Run a Profitable Gym
Run a Profitable Gym is packed with business tools for gym owners and CrossFit affiliates. This is actionable, data-backed business advice for all gym owners, including those who own personal training studios, fitness franchises, and strength and conditioning gyms. Broke gym owner Chris Cooper turned a struggling gym into an asset, then built a multi-million-dollar mentoring company to help other fitness entrepreneurs do the same thing. Every week, Chris presents the top tactics for building a profitable gym, as well as real success stories from gym owners who have found incredible success through Two-Brain Business mentorship. Chris’s goal is to create millionaire gym owners. Subscribe to Run a Profitable Gym and you could be one of them.
Run a Profitable Gym
State of the Industry 2025: The Data Behind Gym Success
How many clients should your gym have? What should you charge? When’s the best time to run classes?
In this episode of “Run a Profitable Gym,” Chris Cooper shares highlights from Two-Brain’s 2025 “State of the Industry” report—a comprehensive analysis of stats from gyms around the world, including thousands of Wodify clients.
Chris is joined by Wodify’s CEO, Brendan Rice, to discuss what the numbers reveal about gym performance as we move into 2026.
They discuss trends in retention, attendance and profitability, and they share how top-performing gyms are increasing average revenue per member while cutting discounts.
Chris and Brendan also talk about the shift toward small-group training, why fewer offerings often lead to higher profits, and how gyms can use this year’s data to set smarter goals for 2026.
Tune in, get the facts and use them to build a stronger, more profitable gym.
Want the real numbers behind gym success? Grab the brand-new “State of the Industry” guide via the link below.
Links
State of the Industry 2025
Gym Owners United
Book a Call
3:49 - The retention magic number
8:21 - Class times in high demand
15:22 - Class sizes & small group option
22:59 - Headcount & revenue per member
36:20 - Demographic shift opportunity
How many clients should you have in your gym? What should you charge? When should you run class times? How long should you expect to keep a client? All of these are the answers that will determine how successful you are in business. And every year we partner with software companies, especially Wattify, to get the truth for you. We run a survey, and so we get your opinion, but we want bedrock truth. We want actual facts and data that will help you see how the industry is doing, what other people are doing, and not just what they're saying on Facebook and Instagram. I'm Chris Cooper. This is Runapprofitable Gym. And today, Brendan Rice, the CEO of Watify, is joining me to talk about some of the data and the insights and the changes that we've seen in the industry over the last year. You're going to love this interview. Brendan gives me so many unique insights on what's happening, some great ideas that'll help you plan your gym out better. And uh, you know, just a perspective that is really rare in the industry today. You're gonna love it. Here we go. Brendan, welcome back to Run a Profitable Gym.
Speaker 1:Chris, thanks for having me. Excited to talk to you.
Speaker:Yeah, man. And before we get into it, I just want to acknowledge again, Wattify has been contributing to this state of the industry data now for years. The information that you give us is really valuable. And your analyst on staff always gives us some really interesting perspectives. And on top of all of that, you know, you're a very quick thinker and also a deep thinker. And I thought you'd be able to give our audience a little bit of extra value on what some of these numbers actually mean. So if you're listening to this, you're gonna get, if this is your first exposure to Brendan, I think you're gonna be wowed by, you know, the insights that he brings to numbers.
Speaker 1:Thank you. We'll see if I live up to that.
Speaker:Yeah, exactly, man. So um let's start with retention. So, you know, it it is kind of tough sometimes to track retention, but retention we all know is like super duper important. It's just hard to nail down what's actually working. And so, you know, this is something that you and I talk a lot about. And now, thanks to this data from Whattify, we've got a pretty good handle on what is really important for retaining clients, what's kind of less important, and what really isn't important. Let's let's start with like the trend that you see in the data.
Speaker 1:Yeah, definitely. And and really quick, just to go back to the beginning and acknowledge, you know, thanking Tuberin on your side. We've been putting out this report with you guys for a few years, and we're happy and uh proud to be able to provide some of the data. But you guys do a lot of the legwork and the distribution and you know, starting around COVID, working with you on a lot of reports and data sharing, I think it was really important for the industry. And it wasn't always the best, most optimistic data, but it was really important, especially coming out of 2020 and 2021, to keep sharing that. And I'm excited to continue doing it. Now, having a few years behind us, what's awesome about this report is there's definitely some continued momentum, positive momentum, and optimism in the industry. So thanks for uh putting it together and we're we're really proud to contribute with you. It's awesome, man.
