Does one gym “prove” established, data-backed practices are “wrong”?
No—but that was the opening argument in an Oct. 2 article in the Morning Chalk Up.
According to the article, Odin CrossFit, in Maryland, is on track to gross $1 million per year, with 95 percent of the revenue coming from group classes and 5 percent from nutrition coaching.
The gym is, according to the article, “very profitable.”
No problems here, even if there’s a lack of precision with regard to profitability. I don’t know what “very” means and would prefer an exact figure.
Here are the issues:
- The article states that Two-Brain gyms “are mentored to diversify and offer higher-ticket membership that goes beyond group class memberships,” with the implication that this is the only model we use to help gym owners.
- The article states that Odin CrossFit is proving this is “wrong”: “Hybrid memberships—which include other services such as personal training, individual design and nutrition coaching in addition to group classes—are an effective way to increase average client value and overall revenue.”
We’ll clean it up so you have the correct info.
“You Need More Than Group Classes to Succeed”
“’You need more than group classes to succeed as a gym owner.’ It’s a message many gym business mentors and successful gym owners put out there, and they have data to back it up,” the firewalled article states, with a link out to a second article in which Two-Brain founder Chris Cooper lays out recommended gym revenue breakdowns (70 percent from a primary stream, usually group classes, plus 20 and 10 percent from two other streams).
So did Cooper actually say that you absolutely must avoid the group-class-only model to succeed?
No.
In our guide “5 Ways to Make $100,000 a Year From Your Gym” (request it here), Cooper lays out the exact plan to generate $100,000 in profit and salary with more than 90 percent of revenue coming from group classes.
He wouldn’t describe the model if it were impossible to use it.
As check-our-work backup, the guide includes a spreadsheet, an executive summary, and a list of pros and cons for the group model.
Your summary: The group-only model can work—but it’s very fragile and puts a lot of strain on owners. In many cases, it’s unsustainable. Another model might result in a stronger gym.
And here’s the really important part: You can make $100,000 a year running the group class model with 150 clients if you set your prices correctly, but chasing more than 150 clients at low rates requires a huge level-up in ownership skills. You won’t just snowball your way to 300 members because you’re an awesome coach (I tried this approach personally; it didn’t work).
Want proof that huge client counts are rare in group class gyms? In our upcoming 2024 “State of the Industry” report, our survey data confirmed what we know from previous research: Half of gym owners who use the big-group model have 122 clients or fewer.
Yes, you read that correctly. The median client count for survey respondents who derive the majority of their revenue from group training is just 122. Not 150 or 200 or 300. Just 122.
Acquiring and retaining 300 or more members is very difficult, and managing the large team required to serve 300 members is similarly challenging. (Odin has 14 coaches, by the way.)
Because of these facts, very few successful 300-member group-only gyms exist.
But they do exist. Odin is presented as one example.
And one Two-Brain mentor, Saara Snellman, runs another: CrossFit Kreise 9 in Switzerland. I dug into her numbers in this article. She has 340 members and runs mostly group classes.
But Odin and Kreise 9 are very rare. I’d suggest Saara is an elite-level fitness entrepreneur—she’s probably in the top 10 percent of gym owners worldwide.
Very profitable group-class gyms with huge client counts are just not common, and they don’t represent a “do it exactly like this and win every time” model.
It is a mistake to suggest that a few gyms like this show that most gyms don’t need to consider diversification, personal training, small-group training, nutrition coaching, hybrid memberships and other options if they want to build a resilient, anti-fragile business.
Short summary: Huge, very profitable gyms like Odin and CrossFit Kreis 9 are fantastic, but these few businesses exist in spite of the flaws in the group model, not because the model will work for everyone.
So are Two-Brain clients “mentored to diversify and offer higher-ticket membership that goes beyond group class memberships”? Often yes, but not always.
As I said above, we have a guide that shows you exactly how to make $100,000 a year with five different business models. Our mentors work with gym owners to create the strongest, most profitable gyms. We don’t force a model on anyone. We meet them where they are and help them build the best business by prescribing the tactics that will help the owner accomplish their stated goals.
Saara’s mentor worked with her to create an amazing gym that focuses on group classes. Other mentors help other gym owners create new and very profitable revenue streams, including the “hybrid memberships” mentioned above.
And yes, these memberships “are an effective way to increase average client value and overall revenue.” That fact isn’t erased by one gym that is using a different model.
Data Vs. Outliers
Here’s the main thing you need to remember when you read the Morning Chalk Up article:
One example doesn’t invalidate mountains of data.
In fact, the rarity of huge, profitable group-class gyms confirms that Two-Brain data is accurate.
Want more data? Our 2024 “State of the Industry” report is coming before the end of the year. We have data from thousands of gyms, and we’ll share it with you for free.
Even better, we’ll help you use our data to analyze your own business so you can figure out how to improve it fast, whether you run a PT studio or big group gym. Stay tuned: We’ll tell you how to get the report.
And if you don’t want to wait for it, book a call here to talk about how a mentor can use hard data to help you accomplish your business goals.
