Client lifetime value. If you don’t track this key gym metric, I’ll tell you why you should. And gym owner Debbie Rosslan will tell you how to improve it. Welcome to Two-Brain Radio. We’re back right after this.
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This is another edition of Two-Brain Radio. I’m Mike Warkentin, your host. Lifetime value. I never calculated this number once for my gym, but I wish I had. LTV is the total amount of personal spend from the first day of membership to the last. Obviously you want to keep that member for as long as possible. Knowing this number can help you make smart decisions in your business and tracking it will help you figure out if you’re always offering more value to clients. LTV has two key parts, average revenue per member per month, and length of engagement or ARM and LEG as we refer to them. At the best gyms, both numbers are high. We know this because we track tons of data Two-Brain Business. On our March, 2021 leaderboard, we learned that the top 12 gyms in the world for LTV have numbers ranging from $8,200 to 14,000.
Debbie Rosslan of CrossFit Unstoppable was on that top 12 list. And she’s here to tell us how she earned her spot. All right, Debbie, welcome to the show. I’m going to ask you right off the bat. Do you track lifetime value or was this a number that was new to you when you heard you were a leader at Two-Brain?
So when I got the email from Eden, I was kind of shocked. I look at the numbers, but I don’t really focus on that. So, I’m mostly focused on the LEG. But when she sent me the email, I was pleasantly surprised.
So that’s length of engagement and we know that LTV lifetime value, pardon me, is a function of average revenue per member and length of engagement. Those two things create lifetime value. I’m curious for you, which one of those metrics did you focus on first at your gym? And if you focused on one first, when did you start really addressing the second one?
I’m mostly focused on the length of engagement. Just when they get in there, I want to develop that personal relationship with them. And just recently I’ve been trying to work on the ARM and for probably like the last two or three months focusing on that.
So let me get a little history from you then. How long has your gym been around?
We opened at the end of November in 2011. So we’re going on 10 years now.
- So this is an interesting one because one of the things that I’ve discovered as I’m chatting with gym owners about this subject, that gyms with high lifetime value have to be around for a long time. So business success, like just outlasting every other small business that fails, you know, in two or three years and being around for a long time is a huge part of lifetime value.
But then the second part is that you have to be good at your job. It’s not just enough to just survive. You actually have to please your clients. Right. So tell me a little bit about, I’m going to ask you the, about the one you just focused on first. Tell me a little bit about average revenue per member. Where were your rates if you remember back in 2011 and I can tell you that mine were way too low. When we had our gym. We opened at about the same time, and then we did a rate increase with Two-Brain and so forth. Have you done something like that? Do you remember what your rates were and what they are now?
I actually, we were one of the first gyms in central Missouri. So I was basing mine upon like the Kansas City St. Louis and the one in Columbia on what we paid there. So I raised it a little bit, but then I lowered it because I needed more members. And so as we gradually went up, I increased. I think I’ve increased twice and since Two-Brain I’ve done one increase.
So what was it back in 2011? Do you remember the number?
We were probably, I believe it was 105.
- Whereabouts are you now for an average membership and then you can tell me what package that would be.
Average membership is 149 a month.
About a 33% increase in general there, we kind of did the same thing where we did the pricing of like, I think we just chose 150 out of the blue, cause it kind of looked about right. And it was kind of what gym’s were charging at the time. And then I knew in 2013 that it was too low and I actually entered my changes that I was going to make it to Zen planner and they’re still there and I didn’t implement them for like another seven or eight years until I actually started working with Two-Brain. And we went through that process of raising it. But man, we left a lot of money on the table back then because we were delivering the value.
I totally understand that. I think a lot of that, it depends on where you live and your economic situation with the members, but I know I’m not supposed to predict what they will pay, but we’re there.
So let’s dig in to the other side of it now. So I know you do a lot of really cool things for your members along the client journey. Can you tell me about some of the retention features that show up from the time someone becomes a member to the time that they leave and of course we try and hold them forever.
