared to the standard, you know, two a week or eight per month? And a score of a hundred percent people showing up all the time is really important. That’s what we’re striving for all the time. So now what we do is we create better client outcomes, right? And then we share with each trainer who’s getting their clients to show up most often.” And this is actually what builds value in clients: making sure that they’re using the sessions that they pay for. Okay? So I’m just gonna add to that. So now this is Coop talking, not that gym owner, but the way that people measure the value that they’re getting from your gym is “are they actually using what they’re buying?” And of course “are they also getting results?” So it’s not what package they buy. It’s “are they actually fulfilling on the package that they’re paying for?” So it’s more important if somebody’s buying a package of eight that they show up for all eight than it is that they buy a package of 12 and still only show up eight times.
Chris Cooper (07:48):
Okay? That’s, that’s the gap that you’ve gotta be really careful of. Again, ARM is a measure of value, and value is a perception. Do they get everything that they’re paying for at your gym? Are they getting results? Are they being heard? Are you sitting down and measuring their progress? Are you changing their prescription when you have to? And then they will reward you with value in return, which is a high ARM. The next person on the leaderboard said, “I was on the leaderboard before with actually a higher ARM. So we’re focusing on getting the systems in place and creating the client journey, basically just following the things that I’m learning from Two-Brain. But we’re primarily one-on-one personal training with a growing segment of semi-private.” So back to Coop speaking here. We are teaching a lot more semi-private training in Two-Brain right now.
Chris Cooper (08:37):
We’ve got a subject-matter expert on staff, Brian Bott, and he has taught Two-Brain gyms how to implement this. And I think you’re gonna see this trend continue in future months as more and more gyms start thinking about semi-private training, which is not the same as small-group training. It’s a different model, and it’s been very valuable to people because it gives them the value of training in a group but also the value of a personalized training plan and some one-on-one attention from a coach, too. Super good. You’re gonna hear more from us on this topic as we go. So this person said, “As we added semi-private training, we sold that out in the first nine days of the month. We’re super excited.” And that boosted their ARM. The next person said, “We did a price increase on our new members and we’ve added a foundations program. We do a lot of personal training, and we’ve added our group classes, but we also got rid of our lowest membership option, which was a 30-minute session. And the retention on that has been great. A lot of the people who do personal training are now excited to add group training on their off days. So they’ll use group training to supplement their real training. The group is kind of a cushion for folks who might be struggling financially, or they wanna move to more accountability. Since joining Two-Brain, we’ve implemented goal reviews, anniversary and birthday cards, and a couple of events. We’ve done goal reviews twice now, and the second time has been really genuine and felt more comfortable, and it also led to a big increase in ARM. We’re very personal with our clients. I find that it’s important when hiring people to hire the most personable coaches too, because that also increases value. You can push great clients away by having an impersonal coach. When I worked at a big box gym, I found it very impersonal. Now I make sure that my coaches are appreciated. Like I send them flowers, I text them, I send them cards. I do the same with my clients. I take a general interest in their lives. I feel like we’re a really good community of people who really care about each other.” So, you know, here’s Chris’s notes on this one. This is a very important thing to do if you want to have a high ARM, but it’s an almost impossible thing to do if you’re focusing on just having a big client headcount. Like, think about how easy it is to send birthday cards and anniversary cards when you have a hundred members versus 300 members. That’s like a full-time job for somebody.
Chris Cooper (11:00):
And so having a high ARM means you don’t need as many clients and you can provide a better customer service. In fact, that’s the service a lot of us dream of providing to people–this high-touch personal service, where we’re involved in their lives, we know what’s going on and we can afford to send them flowers and birthday cards, right? Another vote for high ARM. The next person said that they boosted their ARM by adding an onboarding program. Then they extended that out into a 90-day package. Then they created an ongoing membership option with nutrition built in. A couple of their coaches have been great about adding on group to personal training or personal training to group because they understand the value that that will get the client, too. And this person also grew her team from just her to four coaches who are working part time.
Chris Cooper (11:48):
Interestingly, this is a women’s-only gym. They started off as classes, but now they’ve gone to mostly personal training in semi-private sessions, and they have a very clear focus and a very clear niche, where they have a diastasis and pelvic-floor program. So women either start in that program or they take advantage of that program at some point in their journey. So having a narrower niche—back to Coop here—that actually helps you boost ARM. When you’re a specialist, you charge more. Think about surgeons, right? The more specialized you become, the more valuable your time is. And so that actually boosts ARM, too. So instead of trying to appeal to everybody and saying “my service will help anybody get healthy and fit,” you can try narrowing your niche, and that will boost your client value. Okay? The last person that we interviewed for this said that they opened in November with flat pricing and they’re sticking with that flat pricing.
Chris Cooper (12:43):
They’re heavy in personal training, but they also run about 10 classes a week. They only sell classes to people who are in a hybrid membership. So they’re getting some one-on-one personal training. Their personal-training sessions are around $120, but that’s standard for that area. And the group classes are capped at eight people. So that drives up their value, too. When people ask why they’re more expensive than other people, they talk about, you know, the specialization of their coaches. Their coaches are very highly skilled. All their trainers are full time. Several have 10 years’ experience. They can work with you to fix existing problems. That’s within their scope when you come into the gym. And he said that he gets a lot of people who have done CrossFit for a while coming to join his gym. And then when he got them in there, he gives them more one on one attention that improves their form, and they actually fall in love with high-intensity interval training again.
Chris Cooper (13:40):
So they do a foundations pack of four sessions one on one, but most people from there go into a hybrid membership. They also sometimes do challenges. So they wrapped up a 60-day weight-loss challenge, which included some group training but also personal training sessions, and then they get a nutrition template, and those people just keep going after that. Okay? So there’s a lot of ways that you can improve your ARM. Probably the best way is to add a new onboarding package. Another way might just be to increase the price for new people coming in, prove to yourself that you’re worth more, and then eventually raise rates on your existing members to bring them up to that standard. These are two of the tactics that we teach right in our RampUp Program at Two-Brain. And it’s because we really wanna focus on higher value for the gym owner’s time.
Chris Cooper (14:30):
Some key takeaways from our leaders here this month. First off, you don’t need 300 clients. 150 is more than enough. If they’re high-value clients and you’re providing a high-value service to them, you should focus on quality clients, not quantity clients. You’re not trying to serve everybody. What you are trying to do is serve really well the people who are in your gym. You’re trying to make enough money to support you and your family, to support a great career for potential coaches, to keep your gym around long enough, and to make enough money that you can give it away if you want to. So this is “Run a Profitable Gym.” Thanks for listening. Join our Gym Owners United Group today. That’s where I answer questions for free, run some free webinars and 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. I hope you do it today. Take care!
