The Future Is Niche: Specialization for the Win in Your Gym Biz

The future belongs to gyms that specialize.

The data proves it: Small group training has a 7% higher profit margin than large group training, and length of engagement in niche gyms is double the industry average.

Today on “Run a Profitable Gym,” Chris Cooper lays out how niching down will transform your gym. Yes, you can find and own a niche without kicking out existing clients.

When you niche down, everything gets easier: Marketing becomes crystal clear, referrals become automatic, your schedule shrinks, facility costs drop, staffing simplifies, and retention skyrockets.

Generic “fitness for everyone” gyms compete on price and lose. Specialized gyms charge premium rates and win.

Stop trying to be everything to everyone. Find your people and serve them exceptionally well.

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0:01 - Intro

0:40 - The industry right now

5:25 - Why niche down?

8:39 - How to find your niche

18:37 - What isn’t a niche?

Transcript

0:02

the future is niche why specialization wins in fitness welcome to run a profitable gym i'm chris cooper and today we're going to be talking about something that's going to feel counterintuitive to most gym owners and that's the power of saying no more specifically i'm talking about niching down your audience about getting really really specific with who you serve and why the future of successful gyms increasingly belongs to those who specialize rather than those who try to be everything to everyone the future is tailored it's customized it's bespoke and if you're still trying to serve anybody who wants to get fit then you're missing the biggest opportunity in the fitness industry right now so let me paint you a picture of what's happening across every single service industry on the planet right now custom-made specialized services are winning everywhere access to the kind of medium general service is becoming easier and cheaper online, and that means that the real professionals are moving towards specialized and custom. Think about healthcare. While traditional doctors see 30 patients a day for about seven minutes each, concierge medicine practices limit their client base to a few hundred patients who pay an annual retainer for unlimited access and personalized care and attention. These practices are thriving. They're probably growing in your community. Then look at travel. While discount airlines can pack planes with 200 passengers, private aviation companies like Wheels Up and NetJets are experiencing explosive growth right now, serving people who value customized, hassle-free travel. Even in hospitality, boutique hotels with 20 rooms and highly personalized service command premium prices and higher occupancy rates than many large chain hotels. They know exactly who they serve and what their person values, and that's not a holiday inn. Now, these aren't for everyone, and that is the point, but these businesses are easier to run, they're usually more profitable, and they're much less stress for the owner instead of trying to just serve everybody with kind of the medium standard. Now, here's how it looks in the fitness industry. According to our state of the industry data, here is exactly what we're seeing. First, small group training beats large group training in profitability. Small groups average 28.3% of profit margin for owners with a median of 26.3%. Now you compare that to big group classes, which average just about 20% profit margin with a median of 20%. That means the best big group gyms are doing better, but none of them are doing as well as small group or semi-private. That's a seven-point difference in your profit margin just from working with smaller, more focused groups, fewer clients, lower churn rate. But here's the kicker. Small groups require a lot less marketing, too, because their retention is so much better. And when you look at length of engagement data, more specialized approaches, one-on-one or semi-private or small group, they consistently have longer length of engagement. clients stay longer. The industry average for big group gyms hovers between seven and 17 months. But gyms that focus on a specific niche, they're keeping clients 25, 30, even 36 months or longer, sometimes for years and years. So think about what that means. If you charge 200 bucks a month and you keep a client for 19 months versus 30 months, that's$2,200 less in lifetime value per client for every single client. And that's without spending an extra dollar on marketing. One-on-one training at scale, what we would call semi-private training, that beats everything when it's done really well. Those gyms are averaging 29% profit margin with a median of 28.4. Like they're all doing better. And there are countless examples of women's only gyms outperforming their mixed gender counterparts in the same market. Take Parisi Speed School, one of my favorite examples. These gyms focus exclusively on youth athletic performance. They are highly profitable. They generate really strong revenue. They're very stable. And here's the beautiful part. Most of them only run four or five hours a day. They know exactly who their market is and when they're available. And they serve them intensely during those after school hours. And then they go home. And that's why Two Brain Business itself is one-on-one mentorship. That's why we don't serve dentists. We know who we serve best. It's gym owners. And we built everything around that specific audience. Of course, not every niche gym is going to do well out there. But here's the truth. The ones who do well do better than anybody else. They dominate their space. And I know this feels odd. Serving a particular niche specifically means excluding people who aren't in that niche. And as gym owners, we've been trained to say that our workouts are for anybody, but they're not for everybody. And we know that some people won't like our approach and they'll self-select out. And that feels okay because it's them choosing to leave instead of us saying, this is not for you or us saying, this is only for these people. But when it's time for us to do that