Deep Data Dive: The Fitness Industry Under the Microscope

And I've got John Franklin. He is a big wheel at Kilo. He is the Chief marketing Officer at two Brainin business, and he's also the host of the podcast Gym World Worldwide. I'm your host, Mike Warden . Please hit subscribe before you forget. And now we're gonna get right into this because it's the info you need to help you run a better gym. So guys, a big one right off the top. I need your perspective on this.

We saw that expenses are up in gyms. Revenue isn't what is going on here and how do we fix it?

Uh, what , and actually what we saw here on page 21 of the guide is that expenses are going up like 89% a year and revenues aren't. So that's really what I'm mostly concerned about. The average revenue increase on page 39 was $3,617 more a month. So like if your gym is paying you $3,500 a month right now, and you haven't raised rates, you don't have a plan to make more revenue.

Basically everything that you earned last month is going to the landlord next month.

Uh, so each incremental member that you're replacing for each one, that leaves costs way more money. So if you're not monetizing your current client base by serving them well , uh, you're just gonna get farther and farther behind every year that you continue operating.

In some places

Like there's always going to be speed bumps every few years. And so you can balance that out by having an

Like you , you have to read your lease and say what's in there. Like, are there can charges going up? Are there rental increases planned? And the, the only bad thing that can happen here really is that it comes as a surprise, catches you off guard and that can smoke you.

But if you know that it's coming, then you can plan for it, then you can plan your rent increases or you can work with your mentor so you know there's gonna be more revenue coming in when those rates go up, it's, it's surprise that creates catastrophe and it's surprised that wipes gym owners out. Having a plan will, will help you survive. Having

You know, you , you have your, you have your lease, that's your big one. You have your staffing, that's your big one. But if you don't have that, the other re the other lever's revenue, right? And I'm sure we'll talk ad nauseum on ways they can increase revenue, but yeah, in general, it's easier to grow the top line than the bottom line if you're starting from just such a, such a lean model to start with .

We're gonna get to that shortly because there's some interesting things that gym owners are gonna have to consider. Uh, before we do that, let's talk about members per gym. Everybody says, oh, I need more revenue, I need more members. So the question for you guys is, is that actually the case?

And I'm gonna pull up right away here , uh, on page eight, the , uh, the stats of what we have for average gym membership, but is that the solution to this problem? More members?

So basically, if you're just running group classes, you take the , the revenue they make from group classes, divide that by nine, multiply by four, and that's your budget to pay your coaches. The way that your coaches earn more per class is by charging more per class or making more revenue from classes .

And the way that you do it for one-on-one training is that you pay your coaches four nights or 44% of the, the hourly rate and you do the same for semi-private. You , you know, it basically, there's a lot to this, but the reality is like you create a bigger pie and that's what pays people more. But you also don't starve yourself to pay your

staff. And four nine's model is just a great app applicable like plan that you can use when you're saying, what should I charge for things and how much should I pay my staff? And when your staff needs to earn more money, that's your cue to charge more.

We teach people , uh, different models that they can use and how to apply them to run a sensible business that's gonna last forever, but basically two ninths . So 22 to about 30% should be your total fixed cost expenses every month, including your rent, including your insurance, including keeping the lights on.

How do they think about like, how much can I afford to spend outside of staff, right? Like, how much space can I afford for the revenue I'm making? Is there a framework you'd tell them to, to think through using the four nines model?

And they, they have this myth in their head that like, if I build it, they will come and more space equals more opportunity for more clients. But the reality is that the most successful gyms very often bootstrapped. You can listen to Mike's podcast episodes where he interviews the top gyms in two brain and a lot of 'em started out in a garage, in a park, you know, with a thousand square feet.

And there are certainly models out there where having a small base, 2000 square feet in a semi-private model can still create a half million dollar a year in revenue. But there are also models where, oh, we're gonna have 18, 30 people in a class and you're starting off with just such a huge nut that you've gotta cover every single month in expenses that you can never make any money.

