Mike (00:02):
I am a generous person. So I shall pay my coaches more. However will I do it? I shall review seniority lists and then use my abacus to calculate an appropriate increase. And then I shall retire to the drawing room to read the new book by the young author, Ernest Hemingway. Today on Two-Brain Radio, Chris Cooper is here with modern ways to pay your coaches more. Get out of the past and join the clever entrepreneurs who are paying staff members more by growing their businesses.
Chris (00:28):
We know that getting clients results isn’t enough to make a great business or a great career, but it is the foundation. If you’re not getting your clients results, none of the other stuff matters. Your marketing plan, your operations plan, your retention plan, your systems, how much you care about the clients. You need to get them results. What does it take to get a client results? Long-term behavior change, short-term habit change. It means learning skills like motivational interviewing, peer-to-peer programming. It means focusing on things like adherence and retention instead of novelty. And I built twobraincoaching.com with my partner, Josh Martin, to teach coaches how to do this. More than ever before it is critical to get results for your clients. You need to charge a premium fee. You need to provide high value to warrant that fee. And what is most valuable to the client? What do they care about the most? The results on the goal that they choose. Twobraincoaching.com has programs set up to help your clients achieve those goals. We will train you and your coaches to deliver personal training, group training, online training, nutrition coaching, and coming soon, mindset coaching, in a way that’s simple for you to adopt, it’s legal everywhere. And it’s super effective. These courses were built by experts with years of experience getting clients results. Twobraincoaching.com is a labor of love for me, and I know you’re going to love it too.
Chris (01:55):
I know you. You are generous. You put other people ahead of yourself. Your clients, your family, and even the people who are paid to put you first, your coaches. Now it’s not wrong to put other people first. Your team is critically important to your gym’s success, but it is wrong to undermine the gym’s stability or sacrifice your family’s income by paying your coaches too much or following the wrong strategy. Coaches and your other staff can have a great career in your gym, especially when the relationship is good for everyone.
Chris (02:31):
And today, I’m going to tell you how to give your staff a raise. The first principle here that we need to understand is that you earn more money by creating more value for more people. Your staff can do the same. And today I’m going to walk you through the exact path to do this and why salaries and bonuses aren’t the best ways to create opportunities for your staff, because the best way to create opportunities for your staff is to allow them to grow the pie, not to divide it up a different way, or to allow them to take the biggest slice. OK? So before we get into this, I don’t want you to assume that every great coach is a full-time coach. A great coach can work part time, and I’ve got a link in the show notes to a blog post I wrote called gym management: the case for part-time coaches. But whatever they choose, full-time part-time, here are the steps to building the careers that they want.
Chris (03:28):
Step one: At your quarterly career Growth ToolKit meeting, of course you’re doing those, right? You can ask your coach, what do you want now? Ask the coach to tell you about his or her perfect day. Ask how your gym can support that perfect day. Ask where he or she would like to be in six months. And we teach people how to do career Growth ToolKit meetings in our mentorship program. But basically a career Growth ToolKit meeting is a 30 minute sit down with a coach where you do an evaluation to measure where they’re starting from. You give them some goals to accomplish in their career. And then you work backward on the math to help them achieve those goals. You assign different roles and tasks based on, you know, what they want to achieve, how much they want to work and what their target income is. And then you mentor them to achieve those goals.
Chris (04:12):
That’s step one. Step two is you determine exactly how much the coach needs to earn those, the money that will pay for those goals. So you can use tools like the happiness index. If you want to approximate. Or you can use that coach’s personal budget if you really want to get specific. And then you should calculate a goal number and that’s step two. Step three is to use our career Growth ToolKit tool or to build your own spreadsheet, to work backward from that number. And then you assign a dollar value to the different roles in your gym. This much for group classes, this much for personal training, this much for cleaning, this much for admin work. And then you create opportunities to do those things for your coaches. So you can create opportunities to do personal training or nutrition coaching, or other specialty programs. And I lay these all out in our free guide intrapreneurialism one-oh-one, which you can download if you go to the show notes for today and just click the download button.
