Special Episode: Inside the Top 10%: What the Best Gyms Do Differently with Wodify CEO Brendan Rice

[00:00:00] Welcome to the Business of Unicorns podcast, where we help gym and studio owners create a business and a life they love. I’m your host, Michael Keeler. Join me and the Business of Unicorns team each week for actionable advice, expert insights, and the inside scoop on what it really takes to level up your gym.

Get ready to unlock your potential and become a real unicorn in the fitness industry

Hello, fitness business nerds. What’s up? Welcome to another episode of the “Business for Unicorns” podcast. Today, we’re doing something we’ve never done before. Today’s episode is part of a series that we’re doing, and it’s based on something we do in Unicorn Society. So our Unicorn Society group, every single week, we run something we call live trainings, and these live trainings are for the gym owners and leaders in our community.

And all [00:01:00] those sessions, until now, have been behind closed doors. They’ve only been available to our Unicorn Society members. So what we did is we picked four of our favorite live trainings we’ve done recently, and we’re sharing them with you now here as part of this kind of limited podcast series. These are real trainings we actually did for our Unicorn Society community.

They include frameworks, case studies, and all the questions that our members ask when we’re in one of these live training sessions. You’re basically getting a seat in the room. And so whether you run a gym or lead a team in your gym or hope to do both someday, I think you’re gonna get a lot out of these special four episodes.

And the one I’m sharing today actually comes from our friends over at Wodify. Wodify CEO Brandon Rice did a live training for our members recently, and I thought it was just so insightful. Brandon and his team, they sit on top of data from thousands of gym owners around the world who use Wodify. And so Brandon basically pulls back the curtain on what the top 10% of gyms actually do [00:02:00] differently who are Wodify users.

And here’s the thing is, the answer is not some sort of secret hack. The answer he gives in this presentation is consistency. That’s really the secret to the top 10% of most effective gyms. He breaks down concrete steal this tomorrow tactics across three levers that matter most. One is keeping the clients you have, two is bringing in new ones, and three is making the revenue math work.

And he goes through all of that. He talks about how to gamify attendance, how to leverage outdoor activations and events. He talks about what he thinks is a smarter approach to discounts and the quiet power of small improvements made over time and how they compound in your business. I thought this was such a smart talk.

Brandon’s so wise, and he used data in I think a really compelling way. So if you, if you’d like to have your strategy to grow your gym backed by real numbers, you’re gonna love this episode. Let’s dive in I’m really excited for today’s weekly live [00:03:00] training because we’re, we’ve been partnering with Wodify for just I think over a year, right about a year now, and I’ve been such a fan of this company from afar for a while and getting to know them and work with them really has just really re- reinforced my admiration for all the work they do for our industry to put together tools and solutions that make it easier for us to run our gyms.

And Mark and I don’t pick our partners lightly. We think a lot about both the integrity and the values of the companies we work with, and the fact that they have solutions that are actively getting better all the time. And I can honestly say that’s so true about Wodify. I actually had to spend some time with Brendan this past weekend.

He came to our New York City gym owner meetup, and it was great just to hear more about how he thinks and how they go about doing the work, great work they do every day. So I’m so excited to have them here today. The floor is yours. Awesome. Thanks for the intro, Michael, and super excited to be here talking to you all today.

I’m giving kind of a modified version of a presentation I’ve worked on for a couple years now related to bringing insights from the data that Wodify has access to as a company. And [00:04:00] so we work with thousands of gym er- gyms around the world, and one of the unique perspectives that gives us is using the actual source of truth data from those gyms, meaning like we’re the system of record for billing and attendance tracking and programming.

So it’s not a self-reported survey. It’s a, it’s 100% accurate data on how these businesses are performing. And so we have a large sample size. And then what I’m gonna get into is we take a cut of that sample, looking at the best performing gyms in certain areas, and we just try to figure out what they’re doing through looking at deeper into our own data and just talking to them.

And then I try to package that all up and present it in hopefully an interesting and engaging way so you can get some of those takeaways for your own business. And honestly, none of it is like groundbreaking, revolutionary stuff. It’s probably tactics and strategies you’ve either heard of or implemented already or maybe considered, but it might not be right for your business.

But what I’d ask is that to get the most out of it, I would just [00:05:00] encourage you to keep an open mind. If you are doing something, maybe there’s one or two ways for you to pick up on an element of it you’re not doing or improve on it. And if you’ve tried something before, maybe this is a chance to try it again.

But- One of the questions that I always get asked around this is what do we see as a company the best gyms doing? And my answer to that has evolved over time, but at a high level what it is is consistent, organized, and intentional execution. So they don’t do everything, but they know their clients, and they have a business strategy for the initiatives they want to run, and they do those things consistently really well.