excluding, when we have to turn somebody away because they're not really our ideal client, that feels wrong. It almost feels immoral. Like why would we ever turn away somebody who wants to pay us money? Isn't it our duty to take them if they want to pay us? Well, I'm going to tell you why it's our duty to turn people away who are not a good fit or who aren't in our niche. And then I'm going to show you exactly how to find your niche. So first, let's talk about why you should niche down in the first place. There are seven massive advantages and each one will make your life easier as well as making your business more profitable. First, marketing becomes dramatically easier because your social proof is crystal clear. You can say, we do this for this person. You can show yourself working. your gym or they don't. There's no confusion. Second, referral marketing becomes super duper easy. Back when I was starting out as a personal trainer, my first clients were track and soccer athletes. And so I would go to their track meets. I'd go to their soccer games to meet them and support them. And of course I would meet the other parents of the other track athletes and I would meet the other soccer players. And so they would say, who are you? And I would say, oh, I'm Holly's trainer. And oh, great. You know, and eventually I would get clients, right? Because you know exactly where your market congregates. You don't have to advertise on Facebook and Instagram and TikTok and Google and everywhere else, hoping to catch everybody. If you're only working with people over 50, then you know that Facebook ads are going to work great for people over 50. If you're focused on high school athletes, you know where they hang out after school and what events they attend and you just go there. Third, running your gym becomes easier because you only buy equipment that you need for that niche instead of trying to have every piece of equipment that might be needed by everybody. I mean, many of us 10 years ago were buying jerk blocks because we thought that everybody in our gym had to be great at weightlifting. And of course, that wasn't true. It was a waste of time and space and money. Fourth, your schedule gets a lot simpler. You don't need 5 and 6 a.m. classes if you're only working with teenagers. You don't need evening classes if you're focused on retirees. You can optimize your entire schedule around when your specific audience is actually available to train and shorten your day dramatically. Fifth, your facility costs drop. You don't need a body fat scale if you're focused only on elite athletes. You don't need jerk blocks if you're focused on metabolic conditioning for people over 50. Every piece of equipment and every square foot of space in your gym can be intentionally chosen and set up for your specific market. The space that you need goes way down too, which drops your expenses. Sixth, staffing becomes way easier because you have fewer classes and you can do way more with technology and AI for administrative tasks when you have a clear niche. But here's what really matters. People who are niche specific coaches love their jobs more and stick around longer because they're not dealing with the clients who drain them. I only coach cyclists now because that is the audience that feeds me energy. I'm not working with people who are over 60. One of my other coaches is. I'm not working with young kids who don't have specific athletic goals. One of my other coaches is. Those audiences light them up, but they don't light me up. When you niche down, and this is number seven, when you niche down to only serve the kinds of clients that your coaches really love working with, you solve your retention problem on both sides of the equation. Your clients stay longer and your coaches stay longer too. let's talk about how do you find your niche? How do you move to becoming a niche-specific gym if you've been saying, we'll take anyone all this time, and you don't want to bar anybody, you don't want to say no to anybody, you don't want to kick people out? You know, how do you actually find the right niche for you? How do you test the idea before you change your whole business model based on this one podcast? Well, here's the step-by-step process. First, start by making a list of your five favorite clients in the gym right now. These are the five people that you look forward to seeing and you wish they would come every day. You write down their names, okay? So you get out your pen here and you're jotting down their actual names. Now, what do they have in common? So leave some space beside their name. Are they all in the same age range? Do they all work in the same profession? Do they all have similar goals? Do they all ride a bike? That commonality should give you a clue about which niche to try first. Start, this is the next step, start by running a specialty group for that niche. Do what we call firing bullets before cannonballs. So you test your niche idea with a small focus program before you bet your whole business on it. So you create a women's only program for six weeks or you start a legends class for people over 50 for two months or you launch a youth athletic performance program for the summer. Run them for six weeks, eight weeks, have a firm time limit. And when that program ends, audit the results, look at the attendance, look at the retention, measure your satisfaction and their satisfaction. And most importantly, look at whether these clients are willing to refer their friends. If a specialty program gets good results and people in it are excited, work to make that specialty program at least 20% of your business over the next six months. For me personally, I found my niche in CEOs, CFOs, and competitive cyclists. So here's an example. When I retired as CEO of Two Brain, the first thing I did was went back to my gym and said, can I have some coaching hours? I wanted to coach people again. And Ryan, my partner at the gym said, okay, well, I can give you Wednesday nights at 7 p.m., but you got to get your own clients. And I immediately thought, who's my niche? It's cyclists. I've been a cyclist for years. I was a cyclist