Right. So I always like to be like the first contact. I know some gym owners don’t like to do that, but I like to develop that relationship right from the get-go, you know, talking to them, asking how their first workout or training session went. We check in with them on their first week, their second week, very active on SugarWOD, fist bumps, whatever, and making sure that they are taken care of. And so for the new members, that’s what we do. We have that client journey, but I also want to make them feel like this is not your ordinary gym. This gym is you’re going to do fun things every month. So we schedule social outings every month or like a Friday night lights type thing to where they can come in. They can look forward to that. So if they know on the calendar, we’re going to be doing, you know, a winery 5k in a couple of weeks, then they might stick around for that. We schedule those kinds of things. Also looking at numbers and Anastasia can attest to this. I am not good at numbers. So, but when I was actually working on my LEG one month, this is several months ago, I saw that some of my members were coming upon a hundred months. I’m like, wouldn’t it be cool to make some kind of club too? Oh, these guys have been around for 100 months.
That’s like eight years. That’s more than eight years.
Exactly. So, we have right now, we’ve got 15 members in that club. And what we do is, or what I do, I write them a thank you card, give them a gift card and then put their picture on our members page. And then also we got a little board with their pictures and the hundred month clubs. So I think a lot of people, even when I started that I had several members reach out to me and say, how many months have I been in? You know, that kind of thing. So they’re looking forward to that.
Gym members are competitive, who knew.
Exactly. Yeah. So that’s been a big thing. And we also, I’ve been starting like, the committed club to where, you know, if they make at least 12 classes in a month, I keep track of that through our push press check-ins and I post that. So they want to be on that board. So we’ll focus on that. And I think a big thing with our gym is, and I’m sure a lot of gyms around the world do this, but you know, being social with the members and showing them that you’re not just a trainer, you’re not just an owner, you’re a person too. And you care about what is going on in their life. So, that’s what I like to do with the members. We also do thankful Thursday where I have my trainers or myself. We write out little thank you notes or whatever. And we post them up there and have the coaches highlight members every time they coach on our members page. And it makes them feel more important that they are noticed and they want to come to the gym.
So it sounds like you’ve got just a host of touch points. Like I understand that you do t-shirts and retentions and water bottles and so forth in your on-ramp process. Is that correct?
We don’t do t-shirts, we do the water bottle, that kind of thing. And a sticker, just to say, Hey, welcome to the CFU. We’re glad to have you that.
Yeah. So you just have like, right from the beginning all the way through, you have just a huge amount of touch points with, you know, every member, and some of them or even most of them you said are like, you personally take care of some of this. Is that right?
Right. I mean, I have somebody who helps me. I’ve got a joy girl who does part of the things like we send out birthday cards and we actually had one in March. He stuck his head in my office door and he goes, thanks for the birthday card. It’s the only birthday card I got. And that made me feel good because, you know, us reaching out to them and, you know, putting their name out there, you know, sending them a card and most people don’t get cards in the mail anymore. So I think that’s a good thing to do.
Yeah. And the reason why I kind of asked about what you do yourself as that joy person role, you know, client success manager role that can be offloaded for sure. But I have talked to some gym owners like yourself who take that role themselves because they love it. And they think that they can do an excellent job. And it’s something that they want to do. Not necessarily something they have to do. Like if you’re the only person in your gym, you of course have to do that. But it’s interesting to me when certain gym owners say, you know, one of the most valuable roles for me is going to be building those personal relationships with clients. Whereas there are other gym owners like Chris Cooper’s and example where people in his gym don’t know who he is sometimes, which is kind of funny because he’s like this gym guru for lack of a better term, even though I know he hates that one, but people in his gym may not know who he is because he has a wonderful staff that he’s developed.
And his value is in the things that they don’t see necessarily because he’s got people placed, but then there’s other gym owners, like you who take a different approach and you know, you certainly have staff, but one of your things is you want that relationship with each member. I’ll ask you a question about how many members do you have?
I think we’re around a 100, well with our bootcamp, it’s about 120.
Yeah. The reason I ask is because I imagine please correct me if I’m wrong here. I imagine it would be really hard to maintain a personal relationship if you got into that 200 member range, do you think that would be tough?