So again, a lot of the tactics I’m gonna share aren’t groundbreaking and revolutionary, but they’re tr- they’re aligned with that idea of consistent, organized, and intentional execution. Quick introduction. Michael already talked a little bit about Wodify. We’re really excited to partner with Business for Unicorns.

I’m the CEO of the company. We’re the largest independently owned platform for fitness and wellness [00:06:00] entrepreneurs. We make a gym management software. It’s the core of our business. Connected to that is digital performance tracking, marketing automation, and a whole suite of tools to help you run your business.

But prior to Wodify, I started an e-commerce company, and I’m just passionate about entrepreneurship. I’ve been working in this area of business for over 12 years, and in my personal life, I just like trying new h- new hard things and being a beginner at a lot of different areas of fitness, so whether that’s CrossFit, ultramarathons.

We were just talking about HYROX earlier. There’s a big HYROX event going on in New York right now. Pilates, jujitsu, whatever is humbling me next and where- whatever I can learn from, it’s gonna help me lead Wodify in a better way. We’re a tech partner. That’s how we think about ourselves as a company, not just a software vendor, and we’re partnering with some of the best fitness and wellness businesses around the world, and we help attract and retain clients, manage your business, and then continue to grow over time.

But again, this presentation’s certainly not a Wodify pitch. It’s a sharing tactics that I’m hoping you [00:07:00] guys can take away for your business. Who here can identify which one of these athletes is fitter? I’ll jump in and say it’s a trick question We can’t. There you go We can’t. There we go, yeah. Or why not?

I’ll jump in and say you can’t tell from the outside what health is. Yeah, you can’t tell, certainly can’t tell from a picture, right? So obviously the leading question, fit means different, exactly. But whatever your definition is of fit, you probably need to know some other things like performance benchmarks, body composition, health vitals, maybe just, like, how they’re feeling.

And so if you did know all of that and you were trying to become fitter as a person, and you found out she was fitter across all those broad spectrums, what would you want to know about that individual? What she does for her training. Jessica. Oh. Brownie points for coming off mute too. You would want to know, yeah, what she does for her training, maybe the programming she [00:08:00] follows, the habits and nutrition, the tools that, that she uses.

You’d want to understand the activities and the systems that person does in order to achieve a goal that you’re looking for as well. So along the same vein, which of, which one of these two affiliates is more successful or gyms is more successful, right? You don’t know. It’s a photo. But what you would need to know are things like the g- the business’ performance metrics, how many members, how long they stay.

The business health, some KPIs like growth rate, and maybe some other financial KPIs like how much their members are paying on average or all those other things that would help inform which gym’s more successful. If you found out this one was s- just similar to the athlete, but now put yourself in your business owner shoes, what would you want to know about that gym?

The same. What are they doing? What are they doing for marketing, sales? How much do things cost? How long do people stay? Exactly. The behind-the-scenes data, the tactics they’re [00:09:00] using, and maybe just the advice from them, right? That was a big part of that meetup we just did with the Business Free Unicorns group in New York.

It was just roundtable conversations. What would you suggest that I do, or how could I run my business in a way that you’ve been successful with? What are the mistakes you made that I could learn from? And so really that’s the premise of this presentation. What I’ve observed is that there’s so much information out there, and a lot of fitness founders, gym owners are engaging in what I call random acts of strategy.

Random acts of strategy means maybe you launch a new program offering next week because you heard that’s the new trend, or you decide suddenly you’re gonna have a new onboarding program for clients, and then two weeks later you forget what it was because you moved on to the next thing. But without organization, consistency, and some of the data and the tactics we’re gonna share, you’re making those decisions and you’re running your business on instincts and not insights, or on maybe interesting headline in the [00:10:00] news and not strategic or, or organized execution.

So this presentation is called Inside the Top 10%: What the Best Gyms Do Differently. Our methodology to explain how we got this data, we took a sample size of 1,000 US-based gyms. So we didn’t include everyone, like some outliers. Most… These are mostly group-based functional fitness gyms. And we looked at the top 10% of those gyms, the top 100 gyms based on their average client lifetime value, new client growth rate, and average monthly revenue per client.

This, these metrics help control for location and demographics. So if we just looked at like how much revenue the gym’s making per month, it’d probably skew towards maybe urban areas or really large gyms, but that doesn’t necessarily mean they’re operating really well. They might have really poor retention, or they might just have a different way of generating revenue.

