Exactly How They Drove Gym Revenue Up 3.5X

You cannot pay yourself without revenue and profit. So we're gonna dig into that today. But first I'm gonna remind you our leaderboard for January, 2024 for monthly revenue ran from $58,000 US to $125,000. Now that's six figure Revenue. This is a CrossFit gym, 58 to $125,000 . If you can believe it, Chad wrote a spot on that list and we're gonna talk to it. Chad, how are you from Denver today.

So I wanna dig in and I'm gonna ask you, tell me anything you can about your revenue streams, rough approximations, whatever you got, what goes into your big number?

It's about 1% and then some drop in is around 1% as well. So the big two are, are the group and the the pt.

And yeah, so we're, we are still , uh, contained , um, a CrossFit affiliate. Um, so we're definitely under the CrossFit brand. That's the programming in the gym except our pt, which is all individualized work , um, and programming for them. But, you know , the original gym started in 2013 and we bought it in 2019 and, and took over , um, at that point.

Talk to me a little bit about like, how are you doing that? Like what, do you have any average revenue per member kind of general ideas there or how are you putting together so much revenue with so few members? And I don't mean the two 40 is not a large number, but I had getting close to that number and my revenue was not that.

And , um, when I was looking to try to get off the airplanes and all the flying and all that , um, 'cause I've been doing modeling for a little over 20 years, I asked her, I said, what , what should we do? And she said, well, we love doing CrossFit. Let's open a CrossFit gym. And I told her that I thought that was a crazy idea and not possible.

Uh , the main concern I had is I didn't know what I was doing, and I literally got on the computer and I typed in how do you run a CrossFit gym ? And one of the first things that came up was Two Brain Business.

And I started doing some research into the company, into Coop and everybody and , um, did a couple, couple calls and , um, realized that I really didn't know what I was doing and I needed a lot of help. So they've, they've helped us a lot from the beginning , um, helped us through the pandemic, given us a plan at every step in the game.

And one of the things that's, that's really big for, for us is how we've changed the evolution of how someone comes into the gym, number one and number two related to that, you know, our client avatar, so to speak. Right. I think in the beginning we were like, come on, let's take everybody, let's get as many as we can. We had all these different pricing structures and everything, some of that we inherited.

And through work with our mentor, we found a lot of things we needed to kind of standardize. And we used to have the old model of, all right , let's bring somebody in the gym and try a class, right? And then , um, if you like it, let's get rolling. And we did have like a small group model, like onboarding process. And one of the things that my mentor kept telling me was this whole No sweat intro idea, right?

And I kept thinking this , this just isn't that this can't work. I thought they, they really want to try it, you know, and I should have listened from the start. Uh, we should have followed that model, but I kept thinking they had to try it or they weren't gonna want it, right?

And the reality was is I started seeing a lot of , of situations where people coming into the gym and then they're stepping out on the floor and they were completely like deer in headlights, didn't know what was going on, right? And um, sure. Uh, especially for something like our gym where we do sometimes a highly technical movements, Olympic movements, gymnastics.

Imagine stepping a brand new person out on the floor and you doing like overhead squat or barbell snatch or like, like bar muscle ups or something, right? So I

So we came up with a plan of doing minimum three personal training sessions. And this is for even your seasoned CrossFit people. We've had people come in, you know, I've been doing CrossFit for 15 years. And okay, well, as we all know, all myself included, even if, even if you think you, you've got it all, if you sit down with somebody and go over some things, there's things you can work on.

And so , um, you know, we got three and then there's four and then six for like brand new people. And , um, so that changed a lot because now we actually have , um, definitive personal training sessions that come with every member. And we bring in probably anywhere from 15 to 25 ish mem new members per month on average. And

It was something that from a financial standpoint was pretty scary because to cover the cost , when I looked up how much you have to pay a sales director, I immediately thought, absolutely not. This won't work. Okay. But once again, got some feedback from Lisa, who's our , uh, our mentor, and she actually put me in contact with another gym that had actually done this and successfully done it.

So I reached out to them and actually spoke to their sales director and made the decision to not only hire our own, but to get some consulting done with their sales director. So we invested a fair amount of money in that too . And , um, the reason why we got into the sales director was one, I I thought that overall it would probably benefit us massively from a financial standpoint.