That would be tough. That’d be tough. But I was a PE teacher for over 20 years. So I’m good at names and faces and that kind of thing. It would be hard to develop an individual relationship with all of them, but I’m not really looking to build and grow to 200 members. I like that 150 ange. We’re almost back to our numbers pre COVID.
- So that was really cool to hear. And the 150 number is interesting because Chris has talked about this so many times in his writing about how it’s kind of a magic number in that you can kind of maintain about 150 personal relationships. It’s called Dunbar’s number in the terms and so forth, but it does seem to be a thing in the gym industry and when Dunbar created it wasn’t related to gyms, it was related to just general human society. But the cool part is that what we found in a lot of cases of the gyms are really struggled to get past 150, because when you get larger, some of those connections go away and you’ll lose members and so forth. And unless you have really amazing systems. So I was curious, I wanted to hear your answer to that because if you had said, OK, I maintain a personal relationship with 250 people, I’d be like, wow, how do you do that?
No, that’d be crazy.
I think it would too. And at that point that, you know, there’s systems that you have to develop and staff to make that happen because you personally just can’t do it. I love the idea of what you’re talking about, the hundred month club. And it just, it seems so intuitive when you mentioned it. I wouldn’t have thought of it though, but it seems so intuitive because we have, you know, leaderboards and, you know, we’re all competitive fitness people and I’m not, but many people are in gyms. So just by putting this thing up and celebrating these members who had been there for a hundred months, you’ve kind of by default set some goals for other members, is that right?
Yes. So, you know, like I said, a few members reached out and said, I should be at like 92, I’m almost there. Right. And, so, you know, I’ve got some coming up on, so this is our third location, so I can kind of remember who went through their on-ramp and stuff in our, you know, first and second building. So, you know, people, when they started here in our current building in 2013, they are, Oh, I started in January 13, so I should almost be there. Right. So they’re kind of keeping track in the back of their head. And, it’s kind of cool to see them talking about that.
So the interesting thing, you know, from a business perspective is like, if someone says to you, I’m at 93 months, I can’t wait to get to a hundred. You kind of almost guaranteed another seven months of membership. Right. That’s, that’s so cool. And so, you know, guys, if you’re listening out there, what I would suggest is if you don’t have a club like that, start something and it doesn’t have to be a hundred, maybe you haven’t been around long enough to have a hundred months of business, but start something. And I almost, you know, just based on what Debbie said here, you would probably think that some of your members are going to want to hit those numbers. And that’s going to increase your retention. Interesting too that is you could certainly give out some sort of like, you know, special t-shirt or something like that, or just anything small because people love that kind of stuff. And the cool part about it is that it’s like one of those things you have to earn it, you can’t buy it, you know, and if you try something like that, you might find that all of a sudden, you’ve got some people competing to be your most senior members and that’s going to help your lifetime value for sure.
I got it from an idea someone had like branded their name on something and my husband is very creative on things. And I had asked him about it, but his time is precious too. So we never did get around to that. So I just, OK, I’m just going to do this for now. So when hunting season is over, I’m going to have him make up like a little plaque or something to where their names are on it. So it’d be more uniform, with their pictures above it.
And it’s kinda like, it’s a point of pride for sure. And, you know, one of the things that I remember seeing, it was a little cafe in Scotts Valley, California, where CrossFit was headquartered at one point and they had this rack of mugs behind the coffee station and it was, it had their long-term clients names were on them. So when they walked in, you know, Phil or, or Cindy or whatever, would get their branded mug with their coffee. And like that becomes a point of pride. Right. It’s just one of those special things that makes it your quote, unquote, third place, right. Where you’ve got home and you’ve got work and you’ve got these third places which can be churches and they can be gyms or bars for some people. And it really, you know, I’m sure your members must feel like that these people who’ve been here for 10 years, I’m sure they probably feel like they’re a huge part of CrossFit Unstoppable. Can you tell me about one of your longterm members and what, like what kind of client avatar that person represents?
