Ever offered personal training at 85 percent off by accident?
I have.
It happened to me regularly when a single member showed up for a “group class.”
The client got great service, which isn’t a bad thing. But my gym received about $7 for the hour, and I lost money on the session.
You don’t have to make the same mistakes I did. Two-Brain’s 2022 “State of the Industry Report” is now out, and it can help you get paid what you deserve.
To get the complete 56-page report, click here.
I’ll dig into just one part of it here: class size.
- According to data supplied by PushPress, the average group class has 6.6 attendees.
- Wodify data shows that 71 percent of gyms in its system average one to four participants per class.
This data suggests large classes are somewhat rare.
Here’s what Two-Brain founder Chris Cooper had to say about the stats:
“Almost no one in the data set is consistently running classes with more than 10 attendees all the time. Building your business on the target of running large classes all day is just not a good idea.”
Yet I chased large classes for years. In fact, I thought they were the key to making my business profitable. So I needed more and more members to fill an every-growing number of slots.
I had made another flimsy assumption: Adding class times would give me access to a sea of prospective clients who hadn’t joined my gym solely because its schedule didn’t work for them.
Example: “I bet a ton of parents and shift workers would join if I added a 9:30-a.m. slot.”
That mistake caused me to add class times with the if-you-build-it-they-will-come mentality, and the effects of the error compounded because I was terrified to cancel unpopular classes and perhaps lose the few clients who attended them. So I lost money instead. And a lot of sleep.
Run Your Numbers
Here’s an exercise Coop lays out in our new report. It’s based on the average group-class rate of $160, as reported by our survey respondents, and 6.6 attendees per class (PushPress data):
“If the average gym is charging $160 for an unlimited membership and the average client attends 3.4x per week (with 4.3 weeks per month), then the gym is only grossing $10.94 per attendee or $72.20 per class.”
So what if a class only has three attendees? Well, the gross is then $32.82. With the cost of staffing (about $22, according to our survey respondents), utilities, rent, software and consumables figured in, a three-person class might break even. It certainly isn’t a pillar of profit.
More from Chris: “For your gym, you might want to do the same calculation
for any class with fewer than six attendees on average. Once you have that number, you can decide if it’s wise to keep the class or do something else with that time.”
Here’s how to do it:
- Figure out your average monthly price for group classes.
- Assume the average client attends 3.4 times a week, with 4.3 weeks in a month—so divide average membership price by 14.62. (You can use your actual average monthly attendance if you have the stat.) This gives you gross revenue per class attendee.
- Multiply the average attendance in any time slot by your gross revenue per attendee.
Example:
- Average group-class membership price: $205
- $205 / 14.62 = $14.02 per class attendee
- If your 10-a.m. class has 2 attendees on average, your average gross revenue is $28.04.
- If you pay a coach $30 an hour, you are losing money on the class. Consider spending the time on something else.
What to Do Instead?
I was utterly lost when I considered what to do instead of continuing to run a poorly attended group class. Now, at least one solution is clear: Work with a personal-training client at $74 an hour—our survey respondents’ average cost of a 60-minute one-on-one session.
Instead of trying to find six or seven people to fill the hour and generate $70 of revenue, you could just find one and offer a high-value service.
And that’s just one thing you could do with that hour. Here are three other ideas that will generate a return on your time investment:
- You could also spend an hour improving retention—that has a monstrous effect on profitability.
- You could create and market a high-value specialty program to generate new revenue.
- You could plan a bring-a-friend marketing event to help current clients connect you with very warm leads who would benefit from your services.
Any of those suggestions would be better than losing money in an hour.
Had I realized all this in 2012, I’d be tens of thousands of dollars ahead. Thankfully, info like this is now readily available, and it will help you run a profitable gym, PT studio, affiliate or access gym.
To get our 56-page “State of the Industry” report, click here.
And if you want help figuring out exactly how to use the info in our report to improve your business fast, consider working with a Two-Brain mentor.