My question was how long was it gonna take to replace that income, right? And then get on, get over the top of that hump.

And the biggest sort of drain on our, on our, our personal life, the , with the work life balance was we were staying in the gym till 8:00 PM three, four nights a week because we're doing these new client meetings, right? And my wife, literally in her brilliance as much as it was to start the business, she said, we can't do this anymore. Right? We don't have a life. We need to .

And she said, I think we need to get somebody to do this. So once again, I told her, it's not possible. She's crazy, just like all this stuff. Um , and , um, and she's like, we need to do this. So that started the process, got some, you know, definite coaching from our mentor, and then we went for it.

And , um, and so the advice I got was, all right , Chad, you're gonna, you need to understand that you're gonna take three months of the cost of that person, and you just, you might as well accept you're gonna burn it, right?

Because it's gonna take about that long to get on top of if this was the key, if it's gonna work, you know, now it wasn't just stepping into this with this blind sort of, well, I hope it works. Like the , the reality is we are lucky in the Denver area in the sense that we have a very large influx of new, you know, potential members and leads, right?

So I think this could be a challenge for people maybe in different rural areas, right? But for us, it was, I , I feel like, okay, there's enough people coming in, I knew the leads, right? And at this point, we weren't even doing any paid advertising, which is another thing we can change, I can comment on. We started doing that as well. So we went for it. He came in and it, it was like we never looked back.

He, he signed, so my, my close rate for the whole team, 'cause we had our coaches doing it before, they were doing all the meetings, and my wife and I, and our close weight was around, it could be 40, 50%, and Sean's is around 75 to 80%.

I wanted to kind of work through, we would have slumps sometimes in those leads. And I wanted to kind of work through that. We got some additional , uh, mentoring with Calm there a couple different times I connected him with, with Sean . I sat in on that. And so we try to utilize that. I'm not sure if people know about that, but you can trade out your sessions.

Um, and I did that for a good period of time where you can take your, your mentorship session and set it aside and, and grab somebody else.

And then he's just slowly ratcheted up kind of our starting revenue, right? Like we get a report that tells us what's our auto pay for next month, right? And he's ratcheted that up, you know, like quite a bit since. So, you know, since he even first got started. Uh , um, so super grateful for that.

And then, let's see what another, another thing we've done is , uh, my wife decided she was gonna take over the nutrition aspect of the gym. Um , that's something we struggled with over the last couple years. I don't, I'm not sure why. I think, I think the biggest thing is is for us it was like we would , we hired externally to the gym.

And I've just noticed that CrossFit specifically in this micro gym space, it's all about sort of like that street cred. If you see someone there, you see their training, you see what they look like, right? And so we had had some external people, I even tried getting like an RD for a while , thought, well, the best, let's get the best. And it actually was the worst.

They weren't training in the gym, they didn't know the community, you know. So as soon as Esther took it on, within like two weeks, she had like 12 clients, right? So she, she's brought in right now her month, about $2,000 in extra income just from nutrition , um, itself. So that's really like boosted it up over time.

And then as far as like retention pieces, which I think obviously goes into keeping that number and keep and driving that number up. We've got an active CSM and we've like added layers to that each, each sort of like new iteration of that as we've gone along to make sure that, you know, we're not losing members because they're unhappy , um, because we don't know what's happening.

We have a very active goal review process. We're huge fans of the 90 day goal reviews. In fact, we started seeing a drop off at about 45 days, right? One of the things we noticed when we brought in a sales director like Sean , he's so good at sales that he gets people, I think, to sign up who are very new and may not even consider that, right? And they need a little more care.

And so we started looking at, okay, when are these people dropping off? When are they leaving? And 90 days seemed like an eternity, right? And if you don't have someone talking to you saying, how are things going? So we now have a process where we go 45 days, there's a connection there, there's a quick sit down , how are you doing?

Is there anything we can help you got , uh, out with your, you know, with, you know, feedback, any sort of like way we can make this a better process. And that's helped save some memberships that maybe someone was like, I'm not sure about this, you know? So , um, we've started that process and that's kept our average revenue per member, you know, stable and growing over time.