And so these averages showed us 100 of gyms that were spread across the country, different demographics, different focus, which really [00:11:00] helped give us quality data. And then, like I was mentioning, we took that quantitative data coming from our gym management software, as well as qualitative survey data from the top 10%.

So we actually talked to these owners and got their insight. I’m gonna go through a few interesting data points behind each of the categories. Share… In this meeting, I’m gonna share one tactic from each category. We have some resources at the end where if you wanna see a few more, I think we have thr-three tactics per category, but I’m gonna focus on one each this presentation.

Share some advice and tactics you could implement next week. And at the end, go through a calculation and an illustration for how small changes over time in businesses that operate heavily off recurring revenue, most gyms do, really can be night and day difference from the business being successful or not.

So let’s start with client lifetime value. Client lifetime value is a great measure of combining average revenue and retention. [00:12:00] So this is on average how much do clients make you over their entire lifetime at your gym? The top 10% in our sample, that number’s a little over 4,000, and the median is a little under 2,000.

So what that shows you is there’s a massive difference in lifetime value at the top. And if you are… If you have systems in place to have a really strong retention and you have a healthy cl- healthy client base in terms of the revenue that you’re charging per member, you can generate over $4,000 in client lifetime value.

And what this allows you to do is w- I start with this one because once you have this in place, it makes your marketing activities that much more efficient. It lets you go spend money on whatever marketing channels you’re activating or marketing initiatives and add clients to a business funnel that’s already really healthy, and most of those clients are gonna stay and earn you on average over $4,000 Now, taking this one step further, we wanted to understand what’s the [00:13:00] difference between those gyms that have four thousand versus two thousand lifetime value.

There’s two things that stuck out: the month-to-month retention difference and how often their clients are showing up. So month-to-month retention in the top ten percent is ninety-seven percent or higher, and the average across all the gyms in the sample is ninety-three percent. Now, four percent might not sound like a huge difference, but that is a massive difference and again, it compounds over time, and we’ll go through…

Oh, is this okay? We’ll go through a little scenario showing how that compounds. Client attendance was the other metric that really stuck out in this group of customers. Through all of our data, what we’ve identified as the strongest indicator of retention is attendance, just consistency in how much they’re showing up, and there’s this magic number around eleven, ten to eleven classes per month, where if they’re showing up that often, there’s like a ninety-nine point something percent chance they’re not gonna cancel that month.

And what we found was in the top ten percent, gyms had about three-quarters of their clients [00:14:00] were coming eleven times or more per month versus less than half in the other ten percent. So these two insights really guided the tactics that we saw driving these numbers and then ultimately driving that lifetime value number.

So here’s the illustration I wanna show to illustrate or the graph I wanna show to illustrate the difference between ninety-seven percent and ninety-three percent retention. So let’s just take a gym that has a hundred clients and average revenue is a hundred and fifty dollars for those clients, and they’re adding five new clients a month.

So really just simple scenario. Two gyms where that’s the exact same starting place. One gym has a ninety-seven percent month-to-month retention, and one has ninety-three percent. And I wanna show you two things. The first is how many members they have over time, and then how that translates to revenue. And so if you’re adding five clients a month, ninety-three percent retention means you’re actually losing more members than you’re gaining.

And so you tick down until you get to around that seventy-eight, seventy-nine member mark, and that’s where your retention, your acquisition even out. [00:15:00] And so you just plateau at that number. When you have a ninety-seven percent retention, you can see you actually are adding new… net new members, and it can grow and grow over time.

And the revenue over three years in those two scenarios is two hundred and twenty-eight thousand dollars more for the gym with ninety-seven percent retention. And so that’s just one metric where a few percentage points can be the difference between a hundred and fifty-plus members, less than a hundred members, and a huge revenue gap over time.

So what can we do about that? What are some tactics to drive up? The one I wanna talk about today, again, this is all about consistency and attendance and getting your clients to show up, and I wanna talk about this idea of attendance milestones with goals and rewards. So attendance milestones are … Really the idea here is a gamification system that you can implement to drive the right behavior, specifically attendance.

And I got really obsessed with the topic of gamification a year, few years ago, like the [00:16:00] psychology behind it, and I’ve read a bunch of academic research. I’ve looked at a bunch of examples outside of fitness and the rest of the market, and it’s just mind-blowing how small gamified experiences really do drive behavior.

And an extreme example is in the gambling world, like sports betting and casinos. They have these little systems to gamify people’s engagement, and it literally creates addiction. And fortunately, we’re in a much more positive space to society where creating addiction is a great thing. Getting people really bought in to consistently showing up will only have a positive impact on them a- and your business.

