Chris Cooper (00:00):
Most gyms don’t make enough money. The gym owner thinks they need more clients, but that’s wrong. Most of the time they’re not making enough money because they’re not charging enough. So how do you set your rates? Today, I’m gonna tell you exactly how to do it and what mistakes to avoid. And I’ll give you three amazing ideas that will help. I’m Chris Cooper. This is “Run a Profitable Gym,” and I’m gonna show you some tools that you can get for free in our public Facebook group, Gym Owners United. You can just go to gymownersunited.com, ask for the “How to Make $100K With 150 Clients” guide, and we’ll give you this stuff. Now, most gym owners screw up their prices because they don’t know how to set their rates. And so what they do is they look at the other gyms in town and they think, “Okay, well, I’m gonna provide a better service than that person, but if I want to attract more clients, maybe I’ll just price mine a little bit cheaper.”
Chris Cooper (00:49):
Little do they know that the gym that they’re copying didn’t know how to set their rates either, and they did the same thing. And so over time you get this descending price point for CrossFit gyms, for HIIT gyms, for bootcamps. And it’s all because nobody started with the math that I’m about to share this with you. So I’m gonna start with how to set your rates in the first place. This is a tool that we call the Microgym Profit and Loss. It’s like a sandbox tool. It’s like a spreadsheet that you can pop numbers into anywhere. You can throw numbers into the yellow columns if you want to, and you’ll see everything else automatically change. I’m only gonna talk about a couple of things here cause I don’t want to intimidate you with a crazy spreadsheet, but if you go into gymownersunited.com, we will give you this for free if you ask for it.
Chris Cooper (01:33):
So here’s the first rule of thumb. You’re gonna start by putting in all of your fixed expenses. So this is not your staff, but it’s everything else. So this would be, for example, your rent if you’ve got a loan payment. Okay, you can put them all in right here. Enter them all in there one at a time. I’ve got my affiliation fees in there, what I think a cleaner’s gonna cost, et cetera. My insurance fee—it’s all in there. If you don’t have some of these expenses, just make ’em a zero. You wanna put all those in first. And then what you wanna do is you wanna change the number of clients to 50 on the spreadsheet. Okay? Now, don’t worry about your membership price. We’re gonna set that in a moment.
Chris Cooper (02:12):
Don’t worry about all this other stuff. You can just kind of zero that out for now. And what you wanna do is you want to add your price until you get to this number. So this number here is $9,550 on my sheet. That’s my total expenses. The average for most microgyms, by the way, is about $11,000 per month, not including coaching or other labor or your pay, okay? Just the cost to flick the light switch on in the morning is around $11K. How do I know that? Because we publish the biggest data set in the industry with tens of thousands of gyms. But what you wanna do right now is you wanna say, “Okay, if we start with 50 clients, what does my price need to be to be able to make $9,550 per month? So just to cover my expenses and break even. Nobody’s getting paid. I’m doing all the work.” A good rule of thumb is that 50 clients should pay for your expenses. So now what price do I actually need to cover those expenses? Well let’s see here. My average membership price, if I make it $150 with 50 clients, yep, that just basically barely gets me over. So that is gonna be like your average membership. That’s not gonna be your highest value membership, but I’ll come to that later. Another good rule of thumb here: With a hundred clients, you should be able to get a little bit further, right? So a hundred clients should get you earning an extra $50K a year. And this is still assuming that you’re doing most of the work. With a hundred clients, that’s gonna be a lot of work. And for a lot of people, this is where they have to start hiring staff and stuff.
Chris Cooper (03:38):
But let’s see, you know, if we get to a hundred clients, what happens to that price point? Okay, so that gets us to $19,000 a month. That’s an extra $10K or so. We’re gonna have extra expenses, though, because with a hundred clients, we’re gonna have to hire some help. Now, I’m not gonna go deeper into a P&L with you—too boring. But if you want some help with this, you can book a call with our team and talk about mentorship. We will walk you through this step by step and make sure that you’ve got the right prices set. Here’s a key I want you to understand: If $150 is your average price, every single discount that you give will drive that down. Every single price point below that that you offer will drive that down. Every time you comp a coach’s membership, that pulls that average down. Very few gyms are actually hitting this average.