So you're bringing them in, not just dumping 'em to group classes like I did, and this is why Chad's number was better than mine ever was because he's doing free consultations, bringing 'em in with personal training, no matter how much experience they have, that boosts your average drive per member and it improves retention. We have stats on that. And then they go into group classes.

Some of them probably keep doing personal training. We might talk about that in a sec. From there, Chad did a really cool thing where he did some research and got a sales person in place. Now this is an investment, but he did the work ahead of time to find out, can I do this? How do I do this? What's the reward here? What's the cost? What's the risk? And put that in place.

And then he started talking about marketing. It wasn't marketing with a close rate that was at 40 or 50%. It was, I have a guy who's closing at like 75, 80%. I'm gonna supercharge this with some marketing and these people are gonna come in and more of them are gonna sign up, which is gonna make my investment.

And my ROI so much better as opposed to what I was doing where we ran marketing, I didn't know how to sell. People came in the door, I couldn't deal with it . And then my close rate was worse than 40%. I guarantee it. So we got that from there. We've got extra programs. So nutrition program is a great one. It's a no brainer and a ton of gyms, it's difficult to get them going at times.

And there are various ways Chad talked about that. You can struggle with it. Not a lot of gyms crush nutrition. Now that's a stat from our state of the industry report. Some do. So when you start, it might be three or 4%, but that's still three or 4%. And nutrition programs can scale very quickly without a ton of space and a ton of equipment.

And I know gym owners that are crushing 20% of gross revenue through nutrition programs. So that program can scale really, really well. And then the final piece I gotta highlight for you is retention. Chad mentioned the CSM, that's a client success manager. The client success manager's job is to retain clients.

He also did some analysis of his client journey and said, because our salesperson is crushing it and getting people in here, we might need some extra retention stuff earlier, as opposed to every 90 days, which is the standard, adjusting it now every 45 days, we have more touch points , we're retaining more members at a higher average revenue per member.

You see how this big snowball is rolling downhill and resulting in revenue grow , monthly revenue that's over 50 grand. So you guys can do that too. But again, it's not everything at once. It's targeted stuff step by step . Chad , I wanna ask you specifically about your mentor. Did she give you specific steps like this?

Because everything you just talked about is gonna be super overwhelming for the average gym owner saying, I don't know how to deal with this. Was it just like, let's do this right now? Or how did that mentorship process go? Yeah,

I did the research with the modules and then I had someone to go to to say, okay, we've got these sort of things. We're trying to work on that . So, you know , it was always very well guided of here's what you wanna do, do this now. You know, so the ma the process is really, I love Lisa. And , and her path is very directive, right?

It's not a therapy session of, oh, this is terrible, this is what's going on, right? It's like, okay, let's, what's the problem now? Let's, let's have an action and specific steps to take for that. And then your next session you're talking about, did we take these steps? So

And Sean was able to really take off with this because one of the problems with w way we were selling things was we were very limited in what we were presenting. Okay? We had to where it was like, okay , here's package A, B, C, right? Um, and if they were like, A is the cheapest, right? C is the most expensive, you know, from a sales standpoint, where are we probably gonna go on average, right?

You're gonna go, right. So what we really realized is like, let's get some more flexibility and move into creating a sales process where Sean can actually design something for specifically what that client wants and needs. Most of the time they're coming to us with the, the kind of inherent sort of belief that we, and hopefully that's definitely the , the truth that they trust us, that we know what we're talking about.

We're the experts. If they wanna achieve a, then we're gonna give them the plan to get there, right? And so rather than just being restricted to specific plans, Sean can create very custom things like, alright , so if you want some group membership, a group membership plan, but you also wanna do one or two times a week for some pt, right? Let's get you into that. Do you want open gym access? Right?

Um, do you want nutrition? Okay. And so he can build all those things together and we've sat down and, and put together the pricing structure of all that. So he's got his prescriptive sheet and he goes, here's what you want. Here's your goals, here's what I recommend. Right? So then from there, he has that ability to build that hybrid sort of membership, which then boosts most of the time the average, right ?

Uh , membership. But the main thing is it's actually getting these members what they truly want, rather than just going group pt, that's your only option here, right? So that, that's been huge for delivering our mission, which is to truly help people live their best lives and help the larger community, right?