And so this, this tactic is about creating an element of gamification for rewards and milestones based on attendance. Here are just two examples from a few of the gyms we s- in the study. CrossFit Westport said, “We have a 100, 200, 300 class milestone board highlighting members who show up consistently and put in the [00:17:00] work.

It’s our way of honoring commitment and keeping motivation high.” And then The Strip CrossFit said, “Our retention program,” and even right there, retention program, the fact that we’re even talking about having a retention program is maybe a starting place. Ask yourself what’s your retention program? What would you write down if you had to identify what that means?

“Starts on day one. People get milestone rewards at three, six, 12, 25, and 50 classes. The entire package costs us about $20,” package mean- meaning the rewards they give out, “but the long-term buy-in and retention well exceeds that.” So there’s two different strategies here, but both of them employ this idea of recognition and reward at attendance milestones.

This is the package I was actually visiting a few weeks ago, so I took a picture of it. This is the package from the strip CrossFit I was mentioning. And so at three classes you get a sticker, six classes you get a, like a protein bottle. Nine you get a shaker, 25 you get, I think, the T-shirt, and 50 you get the mug.

So the idea is you’re [00:18:00] getting them bought into those early wins where there’s a huge drop-off in retention in the first 90 days. So if you could get them over that hurdle of the first week, the second week, the first month, the first 90 days, and along the way not just give them rewards like a Amazon gift card, give them rewards that have your branding on them and are tied to their fitness journey.

Around the one-month mark, maybe they start drinking protein shakes ’cause they’re working on getting stronger, and they didn’t do that before. So a shaker bottle is a relevant reward. And then even the T-shirt reward at 50 classes has the, the giant tagline, “Earned, not bought,” which was an intentional tagline.

It wasn’t just the name of the gym, it was a recognition of the work they put in Here’s an example. I’ve seen these at more and more gyms that I visit now where the milestone, part of the kinda milestone ceremony is a physical board they can sign or something with their name on it to recognize that achievement.

And then here’s just one more example of a branded piece of swag that [00:19:00] you could get for something like, this one is 2,000. Street Parking has insane retention, so they actually have people who’ve done 2,000 classes if you can imagine getting to that level. So the idea here, create a flexible system that works for your business and your average, the attendance goals you’re trying to drive.

But across the board, what I’ve seen with all these programs that are done really is have the reward be some form of branded swag that they can’t just go buy from your retail storefront. You want it to feel like they earned something, it’s unique, maybe other people ask them about it. Also, give people a chance to have their spotlight moment, whether that’s signing a board or highlighting them on social media or having a, a fun photo backdrop they can take a picture in front of.

That’s a really important way to make it meaningful for them, and it creates amazing marketing collateral for you to sh- to show off on your social media and for them to share on theirs. And then, like I said in a few of these examples, start small to get people hooked into the, getting over those early hurdles, [00:20:00] and then you can quickly extrapolate to much bigger milestones.

So once someone reaches 100 classes, you don’t need to get them to 110. You need to get them to 150 or 500. I’ve been to gyms that have 1,000-class boards and have a few members on that. So that’s, so just think about spreading them out in that way. And then I’ll share just a personal example of this because sometimes, especially at the beginning of systems like this, it might feel like it’s not working.

You might be like, “I don’t know. I’m doing it. People don’t seem that into it.” But one, just th- this idea of consistency, like it’s not gonna change your business overnight. But the value is in the long-term consistent execution. And there’s stuff that- It will happen behind the scenes when you give people their spotlight moment that you won’t realize.

And so the example I’ll share is my wife is really into Pilates, and she goes to a Pilates studio called SolidCore, and they do a really good job of this. And so she hit her 100th class, and this is their spotlight moment. They have this… They have the SolidCore logo, and they have a little [00:21:00] board with her name on it, and it said 100 classes.

And they might have taken this picture, and she walked out of the studio, and they might… I don’t know. We did another one of those spotlight things, who knows? But what does she do? She texts me right after and she’s, “Check this out.” She’s proud of herself. And so she’s sharing it internally in her network, and then she went on a run on Strava and she even shared it as the picture on her Strava run.

And it’s like, you know what? Hell yeah. So these things are long-term brand building tools for your business that people, if you give them the right moment and the right way to spotlight them, they will share with their network and it’s the best marketing you could possibly have. M- I’ll move on to the next section, but there’s just a bonus tactic here.

If you are a performance-based gym, if you’re doing any sort of programming with strength especially, one of the tools Wodify has is performance tracking. And what we’ve seen is that there’s a 20% improvement in 90-day retention rates for gyms that are doing performance tracking. So whether you use Wodify or a different tool, our- ours is built [00:22:00] into our gym management system.