And another way to look at this is you , you think about like on what day of the month are all my bills paid? So I'm not talking about staff costs , I'm talking about like my fixed costs , my rent, my insurance, my uh , website costs . You know, how many days do I have to work until those bills are paid? And you think of that as like the speed bump, okay?

Or like the , the one day of the month, the break even day. And um, in Canada we actually call this financial freedom day. So I'm gonna call it that. That's the day on which your taxes and your fixed costs are paid.

So if you know it takes you 10 days of the month to earn enough revenue to pay your rent and your insurance and the lights and the heat and your website costs, then that's financial freedom day for you. Your first goal should be let's make more revenue so that we can pay all those bills off by the ninth day or the eighth day.

And that is another great way to look at this instead of worrying about like percentages and and profitability.

And so , uh, if you're thinking of rent as your main fixed expense, a little trick that you can do is you can literally take the rent of the new space and divide that by 0.2 and that will tell you how much revenue you need to make to actually be able to afford that, right?

So if it's a 5,000 square foot space, you divide that by 0.2 or $5,000 a month rent, you divide that by 0.2 , that means you have to make $25,000 in revenue , uh, to actually be able to afford that space. And if we look at the average gym revenue data that what gave us, it's $12,000 a month, right? So that's the average gym revenue.

So if you wanna see how much rent you could afford based off of that, you just take that and multiply it by 0.2. So that means if you're making $12,000 a month in revenue, the amount of space you can afford is $1,200 a month in rent because you're gonna have your insurance, your utilities, all this other stuff.

So using Chris's model, you can use that as like a quick little framework to figure out how much can I currently afford and how much I would need to make in order to grow into your dream space, whatever that may be.

That's what push Press says, 159 average members per gym. That is a 3.2% increase year over year, 2022. Numbers 1 54. What do you guys see in that? Can you solve revenue problems by packing more members in? Is that the answer?

What we're recommending is that you learn how to read AP and l , um, but more than that, that you know your numbers well enough that you can build a plan where 150 can pay you a hundred thousand dollars a year. And that usually means like increasing ARM for people.

The reason we picked 150, there's a multitude of reasons, but the reality is like the average gym gets about 150 members from an anthropological point of view, we can maintain about 150 relationships. There's a lot of reasons and a lot of science behind one 50. One 50 is not your limit. We're not saying stop there, we're saying that 150 should pay you a hundred thousand dollars a year.

It should let you hire a full-time coach and another halftime person and basically take care of people. Like what you wanna do. If you get to 150 and all those things are true, by all means scale to 200 scale to two 50. But don't try and build a business model from the start assuming you're gonna get 300 members because it just doesn't happen.

You know , there are a few random people out there who , uh, opened up the first CrossFit in Florida and they're gonna get 300 early adopters. They're gonna struggle to keep those people. And long term we've seen this thousands of times. Like that model just doesn't play out unless you start with a working model at one 50, make a good business and then scale up from there.

And that's really the key here is like you need to have these numbers so that you can make these appropriate decisions instead of constantly kicking profit down the road, taking on massive expenses and going bankrupt in year three.

And so you do the same math that John just laid out, you take your rent, you , uh, divide by 0.2 and that tells you how much revenue you need. And of course your rent's gonna be higher in Vancouver or you know, downtown LA than it is for me. But that also means that your revenue per member should be higher.

Like you can't run a gym in rural Nebraska and charge the same rate that people in downtown San Diego are charging. And vice versa, right? If if you live in a high income , very expensive real estate area, you should be charging more for your service. Again, that's, that's just the bottom line. So ARM has to be even higher, but 2 0 5 is a great mean average for people.

You don't , uh, raise that up if your expenses are higher.

If you look at the amount of gyms that have more than 10 people in their class, it's like 2%. So like to, to get a large group training model where the average attendee or the average class is more than 10 people and like only like two, 3% of gyms actually ever get there. So it's incredibly difficult to do. So if you get there, congratulations, you're an elite gym owner. Uh, it's just down a little bit there, Mike.