Chris (05:08):
Step four is to determine the starting position. So what will the coach need to learn before they can really capitalize on the plan that you’ve just built for them? Will they need to take a super new certification before they start their kid’s program, for example, or will they need to take the Two-Brain Coaching first degree program before they can work one-on-one with clients? Are they brand new, et cetera. Step five is help them launch whatever their growth program is. You got to mentor them through it. And you’ve got to perform regular reviews to make sure that they’re on track. You have to have an evaluation process. And then step six is, you know, when they get there, give them the opportunity to open their own business under your brand.
Chris (05:50):
So after you’ve taught a coach how to be an entrepreneur, you can help him or her step outside your protective umbrella and open their own gym with you as a partner and mentor. And there’s a link to a blog article called go with them. So here’s the path to a solid career. Step one through five. And then step six is if they want to open up their own gym. Step one, sit down with them and say, what do you want now. Step two, determine how much they need to earn to make that dream a reality. Step three, create opportunities using a career Growth ToolKit tool, step four, determine their starting position. Step five, measure their progress regularly and mentor them on it. And then step six, for some coaches, give them a chance to open a business under your brand. But the key to all of this is asking your coaches, what do you want now?
Chris (06:39):
Some coaches might want more money. Some might want more opportunities, somewhat consistency and some are willing to take risk in exchange for equity, but nobody wants the same thing forever. So the best way to help your coaches build careers is to mentor them to success. The wrong way is to pay them bonuses based on metrics they can’t control or to pay them based on like ideas out of the 1940s, like seniority. According to data in our state of the industry guide, most gym owners aren’t profitable enough to give their staff members raises. The average coach income in our state of the industry last year was $21 per class coached. That’s not enough, but the businesses can’t afford to pay them more. So the best way for coaches to earn more is to help grow the business. Instead of giving them a largest share of the pie and going hungry yourself, just grow the pie.
Chris (07:33):
So here’s how to pay more. So start with what can you afford to pay per class? So you add up all of your revenue from all of your groups or your classes, and you multiply that by 44%. This is the rule of four ninths. And that’s your total class budget for staff. Think of that as like your salary cap. OK? That’s how much you can afford to pay all the coaches to coach your classes. Now divide that budget across all of the classes that you offer.
Chris (08:01):
It’s Chris Cooper here. Your gym’s programming won’t attract new clients, but it can help you keep your clients longer. Good programming includes benchmarks, novelty, skills, progressions, leaderboards, you know all that stuff. But great programming contains something more: a link between each client’s fitness goals and the workout of the day. Your coaches need to tell your clients more than what they’re doing every day. They need to explain why they’re doing it. Gym’s whose coaches could explain the why connection had a 25% better retention rate during lockdowns. Imagine how that translates into better retention when things are back to normal. Now, I want to solve this problem for gym owners. Programming is the service you deliver to your clients. So I partnered with Brooks DiFiore, who had one of the highest adherence rates in the world for his group classes at his gym to build twobrainprogramming.com. We built this for Two-Brain gyms and we give them free access in our mentorship program. But I’m now making this available to the public. Programming proven to improve retention and cashflow in your gym. Visit Two-Brain programming.com to get it.
Chris (09:09):
So let’s say that you’re taking in a thousand dollars a week, you have a budget of $444 and 44 cents to pay coaches to run those classes. Now you’ve got to divide that budget evenly across all classes, because each coach is teaching the same programming and following the same plan, they should all be paid the same amount for classes.
Chris (09:29):
They’re delivering an identical service at 6:00 PM and at 6:00 AM. If the resulting per class rate is too low, then you have three choices. Number one, raise the price of your group training classes, which will expand the 44% budget without changing the ratio and allow you to pay people more per class. Number two, put more people into the classes or number three, deliver fewer classes. So which one of those three options should you choose? Well, you can go back to our first rule. You make more money by creating more value. So if you deliver far more value than you charge for group training, raise your rates. The average group training rate, according to our state of the industry data is about $154 per month. You should be much higher than that. The September 2021 leaderboard for average revenue per member per gym showed that some gyms are actually making just over $400 per member per month.