But performance tracking and showing people with data that they are improving is a no-brainer for retention. It provides proof of progress by doing things like hitting PRs. It provides some of that gamification I was talking about. So you can see there’s like a PR star here, there’s leaderboards. And it provides a community environment through congratulating each other.

So really would encourage you, if you’re not already doing some form of performance tracking, get it out of a spreadsheet or a notebook and put it into a system where you can take advantage of all those other value adds. The next topic we’re gonna move on to for the top 10% is growth leaders. So those were the top 10% of gyms that had a, the best new client growth rate.

To measure this, we looked at a period of three months And we looked at how much their client base grew over the course of three months. The, uh, the, at the top ten percent, the increase was fifteen percent, and the median of the full sample was two and a half percent. [00:23:00] So again, big disparity here. Clearly something different going on with what, how these gyms are executing in order to grow.

The tactics, the theme of all these tactics was creating more exposure, more positive exposure to generate more sales. So we sh- we have tips and advice around digital marketing strategy, specifically for Google reviews and online reputation, how to activate a word-of-mouth referral program, and then the one I’ll focus on today, ’cause it feels a little relevant for the seasonality we’re in, is how to run outdoor activations, in-person outdoor activations, outdoor classes that can drive significant growth So free outdoor classes.

And if classes feels like not the right term for your business, think about it as like free outdoor activations, but I’ll talk through the lens of classes ’cause that’s the one we see most often across these top 10%. Really sounds simple, but really effective play in terms of driving growth [00:24:00] during warmer months or if you’re somewhere…

I was talking to a gym owner about this the other day who was in Phoenix, and he was like, “Dude, we’re not doing outdoor classes in the summer. Are you out of your mind?” And so it’s okay, but just consider outdoor meaning outside of the walls of your gym. So that could be in a park, it could be in a brewery or a restaurant concept that has a room where you could set up some sort of class.

So this quote’s from a gym called Alchemy 365. They’re actually the gym I go to in Denver. And they turn their summer… They turned summer into their biggest growth opportunity by launching a consistent outdoor class series, and it really worked. They went from a 50% drop in new leads to a 200% increase.

What I love about this tactic is that it’s so flexible. Really, the only requirement is you’re trying to get somewhere where your clients can participate, they can bring friends, and you get this additional kind of exposure, like almost like a billboard. Because ch- if you choose somewhere in a high traffic area, other people will notice what’s going on.

Just another [00:25:00] like personal anecdote to share. When I was in New York for the Business for Unicorns conference last week, I went on a run on Saturday morning and there was this company, Bandit Running, that was hosting this outdoor activation down by a park. And there must have been like 75 people there.

They had little giveaways, and everyone running by was looking over and trying to understand what they were doing or what this company Bandit was doing. So it’s a great way to get attention to your brand. The way to run it, I’ll go through these pro tips and then suggest some of these, some more anecdotal advice.

But start with br- focus on members and those members bringing friends. So definitely leverage your member base as the built-in marketing to, to get attendance. Those are the people who trust you and would be like, “Oh, fun.” That’s build it into your event schedule. But make sure part of it is bring a plus one, bring a family member, bring someone who you think would enjoy this.

The second tip is probably the most important, which is creating a [00:26:00] schedule so you can manage the consistency and logistics. I’ve had owners who I’ve talked to get really excited about this idea and run one event and they’re like, “That didn’t work. Only a few people showed up.” I’m like, “Okay , first of all, the first time you plan it, it’ll probably be the biggest lift logistically and marketing-wise because it’s the fir- if it’s the first time you’re doing it, you’re trying it all the first time, or if you haven’t done it in a while.”

And so what I mean by creating a schedule is look at the next few months, pick a handful of dates, commit to a location or locations, s- figure out a marketing strategy you’re gonna use for all of them. And then commit yourself to trying it for a period of time. And what will happen is even if only a few people show up to the first or the second one, if you do a good job of that, it will compound and they’ll come back, they’ll bring more friends.

People who maybe missed one or two who are at your gym will tell, will ask other people like, “Hey, did you go to that thing on Saturday? How was it?” So the gyms that are winning with this are really [00:27:00] consistent in their execution, and they plan far enough out where their members can plan ahead. So saying, “Hey, we have an event coming up in three weeks on a Saturday morning”, lets people block their calendar, talk to a friend.

Instead of, “Hey, tomorrow come to our outdoor event.” They probably already have stuff going on. And a lot of these work well outside of normal class time, so either weekends or maybe evenings. And then moving down this list, bring the energy and fun. That’s a huge piece of it. The programming, what works best is usually a pretty simple program for whatever the workout is.

