By the Numbers: Lifetime Value

A client opening her gym bag - by the numbers: LTV

What’s the average client worth to your business?

When you see the answer, you might think about each client differently.

While every client is more important than the money he or she spends, you do have a transactional relationship with your members. They’re not paying you for friendship. Tracking your average client lifetime value (LTV) serves a couple of goals:

  1. It tells you if your service is becoming more valuable over time.
  2. It puts marketing costs (or “cost of acquisition”) into context.
  3. It might change your perspective when you’re talking to clients.

Five-Figure Clients

When I was a treadmill salesman, I had a very gruff, fast-talking boss. She was great at sales, and I wasn’t.

One day, while she was visiting the shop, a shipment of new treadmills arrived at the loading dock. Just as we started unloading the treadmills, the phone began to ring.

It rang once. I kept moving boxes. She didn’t say anything.

Then it rang again. I continued to move boxes. She stared at me.

When it rang a third time, she sprinted to the front desk and answered the phone, out of breath. She spoke with a potential client for 10 minutes. Then she put the phone down and made a beeline for me.

“You always answer the phone,” she yelled. “There’s always a $10,000 client on the line!”

After that, I answered the phone every time—unless I was talking to a customer in person. But you can bet that I returned phone calls fast. The perspective on a person’s potential value added an urgency to my care for clients.

I promise: Your perspective will change when you look at a client and say, “That person will spend $12,000 here over the next few years.”

Leaders—and Their LTV Secrets

Every month at Two-Brain, we track metrics in 20 different categories. We find the gyms that are outperforming everyone else in each category, and we rank them on a leaderboard. Here’s our LTV leaderboard for March 2021:

A leaderboard showing the top 10 gyms in the world for lifetime client value—from $8,500 to $14,000.
We publish the actual gym names for our clients but not publicly.

After we report the leaders, we interview them, pick apart their processes and teach what they know to every gym in Two-Brain. This is called the Two-Brain Info Cycle.

We also publish some of their insights here on my blog, on Two-Brain Radio and on our YouTube channel (be sure to subscribe if you haven’t).

Below, I’ll share nine secrets to incredible average LTV from the leaders in Two-Brain.

Secret 1

The members who spend the most per month are usually those with the longest length of engagement (LEG). Top owners suggested a strong link between average revenue per member per month (ARM) and LEG.

Gym owner: “Your highest-value members are also the most likely to stay.”

Gym owner: “We focus on both ARM and LEG in parallel.”

Secret 2

Your high-LTV clients might not be exactly like you.

Gym owner: “We work with many senior athletes. I just had a 68-year-old do a box jump today.”

Secret 3

Top gyms customize or tailor everything.

Gym owner: “We started as a personal training studio first, and I think that gave us the right perspective now that we run groups.”

Gym owner: “We tell our coaches to treat all of the gym’s clients like they’re personal training clients. If you want to keep them, you have to give them that much attention.”

Secret 4

They talk to almost every client every day.

Gym owner: “I send a daily text message. Not all of my trainers do, but they all have a high-frequency rhythm with our clients.”

Gym owner: “I tend to engage more with the people who have higher adherence rates.”

Secret 5

They do social outings—and they find ways to connect outside the gym or online even more often during COVID lockdowns.

Gym owner: “We tried to do something once every month before lockdowns. Now we do it every week.”

Gym owner: “We stay in frequent touch (almost daily), but we don’t have to hang out every weekend to be a part of each other’s life.”

Secret 6

They benefit from their own survival. To have 10-year length of engagement that drives up LTV, you have to stay in business for 10 years.

Gym owner: “Our numbers might be a bit skewed because we’ve been open for 15 years.”

Gym owner: “Our higher-value clients were more likely to stay during COVID lockdowns.”

Secret 7

They know they’re selling more than a workout.

Gym owner: “Most of our clients are looking for accountability, and that’s part of our service.”

Secret 8

They focus on excellent onboarding.

Gym owner: “Coach interaction goes up when they know the client really well.”

Gym owner: “Our new clients actually pull the value up—the older clients might be on lower-value packages or rates.”

Secret 9

They focus on clients who fit “the mold” of the gym.

Gym owner: “When we get clients that fit our ideal avatar, they only quit if they move.”

Gym owner: “We really focus on keeping people long term and boosting LTV that way.”

What Two-Brain Data Says

Now, here’s what our data says about LTV:

1. The average retention in CrossFit gyms is just under eight months. (Obviously, that’s too low).

2. If you can keep a client until the ninth month, you’ll probably keep that client for a full year (about a 70 percent chance).

3. The next common drop-off point is at the 13-month mark. But if you can keep them past 13 months, you’ll probably keep them for two full years.

4. If you can keep them for three years, you’ll probably have them for five.

5. A solid onboarding process, lasting between two and four weeks in this sample, really made the difference between clients who stayed for a few months and clients who stayed for a year.

There’s a lot to unpack here.

We have every gym owner build a Client Journey document in our RampUp program so they can identify these drop-off points, fix their retention, boost their ARM and keep high-value clients longer.

We can teach you how to do it, too. To talk to us about mentorship, click here.


One more thing!

Did you know gym owners can earn $100,000 a year with no more than 150 clients? We wrote a guide showing you exactly how.