before I was a powerlifter, before I was a CrossFitter for a decade, and now I'm back to being a cyclist again. And so I said, okay, well, how can I get some cyclist clients? Well, every Sunday during the summer, I cycle with 12 local people. Some are healthcare professionals. They're all professional in some degree. We all have families. We're all over 40. But I also remember that two of them coach kids, and they have a passion for bringing kids up, especially in mountain biking. And so I reached out to one of them and said, hey, you still doing your kids' training program through the winter? And he's. He's like, no, we don't have a place to do it. We lost interest. None of us really know how to coach the kids. They don't have equipment. And I said, well, what if I put together like a 16-week plan to get them ready for the end of May when they start their mountain biking races? And so I put together this plan and I sent it over to him and he said, this looks incredible. obviously you're not doing this for free. Like what is the charge? And so I gave him our standard group rate quote. He floated it to the parents said like, here's Chris's plan. You know, some of you know, Chris, some of you don't 16 week program. What do you think? And almost all the parents said, yeah, let's do it. A few were like, ah, 16 weeks. I don't know. And so we decided to go into blocks of eight weeks. And so then I created media for the cyclists, which is really easy for me to do because I love talking about cyclists and about cycling. And so I created. YouTube videos. And then I started writing love letters to the kids about nutrition and about stretching and like what to eat and what to do before a race before training. I made emails about zone two and zone three and zone four and zone five. And like, here's how we train them. I gave them kind of an arc of here's how our training is going to look over 16 weeks. Some of the parents had questions about lifting weights. I could easily answer those and tell them how it would improve their kids cycling as well as why it was safe. The creating the content was super easy because I'm passionate about cycling and I could talk about it all day long. Then when the kids started signing up, it was very easy for me to attract more kids. Number one, they just started coming on their own. Other kids started asking about it. Cross country skiers who ride bikes started joining too. And they started posting about it on social media because they were stoked. I brought a lot of energy into the group because every kid was a cyclist. I could relate to every single one. I'm not a great kids coach for kids that don't have like a specific goal, but you know, I could stay after class and talk to them about it for half an hour. I wasn't rushing out because I was super duper engaged and interested. And they started asking like, how do I bring my friend? Parents started showing up 20 minutes early to pick the kids up so they could watch. And so it was very easy for me to say like, Hey, next week you're doing this too. Or if some of their parents were cyclists, I'd invite them, Hey, jump in on this, you know, part of the workout or whatever. People were taking pictures, you know, niching down like that created social media content. It made referrals super duper easy. The marketing just became automatic. My energy was great. I love doing it. I love staying after and answering questions, talking about it, writing emails, shooting videos on YouTube. If you go on the catalyst method, YouTube channel, you'll see these videos for the cyclist because I made them all public. I write them all one email every week that includes these videos and tips right in it. Like it's very, very easy for me to do this. And the program is growing without any effort because it shows that I'm engaged. Now, my gym is not just for cyclists. Maybe it could be, but my coaches feel the same way about different niches. One coach feels like this about powerlifting. And so he's got a powerlifting program. You know, another coach, she feels this way about helping women stabilize their hormones, you know, and so she can build a program like that. But if it's just you in your gym, having this niching down makes marketing easier. It makes retention super duper easy. It makes it easy to create content and easy to find the energy to keep going. This is the power of the niche and the niche is always more valuable. You can charge more for a niche product than you can for like a general fitness product because what you're trying to do is placate the mean, the average person and the average person doesn't really want to be there. They want to argue with you about price, right? So find your niche, be more valuable and charge what you're worth. So, you know, last week, um, I was flying home from strategic coach and I was sitting on this kind of small regional jet and this guy sits next to me and I'm ready to have a nap. You know, there's been delays. I'm tired. And of course he starts chatting and he's got this striped kind of button down t-shirt and he's, he's a little bit overweight and he's wearing these jeans. And it turns out that this guy is the CFO from a multinational company. I would never have guessed it, except he kept asking me questions like, what do you do? where are you going? You know, where do you live? That kind of thing. And through the course of that conversation, you know, the guy is like drinking a diet Coke and he's eating chips. And I'm like, man, I hope that's not your lunch, you know, cause we're becoming friendly. And he's like, well, actually it is. I just came from a meeting. I got to go to another meeting. And I said, man, like your job sounds really important. What's your lifestyle like? And he's like, oh, it's a big trade off. I'm hoping to do two more years. They pay me really well. I love my work, but the lifestyle trade off is not worth it. And I said, how many nights a year are you on the road? And he's like, I don't know. It was 170, but then you got to add in, you know, some travel days and stuff like that. He's like 170 hotel nights. And I said, what do you do when you're in a strange city? And he's