A lot of body weight, depending on where you’re at. Maybe some, maybe some weights. But you’re not doing anything too complex, because you’re not in your gym, and it’s hopefully a big group. So you, sometimes you wanna staff it with a handful of coaches, but you’re probably not in a space where you wanna risk any sort of injury or anything like that.

So the programming can be simple, but high energy. Bring music, depending on the venue. Hopefully it’s somewhere that, that you can bring a loud speaker to. Have your most energetic and fun [00:28:00] coaches out there for the people who maybe aren’t already members at your gym to get a great first impression. And then, like I was mentioning, if you do have a concern or there’s some limitations around the weather in your area, you can do it just as well.

Seen a lot of creative stuff here on social media, indoor at social venues. And a lot of businesses actually will be excited about this and offer you to use their space for free, because your clients are gonna stick around and buy a coffee or a beer or whatever that business sells after the fact. Yeah, Michael, I just saw your, your chat about outdoor classes in Central Park.

That’s awesome. It was, yeah, it was really huge for us. We wound up usually, back in 2012, we brought our whole team there, and so we had 50 to 100 people with a bunch of trainers all training them, and it was such a fun vibe. I really do… I actually miss it. It was really such a good time. And because we had attracted such a crowd, we had a lot of loc- other local businesses who wanna partner with us.

So we often had free smoothies afterwards- Yeah … or free health food afterwards, and it was a great activation for those partner companies, too. [00:29:00] I love this idea. Yeah. And to build on that, just that idea of consistency. The first one, maybe a local business owner shows up and participates and is, “Oh, you know what?

I could come help you with the next one. I could bring this thing.” So having that event schedule and having a medium term, let’s call it plan, for how you’re gonna have more than just one is really important. And yeah, they’re just fun. Like, I, I think I first saw this concept start to take off from gyms during 2020 and 2021, where they kinda had to host outdoor stuff, and a lot of them have kept some version of that because they saw, yeah, people like mixing it up.

People like getting outside and, and just having a slightly different experience. So definitely one I would encourage people to consider. This last theme we’re going to talk about is revenue maximizers. This is the most behind-the-scenes tactical in terms of billing. There’s a lot of ways to maximize revenue.

You could i- introduce higher value offerings, could work on a lot of different things, but I’m gonna focus more on the billing side ’cause that’s what we have a lot of [00:30:00] insight into. So average revenue per client. The top 10% are all over $170. The median is around $112. The interesting thing, even at the top 10%, it quickly s- starts to skew up a lot higher from there.

So there are gyms averaging 200, 300-plus average revenue per client. Uh, a- and those usually have a very focused business model. Maybe they’re only offering personal training or high-ticket semi-private training. But what we saw here is even at the larger group model, the top 10% breaks into that 170-plus mark and there’s some really interesting things that they’re doing, again, just from a billing standpoint to achieve that average revenue.

So the two things w- we looked at here from our billing system is what percentage of them are doing weekly billing instead of monthly, and then how are they discounting? So on the weekly side, that means either every [00:31:00] week, every other week, or every four weeks. It doesn’t have to be every week, it just means the cadence is based on weeks and not months.

And in the top 10%, a quarter of the gyms, 25%, had some form of weekly billing versus the rest of the sample that, that number was only 10%. And so there’s definitely some… The strategies aren’t right for every business. But what we’ve seen, the math is you get an extra billing cycle every year. That’s the, that’s just the basic math on it.

So if you have an offering that you’re comfortable with and lends itself to something like biweekly billing is my favorite, ’cause if you just do it every four weeks, it can be a little bit annoying for clients. “Why don’t, why aren’t you just billing me every month?” Biweekly billing is a little bit different, but regardless, the proof is there.

One out of every four gyms is executing weekly billing, and that’s giving them an extra billing cycle every month, and that’s driving up the average revenue per member. The second piece, which I’m gonna talk more about today, is the discounting strategy, because this is hidden revenue leakage that I think is a [00:32:00] lot more prevalent in people’s businesses than they realize.

And at the top, in the best gyms we looked at, less than 5% of their revenue is discounted, meaning if they just billed everyone at 100%, what would that be? And then we back out the discounts, less than 5% is being discounted. For the rest, it’s greater than 10%, and it just… There, there’s a direct correlation with lower average revenue and how much you’re discounting.

And so when you think about optimizing your billing and offerings in order to maximize your average revenue, the discounting strategy is to standardize your pricing and lose especially the long-term or lifetime discounts. This is a graph to show what I was saying in terms of where the percent of revenue discounted nets out across the study we did.

