Why the answer to the question, “How many members do you have?” isn’t indicative of success
If you’re a gym owner, you have probably been asked—many times—the question: “How many members do you have?”
The inquisitive mind of the person asking—likely another gym owner—then compares your number to his own, and starts making assumptions about your business success.
If you’re part of the MadLab Group, you hopefully have learned this is not the question you should be asking to determine either your success, or someone else’s.
What should you be asking?
Here are a few more useful metrics:
• What’s your average/mode lifetime client value (LCV)?
• What’s the average/mode yearly value of your clients?
• What’s your churn rate?
• What’s your average dollar per square foot?
• What percentage of your gross revenue comes from group classes? Personal training?
• How many on-floor hours a week are you working?
• How many classes do you run, and what’s your average class attendance?
• How many full-time coaches do you have?
Going back to the original question about how many members you have, it comes down to quality over quantity.
So what makes a quality client?
In our opinion, the highest quality client comes to your gym for more than a workout. He’s committed to improving his fitness for life. He is not looking for a discounted place to hit a workout, but instead he wants a professional coach to help him manage his health and wellness. And he’s willing to pay for premium services like personal training, specialty programs or individual programming because he is committed to his personal fitness goals. (Even better still if he starts bringing you referrals, of course).
Now I’m not saying that people who aren’t looking for the above aren’t worth your time. There will always be people who want to do group classes for a few months before they move on to something else, and they can be part of your community, too. We’re definitely not knocking the “here for a good time, not a long time” type of clients. BUT, if your business RELIES on the dabblers— the people who want to pay the minimum amount of money to be at your gym and usually leave out the back end as fast as they come in—then you’re, well, somewhat doomed.
We’re saying for every “here for a good time” client looking for a deal, there is a person LOOKING for a professional relationship with a coach. THESE are the people you should invest your energy in, and these are the people who should make up the bulk of your business.
In reality, here’s what having quality clients over quantity looks like for the coach:
Coach #1 has 75 clients. Each pays $150 a month for group classes. His gross revenue is $11,250 a month. He coaches them in group classes but doesn’t have much of a one-on-one relationship with them. Most of them just show up to get their sweat on. If they get injured, they usually stop coming or put their membership on hold. He tends to lose 20 clients a year and is constantly searching and relying on bringing in new clients to replace the ones he just lost. Some years he’s up, some years he’s down, and it’s a constant stress to replace clients who leave.
Coach #2 has 50 clients. Each pays an average of $300 a month for a combination of group classes, personal training, and individual programming. His gross revenue is $15,000. He sees them during group classes once to three times a week, and also for personal training either once a week or once a month, depending on their wants and needs. During these one-on-one sessions (and through their individual program if they’re following one) he is able to really work on their weaknesses and help them rehab any injuries that might come up. His clients still get to enjoy the social and competitive atmosphere of the group class, but they know the true value of them being at the gym is to reap the benefits of having a personal coach for life in their corner to help them stay healthy and fit and committed. This coach loses the odd client (such is life), but generally his stable of clients is solid. Each year his stable grows a little bit stronger and he is able to pursue a career making a professional wage as a coach.
Which coach would you rather be? Which clients would you rather work with?