Speaker:So things do seem to be getting better, right? Let's start with retention.
Speaker 1:Yeah, retention. And the other, the other just caveat before we dive into the numbers, and the reason why I get really excited that you asked companies like Wattify and why I'm excited to share this data is on top of the value of surveying and getting subjective input from gym owners, looking at data from software companies like Wattify is source of truth data. So it's it's completely objective. When we talk about retention and attendance and class scheduling and demographics, we are really, really confident in the integrity of that data. So yeah, let's jump into it. Retention, what we saw in this year's state of the industry are two uh small but important positive trends for retention and attendance. And what we know is those two numbers have an incredibly strong correlation. We often talk about driving attendance up will impact retention. There's kind of a magic number around 10 uh sorry, 11 or 12 attendances per month correlating with like 99 plus percent retention. The data we saw is a across the entire um sample that we shared, there's a 1% increase in monthly retention and a 5% increase in average number of classes attended per month.
Speaker:That's so that's really important. And and some people will say, like, ah, you know, don't worry too much about your churn rate for monthly retention. But 1% is a massive swing. If you're running a gym with 100 clients, like that's 12 clients not lost and that have to be replaced in a year. You know, like that's that's really big. And I that's encouraging that people are getting better at this. Tell me a little bit about like how adherent or attendance, I guess, influences retention.
Speaker 1:Yeah, I mean, I think what we see in the data is that it it more attendance, and again, there's this kind of magic number around 11 or 12 a month, uh, has a direct positive impact on retention. Why that happens, I think, is um I think there's two reasons. The first is that number indicates that the client has created a habit around going to your gym. And so 12, 12 a month, for example, comes out to about three classes a week. And if you're coming to a business and engaging in that programming and that community three times a week, you've likely built it into your habit. You you maybe commute there on your way to work, you you know, you go after work, whatever it is, you've created a habit, and that's that creates lasting attendance or lasting retention. The second thing is it just gives people more exposure, whether it's nine, which is the average, nine attendances per month, 10, 11, 12, the more attendance they have, just the more they're engaging with your product. Like most of your product is what they experience when they walk into your business, whether it's it's not just the programming, but it's the it's the whole experience. So how they're greeted, the friends they interact with, the actual programming itself, how they feel afterwards, any amenities you have. And if you only experience that three or four times a month, the value, you you just are experiencing less value. So I think that's the you know, just the summary on attendance is it's just it's just usage and adoption of your product. And that that's why it has such a strong correlation to retendance, to retention.
Speaker:So now at some point, there must be a bit of a drop-off or at least a leveling out there, right? Like, you know, so coming three times a week seems to build the best attendance, but what if I came seven times a week? If I jumped to the extreme end of the scale, like would I have better retention than if I came six times a week, that kind of thing.
Speaker 1:It really, no, it really does level out around 11 and 12. Uh it's it is very, very high, it levels out. And at that point, those people are probably uh when just talking about retention, they're probably going to cancel if they have some life event like they, that kind of unavoidable retention where you do everything, everything right and they move across the country. Or you keep an eye on them and they have huge attendance uh changes. So for someone who comes five or six times a week, if they start coming two or three times a week, you have to know that for that specific client, there is a habit change. And it might not come out in an aggregate report where you're just looking at average attendance, you're just looking at any clients who don't come a certain number per week. They might not get flagged in that report. It was actually one of the reasons a few years ago we built a feature in Wadify called Wadify Retain, which predicts churn at a client level. So we actually look at the attendance trends of an individual client. But that's um, but to answer your question, the retention kind of plateau happens around uh 11 or 12 classes a month.
Speaker:See, that's interesting too, because quite often you might not even realize as a client that you're coming less often and that life is starting to get in the way. And eventually you just wake up one day and you say, Well, you know, I haven't even been to that gym in two and a half weeks. Geez, maybe I should put this on hold until January, and then you and I know what happens from there, right? They never come back. Yeah. So if the gym is aware of it and paying closer attention to it than maybe the client even is, that's a massive coaching opportunity. I I'd like to talk about class times a little bit because you shared some really interesting data with me before we started recording here.