And so you can see as you go from the top 10% to the 10 to 25, 25 to 75, and bottom 25, it, it is a just direct correlation between that discounting strategy and the amount of revenue they’re [00:33:00] letting get away from their business A scenario to run through to illustrate what this looks like in a real business.

But if you had something like a 15% discount, that could be a number of things. But whatever it is, just say you have a 15% discount that you’re giving to 50 of your clients and your membership is $150. So that 15% discount, which doesn’t sound like a ton, means for every client it’s $22.50 a month off their membership.

Over 50 clients in the course of the year, that’s $13,000, over $13,000 a year that you are not getting as revenue, that you’re losing through discounting. And so that example just shows how these long-term discounts can add up to, in this instance, probably an entire billing cycle for a gym or an entire extra month of revenue.

So what do you do about discounting? It’s, it’s tough because you can’t just get rid of all these discounts overnight. You could, but that probably would impact other metrics that would end up being net worse for your business. [00:34:00] And so one of the ways to think about this is this 90-day kind of sprint, 90-day project for a discount purge.

And here’s how I would break it down. The first piece of this, like day one, is just to get organized with your data. Like you might not know the percent of revenue you’re currently discounting. They might have added up over time. You might have had 10 different discounts that you forgot, “Oh, back in 2023 we ran that promo.

I forgot about that.” So step one is get an organized list of every membership with a lifetime discount, because those are the most important. Even if they’re smaller than your short-term discounts, they’re the ones we’re going to want to fix. So all, all your memberships organized by who has a lifetime discount.

And then day two to 30, so the first month of this sprint, is getting those cleaned up and doing so in a way that minimizes churn risk by every single person that you’re addressing with a lifetime discount should have a personalized communication. A lot of them have [00:35:00] probably maybe had it for a while.

Maybe it was an agreement you made with them three years ago because of something specific about the gym. But if you have confidence in your business in order… In, in, in to execute this, which I guess I should have said at the beginning, if you don’t feel comfortable charging full price, there’s probably other stuff to work on.

If you’re confident in your business, then it- it’s rip the Band-Aid off, but with a thoughtful, personalized approach. So don’t just send a mass email to everyone saying, “Hey, you have a new price.” Send a personalized communication. And again, the math checks out. Like it’s worth it for you to do this work.

The best is in person. The second best is a phone call. The worst is an automated SMS. So send a personalized communication and give them 60 days notice. So again, you’re trying to do this three-month sprint where at the end of it you can go focus on something else. So give them 60-day notice. Send them a personalized communication, and now you’ve taken care of your lifetime discount cohort.

Then for days thirty-one to ninety, while you’re waiting for that sixty-day notice [00:36:00] period to expire and for those people to move to full price, standardize a new short-term discount strategy. So I am not, and we haven’t seen from the gyms we’ve talked to, a requirement to never discount anything. Like sales and offers are a great way to get lead conversion.

And so but you wanna think about those with scarcity, urgency, and being time-bound. And so a… That might mean something like by scarcity, it might mean, “Hey, we have a few packages for personal training,” or, “We have our unlimited memberships. We have ten of them that we have left to sell.” So that’s scarcity.

You’re giving people a chance to get something with a limited quantity. Urgency means it’s limited time. So maybe it’s a get shredded for the summer, but you have to sign up by the end of the month. And then time-bound, going back to the beginning, means in a way where you don’t have to do this project again in three years.

So all of your discounting and sales [00:37:00] strategy should have some time limit associated with it. It is, it– And they start paying full price after that time expires. So that could be most common we see two weeks or thirty days. You don’t want them to get too used to a price they’re paying, and so it’s better to give someone a more aggressive short-term discount than ten percent for a year.

‘Cause when the year’s up, they’re just gonna be like, “Wait, I had started associating the value of this business for this certain amount, and now I’m like really annoyed it’s ten percent more.” But if you’re giving them thirty days for thirty dollars and your normal offering’s two hundred dollars, they’re not gonna think they’re paying thirty dollars forever.

They’re gonna be like, “You know what? That thirty, thirty days for thirty dollars offering was a great catalyst. It helped me get over the hump of signing up and trying out your classes, and now I’m obsessed.” And so two hundred dollars, maybe they’ll happily convert into that. So think about and plan a short-term discount strategy that checks those boxes of scarcity, urgency, and being time-bound.

And as you execute [00:38:00] this, be direct, confident, and human. I talked about the importance of just leaning into that personal- personalized communication and, and also be comfortable kind of bragging about your business and just think about all the different ways you provide value. So when I’ve seen this executed well, usually the communication includes some form of the stuff that’s been going on at your business, especially if you think about the time between when they first got the discount and now.