So , um, that, that prescriptive mo model has really changed things for feeling like we're achieving that as well as helped from a financial standpoint because people will genuinely spend more if they feel like they're getting what they really want.

For example, I need you to come to group classes four times a week, one personal training session a week, and you're going to do nutrition with Esther monthly. That can be your entire prescription. And that package probably sounds like four or $500 , and people will buy that if they don't.

It's as simple as saying, okay, you know, that's the best plan, but I can also get you there with, maybe we take out the personal training for now and we go with this package and there's a whole system in the hands of an experienced sales rep like Sean , which Chad has at his gym. This can be a super powerful thing. And the best part about it is what he just said.

You're actually helping clients achieve their goals by telling how you can get them there fastest. That's it. There's nothing else there. It's not high pressure. It's not me , it's not slimy. It's just saying, here's how I would get you to the goal. So have you seen like marked improvements in average revenue per member and gross revenue as a result of this whole thing?

So a , a team of four. We opt for a smaller team rather than doing a bunch of part-timers so we can get 'em really dialed in and bought in and they can actually feel secure that they've got a career in this, something that they love to do. So being able to have all of that to support my wife and I when , you know, we've got a daughter and she does tons of activities and all that, we can pay for all of that.

Take our va you know, vacation a year and each of our, our staff members can do what they want to do and, and be well taken care of as well.

You are doing it a different way with a high a RMA great length of engagement, great sales process, and a a like 200 to 20 to 240 members, I think you said. So under two 50, which is a sustainable number, right? Which means that you don't have to have, like, you have a big space at 9,000 square feet. And I know rent in Denver isn't , uh, isn't cheap, but you're not doing it with 16,000 or 20,000.

You're doing it with like a , a decent sized space. And I think if I am , if I would be so bold, I think that you have some room to grow, even when your nutrition program, if I have you back in a year, I bet your wife's nutrition program is gonna be doing more than $2,000 a month simply because she's walking the walk , she's in the gym, she's obviously skilled at what she does.

I would guarantee that that thing is gonna be up a bunch of money and your gross revenue's gonna go up. So you've got a whole bunch of cool stuff in place. I gotta ask you this. So gym owners out there, and they're nowhere near your level and just starting out and they say, what would I do if I wanted to add about $2,000 to my monthly revenue? What would you give them as a first step? What should they do?

Which is a way that you can have people who doesn't want the best, right? So from a sales standpoint and from accurately being able to give a client what they want, give them these three options, right? So I think moving that, that, that prescriptive model, I think that really doing a great job of dialing in your onboarding process to have mandatory PT would be an excellent way.

We've just discovered that creating that one-on-one relationship with your member is it's just invaluable. And then by having that added PT revenue, you're now not only creating better movers, safer movers within your gym, but you're creating a relationship that already starts off that, hey, there's value in pt, right?

And so I've, we've seen several people say, Hey, okay, I did that PT in the beginning, but I'd like to go and do another session or continue doing this, right? And so I think having that built into your process, if you can, would be a huge benefit to your gym in general. Um, but would also benefit your bottom line right out of the gate.

So doing that, I think having some sort of nutrition right program would be like, like I think it's interesting that you asked the $2,000, 'cause that's exactly the number that, that Esther's bringing in right now to the gym.

And I expect we expect that to go , um, higher as, as you said, especially since we're spending a lot of time, I think Coop calls it, putting up putting 'em on the podium where we're actually I , right ? Putting the spotlight on people who are, are achieving things. We've got this little whiteboard that people take a picture of in their, their goal reviews and it shows their muscle mass.

You know, we, we, the InBody scan is, is a direct part of when you come into the gym and every single goal review in our gym, you get that InBody scan gives them a metric of saying, Hey, here, you're actually achieving this, or if we're not, let's figure out why. And it's also a good point where we can work with them on encouraging them to do some nutrition work as well, right?

So that, I think bringing nutrition in, because we all know it is the foundation to , to health, right? It's before all of this movement. And you still, we still struggle with this. We get people who still think I can outwork a really poor diet. We know that that's not, so I think if you can get this going in your gym, there's tons of resources from two Brain , the program's built out there.