Chris Cooper (04:23):
What we really wanna be worried about here is this number—ARM, or average revenue per member. And that number has to be higher. It has to be about $205. I can explain why average revenue per member is higher than your average membership price in a moment here, but I don’t wanna spend all of our time together walking you through a spreadsheet. So you can get this at gymownersunited.com. You can play around with all the golden squares, or, even better, you can talk to a mentor and just kind of build this custom to your gym. Now, let’s say that you started off and you’ve calculated your average rates or your ARM, and it’s just way too low. Super common. This is probably the most common thing that happens in gyms that we work with at Two-Brain Business, and we’ve been through this now with over 2,000 gyms. There are a few things that you can do to correct your average revenue per member, including selling personal training, adding an on-ramp program to properly onboard people safely and comfortably, and possibly adding some nutrition coaching or accountability—things I’m gonna be talking about next.
Chris Cooper (05:15):
But you can pull up your ARM if you need to just fix it without doing a rate correction. It’s not the first step that you have to do. However, eventually you’re gonna want to fix your rates if they’re too low, and we hear this all the time. Look, it’s scary. It’s a multi-step process. It’s not as easy as just sending the right email and, you know, praying. But a mentor can really help you reduce stress. We’ve done rate corrections in over 900 gyms with minimal losses, and every single time the gym has come out of it making more money. Even if they might have lost a client or two, they were actually making more revenue afterward. Okay? Now I wanna give you some tools that will actually help you sell your true value in the gym instead of underpricing, undercutting yourself, undermining yourself, working hard for the same or less money.
Chris Cooper (06:04):
The first one is a pricing binder. This is so simple. The way this helps is it just gets your pricing out of your head and onto paper. It makes the conversation just so much easier when you’ve got a client in front of you. So here’s what you do. You bring the client in and you do a No Sweat Intro. It’s a very short motivational interview where you’re talking about like, “What are your goals? What do you hope to accomplish?” Then you ask a few more questions, which we teach in our mentorship program. And then you make a prescription. Now you are an expert coach. I don’t have to tell you like how to make a good prescription for a client. You’re going to look at the client’s goals and you’re gonna say, “Okay, here’s exactly what I think you need to get to those goals.”
Chris Cooper (06:42):
And then you open up your pricing binder, okay? And you’ve got it beside you here and you say, “I’ve got a couple of other questions for you. I think we need to train three times a week, and I think that we can stick to a habit-modification plan, not even a diet. We don’t even need that. A couple of questions for you. Number one: When it comes to nutrition, do you think you need more knowledge or do you think you need more accountability?” Okay, and they’ll say one or the other and you just mark that down. “Okay, great.” And then you say, “When it comes to exercise, do you think that you would prefer exercising in a small group with other people or do you think you’d prefer exercising one-on-one with me?” Okay, and you note their answer. And then from there, what they’ve basically done is they’ve chosen your accountability program for nutrition, or they’ve chosen personal training, or they’ve chosen group. Whatever it is, you flip open your pricing binder, which should look good. It should look pro, right? Some of us do this on an iPad. You flip that guy open and you say, “Okay, well, based on what you’ve just told me, your investment is $239 a week” or whatever that price is. And they see it on the binder. What this does is it instills a lot of trust. It makes you seem like, “Hey, you’ve been here before and you’re not just pulling prices out of your butt.” It also makes it seem like you’re not in the middle of a negotiation. It stresses people out when they think that you don’t know what you’re doing or you’re trying to just get as much money outta them as you can. They don’t trust you. When you open up a binder and “oh, there’s the same price that everybody pays,” that builds a lot more trust.