That could be new equipment, new programs, new amenities, new class offerings. Whatever it is, just be direct, confident, and lead with value. Own the situation. Don’t try to hide it in the footer of a newsletter email or d- not tell them until the last minute. And then this last piece is a technique to help potentially ease some of the friction of the conversation for the people who are getting a lifetime discount removed.

You don’t want to end up with a compromise where you’re like, “Okay, I’m gonna take your 10% discount and move it to a 15… a 5% discount.” So if you need [00:39:00] a lever to pull where you feel like you’re giving them something in order to get back the full value of their membership, consider perks or giveaways for goodwill and not more discounting.

So that could look like going back to the attendance milestones. That could look like branded swag. It could look like, I had one gym was talking about they had these preferred parking spots, so they were like, “We gave away one of our best parking spots for a few months.” So however you wanna strategize little perks or value or giveaways, lead with those if you need them, and not compromising in the middle of where a discount could land.

So tho- those are the three tactics I wanted to share. The last kinda piece of this then I’ll see if anyone has any questions at the end, is the math of how compounding improvements add up over time. We did one scenario with retention, but this is what I’m really passionate about because I think the understanding that we’re all in this long-term game of building sustainable businesses a- and at least that’s what [00:40:00] we subscribe to.

And so if you’re in that long-term game, it’s important to pick your head up out of the weeds sometimes and understand, like these numbers will materially change your business. And so I created a fake example here from using real data. So Iron Forge CrossFit has 100 members. Their average revenue per member is 120 bucks.

They have 94% monthly retention, and they’re generating six new members a month every month right now. So that means they’re exactly maintaining. 100 members lose six, gain six a month, and they’re generating $12,000 in monthly revenue. So let’s say they decide for a few months, we’ll use pretend it’s October to November, they decide they’re going to work on their business, and their first focus is increasing retention.

They employ some attendance milestone, gamification tactics, and their retention increases by 2%. So it goes from 94% to 96%. You don’t have to get to the highest level. You– It’s just about relative improvement to where you’re at today. So 2% increase in monthly retention. Next, they move on to December to [00:41:00] January.

Their focus is increasing average revenue per member. So they ch- maybe they change from monthly to biweekly billing. They go through that process to remove lifetime discounts, and the results are, uh, an extra $10 per month of average revenue per member and that extra billing cycle from the biweekly billing.

And so, so those are the two things they did to their business and the marginal improvements on those KPIs. At the end of 2026, if you do those things, you’re going to have, instead of 100, 124 members An increase of monthly revenue of $4,000 that’s recurring, and an extra $16,000 from that extra billing cycle.

So the business itself, if you just think about any year moving forward from there, has increased annual revenue by $65,000. $65,000 is the difference between profitability and not profitability, from hiring a coach to having to keep them part-time, from [00:42:00] hiring a front desk staff, if there’s … From investing in a new marketing program.

So the point of that illustration is the compounding effects of the numbers we’ve talked about really do make a difference on the business and lets you reinvest and continue to grow from there. One, one quote that I really liked when we did this just goes back to this theme of what the best gyms are doing is tackling one thing at a time, getting really good at them, creating a system, and then moving on to the next thing, and having that system in place to keep everything else flowing.

I hope you took s- something from the tactics I shared, but if you were interested in all of them, the last thing I would recommend doing is all of them at once. So the … Think in an organized and systematic fashion so you can move on and focus on the next thing without having to continually come back and, and remember or work through the weeds of the last thing you just did.

And then the final comment I’ll make here is I talked a lot through the lens of financial success and profitability and revenue and these business [00:43:00] KPIs, and I care about that because I see way too many gyms with really passionate owners and awesome communities and programming that go out of business.

And as … When a gym can’t afford to keep the lights on, w- we can’t serve them as a partner, they can’t serve the people i- in their community, and I think it’s the, it’s the worst thing in the industry that we see. And so the reason I talk about financial performance is that helps us all stay in the game.

Now, what does success look like when you’re actually in the game? It … For most of you, it probably means helping people. It probably means helping people be healthier, lead happier lives, helping your local community, giving coaches and managers career opportunities to stay in fitness. And th- this is what I’ve realized, is that passion and that genuine interest in helping people can’t exist without profit.

And another quote from a customer in the study summed it up really well, “You can still help people and treat it as a business. And in fact, treating it like a business is going to be better [00:44:00] not only for you, but also for everyone else.” So I don’t wanna pretend like I … We’re all running these corporate businesses that are just trying to maximize revenue.

We’re trying to help people. We’re trying to help transform lives and keep the population healthier and keep our communities healthier, but you can think about it like a business, and that’ll just help you do that even more.