You're an elite gym owner and you're doing great. But, but all we're saying is at 150 members you should be able to make a comfortable living. And that's something that's gonna give you a little bit of longevity, right? Uh, there seems to be like this idea, especially in the large group training space, that like caring about your clients and making money are at odds with each other.

And the unfortunate downside of that is over the last three years, we've lost credible gym owners who've just shut down and said, Hey, I'm done with this. This is too hard. I'm, I've been doing this for 10 years, I, I want to be able to make a decent wage. And so they shut down their gym. And the reality is like, you need to make a comfortable living.

You need to be able to have, you know, around the median household income , uh, from all the stress and risks that's associated with running your gym. And so, not to put words in Chris's mouth, but you know, you're saying like at one 50 you should get there, you know, . And if you get more than that, congratulations, that's great.

But like, if you're not there at one 50, there's something inherently broken about your model that needs to be fixed.

Yeah , the reason I ended up connecting with you, Chris, here at Two Rain was because my staffing costs were outta control and I was losing a ton of money every month, almost solely due to labor. So I'm gonna pull up this thing here, and I want you guys to take a look at this staff cost increases from year to year. And you tell me what you guys see here, because this one blew my mind.

As a guy who used to pay less than this, check it out. Average cost to staff a class across all gyms increased by almost five bucks from 22 to 26, 40 $6. That's for one class. And I CrossFit gyms it increased by $6 and 36 cents to be 27 point 36 on average. So these labor costs are up big time. What do you see here?

Of course that's going to eat into the owner's bottom line. Now, should coaches make even more than this? Absolutely. But again, across 12,000 gyms, this is the average. And if you're not raising rates to follow, you're just chipping away at your income as the owner.

And that probably led to fairly inconsistent product, which was okay in 2011, right? Like when you were the

It's the same thing I feel about owners pay for the service they're delivering for, for the problems they're solving for , uh, their member base. Like they deserve to do better than that.

And what that also means though is that the staff at the two brain gyms are less likely to say, I'm starving, I'm gonna go open my own gym because I don't know how I can ever make more money in fitness. You know , that's the problem that I had to solve for myself back in 2005 and more and more in two brain gyms.

Um, people just make more money and so they, they don't get desperate and they don't do crazy things like become your competitor. So we are pulling the industry average up and you know, quite often , uh, we say things like best finds best, and this is actually a concept that came to me through Greg Glassman.

And when we were talking about churn of gyms, even back then, you know, 2014 and some CrossFit gyms just weren't making it, you know, what he said was like, the , the cream's gonna rise, the best gyms will survive. And that's what's supposed to happen. The the trainers from the other gyms will go where the opportunities are. They'll get to the best gyms, the clients at the, the weakest gyms will.

They're not gonna quit exercising. They're gonna eventually go to the best gyms too. And so I think, you know, given a long enough timeline, the best gyms who can pay people the most are going to win. And that should be incentive enough for gym owners to say, I need to charge a good rate here because, you know, the survivors win. It's a game of attrition.

I'm gonna take you from the highest earning staff member. I'm gonna take you to net owner benefits stats. Tell me what this does for you guys. Half of survey respondents take home as owners less than $4,000 a month that is exactly the same as it was in 2021 and 2022.

And that's what forces gyms outta business. It's not that they're not pursuing their level three, it's, you know, it's not that they're not good enough as coaches, or they're not passionate, or they're not even working hard enough. They're doing all those things.

There's , that doesn't include, that doesn't include a place to live that doesn't include , uh, you know , your kids' activities. Like, it's just too low.

So when I see thought leaders in the industry telling gym owners not to focus on money , uh, like not to that money isn't important or money comes after excellence or something like that, it makes me want to hit my head against a wall because you can't, you can't continue to live like a family can't live on this wage in many parts of the us .

They simply can't without, without making extreme sacrifices, like not having health insurance. And so the reality is the best thing that a Jim owner can do if they want to obsess over their customers and and chase all these things, which, you know, are no one's gonna say they're, they're evil or bad. Um, but like the reality is, like, you need to be comfortable.