Chris Cooper (08:11):
I’ll tell you, for me, it really helps me get over the mental burden of like, “Oh my God. I gotta say this price.” And especially when I was a broke gym owner, I would always project my budget—broke gym owner—onto my clients. Like I couldn’t even afford my service. And so I just imagined that they couldn’t either. And I would be scared to tell them the real price or I’d be looking for excuses to just give them a discount or bring that price down. A pricing binder is powerful because it does instill some trust in the client, but more than anything, it helps you get over that barrier of feeling weird about sales. Okay? Some gym owners do feel weird about sales. You shouldn’t, but I understand why you do. That was me for many, many, many years. The second tool I want to give you today is called a value stack.
Chris Cooper (08:55):
Now, when somebody buys into your program, what they’re buying is a result. And what you can do is offer to add little things that will get them to that result faster. When people sign up for coaching, most of the time what they’re trying to buy is speed, right? They want to get to their result faster. And so that means that you can add in little things that will get them that result faster, and you’re adding value as you do. Okay? So I’ll give you some example here. Here’s a list of things that you might add to a value stack. Now, keep in mind that you’re not just trying to dump stuff on people. You’re definitely not trying to overwhelm them. That will actually slow their progress down. What you’re trying to do is ask yourself like, “Okay, if I wanted to get them to this goal that they have faster, what would they need?”
Chris Cooper (09:40):
Okay, so what would the client need to lose 20 pounds? They need your core exercise program—CrossFit, boot camp, whatever that is. And they need protein in every meal and to not overeat, right? But if they wanted to get there faster, there’s a couple things that we could add. So maybe they would need a specific meal plan. Maybe they would need four workouts a week instead of three and some non-exercise activity like walking in between. Maybe they would need some daily accountability texts to keep them on track. Like, “Hey, did you eat breakfast?” Or, “Hey, go up to bed on time tonight.” Or whatever it is. They might need some recipes to help them stick to what they’re supposed to eat so they don’t just get overwhelmed and give up.
Chris Cooper (10:22):
They might need some stretches to do at home in between sessions. They might need some support from their spouse. And you can help with that. They might need a grocery shopping list, right? They might need to know how to do meditation at home or a little guide that you write on how to shut down electronics an hour before bed. They might need some supplements. Whatever you think would speed up their progress, you can add these things in a value stack. Now because you’re creating extra value, they should reciprocate that value by paying a higher price point. But here’s the key. You’re not just selling more of your time; you’re trying to sell things that scale. So, for example, let’s say that you put together a recipe book of 50 top recipes that people could use if they were on a keto diet or they were watching their macros or whatever, right?
Chris Cooper (11:08):
And you can get these booklets. If you’re in Two-Brain, you can get samples from the Two-Brain Content Vault. You can get them in a lot of different places, but you’d have to pay for them outside Two-Brain. You get them these recipe books, right? You write this book, and you put it together once. Maybe it takes you a couple of hours, but you can use this with the next 300 clients, and you don’t have to remake it every time. With texting, you can set it up, and with the first client, you’re gonna do it manually, but then you can automate that with software once you’ve got that text process down. And then it just goes forever. So when you’re adding stuff to a value stack, you’re looking for things that either you can buy or you can build once and then leverage after, you know, hundreds and hundreds of times.
Chris Cooper (11:50):
If you subscribe to an app that will let them track their workouts or whatever, that adds value to the client as long as you’re not dumping five different apps on them. If you’re shooting videos on stretching, wonderful. If you’re pointing them to a sleep-tracker app, that’s free. That adds value, too. If you’re including a supplement like—“Okay, on your request, we’re gonna give you a greens complex here, and we’re also gonna give you some samples of a pre-workout” or whatever you’ve got. That all adds value to them, and it doesn’t take up more of your time. So that is the key to the value stack: adding things that have time leverage. Things that you either build once or you buy. Things that increase the value that you’re giving to the client, that increase the value that they pay you, that isn’t just like more and more time.
