The Economics of 240 new dabbler clients to your gym, versus 60 Madlab clients: Marketing the MadlabWay!
Marketing: A necessary, yet often dreaded, aspect of being a gym owner.
For most gym owners, marketing has become synonymous with the agonizing pursuit of new blood:
I need more clients!
How do I get more clients?
How do I market to the right people?
Where do I find these people?
The route many go down is to market short-term “offers” or “deals” at their gym—usually to sell group fundamentals classes—to bring in all of the people.
Often these marketing efforts work. Well, kind of. Sort of. They work to bring in an influx of new people, but they don’t work to generate high-paying clients who actually stick around for five-plus years.
Hard reality: Our data from working with close to 2,000 gyms in 15 years shows churn rate on group fundamentals (things like an 8-class group class, a one-month Group-on deals or a 6-week challenge to name a few) is between 70 and 80 percent, meaning you’re marketing predominantly to people who won’t stick around for a year! It’s no wonder you then have to run another deal and another deal, and do more, more more tedious marketing: The people you’re bringing in are leaving as fast as they’re coming in…
This is why our marketing focus is to attract clients who will stick around, so marketing doesn’t have to be a dominant feature in your life as a gym owner.
Let’s look at the economics of picking up 5 new personal training clients a month (our data shows this at closer to 10-20 percent churn) versus 20 group fundamentals clients per month (70 to 80 percent churn).
- 20 clients per month = 240 clients per year at $150 a month (the typical rate many group exercise facilities charge for their monthly rate)
Total revenue at the one-year mark:
- 48 of them (80 percent churn, 20 percent retention is the number we’re using, which comes from data accumulated from 2,000 independent gyms) are still around at the gym: 48 x $150 = $86,400
- Of the other 192, the average number of months this group sticks around for is 3 months: 192 x $150 = $86,400
- Gross Revenue: $172,800
Personal Training/Hybrid gym model clients:
- 5 clients per month: 60 (who pay an average of $1,500 during their one-on-one personal training and then an average of $250 a month after the first two months for a hybrid gym membership (combination of group classes and one-on-one training) = Average of $4,000 a year in their first year
- 48 stick around (This is based off of 80-90 percent retention from personal training/Hybrid gym model at MadLab Group gyms. We’ll go conservative here and call it 80 percent retention) = 48 clients for one year = $192,000
- The remaining 12 (the ones who don’t make it the full year) stick around for and average of 6 months and pay an average of $2,500 for their initial personal training plus the remaining months they stay) = $30,000
- Gross Revenue: $192,000 + $30,000 = $222,000
So, to sum up: Working your ass off trying to be a marketing machine is exhausting, time consuming and stressful and if all goes well can bring you 240 clients in a year and $172,800 in gross revenue at the end of the year, as compared to a small marketing effort that drives the RIGHT people and brings you 60 personal training/hybrid gym membership clients in a year and generates $222,000 in gross revenue in 12 months.
In the second system, you generate $49,200 more gross revenue, not to mention you consume WAY less energy, and significantly reduce the stress the pressure of having to find and sell 20 new, inexperienced people each month causes.
Think about how much energy goes into working with a new client than a 5-year veteran?! It’s not even comparable!
So now the questions becomes, how do you find those clients?
This is where we come in. Here’s a real quick Coles Notes about how the Madlab system will help you generate high-quality leads:
Step 1. Organic referrals from our coach for life model
Our entire model is built on a relationship between a client and a coach for life. This is something that simply can’t be formed in a group class model. (How do you find out your clients’ pain points in a class of 20 people? You can’t).
And when you work with a client closely, not just on their fitness, but on their nutrition, sleep, health and wellness, they will see faster, bigger gains in their lives, which we all know is the easiest way to generate referrals, and we also know referrals are the easiest and most high quality new clients to capture!
That being said, you can’t rely solely on referrals. SOME effort does have to go into a conscious marketing effort.
Step 2. 12-week Marketing Guide
This is like your Associate’s degree in marketing. Our 12-week marketing guide sets you up to have all your social media channels working for you. It also provides you with content strategy and business strategy—all of the basic things you’ll need to be ale to market your facility to high-end pt clients.
Step 3. Free Marketing School
The Marketing School is 20 hours of video content that teaches you the next level of marketing, kind of like your Bachelor’s degree in marketing. We teach you how to take content and leverage it to bring you leads.
The ultimate goal here is to help you build a spiderweb in which to generate leads from local businesses, corporate programs, social media, referrals and email marketing. It also teaches you about long-term marketing strategies, as well as branding and rebranding, as well as things like google analytics.
Step 4. Ultimate Marketing and Sales Funnel Course
You guessed it, this is your Master’s or doctoral degree in marketing. We also call it the LEAD Tutor. It teaches you to develop a unique selling proposition so you can market to specific clientele. Not only will you learn how to market to your ideal clients, you will (more importantly) learn strategies about the best ways to follow up with these people to get them booking an appointment, actually showing up for the appointment, and ultimately enrolling with you.
Optional Step 5. LEED Machine
Finally, this is for those who don’t want to have anything to do with marketing, so you hire us to do it all for you… More on this in a future article.