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How Much Should Gym Owners Spend On Marketing?

Member working out at Anytime Fitness

As a gym owner, one of the most important things you need to understand is something called Member Lifetime Value (MLV). It’s an estimate of how much revenue a member will generate during their lifetime as a customer.

If you know how much revenue your members will generate, than it becomes much easier to figure how much you should spend on marketing. Keep reading to find out how to calculate MLV for your gym.

Get Ready To Change How You Look At Your Business

Here’s how to calculate Member Lifetime Value (MLV)...

MLV = (Monthly Membership Fee) x (Average Length of a Membership) x (1 + Referral Rate)

Here's an example for a fictional gym called Waldo's Workout World.

Let’s say Waldo's Workout World charges $99/month and that an average member stays for 20 months. Let's also assume that one out of every four of their members will typically refer a friend (that gives them a referral rate of 25%).

Now, let's plug those numbers in the the equation (if you're having flashbacks to 8th grade algebra, we're right there with you). Our equation now looks like this:

MLV = $99 x 20 x (1 + 0.25)

If you did that math in your head and got $2,475, then you're a genius. That's exactly how much revenue a new member would generate at Waldo's Workout World. Impressive, huh?

So What Will You Do Differently?

To start, understanding how much revenue each member generates allows you to make intelligent marketing decisions. If a new member will generate a few thousand dollars of revenue, how much are you willing to spend in order to get them to sign up?

Try Our MLV Calculator For Yourself

To help you understand Member Lifetime Value even better, we build our own MLV calculator just for gym owners. It'll even show you how quickly Sweat Angels will pay for itself if you're considering using our program to market your own gym.

To access the calculator, just click the button below:

Schedule My Sweat Angels Demo Now

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ABOUT THE AUTHOR

John Rougeux

John is co-founder and CMO at Causely. When he's not trying to build the most philanthropic company in the world, he's probably hanging out with his wife and three daughters in Lexington, KY. You can also find John on Twitter and LinkedIn.

ABOUT THE AUTHOR

Matthew Watson

Matt is Customer Success Manager at Causely, where he does everything in his power to help our customers succeed. He loves sports, his wife, his dog, and the great outdoors, but not in that order. He may love his dog more than sports. You can find Matt on Facebook and Twitter.

ABOUT THE AUTHOR

Sarah Werner

Sarah is a writer, marketer, and brand specialist. She has experience in both non-profit marketing and financial development as well as for-profit content marketing and social media. She holds degrees in English and Art from Asbury University. When she’s not writing content for Causely, you’ll find her outside with a book or camera enjoying the company of trees. You can also find Sarah on Twitter, Instagram and LinkedIn.

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