like, I usually go out for expensive dinners, sometimes alone, sometimes with the company, yada, yada, we had this big conversation. And I said, Hey, look, man, like, what if I could give you three or five things right now, I could write it on a napkin for you, that would really help with the lifestyle problem and not add any more to your time. And so we started talking. And, you know, within about six days, he was a paying client of mine. But what's interesting is that if it was another trainer from my gym sitting next to that CFO, they wouldn't have had that same rapport. I got excited because I know what it's like to be a CEO or a CFO. I know what it's like to travel. And so that's my niche. Other gyms in my town have found their niche with hockey players. You know, one of the best businesses in my town is a guy who's a high school teacher. He only trains hockey players and he only trains them for four months in the summer. He does it out of his home garage. He makes about another$100,000 a year doing this. And that's all he does. But he gets all the top level hockey players because all the other top level hockey players have been doing it and they've been there for years. Why does this work? Well, there's three reasons. There's peers, there's social proof, and there's storytelling. When I'm sitting next to a CFO, I can say, oh, do you know this person? Yeah, I'm friends with them. Oh, have they ever mentioned Catalyst? You don't say like this person trains at my gym, this person trains at my gym, but you can bring up commonalities. And the same thing with these pro hockey players. You know, when all the hockey players in town train at the same place, every other hockey player knows about it because they talk about it when they're on the ice. They talk about it in the locker rooms. When you tell a story about how you helped one CEO, other CEOs immediately understand how that applies to them. This is tribe leadership, and I'm writing a book about it. The tribe grows on its own because of social proof storytelling and members recruiting their peers to this movement. The next thing is that retention becomes easier because that's where all the hockey players go, right? It becomes part of their identity, and retention drives profit way more than any other single metric, way more than marketing, way more than sales. But here's the hard truth about tribe leadership. You have to define your tribe by excluding some people. Now, we do this in the gym owner world by running a group called GymOwnersUnited.com. And what makes the group special is partially who's in there, you know, 11, 12,000 other gym owners. And partially who's not, the people that you see in other Facebook groups who are just there to rant, complain, post the Michael Jackson eating popcorn memes, take shots at. CrossFit HQ. those people are not there. We've excluded them because they just don't fit with our tribe and you can do the same. Now, I want to just quickly talk about what your niche is not. Your method is not your niche, especially not long-term. CrossFit is not a niche anymore. In 2005, if you were the only CrossFit gym in town, you had a niche. You were the CrossFit gym. But by 2010, when there were five CrossFit gyms in your town, you didn't have a niche anymore. Now, you just had a methodology like everybody else. There were variations, right? But the niche was too broad. Were you helping people get to the games or were you helping them lose weight or were you helping them to start working out or get off their meds? If you're selling a methodology, people are just going to look for the cheapest or the most flexible option. But if you're using a methodology to serve a niche, then you won't have that problem. If you're running a CrossFit gym for people over 50, you're probably the only one. You can absolutely use CrossFit to train CEOs, but. CEOs are your market. They're your niche. Spartan Race used to be a niche, right? So did Zumba. Hyrox is a great niche right now, and you should probably capitalize on it if it makes sense for your market. But understand that early adopters are transient. They can look like a niche, but they're not. Methods eventually become commoditized. They are your tools to serve your niche. They are not your niche. You should build your niche on a true demographic. Women, men, kids, adults, or get even more specific, adults over 60, postmenopausal women, kids seeking to improve speed for their sport, high earners who value privacy and schedule flexibility over making friends and winning Instagram. These are durable niches because they're based on who people are, not what they're currently interested in. Interests change. We're drawn by novelty. One year we're doing CrossFit, the next year we're doing powerlifting. Then we're doing weightlifting. Identity doesn't change. When I opened my gym, CrossFit was a niche in my town. Until there were multiple CrossFit gyms, I had something unique. But once there were three of us, I needed to go deeper. I needed to find the specific people that I served better than anyone else could serve them. So here's my challenge to you. Look at your current client base. Who are your five favorite people to work with? What do they have in common? Start there. Test a specialty program focused on serving more people like them. Track the results. If it works, double down. Try and make that 20% of your gross revenue within the next six months. If that specialty program doesn't work, try something else. And you can do this multiple times in your gym too. One of my coaches is running a powerlifting program right now. I'm coaching a group on Wednesday night of youth cyclists, and you know, there's other options out there too. Like the future belongs to gyms who know who they serve and build everyone, everything around serving that person exceptionally well, right? The future is niche. Thanks for listening to Run a Profitable Gym. If you found this helpful, share it with another gym owner who needs to hear it. Now go out there, make an impact on the people that you can impact most, make a profit in the simplest possible way, and make it home in time for dinner with your family.