You need to be able to know that like your family's okay, and that you can afford berries for your kids. If you want to think on a long-term time horizon, if you wanna put in the work necessary to deliver operational excellence, but you can't do that if you're worried about, like, if my kid breaks his arm, it's gonna bankrupt my gym. And so that's why this stuff makes me profoundly upset.

And that's why I think , uh, what we're doing here at Two Brains really important to normalize talking about money and encouraging gym owners to charge what they're worth because you deserve it . You , you're

doing an important service, you deserve to make a living wage.

That's a tough one and we wanna pull that number up. The two brain number by the way is $800 a month higher. So if you wanna add some revenue, think about working with a mentor on that. But I'm gonna take you to this guy here. We touched on this briefly, but I wanna just point this one out because it is , uh, a big deal. I'm gonna share my screen here. Pardon me.

So gym owners are this year running classes with more people in them. We , the stats are percentage of gyms with average class sizes of one to four decreased by 23, 24 points, awesome percentage. Gyms , gyms with average class sizes of five to eight increased 26% or 16.68 points. This is a huge deal because all of a sudden those unprofitable classes become profitable. Chris, is this a big deal for coach for gyms?

But what's really cool is that if you track retention data across class size, you'll see that, you know, personal training has the best retention. Okay? But when you're running a group class, the ideal group class size for member retention is seven to 13.

And so if, if that is the segment that's growing is those classes of seven to 13 people, then I am thrilled that, you know, as a coach, you know, like that is a fun class. 7, 8, 9, 10 people, there's enough people that it's really exciting, but everybody's still getting some one-on-one coaching. They don't feel like a number, they're not like lost in the crowd. You don't have these high churn rates anymore.

So , uh, these are very encouraging numbers.

What are you seeing here, guys?

Because we know from looking at clients, like when a client's been with you for two years and they quit your gym, they're joining another gym, they're cycling, they're taking up swimming, they're, they're, they're going do something else. Like you have changed their life, right? Mission accomplished, really, most gyms overestimate this.

They say, oh, my length of engagement is five years because they have a couple of members who've been around for five years. But you have to look at your newer members and say, how long are they staying? And there's also some, some really interesting points here. Like if you can increase your length of engagement by three months, then all of that revenue just compounds and builds every month.

And the average gym owner could take home another 30, $40,000 a year in income if they could just keep all their clients for another three months. And so it's worth focusing on this. We don't really look at churn. We look at like, how long do the clients you have actually stay with you?

Because we wanna know that you're making a difference in their life and they're returning the favor by making a difference in your business.

And if you look at leg , it seems to be substantially longer over like a coaching gym than some of the larger, like if you think of some of the mo the group models that scaled like a berries an orange theory , uh, where they're packing 20, 30 people in a class. It's more or less the same class over and over. It's very operationally efficient model, but like people get burnt out and bored of it.

If you look at the lower end , uh, like the small group training gyms, it's a , it's a similar service, but , uh, you're training in like a pod or a small team. The majority of the people listening to this are somewhere in the middle of like, in that six to 10 person range offering large group class, but not really charging , uh, small group prices and they're not really charging boutique prices.

And Chris did a writeup in the guide about how , uh, you don't want to be con competing with like the Nikes of the world. So Nike's now opening their own chain of gyms. Chris, can you kind of break down the difference between like small group training, like large group coaching gym and like large group boutique and how gym owners should be thinking about where they're positioning themselves in the market?

Like, they're gonna understand there are subtle, you know, if there are five or six CrossFit gyms in your town and opening right beside them is a Barry's bootcamp and right next to them is a Nike and Nike's charging 99, you are trying to charge 1 65. So you can get to an AR like the , the client's gonna choose Nike. Now the problem is that all of these services have an average lag of like three to four months.

