There Is No Average

Demographic data is lying to you.
 
In 2005, the average family income in Sault Ste. Marie was just over $85,000 per year. Thirteen years later, it’s slightly less than $64,500. Yet Catalyst’s gross revenue has increased 600% in that time. How can that be possible?
 
Because average is irrelevant.
 
The problem with demographic data is that we only think about the mean. The mean is what you calculate when you put all possible options into a pot, and then divide by the number of original options. For example, if you add 5 plus 14 plus 20 and divide by 3, you’ll get 13.  13 is the mean average of 5, 14, and 20…but it’s not actually the same as any of those. 13 is not 14. 13 is definitely not 20. And 13 isn’t even close to 5.
 
Why is this important?
 
Because on hundreds of free calls with gym owner, I’ve heard one of these:
“We live in the poorest state in America…”
“No one around here will pay that rate…”
“low income”
“Poor demographic”
…It’s always true. And it’s never important. Usually it’s an excuse.
 
You sell a high-value service. That means it’s not for everyone. The average family in the Sault might not be able to afford Catalyst…not unless their health is a huge priority. But the highest-earning 20% sure can. They’re still here.
 
In fact, if you looked at a modal distribution of my city’s earnings average, you’d see a bunch of families earning over $150,000 per year; many families earning around $75,000 per year; and many families who really need financial help. I do a lot to help people who need help, but they’re not my client. I’m charitable, but my business isn’t a charity. I don’t set my rates based on “the average”, because my service isn’t average.
 
I also don’t try to target “soccer moms” or “old people”. I try to target Kelly. And Rob. And then I try to target Sam.
 
People don’t come to Catalyst for average reasons. Their reasons are unique to them. So I ask, “How can I help your dad?” and then I offer to help their dad.
 
Our groups are not average groups. Our groups are an assembly of individuals training together. We’re CrossFit coaches, not choreographers. We explain how the workout will benefit them today; then we tell them how they’ll achieve that result with the thrusters or burpees or whatever. We don’t just address the group average; we coach the individual.
 
The key to good business is knowing exactly who your client is, and what they want. That will help you know exactly who your next client is likely to be, and why they’ll come to you. It will help you decide what to charge them for your personal attention. It will help you change your question from “Who will pay $200 per month for CrossFit in my town?” to “What service is worth $200 per month to Rob?”
 

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