Speaker 1:Yeah. So class times um are that's always part of the study we do. We look at attendance per class time to create kind of a heat map of the most popular and least popular class times. And I think one of the reasons I like doing that specifically is this report is valuable, I think, for gym owners in two categories. It gives them data they can benchmark themselves against and maybe know where their strongest and weakest and set goals. The other thing, it gives them data to make decisions about operational changes in their business. And the class times one is a good example of that. It might help them make schedule changes. And so often gym owners are kind of operating in a silo with just their own data. So we sharing the class time data gives them perspective on broader industry trends. The just in terms of the popularity, and then we'll we'll jump into uh the supply-demand thing, most popular class time. It's the the class time heat map in general has been extremely consistent the past four years, which is kind of interesting too. Like some human habits just don't change. It's not like suddenly weekends have become super popular. So over 90% of all attendance happens during the week. That is uh 91 point something. And the most popular class time uh standardized across time zones and everything is Monday at 5 p.m., which is actually actually interesting to me. I would have thought it would have been either one of the the morning, Monday morning and Tuesday morning are just behind that. But Monday at 5 p.m., maybe it's a little bit more of a remote work thing, like people can quickly get to their gym and they're not you know leaving an office at 5 p.m. But yeah, Monday at 5 p.m., most popular class time, and then kind of follows the distribution after that of mornings early in the week, and then the weekends are uh are definitely less attendance.
Speaker:And this is why I think it's so important to have objective data because the rest of the service industry will say, you need to be open on the weekends, close Monday if you have to, you need to be available when your customers are available. So you're better off to close for two hours at noon and stay open later. But we don't actually see that in the coaching gym business. And it would be very easy to make a really costly mistake of opening Saturdays and Sundays and closing Mondays when the truth is that most of your clients want to come Mondays and not the weekends.
Speaker 1:Yeah. Yeah. And there's um, there's a lot of different ways to interpret this data too. One is make sure that you're optimized for the most popular times. Yeah. The second is maybe you can run initiatives to drive attendance on lower popular times. So I see a lot of gyms doing their bring a friend or event or outdoor classes on the weekends. And that's a great way to, if you just run a standard class on the weekend with nothing else happening, you're probably going to get the lowest attendance. But on the on the inverse side, it is a time when a lot of people have free time and they're trying to do stuff with friends. And I've I've been to a number of gyms that have massive Saturday classes. Yeah. But they're not, they're not the same as their Monday classes. They're bring a friend, they're some, you know, maybe it's a maybe it's a hybrid class or they're doing some running. So I think you could think about the lower attendance times, not just as, oh, I should cancel those classes, but maybe um I should run those classes differently, or I should tie it into a bring a friend initiative uh or something like that.
Speaker:That that makes sense in my personal experience. You know, at our peak, our biggest classes were Saturday morning at 9 a.m. You'd get 30 to 34 people there. But what's interesting is when we said that's too many, we can't coach everybody. Let's have a nine and a 10 option, then both classes dipped down to like, you know, eight, nine people. Yeah, interesting. The whole is more than the sum of its parts. And a lot of that was just because there was only one option on Saturday, and so you knew everybody was going to be there, and so you came. Um, and that was also a partner workout, too. So it is interesting, like how you can kind of fill classes, but I think like the the overarching lesson here is that your class schedule should be fluid and you should never announce it as a permanent thing. We tell people like you should say, here's our winter schedule 2025, and you have your class times, and then you know, your spring schedule might be slightly different instead of we're changing our class schedule as if you're taking something away from them. But but what you just shared with with me before the call, too, about like, you know, distribution of when people come and what the best time should be. I think that was super interesting, man. Do you want to talk about that?