So it's very high churn . You're not changing the client's life, they're moving on quickly. And so you have to replace those clients really quickly and you're competing against a low price point. So you're trying to bring these clients in on price. You're not making any money, the clients are churning, you're, you become like a broke marketer basically instead of like a gym owner and coach.

And it's just a downward spiral. These things compound and create the perfect storm that kills a lot of gyms. So here's the difference. John asked about, obviously personal training is one-on-one semi-private training is when you're training a group of four to five people and they all have different programs, but they're all working together with one coach, right? This is what I do as a client in my gym.

Small group training is when you have five or six people training together, they train as a squad, they're all following the same program. And this is basically what Greg Glassman did at the original CrossFit large group training is when you have more than seven people training together, maybe even up to 30, everybody who comes into class likes the training.

But after three or four months, they start to look at, well, you know, Nike's got this new gym and it's half the price of this one. It looks pretty awesome. Or Orange Theory looks like they've really got their act together and I don't have to deal with the dirty bathrooms anymore. You open yourself up to this commoditization effect where you're competing with people who can charge less and smoke you.

So they're not doing a workout that requires a row or a box, a pull-up bar and a barbell for each person. So they can pack a bunch of people into, if you look at the footprints of some of these, they're around 2000 square feet and they can run 30 people. Like you can't run a 30 person CrossFit class consistently in a 2000 square foot space. You know , no way you , you , you'd have to truncate it somehow.

So they have operational advantages that allow them to price lower. If you look at the other end in the small group, you know, those guys are in the three to 600 a month range, but their class sizes the same.

And so if you're trying to price on the low end, but you're delivering, like if you're a CrossFit gym, there's four or five people in your class and you're delivering essentially what's small group training, you know, the average person comes into a five person class.

You're competing the low end on price, but delivering the high end of service, which kind of puts you in this weird middle mark , which is, goes back to what we were talking about, which is positioning, packaging, and pricing. And you're service properly for the value you're delivering.

Everybody's gonna do the same warmup, everybody's gonna do the same lift at the exact same time. I don't have time to come around and spend 90 seconds coaching anybody. So what I'm gonna do is like spot the flaw and correct the mistakes on the , you know, just like an assembly line.

Like I'm gonna have somebody just the machine's gonna do the work, but I'm gonna watch for the mistakes and I'm gonna like flag those things. And the problem with that is that it's an industrial model. Industrialization leads to commoditization. The, the customer can't tell the difference. And so they'll choose the lowest priced option.

Instead, you know your best to focus on class sizes of seven to 13, give everybody at least, you know, 90 seconds of one-on-one coaching within that class framework. Keep everybody together, make it really fun, focus on retention and focus on being profitable with classes that size. 'cause nobody is really , uh, running a great profitable, duplicatable model with 30 people in a class anyway, unless it's Nike

Like how , if you're a gym owner who, who has some of these underperforming classes on the schedule, how , how do you have them think about , uh, whether to keep it or whether to cancel it?

So we'll, we'll announce the spring schedule when this comes out. We'll be halfway through the , the winter calendar.

Find people who are like, those people who are in your class , uh, hey, the , there's only two or three people, but they're all nurses, fantastic. Let's start marketing to nurses and fill up that class. If that still doesn't work, I mean, you owe it to your coaches and to your business and to your family to get rid of that class.

And so what you do is the next time you roll out your schedule, you just remove that class from your schedule . You call the people in that class say , I don't know if you notice , but like, we don't run this class anymore. Like do you wanna flip this into a semi-private option? Do you wanna flip this into one-on-one? And not everybody will take that option again because there's price sensitivity.

Uh, but some people will. And what a lot of two brand clients have found is like, wait a minute, training these two people at semi-private is actually better for them, better for my coaches, better for my business than than running that class with four people in it Monday, Wednesday, Friday.

And so essentially if you take the amount of money you take home divided by the amount of hours you work, that gives you kind of like an hourly rate. And so in the example of net owner benefit, where you got the guy whose gym's making $3,900, if that guy isn't working in his gym at all and he has a job at the firehouse that gives him great benefits, like that's a great gym, he's doing well, right?