Chris (10:23):
You can certainly go up from where you are now. Second, if adding more people to a class will increase its value, then focus on marketing. If you’re running a quote unquote class for two people, you need to add more people to that class. What’s the ideal number per class? Seven people, minimum, 13 people maximum. At seven people, retention and adherence go up because you’ve got enough friends in your class to hold you accountable. But at 13, that number starts to go down again because you’ve got so many people that nobody misses the one who doesn’t show up. OK. Third, if you find yourself delivering one-on-one coaching at group class rates, just kill that class. So if you’re giving somebody personal training at 6:00 AM, then you know you need to remove that class. And there’s a strategy for doing that too. But raising your rates, increasing your value, that increases your salary cap.
Chris (11:15):
Adding more clients increases your salary cap. Delivering fewer classes, spreads out your available spend better. It’s not the long-term solution, but if keeping coaches is your priority, it might be the best solution. Right now. You might have to take a small step back, run one fewer class per day before you can take the big leap forward because you’re just not ready to run eight classes yet. Now the key here is to understand your numbers and understand your salary cap. When people say, how do I pay my coaches more? I say, make more money in the gym. The ratios don’t change. And when people attack or criticize the four ninths model, it’s simply because they just don’t understand the math. You don’t need to give people a larger share of the pie. You don’t need to starve yourself and your family. What you need to do is to make the pie bigger and your coaches can help you do that through a process that we call intrapreneurialism, they can grow the pie for everybody.
Chris (12:09):
They can earn themselves a raise and that’s how you give them more and create more value in their lives. Now, what about paying different coaches different amounts? So if you’ve got a group class and it’s running the same programming and you’re following the same class structure, and you’ve got two different coaches coaching it, those coaches should be paid the same amount because even if one coach is more experienced or you know, technically better, or they’ve got 50 certs, that will not change the value that the client receives from that class. However, if you’ve got a coach who is very proficient, you know, level three USAW certified, then they should be running a weightlifting class for which you charge more because you’re adding more value to the clients and they should be making a percentage of that number. And that’s how they make more money.
Chris (13:01):
Whenever you’re adding value to the clients, you can give the coaches a raise and the more valuable the service that you offer, the more the coaches get paid for delivering that service. If you’ve got two coaches doing personal training, should they have different rates depending on their experience? Only if one client is paying more than the other. And that’s why we use a ratio to figure out how much the coach should be paid instead of prescribing an actual dollar value or saying here’s a hierarchy of raises that you get with experience. The truth is that experience alone does not necessarily increase client value. And it certainly will not make one client pay more than another client. However, quality, value. And if your knowledge adds value to the client, then the client should be paying more. I’ll give you an example of where a lot of gyms get this wrong.
Chris (13:53):
Let’s say that you own a CrossFit gym. And you’ve got some people who are competitors. And those people are like, oh, we’re going to follow super-duper secret squirrel programming. We only want open gym access. And because these people are like the best at CrossFit in your gym, you’re tempted to let them come in, coach themselves, pay somebody else for programming and only charge them for open gym. So they wind up taking up the most of your time and space, but paying the least for it. The reality is that the people who wants to compete need more coaching than anybody else. Not less. They need more of your time and attention and individual focus than anybody else, not less. And so they should be paying more than anybody else. Not less. They should not be paying for the minimal amount of service. They should be paying for the maximum amount of coaching if they really want to progress in their sport. And if they’re not willing to pay you for that, then they should be going to, you know, whoever they are willing to pay for it. And that’s where maybe one coach earns more than another. When the client is paying more for their expertise. But when a client is paying two coaches the same amount, those coaches should be paid the same amount, because that is the value that they’re delivering to their clients.
Mike (15:09):
Two-Brain Radio airs twice a week and features all the info you need to run a profitable gym. Subscribe so you don’t miss a show. Now here’s Coop with an invitation.
Chris (15:19):
Thanks for listening to Two-Brain Radio. If you aren’t in the Gym Owners United group on Facebook, this is my personal invitation to join. It’s the only public Facebook group that I participate in. And I’m there all the time with tips, tactics, and free resources. I’d love to network with you and help you grow your business. Join Gym Owners United on Facebook.