Speaker 1:Yeah. So we did this analysis on uh how to think about classes as a supply and demand function. And the the first, the reason we did this is we noticed there's an average of 15 more classes scheduled every month than last year. So so gyms are adding more classes. And so that was an interesting data point. We were like, oh, they're they're we're we're adding more. And as we dug into that, the math we looked at was in the supply and demand equation was based on how many classes you have, what percent of your classes fall at a certain time and day? So to use a really simple example, if you only did 10 classes in a week, your Monday class at 5 a.m. would be 10% of your classes, because it's one out of 10. So we looked at the percent of classes and then the percent of attendance that happens for that class. So if you had 100 attendances per week and you had 10 attendances on that Monday class, you'd be at perfect balance of supply and demand. 10% of your attendance happens at 10% of that class. And what we found was there's about there, there are six class times where supply is greater than demand, meaning they're overrepresented as a percentage of your class times versus the attendance. And so those class times are 8 a.m., 11 a.m., 1 p.m., 2 p.m., 3 p.m., and 8 p.m. And so going back to this idea of what could a gym owner do with this information, well, to start, you could do your own kind of supply and demand analysis. But I would look at those times, and if you have any classes in those times, consider whether you should cancel, combine, or otherwise adjust. Because what we're seeing is just this growth in number of classes, but not necessarily the same growth in client count or attendance or you know, some of the other stats.
Speaker:Yeah, that's interesting and super helpful for when you are testing out new class times. There was a time when our we had a 9 a.m. group that was extremely popular, and it was because the local hospital, which was about three blocks away, they used to run in 12-hour shifts. And at 9 a.m. or 8:30 or whatever, hundreds of nurses would end their shift and then they would come to the gym and then go home and sleep. When that hospital changed their shifts to like 10-hour shifts or eight-hour shifts or whatever it was, suddenly nobody wanted to come at 9 a.m. anymore. And and so, you know, these the numbers that Brennan's sharing, they give you an educated best possible guess, and you should be adjusting every three months based on supply and demand, too. Yeah.
Speaker 1:And the um the other related note to kind of shift to another one of those stats from the report is average class size. We see the average class size at six to seven people. And that number is a little bit of that, like thinking about any any average, you have to ask yourself, like, what does that represent? And my guess is for most gyms, the average represents not a single class. I I my guess would be most classes are above the average and a few are below the average. But the analogy we were we were talking through was obviously depending on your training structure and and the way you run, like if you're running intentional small group classes, great. Five might be your class cap. That might be your ideal class size. If you have a bigger room and you and your class can accommodate 22 people and your average size and your class size for that class is six or seven, I think there's there's a potential risk to that, especially with lead new clients and lead generation. Because if you walk in to a class that feels empty, you might be second guessing yourself. And if you walk into a class that is completely packed, you're there's probably some social validation happening. There's higher energy, there's some really great community building that's happening. And there's, I think, a much higher likelihood that you're going to come try a second class and then end up signing up.
Speaker:It is true. And, you know, there's there's certainly a sweet spot there. What a lot of gyms seem to be doing is running small group training at big group prices. So their average class size is five or six anyway, but they're pricing their service as if they expected 12 to 15 in a class. And that's why they're not making any money. I mean, if if you're making $10 per person attending this class and you're paying the coach $30 for $32 to run the class, I mean, you know, your net on that class is like $16. It's so much important. Yeah. Yeah.
Speaker 1:Yeah, I think it's a pricing and a delivery. You can deliver a class, you can deliver the class experience for five people in two ways. You can deliver it like a VIP small group class, or you can deliver it like a big group class. And I I've gone to probably two in the last six months where I've had those two experiences, and they felt so different. And one, I dropped in at a gym, I was traveling, and there were, I think, five, five or six of us in the class, and it was awesome. And I got the VIP. The coach was so great, and I felt like a VIP. And I was like, that was a great class. Now, obviously, like you said, the pricing structure has to has to uh match that business model. But I left feeling like that was an awesome class. I went to another one and there were probably only three or four people in this class. So, even more of an opportunity for it to have been a VIP experience. The coach led the class as if there were like 40 people. It was just like very little attention, you know, really, really kind of loud music spread out, just kind of a confusing experience. So I think you you mentioned a really important point around pricing, but also just the experience should feel high touch VIP versus high-energy community, really excite, exciting bigger group classes. I think that's where you can get kind of the best value from both of those extremes.
Speaker:I'm gonna ask you about the number of small group personal training studios that were in the report this year because it's so much higher. But first, maybe let's just dive into that a bit deeper. What does small group personal training look like from a client perspective versus you know big group training?