But if you have somebody who's doing 60 hours a week coaching all the classes, doing splits, and he's taking home the same 39 hours, his effective hourly rate, like the amount of time that he's getting paid for or the amount he's getting paid for each hour work is probably worse than just getting a job at McDonald's. And so you have to take the amount of time you work into consideration.

So the other thing is, if you're one of these owners who's still coaching every single class, cutting your underperforming classes is essentially giving yourself a raise. Um , yeah.

EHR is a, a measure of how good of an owner you are. You should be able to make more per hour as an owner than you would make as a trainer working for somebody else. And for a lot of us, this isn't true. I mean, I was, I was only making about 25 bucks an hour as a trainer working for somebody. So I was like, I can open this gym and make more money.

And then when I calculated my effective hourly rate, I realized I would've been better off working at McDonald's and paying for a gym membership. I would've made more money. But this number is really important to keep an eye on because you wanna make sure that like your time is more valuable as an owner than it would be as a trainer working for somebody else .

And at 50 bucks an hour, that's probably true, at 38, it's kind of a toss up .

Now if I'm working as a trainer for somebody else and they're paying me $35 out of their $80 personal training rate, then my time as an owner just has to be more valuable than that. But I think like there are stages. So first you wanna make sure that your time as an owner is more valuable than your time as a cleaner, 12 or 15 bucks an hour.

Then you wanna say, my time as an owner is worth more than my time spent coaching a group. We just saw 28 bucks an hour, then your effective hourly rate, you want it to be over , uh, $38 right here, right? And then you just keep going up. So it's, it's a process, but you have to stay focused on being a better CEO and growing your business. If you do want a coach, awesome, you know, great good for you.

Be a trainer, be a coach. But your responsibility when you open a gym is to become a good gym owner because other people are depending on you to do that.

I'm gonna take you to another interesting one here. We're gonna talk a little bit about revenue streams. We've talked, Chris has said a lot of times, don't do all the things, just do a few things, right? So like nutrition and kids coaching are often the ones that gym owners look toward because they're so obvious. Your clients have kids, they probably need nutrition coaching to get the results that they want.

But here's something we're not seeing. The gyms actually get the results that they maybe thought they would. So I'm gonna go first here to kids classes. Average percentage of total revenue for survey respondents who offer kids coaching is 7.6%. It's down from 9% in 2022. What's going on here? Chris ? This seems like a home run, but maybe Jim owners aren't hitting it. What's up?

For example, like if you put your kid into cheerleading, you're probably gonna pay an average of about 600 bucks a month because once you pay for the access, the classes, the coaching, the travel, those outfits, whatever, my problem in my gym was that I think I was just pricing per pound or something. And I charge like 70 bucks a month for the kids' classes.

And that's a , that's a terrible mistake because kids' classes churn through coaches really quickly and you have to have different insurance and you have to have different certifications. And so if your kids' class isn't like super profitable, you'll do what I did, which is just kill it and now you're not helping kids anymore. So the bottom line is like, most gyms just need to charge more for their kids' classes.

I think it's an amazing opportunity to help and teach kids. I'm very lucky in my city that I have other gyms around with amazing kids programs that I can refer out to. But if you feel like, man, I really gotta provide something for local kids, please charge appropriately so that it is worth your while. You can pay a staff person to keep it going. And , uh, it doesn't just like collapse.

Similar question. Nutrition coaching. Again, this seems like a no-brainer and there are two brain gyms. Uh, Clark Hibbs , yellow Rose Fitness. He makes more than 20% of gross revenue from nutrition coaching done in a spare bedroom by his wife with no, you know, face-to-face interaction with clients other than like on Zoom or whatever.

Yet we're seeing 4.3% of average total revenue for survey respondents comes from nutrition coaching. That's not super great. What do you see, Chris?