So, I will talk about one of my members, she’s been with me since, the summer of 2012, I guess, or the spring. And, she’s actually 60 years old and her daughter and her mom had done CrossFit too. She stuck with me. Her mom, you know, she talked to her mom into doing my masters class and, that helped out. So using her as a seed client, you know, we branched out and she’s had, you know, talked to people to come to our like WOD and wine nights or our free workouts, or bring a friend day, those kinds of things. So, I know 60 sounds really old, but it’s, I’m 53, but I don’t feel like I’m 53, but our average age is around 40, 35 to 40. So that’s pretty much our avatar people who are wanting to find another place like that third home and come in and feel welcome and still get a good workout in and just feel better about themselves.
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Yeah. And it’s interesting that every gym owner that I’ve interviewed about lifetime value, all of our, you know, the leaders who have done a great job in the last month, they all know their client avatar. I haven’t met one yet who like, nah, we just kind of advertise to everyone. Every single one so far has told me, I know exactly who my client avatar is. And so I talked to different people, you know, someone the other day had a different version than what you had just described, but it was no less concise. They knew exactly who they were looking for, which I thought was so neat. And so you have that same thing too. I think, you know, I’m going to go on a limb. Chris Cooper will run data and figure these things out with actual numbers. But just from what I’m hearing, I feel like if you know your client, your perfect client and you work hard to find those clients, you’re going to know how to retain them. And they’re going to want to be a part of your gym for a long time. Whereas if, for example, if I threw a client at you, that’s not your avatar say, you know, a 22 year old university student who wants to be a competitive CrossFit Games athlete. I don’t doubt that you could make that client fit, but do you think that client would stay at your gym for 10 years?
Not for 10 years no.
And it’s not because you’re bad gym owner, it’s just not the client you’re going for.
Right. And we have, you know, every gym has that turnover. And, you can kind of see, you know, as a volleyball coach, I can kind of see in fifth and sixth grade or seventh grade, you know, are you going to make it in high school? And it’s kind of the same way I can see unless these people are nurtured and taken care of, there’s some people that aren’t going to stick around because they’re not going to make it. They don’t feel welcome that kind of thing. So, yeah, we’ve got to take care of them from the get go and keep developing those relationships with them throughout their time.
So Two-Brain listeners, I’ll throw this one at you. If you do not have a client avatar, like your ideal client, the exact people that you want to speak to in your marketing and acquire and serve, put that together. And I bet just by doing that, you’re going to start to find more people like that. And that’s going to probably drive up your lifetime value because you’re going to find the exact best fit for your business. So do that. And if you need help doing that, Two-Brain mentors can help you. So, Debbie, what insight does knowing your LTV score, give you, I know it’s something that you haven’t focused on a ton, but now that you know it and you know that you’re one of our leaders, does it give you anything that you think about?
I think the insight I have is just making sure, you know, I do have those seed clients. I have those 15 people right now in my a hundred month club. I can go to them and say, OK, what kind of programs would you like to see? What kind of things do you think that have worked in the past that could help us in the future, those kinds of things. And then that would, you know, maybe help get other people to stick around those kinds of things.
Yeah. So for you, it’s more of a, we’ll call it a downstream metric where you’re looking more at the length of engagement and the lifetime value just kind of happens as a function of that. The reason I ask is that some gym owners and it’s more common perhaps than other industries. Some gym owners will be able to say though, OK, I know that my client, my average lifetime value is going to be $12,000. That means if I spend even a thousand dollars to acquire a client, which is a huge number gym owners generally don’t spend, they know that they’re going to make that money back. And I think that gym owners maybe don’t necessarily focus on that metric all the time because our cost to acquire clients, isn’t like a Netflix kind of cost. It’s generally lower, at least in most areas. But I’m very, I was just curious to see if it is something that does make you think, and like, you know, when you get a lead now and you think, OK, this lead is, if I sign this person up, this person is likely to spend $9,000 over the course of the next two years. Does that affect any of the way that you would look at leads or handle new members?
Well, I look at the number now because it’s out there. But I don’t think it would really change much with how our client journey is. Just because I’m not, like I said, I’m not a numbers person. Yes. I want to make money, but I’m going to care about that person’s health and wellness first and foremost, before the dollar sign. So I think we would just stay focused on, you know, how is that person feeling and get them to the next step and then everything will just fall into place.