Speaker 1:Uh that's a great question. I think we're watching the industry evolve right now into so many different forms of that. So like two brains put out a ton of great content this year around what small group, and you you guys have helped define some of these terms. So apologies if I misuse them small group versus semi-private, but at a simple, you start with a coach-to-client ratio. And there uh what we see in that like small group area is three to five clients per coach. And then the next decision is whether or not the programming is unique to the individual, or whether it's a standard program that's delivered with modifications and uh adjustments to the individual. Even within that, I've seen a lot of variety. I've seen like, okay, well, there's gonna be three to so there's so many different really cool examples of gyms that we work with and that I've visited that are doing this version of higher value smaller group training. So I don't know that there's a silver bullet approach to it. I think the common theme for all of them is it's more prescriptive. You have to understand what the client's trying to get out of it, you, the programming, you have to understand their goals, uh, and you have to have really good coaches. The coaches have to know what they're doing. If you have those three things, then the all that spectrum of how personalized is the programming, how generized is it with modifications, what does the floor plan look like? How do you manage scheduling? There's a lot of different ways uh like that can actually be successful. I've seen, you know, of all the ones I just mentioned working, they were all brushing it. So I'm like, you know, I I think yeah, there's a lot of opportunity out there for small group high value training.
Speaker:Okay. Just turning, you know, specifically to CrossFit gyms. And if you're listening to this podcast, you know, like about half of the gyms that we work with in Tubrain out of a thousand gyms are CrossFit. And, you know, what what percentage of Watafi clients are CrossFit gyms, Brennan?
Speaker 1:I would say now probably 60%.
Speaker:Okay. So this is a big part of both of our sample sizes. And the where this shift from big group to small group or big group to semi-private is happening is is most commonly in the CrossFit space. I think a lot of people have who own CrossFit gyms have realized that like the big group model, while it was popular 2018 to 2012, and while they could get leads on Facebook cheap for a couple more years, like it's really not the most prevalent successful model anymore. And so a lot of these gyms are shifting to small group or semi-private now. There are some challenges in that, obviously, too. But one of them is you need a different coaching style. And that's why I wanted to ask you about like the client experience in a big group versus small group. But let's just quickly turn to the data. Like you are seeing more gyms in the small group space, right? Yeah. Do you get the impression that these are gyms that are converting to small group or they started as small group or they started as studios? They went one-on-one to one to a few, or which direction are they going?
Speaker 1:I think there's two categories. The first is gyms that sign up, that switch to Watify or start, and they've figured out that's the model that like that's their model. It's they're not really switching from anything. The ones transitioning seem to be struggling to struggling to kind of pin their goals with group training. And they're not like flipping a switch and just converting, they're introducing new offerings to their clientele, changing their lead intake process and trying to grow that, grow that kind of area of their business.
unknown:Okay.
Speaker:I think actually that leads us into the client headcount section. So it overall, gyms showed that they were a lot more profitable this year, which is fantastic. But when I turn to client headcount, while that forms part of the reason, it's not the biggest reason. Like big group gyms went from, I think it was 122 last year to 129 this year. Let's start there. Why do you think that gyms are carrying a slightly larger clientele than they were maybe a year ago?
Speaker 1:That's a good question. From our data, what we can see is that the general fitness industry continues to grow. And our like our retention rate and our tenants going back to the beginning, it are up, are up. So that number, the difference you mentioned correlates pretty closely to that retention. They're hanging on to more members and they're probably adding the same or slightly more, and then you end up with about 10 more, uh, 10 more clients at the end of the year.
Speaker:Which is massive. And I'm I'm glad for it. I do want to point out that especially even with these big group style gyms, you're not seeing people get to 400 members. They're still under 150. Yeah. There are some models where that works, but in general, gym gyms that are based on the idea of getting 300 members or more really struggle to duplicate themselves and have like a working model. Now, you know, one model that I know you absolutely love is Alchemy. What is that model?