So, you know, know there are different models out there that work like let's run three or four nutrition kickstarts a year and get people thinking about it. But more and more talking to gyms, it's very rare that you have people sign up for nutrition coaching and then just like pay monthly forever. You know, they, they sign up for nutrition coaching.

Maybe they might pay for nutrition coaching for about three to four months. You know, if anybody's listening to this and they have a dramatically different experience, good, I'm glad. But the bottom line is like, after three or four months, okay, they've established the habits, what do they need to keep going? Maybe some accountability, you know, maybe some reminders, but that's about it.

Um, you're not teaching them anything anymore. The the thing about your gym is like, you're not a teaching business, right? You're an accountability business and you're a fun business. And so if you're building your nutrition program around this recurring monthly thing, you know, it , it , uh, it just doesn't work out.

And this, this does make me sad, but it also spurs me to say there's probably a better way to do this at my gym. We partner with smart and simple nutrition. They do everything for us remotely. So we run a few kickstarts a year to get my cha my clients fired up. They love it. They get some results.

And then the ones who wanna continue with accountability and planning and habits , um, you know, smart and simple just does that for me.

Because like if you offer some type of macro based coaching, people don't want to count macros forever. It's like that's miserable . And if you offer some type of principle-based coaching, like Glassman did it in a sentence like eat meat and vegetables, nuts and seeds, some fruit, little starch, no sugar. Keep intake levels that will support exercise, but not body fat.

Like, okay, once you, once you internalize that, what does it take maybe two, three months? Like, what are you gonna do for the remainder?

So it's, it's a lot of work for not a lot of revenue where like if you just partnered with someone who's incredible at delivering it, you can probably make a similar amount of revenue , uh, without any of the drag of having to find a coach, train the coach, learn how to train the coach, keep the systems in place, and figure all that out on your own end.

It's asking them, did you eat it? And so that accountability can be a completely different program that doesn't require like elite level nutrition knowledge. It just requires you texting someone saying, did you eat vegetables today? And that's a huge deal.

So last week that's exactly what happened, and I'm back in the gym doing more resistance training. She's like, are you eating more carbs? And I'm like, no, I'm just eating protein. She's like, it doesn't seem like you're working out long in the gym, but you're only burning carbs while you're there. Like during your lifting, you need to increase your carb intake. Oh, right. So like, and that's it, it's a text conversation.

It's less than seven minutes. That's enormously valuable for me.

And , and so you can scale down kind of like going to the gym two times a week versus five times a week. You just pay for the amount of calls, . And that's the whole program,

It would've got you laughed out of the forum. Okay, so here we go. Average number of leads per month. 28 is the average number of leads. And you've got the breakdown on the side . And I'm gonna go down just a little bit further. These stats come from Kilo. This is what a sales funnel looks like. 25 leads, nine of them book appointments, six of them buy something. So guys, what do you see here?

right? If you get on ten two brain sales calls and you ask 'em what's the biggest challenge you're facing in your gym? A lot of people say , uh, I just need bodies in the door, and if I just get more bodies in the door, all my problems will be solved. And so we just spend an hour talking about how that's not necessarily true.

Like if your model's broken, you get more bodies in the door, you're just gonna have more problems because you're not fixing the underlying issue. But let's assume that you fix that. You , you got a two brain mentor, you're packaged in price correctly. What I'm seeing here is there , there really isn't the amount of leads a gym owner is getting is only putting them in a position where they're treading water.

If you look at the waify data on page 11 and 12, 10, 11, pardon

If we're being generous, they're treading water, right? But if you look at the lead flow data, the average gym's only getting 28 leads. If you look at CrossFit, it's closer to about 20, right ? And so if you can increase your lead flow by 20% , uh, that could put you in a position where you're trending upward. Like you , you're just growing a little bit, which is great.

And so one of the easiest ways to do that, it , it I've found is running ads. And so , um, it's just replicable in every market. There's just a proven system for doing it. But it is something that is hated, universally hated every time it was brought up amongst gym owners, right?

