How to Know Exactly What to Charge at Your Gym

Calculate exactly what you should be charging with our Revenue Per Session (RPS) Calculator, linked below.

Don’t set your prices by copying the gym down the street (and maybe knocking off $10).

Instead, there’s a data-backed way to do it, using real numbers from thousands of gyms and one metric that tells you if your price is pulling its weight: revenue per session (RPS).

In this episode of "Run a Profitable Gym,” Two-Brain CEO John Franklin explains what revenue per session (RPS) is and why $200 is a healthy target to aim for.

He walks through the math for calculating your session rate and RPS and shows two different ways to hit the $200 RPS benchmark—raising your prices or increasing class attendance.

Pulling data from Two-Brain’s “State of the Industry” report (metrics from over 7,000 gyms), John analyzes large group and small group/semi-private models side by side, comparing lead volume, close rates, pricing and membership usage.

Listen to learn how to set data-backed prices that let you pay coaches well and run a more profitable gym.

Links

Rate Per Session Calculator

Gym Owners United

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0:00 - Stop copying your competitor’s prices

0:41 - The metric every gym owner should track

1:24 - What 7,000 gyms taught us about pricing

3:01 - Calculate your revenue per session

4:28 - The $200 rule for profitable gyms

5:58 - How to charge the right price

6:59 - What if you can’t raise your prices?

Transcript

John 0:02

Tell me if this sounds familiar. It's time to set your packaging and pricing for your gym. So, what you do is you look at the gym down the street, see what they're charging, and maybe subtract $10. That's exactly what I did when I started my gym, and I quickly found out that the gym down the street had no idea what they were doing. So I didn't know where to go from there. And if you've ever wondered how to price your memberships appropriately, I'm gonna show you a data-backed way to do it today. By the end of this episode, you're gonna know exactly what to charge. And the most important metric this all hinges on. I'm John Franklin, the CEO of Two Brain Business. We're the world's largest gym mentorship company, working with over 3,500 gym owners to generate six figures in profit because yes, it is possible. Today we're gonna be doing some math. So grab a pen. But before we do, let's talk about revenue per session. Revenue per session or RPS is how much money you make for each hour a coach is on the floor. And having a healthy RPS is one of the most important metrics for setting good prices. And here's why. A good RPS allows you to pay your coaches more, it allows you to offer less sessions, but make a similar amount of money, which leads to more profitability, and a simpler gym. And a simpler gym is one that you can run for a really long time. To drive this point home, we're gonna compare two different models, large group and small group semi-private. For simplicity, we'll say large group is anything designed for more than six attendees, and small group semi-private is designed for four to six attendees. We're gonna throw some numbers at you, but we're gonna be using the state of the industry. This is our annual industry publication that we put out with Kilo and Whatify. It contains real data from over 7,000 gyms, so you know we're not just making this stuff up. Here's what we know about these two different models. From a lead standpoint, the average large group gym is gonna get around 31 leads, where the average small group semi-private gym is gonna get 33. Appointments are very similar as well, seven for large group and six for small group. Close rate, also very close. So, up until this point, regardless of which model you choose, you're gonna have very similar metrics in the marketing funnel. Now, price is where things get interesting. We know that the median large group gym charges around $175 a month, and the median small group semi-private gym is gonna be somewhere in the neighborhood of $399. So that's over double the price for small group than large group. Now let's talk about usage. All usage is is the amount of times the average member uses their membership in a given month. In both models, average usage is around eight sessions. So they come around two times a week. In both cases, the average is eight. And armed with that information, we can figure out our session rate. And all that is is the amount of revenue we generate every time a member uses their membership. And the way we calculate it is really simple. I'm gonna go out on a limb here and guess that you didn't become a gym owner because you love doing math problems all day. And we're about to do some math problems. We put together a simple calculator that'll help you run through these exercises. You can get it by scanning the QR code here or clicking the link below so you don't have to do this alone. We just take the monthly membership price, divide it by the amount of time someone uses their membership in a given month, and that's going to tell us how much they're paying each time they go to the gym. So for our large group crowd, we know that session rate comes out to about $22 per session. For our small group semi-private, that's $50 per session, which is double, more than double that of large group, which makes sense because in a large group training class, you're gonna have more members attend, and that's gonna offset the lower session rate. So here's what this means. It means, in effect, that the average large group training gym is offering small group training, but charging large group training prices, which puts them at a severe disadvantage from a model standpoint. Now, there's nothing wrong with group training as a model. Tons of gyms do it profitably. That's what I did. You just have to know going into it that you probably need to charge more than the average group training gym, or you need to figure out a way to get more bodies in the door. And if you need help with your marketing, I recommend watching this video right here. So, with that in mind, you're probably wondering how do I think about pricing? And it all ties back to that metric we talked about earlier: revenue per session. How much revenue are you generating for each coach hour on the floor? We believe that a healthy RPS is $200. $200 is a great goal to strive for for most gym owners because at $200, you have enough revenue to pay your coaches a really good wage, which is going to allow you to attract great coaches. There's gonna be more profit left over for you, and it'll give you a clear number and target to shoot for. So you'll know if any given session is underperforming, and it'll give you a good idea of when to cut fat off the schedule. The way we calculate revenue per session is simple. It's just the session rate times attendance. So for our average large group gym, it's $22 is the session rate. And we know attendance per class is 6.6. So that gives us a session rate of roughly $145.20. For our small group gym, it's a $50 session rate and a $4.6 average attendance, which gives us a session rate of $230, which is above our benchmark. Now, if we're a group training gym and we want to hit that $200 RPS, all we need to do is work backwards from our target. There are two variables we can manipulate. There's the amount of people that attend each class, and there's our pricing. And I'll show you how to do each. It's really simple. So let's say you're not committed to making any changes in your marketing. So we know that your attendance per class is gonna stay at the average, which is 6.6. What does that mean you need to do to your prices? Well, let's look. We'll take our goal revenue per session, which is 200, and we're gonna divide that by 6.6, which is our average class attendance. That's gonna tell us the session rate we need to hit, which is right around $30. We know from earlier that the average member is gonna use their membership eight times in a given month. So if our session rate is $30 and a member uses their membership eight times a month, that means our monthly membership should be $240. You probably didn't open your gym to become a professional marketer. So if you're gonna assume your attendance is gonna be in line with the industry average, you know that you're gonna need to charge $240 instead of the average of $175 if you want to have a healthy revenue per session. This is what good data back pricing looks like. So you might be saying to yourself, there's no way I'm gonna be able to charge $240 for a membership in my market. And that's totally fine. We have another variable we can play with. Let's say you're closer to the industry average of 175. We know we need higher attendance to hit a healthy revenue per session. And the way we can figure out our target attendance is we just take our revenue per session target, which in this case is 200, and we divide that by our session rate, which is 22, and that'll tell us what our average class attendance needs to be. And in this case, it's right above nine. So that means if you're consistently getting around nine or 10 people in every single one of your classes, it has the same effect as raising your prices to $240. So now you have a framework for packaging and pricing your memberships, regardless of what type of model you offer. And if you love this video, you're gonna like this one too.