Growing Your Average Client Value

November 07, 2017
Growing Your Average Client Value

The business acumen of micro-gym owners has increased drastically in the past three years. Now when I talk with a fellow gym owner, they aren’t interested in how many members I have, but they want to know how much each member is paying monthly.

This, my friends, is known as Average Client Value (ACV).

How to Calculate Your ACV

Figure out your total membership — How many members did you have at the close of last month? Yes, this includes all your comp’d memberships and your wife and grandma.

Figure out your total monthly revenue (TMR) — This is any/all monies that your company generated last month via services or goods sold. If you have a rent roll model, do not add that to this pile.

Divide your TMR by your total membership.

Boom, that’s it. Now if you’re looking at that number and it makes you ill — you know people spend more going out to a nice dinner with their spouse in an evening than they do at your gym in an entire month — don’t worry, I’m here to save the day and help you grow your ACV.

How to Raise Your ACV

  1. Raise your damn prices — Not joking one bit, but that’s for a different article.
  2. Provide additional service offerings that can be purchased to enhance one’s fitness journey — personal training, nutritional coaching, retail or, my personal favorite, individual design.

What is individual design?

Read my first article on that.

But what about selling personal training or nutrition coaching? Wouldn’t that be a better option?

Those are both great options and should be an offering at any location that calls themselves a “professional” fitness facility. I’m assuming most of you probably don’t have these two revenue streams dialed in though; otherwise you’d have no reason to read this far.

That being said, the problem with both of these additional streams lives in this statement, which is truer than anything you’ve ever heard in your life:

“There are only 24 hours in a day.”

Try Internet arguing that one with me. Go ahead, I’ll wait.

In the meantime, I want the rest of you to realize you and your coaching staff do have a limited amount of time to service these in-person service offerings. While I do believe you need to be committing energy to these items, individual design is the most effective way to “hack” the finite amount of time we all have to offer.

How does individual design allow me to scale time?

In and of itself, it doesn’t. But if you utilize software like Fitbot to help facilitate your workouts to your clients, schedule programming, create progressions and strength cycles, you can turn your Sunday morning into three hours of creativity where you’ve programmed 50-plus workouts for five different athletes.

Additionally, when bringing on more staff members to help you grow your individual design practice, it allows you the ability to work side by side with your Coaches as you help them learn the craft of programming. Whereas, any errors made by them during a personal training session cannot be immediately corrected — without creating an awkward situation — you can easily sit next to your Coach in development, overlook his/her programming as they’ve written it out on Fitbot and suggest any changes as you see fit.

Let’s look at the math…

Five personal training clients at $70 per hour, 8 sessions per month = $2,800 per month revenue with a 40 hour per month investment.

Five individual design clients at $100 per month + $175 per month gym membership = $1,375 per month with a five-hour per month investment — average time spent programming one client per month = one hour when using Fitbot.

While the novice gym owner might think the first scenario is ideal because it generates more money, the veteran realizes that three times the money could be made during the hours Scenario Two allows.

Now let’s look at the math from a different angle…

It’s my belief that a gym needs to achieve a $200 per month ACV in order to be in a position to pay the owner a great salary, pay it’s employees great salaries and still have retained earnings in the bank. Just my two cents, but whether you agree or not, let’s use it for the following example:

Short of you raising all your prices to $200 per month tomorrow, how do we use individual design to generate that ACV? This is what it looks like:

Monthly membership: $150/month

Individual design: $100/month

Retail: $10/month

Monthly client value = $260/month

In my next article, I’ll elaborate on how to utilize the common knowledge that all competitors in the sport of CrossFit are receiving specialized coaching to some degree — and allow that knowledge to fan the flames of your marketing efforts to increase individual design sales within you gym.

this article originally appeared in Box Pro Magazine on November 7th, 2017.