So let me flip the question for you and ask you this one, this is a hypothetical. So I’ll put you on the spot trying to figure this one out. If, for example, you were reading and you saw Two-Brain metrics saying, OK, these top gyms have a lifetime value of, you know, 8,000 to $14,000. And you looked at yours or your mentor said, you, Hey, your lifetime value is 1200. What would that make you think? What would you maybe look at first there?
What’s going on? Why are they quitting so early?
And that, you know, would you dig into, like, would you dig into the client journey right away? Or would you start like talking to your seed clients or what would be your first steps to try and drive that number up?
Well probably the first thing would be, you know, looking at the client journey, making sure my coaches are on board doing what they need to do. And we do evaluations. Those kinds of things. Do some goal reviews with my seed clients or see if they are hearing, you know, because sometimes people won’t come to me directly because they just don’t, they just like to gossip. So probably talking to the seed clients and see if there’s any problems going on.
An important one. Goal review sessions. And the reason why this is so important is in these sessions, which a lot of us didn’t do for years and years. But in these goal review sessions, you have a chance to ask clients if they’re happy, celebrate if they are and make changes if they aren’t and also add some value to your program, meaning someone says, Oh, you know, I’m just, I can’t get double unders well, would you like a personal training session? And we can work on that and then you make a sale, they get double unders and everyone’s happy. So you see what I’m getting at here. That whole thing, that cycle of success, and some sales in there has a huge effect on lifetime value. So how long have you been doing goal review sessions for, and how often do you do them during the year?
So right before we got shut down last March, we were starting them. So we got like a week, a week’s worth and then shit hit the fan. Sorry. And then we reopened six weeks later and I just focused on the members that I had just trying to get people back in the groove, that kind of thing. So we started back on goal reviews in January of this year. So we’ll do another set this summer. Well, I guess next month, next month or July, we’ll do another set. So probably twice a year.
- What have you found since you started doing them? Like in those, in those January, and again, we were talking a little bit of COVID damage control right now. Every gym owner has to respond to the whole crisis differently. So it’s maybe not, you know, you haven’t been doing it for five years and have nailed, but what are you finding in these sessions, are they helpful in helping clients focus on their next months of training? Are they helpful in adding value and giving them some additional programs or anything like that? What are you finding in these sessions?
For ours it’s more of, wow, they really care about where we’re going.
That’s retention right there.
Yes. So showing them that you care about their goals or their next step, and we can follow up with that. That’s what stands out to me. And we can also see what kind of programs. So like from our January one, a lot of people wanted to work on the toes to bar or something like that. So in February we had a toes to bar clinic. So seeing those kinds of things that will help, but the most important thing I think is just showing them that you care about where they’re going.
So you’ve got touch points in there. You’ve got like a personal conversation with a staff member about their deepest goals. Right. So that’s super important, but then you’ve also got a revenue opportunity. Like I’m guessing you charged for the toes to bar clinic, correct?
There you go. So then you’re making some money off that by helping a large group of people who have a common interest or common goat, you know, something like that. So that’s exactly. Do you do these sessions yourself, or do you have a staff member do them?
We, I actually took our list of members and we had a spreadsheet and I sent it out to my coaches and they picked at least five people that they had a relationship, like based on who they coached, like I have my dark or like early class coaches. And so they picked at least five, and then I took the rest. So I probably did maybe 15 of them, but everybody else was taken care of.
- And that’s interesting too, because again, I wanted to kind of see, like you have a personal relationship, but I wanted to see if you had coaches that were also creating those personal relationships. And it’s really cool to see, because obviously you have that one coach is there every morning class, he or she is probably gonna have a really good insight into that client’s desires, even though you have a personal relationship as the owner. So I think that I’m going to go out on a limb here again and again, this is stuff that we’ll collect data on, but goal review sessions. I’m going to guess that by doing that, your retention and average revenue per member is going to go up. And so listeners, if you’re not doing these sessions, start doing them and it can be difficult to start. And I’ll ask you this question because after I tell my story here, Debbie, is that when we tried to start doing it at my gym with our current members, there was a little bit hesitation because it was something we hadn’t done in 10 years. Hard to get them started. But when we started doing them with new members coming in and made it part of the client journey, it wasn’t so hard to keep it going. What was your experience with starting goal review sessions.