And I understand why if you've been doing this for 10 years, like you probably started during an era where Facebook ads cost , like Facebook leads cost a dollar, right? And if we look here, the average lead now is pushing 50 bucks. And there's a lot of reasons for that. But the reality is, if you can take your gym from 20 leads to 30 leads for $500 a month, that's a 50% increase. That's a lot more at bats .

It gives you a lot more opportunities to take that number from the average. Um , like one thing to note, the average signup number, this is Jim reported, is very different than the kilo reported in push press reported numbers of what members actually got. So there seems to be , uh, a little bit of data inflation. When you ask a gym owner, how many new members do you get every month versus what their

And if you got better at sales, then you know, the same nine appointments or whatever might result in an extra sale . So there's, there's lots of opportunities through the funnel. I think the , what's really important here is that people understand what a lead is because a lot of people who aren't into Brighton will say, Facebook ads don't work.

And the reality is, if you don't know these numbers, you don't know if they're working or not. Like you could be getting 300 leads a month and none of 'em wanna come and talk to you, or you can't close any of them. So you really have to be able to understand what that funnel looks like before you can say whether something's working or not.

And that's another point of this guide is, you know, to teach people how these numbers work and how it can help them have a better business.

I would still to have a 36% booking rate for two Brain , I would absolutely murder for that, right? That's a huge opportunity. And so one of the things that a lot of gym owners take for granted is if they're doing marketing, whether it be through nurture, trying to get more out of each existing leads or at the top of the funnel trying to get more leads. Yeah, lead quality is gonna go down.

If you're used to just only selling or dealing with people who's like, Randy told me your gym was good, so I put my information in your website. Like, that person is a layup, right? That's not a , that's not sales, that's no , you , you barely, you just take their credit card and swipe it at that point, right?

But if you're someone off the internet who entered their information on the toilet at when they're drunk at the bar one night, like that person's gonna be a lot more harder to sell. And that requires developing your skillset and , and upleveling a little bit while software can help, right? I'm obviously biased . I think software helps.

There's still skillset that you have to develop to take those people and move them down the funnel faster. And I think a lot of gym owners are reluctant to develop that skillset 'cause they think it's like slimy. But in reality, it, you know, if you don't sell that person , uh, they're just gonna go buy at Nike.

And so if you think Nike delivers a worse service at their gyms than than yours or Orangetheory or F 45 or whatever, or your competitor, you know, you , you should learn how to do this. And you should learn how to nurture leads because , um, you're helping that person.

And what are gym owners like, how are , how are they gonna use it? What happens?

Instead, what we want to do is arm you with the knowledge to make your own decisions and build the gym that you wanna build. And if you wanna have group classes, then great, we wanna show you, here's what you have to do to be successful with group classes. And to be successful means knowing the numbers well enough that you can make informed decisions. I mean, John is very good at this.

You heard him rattle off a bunch of math, he's really sharp and really quick. When I was starting my gym, I was actually the polar opposite. I was terrified of my numbers. I didn't even wanna look at my bank account every day . But understanding these numbers is what empowers you to actually fix your business. So if, if we gave you some numbers, that's the first step.

Like you gotta have the numbers before you can use the numbers. But if you don't understand the numbers, then you need to work with a mentor to actually learn what they mean and then understand the changes that you have to make in your business. And then actually get through those changes to have a more profitable gym. If you're a gym owner, congratulations, we're doing better. We're still not doing well enough.

And the key is first, measuring how we're doing and then looking at ways to improve it. And that's what a mentor does. So we know that mentorship is more than just making you more profitable. It's leveling yourself up as a leader. It's leveling up your business, obviously, but it's also , uh, creating a future for your family.

It's creating opportunities for your team, and it's also making sure that your clients get better results and stick around long term and actually change

their lives. That's what this is really all about, and I hope this serves as a cornerstone for you to do that. We don't take that lightly. That's why we invest so much in building these things every year and then giving them to you for free. So if you want to get this, just go to two brand business.com/data. It's our gift to you. Use it to make whatever decisions you want.