If you’ve been listening to the chatter in our groups, you know we’ve got some key metrics we’re wanting all our clients to focus on to increase their overall success in their gym. We have done tons of research and believe these six metrics (and the steps it takes to increase them) will take you to your goals! I first learned about these metrics about a year ago. Riana and I entered a friendly contest to see who could beat who (we do that often). What we found was that by focusing on our lowest areas, we both won. Ok, she beat me in a few areas overall, but it forced me to look at some areas of my gym that were underperforming. For example:
- I realized we still had so much untapped potential with space in my gym. (Yes, I’m a unicorn here.) It forced me to start looking at the areas that weren’t being used effectively and start using them!
- It helped me see that my salary wasn’t as great as I had hoped it would be by this time in my business. COVID had scared me and prevented me from taking the raises I knew I should have been taking over the past year. I fixed that and now assess mine twice per year when we meet with our full-time staff to assess their’s.
- I recognized I had the ability to increase my staff’s overall benefits, but I needed to find smart ways to do it so I wasn’t paying out excessive taxes. As a result, we began offering student loan reimbursement and retirement benefits.
These are just a few of the things I recognized when I started looking at the metrics in my gym. Today, I want to talk more specifically about ARM – your average revenue per member.
Your ARM can be calculated by dividing the total number of recurring memberships in your gym by your gross revenue. A few caveats:
- Recurring membership means someone who is regularly paying you with a card on file. A non-member who buys private lessons but isn’t on autodraft would not be an example of this. Someone enrolled in classes or team is an example of this.
- This is going to be a generalized number if your gym is like mine. For example, mine showed that the average person paid $159/mo. Well, that’s simply not true. I hosted birthday parties; I have batting cages; I sell a TON of cookies at my snack bar – all of that. The thing is – we need a number to go by. If I increase my birthday parties, it increases my ARM. Ultimately, that still increases my top-line revenue, so I benefit. Make sense?
- Once you have this number, you can begin making decisions that focus on increasing it. I know we’re talking about inflation and how expensive things are for families these days. I want you to remember – people will not spend money with you if they don’t want to. No one is forcing them to remain part of your program. Instead, you’re simply going to persuade them to spend their disposable income in your gym (a small, local business) rather than the Aldi “aisle of shame”. That’s where all my disposable income goes anyway…
If you’ve been on a coaching call in the last month, you’ve likely heard this term and your coach is starting to work with you on at least one of your metrics. Not everyone needs to focus on increasing their ARM. Shelley’s ARM is almost TWICE as big as mine. (Yes, I giggled at that too.) My recurring memberships are far bigger than hers though. Can you see how that could create a friendly competition that improves and grows each of our businesses?
By looking at the data and determining what “this person” who has an excellent ARM is doing, we can use the tactics with other clients as well. That means you’re no longer getting the brain power of six coaches, but rather the experience of a network over over 100 Academy clients. There are people in Hustle and Grind who are killing it on their ARM, while there might be people in Level Up who have an excellent LEG (Length of Engagement). Imagine if you had great arms and legs! (I can’t help myself with the jokes….) But seriously – if your ARM was above $300 and people stayed in your gym (LEG) for 3 years, their lifetime value in our gym would be over $10,000. If we knew we had systems and processes that were WORKING effectively like that, we’d treat every single customer like gold – exactly how we should be anyway, right?
These metrics not only benefit us, but when we are increasing them, we’re building a better overall experience for the client. So – first off – if your coach gave you homework to start calculating your metrics, get to work.
If you are on a call package, and haven’t booked a call recently, make sure you do that so you can learn more about how to pull these metrics and start getting accountability for growing your gym effectively.
P.S. If you’re afraid systems, staffing and strategic planning will go by the wayside, never fear. All of those areas ultimately help you increase one of the six metrics. By doing these metrics, we can help you use data to determine your weaknesses rather than go off of feelings.