Organization. Just, you know, keeping track of who is aware. You know, we try to get them done within two weeks. So then that way, we’re on that pattern and then checking in with them, you know, the last couple months I’ve, you know, maybe sent out a message or whatever, Hey, how’s the pull-up progression going on some of them, because I know that’s a big thing for the ladies. So we do that, but I think it’s the scheduling and organization and staying on top of that is that’s our biggest hiccup.
Did you get good buy-in from the members, like where they, like, you know, were people like quickly booking or was it a bit more push to get them in or how was the response?
So sometimes I have to bribe my members. So everybody who did a goal review session got their name in a drawing for a $50 CrossFit Unstoppable gift card. So they could use it towards drinks, apparel, that kind of thing. So I think we did 80, 80 to 90 goal reviews. So we had 80 or however many names and I drew for it and somebody won $50.
So, and I’m going to guess that you made more than $50 on your toes to bar clinic, correct? Yes,
We did another clinic too. So, I made it back. So bribing helps sometimes.
And that’s just a no brainer. Exactly what you’re saying. And the other cool part is that that gift certificate comes back into your business. So it’s, again, it’s a bit of a retention tool as well. So I mean, that’s a very clever way to do it. We, at one point we tacked on, in the intramural open, Chris Cooper’s pla, to make the CrossFit games open a whole lot of fun. We tacked on a large number of points for booking a goal review session. So when we had teams competing, we just said, OK, you know, you get 15 points or whatever the scale was, if they booked a session and we had some do that, which, you know, I think when we did it, we didn’t have a ton of people book. I don’t think we made any necessarily sales, but what we did get was a number of really deep conversations with long-term members who were very invested in our gym and helping the teams. And so that was a huge win no matter what. So, I mean, that’s another thing that you might consider trying when the open rolls around again, but I really liked the idea of a little bit of bribery.
I kind of did the same thing with the open, they got points if they left a Google or Facebook review. So I think I got 40 reviews out of that. So that was good.
This is off topic, but I’m going to ask anyway, cause it’s important. Do you have a system set up to generate those reviews when it’s not a push during the open or something like that? The Google reviews or Facebook reviews?
We are with Gym Lead Machine. So there’s about a month in it sends them an email. Will you do us a favor and leave a Facebook review or a Google review? So we’ve got that one month in with the new members that come across. And then sometimes just out of the blue, I’ll have like a little contest with the members. That kind of thing.
The reason I ask is because a lot of gym owners do not have a system for that. And they’re so important, those reviews for generating interest in outside. So the Gym Lead Machine automation is generating reviews for you?
It’ll ask them, the new member to, will you do this for me? And I’ve gotten several out of that.
That is a huge win. And that’s just an automation, just so like you don’t even have to do it. I love it.
Debbie. You’re checking all the boxes for me today on Two-Brain Radio. I appreciate it. I know this isn’t the most common metric in the world, so I really appreciate your thoughts on it because I love getting gym owners who are in the lead in these things to kind of talk about the numbers and the things they do that support them, because it’s going to give a lot of people out there, some insights. So if you’re listening guys, see what Debbie’s done, see how you could implement some of this stuff in your gym and get to ten-year members or beyond. Thank you so much for being here today. I hope we’ll come back. We’ll talk to you when you get to like, you know, 15 years, maybe 150 month club.
Hey, there we go. Thanks for having me.
I’m Mike Warkentin, I was here with Debbie Rosslan onTwo-Brain Radio. Be sure to subscribe for more episodes of the show. And now before you go, open the Facebook app and join the Gym Owners United group. You can literally ask your gym business questions in there and get answers from other gym owners, certified Two-Brain Business mentors and Two-Brain founder, Chris Cooper himself. It’s the only public forum where Coop offers his insight for free. And you can just talk to him there. That’s Gym Owners United on Facebook. Please join today and I’ll see you in there.