One of the things we did is we switched out a mentorship session with Cynthia Fai . So she's one, she's one of the specialists, have worked with her a couple different times and she basically will be like, okay, here's how you do it. Do A, B, C, D. And we've executed that and always had some great bottom line revenue for that. So I'd say a nutrition program should be, would be essential to that.

And that's gonna increase your, your , uh, your bottom line. And then I've considered paid advertising. Okay? I don't think it should be. First we cover all the bases with retention with our CSM doing a risk report, you know, every week who's not coming to the gym, making sure that we take care of our members with their goal reviews, et cetera, having a lot of really cool events, right?

That are free to them , um, for them to participate in working on that community, right? And working on affinity marketing as well, where we get referrals from other people. But I think paid advertising can be really helpful and really powerful to Fourier into. It can be expensive, right? Like to a bottom line.

But if you do the numbers and we have, we've absolutely recovered by, you know, three, four times what we've invested in it when it comes to things , um, like putting it in the high ticket items. That's another thing I think you could, you could do. We don't get a ton of them, but when we do, they're big, right? So that more than pays for, for, for the , for the paid advertising.

So I'd say those are the main aspects. And finally, if you can afford it , um, I know not everybody's in that same position, but we've had great luck with it. The sales director thing is a great thing to have because when you have somebody who that's what they live and breathe, right, they're gonna do a better job than you.

I remember when we first, we first hired Sean , and I was like, okay, I'm gonna sit in on his thing and I'm gonna like watch what's going on just to make sure everything's going right. And it only took me a few sessions just to sit there and, and say, what, why haven't I, why didn't I do this a long time ago? Number one. Yeah . And , and you gotta be careful.

We , you don't want, you don't want slimy salesperson, right? Yeah . So that we had like 70 applicants for our sales position, right? So wading through all that, and we had a, it's a pretty cool story because I'm wading through all these applicants and I'm walking by in our like, like athlete sort of like common entryway area up there.

And there was a guy standing there and I, I, I noticed he , I'm like, this guy's not a part of the gym. And he, I walked by him and I said, Hey , uh, are are you new? He goes, hi, I am Sean , I'm your sales director. And I was like , awful play . Okay. Yeah. I was like, okay. So , uh, we sat down and talked and he, he has a way of like talking with people and making him feel he sold you right? Great .

Yeah , he really did. And so when I sat in on his sessions, I'm like, this guy's like much better. He makes you feel comfortable. Yeah . So, you know, be careful about that. But I think if you can find someone you know, like him and you can have someone like that to give you your time back. We talk a lot about it in this, our mentorship about buying our time back, right?

And the whole thing is getting the right people to right seats and if they should be better than you at what you're doing. And my wife and I and our coaches were doing it. We were doing okay, but we weren't really salespeople. It wasn't what we were passionate about. And so when we handed that over to somebody who is, it made all the difference.

We have plug and play resources for clients, checklists, step-by-step resources, timelines done for you . Stuff where you just take the stuff and you put it in place really fast. You get a nutrition program going in about a week, I would think if you did it with a mentor. But I'm gonna give you this for free. The prescriptive model, I'm gonna put a link in the show notes for you.

This, you can literally take this, read this article, it'll take you maybe 10 minutes. You could put this in play today in your next sales consultation. And if you do this, I'll give you a couple of stats. People are going to stay longer and buy more. And as part of the prescriptive model, we have goal review sessions.

In those goal review sessions, 90 days down the line, 30% of clients upgrade their service packages by 30%. Those are stats from deep in the two brain vault. That means that you're going to sell more stuff to people in your business and add more revenue without adding a single member. Just by asking them how are you doing in progress ? Progressing towards your goals. You can do that very easily.

Chad is living proof of that. I'm gonna put the link in the show notes, do me a favor, read it, use it, and then use that money book a call to talk about mentorship and see what we can do to help you move even faster. Chad, I wanna thank you so much for your time. I love circling back and finding out what you've done over the last year. So we gotta make a date March , uh, 2025 and do this again, I think.

Yeah , ,

I'd love to have you in that group. It's Gym Owners United on Facebook, or go to gym owners united.com to join. Do it today.