Chris Cooper (12:36):
Okay? So that’s our second tool that you can use. The first one was a pricing binder and the second one is a value stack. And the third one is what we would call “adding a high-value offer,” but many people call it “adding a high-ticket offer.” I’m sure by now you’ve heard the term “high ticket.” I’ll be honest with you: I hate the term “high ticket.” It just feels sleazy to me. High ticket is like, “what can we get them to pay?” High value is “how much value can we possibly provide to the client and receive value in return in the form of payment?” There’s a fine line there with the language, but there’s a huge difference in perception of value when you’re giving it, and that’ll make it easier to sell. Okay? So now I do think that gym owners and trainers should be offering a maximum-speed, maximum-value option that creates a lot more than what they’re currently selling.
Chris Cooper (13:30):
And I’ve got a few reasons for this. The first reason is that most gym owners are wildly undercharging for the value that they’re already providing anyway. You know, as I said at the start of this video, you’re just charging too little. So many high-ticket offers should probably just be like your normal offer. Second, a lot of clients want to get to their goals faster. Not everyone. You know, maybe 10 percent of the people in your gym are impatient, or, like me, they can afford to pay for speed. They don’t wanna wait. And so if you don’t offer them the fastest possible road to get to their goals, somebody else will. And impatient clients like me will go out and look for that. Okay, so you heard that, right? Like higher-value, higher-speed prices actually attract some higher-value clients, where cheap prices and discounts actually repel them.
Chris Cooper (14:17):
Okay? The third reason you might want a high-ticket or a high-value offer is that thinking through “what is the absolute best plan?” makes you audit your current plan. So, for example, if you ask yourself the question, “How do I get this client to lose 20 pounds faster?” what that’ll actually do is have you map out what it takes to make a client lose 20 pounds. And if your current offer doesn’t really fit into that, you might wanna rethink your current offer. So it’s actually a good audit on the service that you’re providing, right? If your high-ticket offer is completely different than your normal offer, and your normal offer doesn’t really get results, then it’s time to rethink your normal offer, right? Remember, when people buy a high-value offering, they’re not necessarily buying a different service. They’re buying speed, okay?
Chris Cooper (15:09):
Fourth, selling a high-ticket option for the first time usually proves to gym owners that they can charge more and that people will pay it—that they are more valuable. That’s the thing that I like best actually—that the first high-ticket offer you sell is so reinforcing that you’re worth it that you start to see other services differently, and you adjust your entire mindset to suit that. Fifth, a higher price point will often force clients to stick to the program. Look, paying more sometimes is good for them. It’s certainly true with many of my clients. If they weren’t paying for one-on-one attention, they just wouldn’t show up, they wouldn’t do the work, and they wouldn’t get the results, right? And six, a higher-touch service creates more opportunities for your staff because you’ve got a little bit more margin there. Your staff can earn a little bit more using the 4/9ths principle, and they can serve the clients to the level that they wanna be served.
Chris Cooper (16:01):
The last reason is a simple sales one. Having a higher-touch or higher-ticket or higher-value program in your pricing binder anchors the client’s expectations for what’s to come. If they see $225 a month, that’s not as scary if the first option they saw was a thousand a month. All right, so here’s the exact steps to setting up this high-ticket offer. And I I give you this one third because you’re gonna need the pricing binder, and you’re gonna need your value stack. Okay? So remember, the whole value stack is worth way more than the sum of its parts. So all the features that you’re adding, like the recipes and the check-ins and the stretching videos, might take you a little bit of time to set up, but you’ve only gotta do it once, and then you’ll have it forever. You don’t have to resupply them or reshoot them every Monday, but they still add immense value to the client, right?
Chris Cooper (16:48):
So get with your mentor, figure out what’s in your value stack, figure out how much that speeds up a client’s process and what to charge for that, and then set your rate based on that. Okay? For many people, this is around five times their average membership price, which we set earlier in the video, okay? So I’ve given you some really easy rule of thumbs here. And then, you know, add these to your pricing binder of course. But I’ve given you some really easy basics. First, 50 clients should cover all of your expenses, including rent. I know people in Seattle and San Francisco are gonna be like, “Well, that’s crazy. I paid $12,000 in rent a month.” But your prices should reflect your rent. You don’t charge the same as I do in Sault Ste. Marie, where rent is a fraction of that, right?