Speaker 1:Yeah, the the I think where you see a lot of the success is happening on the edges of what we're talking about. There's there's a group model where you have pretty big classes, and some of them are still high value, like alchemy, and there is a model of high value gyms that are still running pretty big group classes. You're never gonna, or you're probably not gonna be able to charge $400, $300, $400 a month for that. But you know, alchemy is $180 or something like that. So you see if if you can fill a 25 or 30 person class consistently, then you can probably have a successful gym running a bigger group model. Uh, and then the other end is, you know, filling a high value small group model consistently. But the but the six whatever your model is, you should kind of understand your capacity. And, you know, you're you're never gonna be at 100%, but your business model should, your goals should align with the business model where if you can fill that capacity, you should be, you know, growing and doing well. And then the the other, you know, thing we see in the data is most of what we share with two brain are averages. So we have these like clear benchmarks. The other thing we've done this year is we've looked at kind of inspired by your series where you look at the leaderboards for two brain clients, we have like the top 10. So we for the CrossFit games and the CrossFit affiliate summit, we did an analysis of the top 10% of affiliates. So we took a sample of I think it was a thousand US affiliates and just looked at the top 10% metrics. And so across ARM, leg, retention, attendance, all these stats we're talking about. There was a pretty significant gap. Like just in ARM, we saw uh for this, for this study, the median was 112 a month and the top 10% was over 170. So that's a huge difference. So yeah, there were that that was really interesting to look at that like top 10% to show, really, if anything, it's just to show like this is possible. These averages aren't like there's a pretty wide range on both sides to grow into as a gym owner.
Speaker:So I find that particularly interesting, and I hadn't heard that before. And I was gonna even bring this up like gyms are up a little bit in headcount, but they seem to be up a lot in ARM. And if we look at like where is this revenue coming from, an earlier chart, there's fewer categories. You know, if we had said where is your revenue coming from three years ago, we would have had to list 10 different things. There was retail, there was a kids program, there was a legends program, there was a weightlifting program, right? Now it's like, well, there's four or five things. One is retail, one might be supplements. Yeah. But ARM is still up. Is it are gym owners just getting better at business? Are they getting better at pricing? Like, what do you attribute that to?
Speaker 1:Well, there's there's two things we saw actually that if you're listening to this, uh great, because this isn't in the state of the industry data when you when you think about what's behind R discounts and billing structure. So the first is that top 10%, they have a little bit less than 5% of their total revenue discounted. So if you if you build all of your memberships and invoices at 100%, uh that group only discounts five a little bit less than 5%. So they're collecting 95% of the revenue they intend on collecting. And the rest is over 10%. So just like right there, you have a massive difference. Um and then the the other thing, just on the billing structure side, is, and I'm curious to hear your opinion on this because it's not overwhelming, but the top 10%, a quarter of them, 25%, have some structured weekly billing, either every other week, every four weeks, or every week. And only 10% of the rest of people do that. So the obvious math there is you get an extra billing cycle in. But there's more than one way to do it. And that's what we see. If we're driving arm up, that is not we do see data around revenue diversification. Like there's also a higher percentage of their revenue coming from appointments. A lot of them are doing retail, but those were kind of some of the interesting, like non-obvious operational ones.
Speaker:Tell me if I've got this wrong. So they're selling a few things, but not 12 things. Their pricing is higher and they discount fewer people. And they all seem to be on some kind of weekly type billing cycle instead of monthly.
Speaker 1:Correct, except for not all on weekly. 75% still are billing monthly, but proportionally 25% much higher than the average. And yeah, so it's it's something worth considering for sure.
Speaker:Okay. Yeah, I misspoke there. So not all the best gyms are doing that, but more of the best gyms do that than that. Really important. I mean, if if people listen to this and they they want to get one takeaway, like that's it. Like, look at what the best gyms in the world are doing and just copy them. They have a billing cycle that recurs either every four weeks or every week or whatever. They are giving fewer discounts than anybody else. You know, they sell two or things, three things that are high value and they sell them really, really well. Like, I think that right there for me is is reason enough to spend all this time and energy and money publishing this data set every year, just that knowledge alone. Brendan, that is super good.
Speaker 1:Well, and on the just one more comment on the discounting side, because I think some people hear that and they think, okay, I'm going to do 100% list price for everything. And there is a caveat there, and and you two brands probably got a perspective on this too, but just from a data data perspective, and we see this in our own business too. What adds up are in Indefinite lifetime discounts. And so when we looked at this data, we look at all the revenue they're going to collect. So if you have an opportunity and it's right for your business to do, and you have want to run a promotion and you're like, we're going to do some short-term discount. We think it'll impact our lead conversion. We're doing a summer initiative. That we could debate whether or not that's a good business strategy, but that's not really what's impacting your arm and your overall revenue. What's impacting it is the 20% discount you gave to someone two years ago and you just applied it forever and you don't even think about it anymore. And so our recommendation when I talk to Jim Warren's about this is start, just look at a report, look at a discount report and hide all of the ones that have an expiration date. Like start there. Just look at that list because that is where there's an opportunity to over time. If you if you work down that list, then six months, nine months, a year from now, two years from now, your business will just grow into a healthier, more sustainable business in the long run.
Speaker:Yeah. I mean, if your gym has grandfathered rates, start there. I mean, your business has improved so much, I'm sure, in the last five years. Your what you're offering is completely different and twice as good as it was back then. Why are people paying for your 2010 level of service when you're delivering at a 2025 level now? Yeah. Yeah, it's I don't know. And it's just, you know, it really comes down to like the leadership skills of the owner and doing the uncomfortable things because it's right, not because it's, you know, easy. Uh yeah.
Speaker 1:It's similar to price increases, but in a lot of cases, even more personal because like an individual might have a unique discount and you got to go have a one-on-one conversation with them, which can be more challenging than sending an email to everyone and explaining a price increase.
Speaker:And quite quite often, those people have been promised a lifetime rate, haven't they?
Speaker 1:Yeah. Yeah.
Speaker:I'm sure you see that too. So one interesting thing that I really wanted to mention to you here is that gym profitability is up even more than like gym membership, which is fantastic. Uh gym expenses went down on average by about $1,000 a month, which is great too. And all these things, slightly more clients, higher ARM, lower expenses, these all contribute to profit. But one thing that didn't go up was coach pay. What are you seeing there?
Speaker 1:Well, that's a good question. We're we're launching next year a completely revamped payroll feature. Right now, WattFly probably doesn't have the best data on coach pay. So I don't have a great answer for you, other than my kind of perspective on the industry in general has been there there's the supply and demand for coach pay. And if gym owners are being really conscious about their expenses and not letting them rise, they probably have in their mind a fixed amount for how much they're going to pay their coaches. And as long as they can keep getting coaches for that amount, they might think like that's okay, then I don't have to raise that pay. And so I think the question is do you have the right coaches and what's your coach retention like? Because that's where when I've talked to Jim, like I was talking to one of our customers in Arizona, and we were talking about coaches, and he's he's awesome coaches, awesome retention. And I was like, Well, what are you doing differently? Or actually, this might have been um, I don't know if you know Joe TP from the strip crossfit. This might have been Joe. Yeah, it was someone, but his is his answer with like one sentence. He was like, Oh, I pay them more. Like it was so simple. But my point is that um with some expenses, minimizing them is actually kind of like uh the goal or a good thing. And with coach pay, it's probably not right because even if you could go get another coach if that one leaves for the same pay, there's huge benefits to long-term coach retention, to getting better coaches, the map, the impact that will have on your retention and your client experience and your ability to charge a higher arm or launch some of these services. So coach pay is like an investment in your business. And you obviously have to understand how it makes sense for your PL. But if gym profits are up, I think one category of reinvestment that would be a really smart is in Coach Pay.
Speaker:Yeah, I agree. Like, you know, when we're when we're telling gym owners your salary cap is 44% of your revenue. As your revenue goes up, that salary cap should go up too. And I, you know, I think it it probably will go up by next this time next year. You know, now the gym owners are more profitable, they're gonna turn around and give that to coaches. I I often see the inverse problem, which is gym owners making no money and and their coaches are actually doing better than they are. So I'm confident it will happen. It's just kind of happy to see gym owners making more first and paying themselves first because that's what's gonna keep them in business. Yeah, that's great. Yeah. I I will say, like, you know, I sometimes time goes by so quickly for me that in a recent video, I said, Oh, yeah, you hire a cleaner for 12 bucks an hour. Well, when I first hired a cleaner, that was the minimum wage in Ontario. Now that minimum wage is 18. And so I sometimes forget like everything's gone up.
Speaker 1:Yeah, yeah. They're uh they're, you know, it it gets it gets more expensive, which is why keeping a really close eye on your arm is uh equally important. Like if your arm isn't going up, the rest of the world is, and and the rest of the world, it's not just inflation. Like I do think you have to think about delivering more and more value so you can continue earning more profit because nothing's gonna, your your expenses aren't gonna freeze ever. Like they're just not.