Chris Cooper (17:34):
Your prices should be reflective of the local income where you are. Now I will say that a lot of people really wanna help communities who have no access to gyms, and so they’ll put a high-value gym in an area that just can’t afford it. That’s a mistake. What I like to say is make lots of money and give it away. So instead, what you could do is put your gym in a better location, make lots of money, and then volunteer twice a week in this poorer neighborhood and do your classes for free. Like don’t mix your high-value service with “I need to give discounts. I need to give it free.” Like be really clear about who the clients are who are going to pay for this service, be clear about who you’re going to serve who can’t pay. If you’re gonna do something cheap, you’re better to do it for free.
Chris Cooper (18:20):
Okay? When should you add a high-ticket offer? Because this is not for everyone. If you’re late in the Farmer Phase of entrepreneurship (meaning you’ve got an established bricks-and-mortar option); you’ve got some seasoned, qualified coaches; you’re not brand new; you’ve got a good foundation; you’re making a good income (you should probably be already be making close to a hundred thousand dollars a year); you’ve got all of your systems and processes written down, optimized, dialed in; your marketing is working; you’re good at sales—that’s when you all add a high-ticket offer. If you do it too soon, you’re gonna flub it. You’re gonna get leads in who are interested and you blow it in the sales process. Or you’re gonna sign people up and your ops won’t be at a good level and people will quit. Or your staff won’t be trained highly enough and people will quit.
Chris Cooper (19:06):
You do not wanna burn through the early adopters of your high-ticket program because once they’re gone, they’re gone, and there’s far fewer of them than normal clients. You should also be super comfortable with the sales process. You should know when to make the higher-value offer. It’s not the first thing you offer to everybody. You have to know when that will actually speed up the client’s process. Again, you’re not trying to guess at their budget. Their budget is different than yours. But if you’re doing that, it’s a sign that you are not ready to sell a high-ticket offer anyway. You should have the experience to confidently say, “I can get you there faster. And I know how.” Like if it was an emergency and you had to get somebody down 20 pounds in three months and your normal program would get them there in six months, nine months, you need to confidently be able to say “I know what would speed the process up.”
Chris Cooper (19:55):
If you don’t know that, don’t sell it. Right? Finally, you need to know when a service like this is best for your clients. Look, if they can’t afford it, they will tell you so. Okay? There are a dozen programs out there that will teach you how to sell high ticket, and they’re gonna teach you how to do sales, and you’re gonna do rep after rep after rep. But the reality here is that you need to practice enough to get comfortable with your own rate. You need to be experienced enough to know that you can confidently deliver. If you are not sure that you can get them down 20 pounds by adding accountability and recipe books and everything that they’ll need, then don’t offer it yet. You’ll get there, but it’s not time yet. All right? Look, I’m Chris Cooper. I want gyms to be successful.
Chris Cooper (20:38):
The number one reason they’re not is that they’re undercharging. I’ve given you a tool to help you figure out what your pricing should be. Minimum. I’ve given you a tool to help make sales easier: the pricing binder. I’ve given you a tool to help you increase value called the “value stack,” and I’ve given you a process to build a high-value offer for the 10% of clients who want and need that. This podcast is called “Run a Profitable Gym,” and I hope that if you haven’t, you join our Gym Owners United Group today. I answer questions in there all the time. I do free webinars around once a month, and I give you all kinds of tools every couple of weeks to help you grow. If you’re ready for mentorship, just book a call with our team and we will help you through all this stuff. Press the easy button. You don’t have to learn how to run a P&L or figure out the math. You don’t want to guess wrong. Guessing wrong, if you underprice yourself by $10 per client per month, you are setting yourself back by thousands of dollars every single month, and sometimes it can take you months or years to fix that mistake. Just charging the right price up front, this is the first step to running a profitable gym. Hope this helps!