Speaker:I think that's really important too. And also it's important to keep your arm going up because if you're just paying your coaches more because you've got 20 more clients than you did this time last year, that's a more volatile number. And and that can go down, but arm never goes down.
Speaker 1:Yeah.
Speaker:Or almost never. Brennan, I'd love for you to give us like one more, you know, smart guy insight here that we can share with people.
Speaker 1:Smart guy insight. So on the demographic side of our data, we have a lot of demographic data. So we look at um age as one of the characteristics we look at. And we look at distribution over a uh a few different age groups. And what we saw this year, which was actually, I think, as a percentage, the biggest change from last year's state of the industry, was a 10% increase in the group of clients that are 21 years or younger, and a 5% increase in the clients that are 50 or older. And on the 21 or younger side, that really stuck out to me as another optimistic data point. Like that's awesome, first of all. And as a gym owner, position yourself for long-term growth. I think a lot of gym owners talk about their ideal customer profile and their avatar. And they might think of it as a fixed, like they might have a persona, it might be like, Jason, he's 22 years old. And he, and what's interesting is the marketing and the business you built a few years ago, you kind of have to decide whether you're going to evolve your business to serve the same clients for 10 or 15 years, meaning you actually kind of try to grow and change your avatar with the cohort of clients that you have that you serve mostly right now, or you stay kind of fixed on an avatar, but just know like that person's changing. Like the the growth in clients on the younger end of the spectrum. There's a lot of really interesting studies and and information out there about those people are looking for something different. They're they're really looking for a a lot, a lot more than just I want to look good naked or I want to lose weight. They're looking for place, a community. They're looking for more well-rounded fitness and wellness. They're looking for amenities outside of just classes. Like there's a lot of really interesting demographic trends that gym owners need to get ahead of if they're going to capitalize on the growth in that. I think it's Gen Z. I would get my Gen mixed up. But yeah, Gen Z, Gen Z. That's it. I mean, you know, it's Gen Z. If you're going to capitalize on that demographic, they are looking for something different than those people 10 years ago. So it's really, I think that can help them form a lot of kind of medium-term, you know, one, two, three-year decisions gym owners are making.
Speaker:That's very interesting. And just what you said, I was nodding along because I was like, okay, yeah, actually, my gym has evolved with the clients that we have. Like, you know, I have a this client named Neil who comes to the morning classes. He's been with us for I think 16 years now. The gym is perfect for him. Wow, that's awesome. But, you know, my my daughter, she's away at school, she's 21. You know, she's at a different type of gym than mine. And it's all young people, and she loves it. You know, and so this is something that just gym owners need to be more aware of.
Speaker 1:Yeah, it's a decision. And I think you you what's important is you kind of pick a path and you don't try to keep serving everyone knowing that the needs are changing. Uh, I went to a, there was a, I didn't go. There was a there was a class at my gym that was like a special, it was like one of those social bring a friend type of classes, and it was for singles. And I was like, what a great idea. As long as it's a great idea for your gym. Like that that class would would fail if that's not the market you're serving. But I think they they had a wait list of like 20 people or something. And it was such a interesting idea. It was like a lot of people meet their partners at, you know, the the business. And why not host a singles class if you are serving clients in that demographic? Uh so is just one example of knowing who your market is and and providing some offerings that would resonate with them.
Speaker:It makes sense because if you're under 21, you're probably single. Yeah. And this is something that you're you're doing, right? Yeah, that's awesome, man. Well, Brendan, thanks again. We're gonna do this again real soon because I always learn so much from talking to you. And it's energizing to get this unique perspective on things. Like every time we have a conversation, I'm like, oh, I never thought of that before, you know. And um, I can name specific examples of times when you've come up with an idea that I've thought, yeah, that's brilliant, but it's it's so smart that it just makes absolute, you know, obvious sense. So thanks again for being part of this, man. And uh we're you really are helping a lot of GMOers by sharing this data, sharing this analysis and your own insights and helping them make better decisions.
Speaker 1:Yeah, thank you guys for all the work and putting it out. And we're happy to be part of it, looking forward to all the years to come.
