Gone are the days of hustling to sign up 50 new clients for your six-week transformation challenge: It’s time to focus on client and coach retention.
I admit, I’m no expert on running a gym amidst a worldwide pandemic (and I don’t think anyone can claim to be). These are unchartered waters for all of us, but after being involved in the fitness industry for 11 years—as a CrossFit Games athlete, as a coach and as a writer, who speaks with literally dozens of gym owners and coaches each week— here’s what I have deduced: To retain clients and coaches, paying your coaches by the hour makes even less sense now than it ever did.
Before I get to COVID-19 and why I believe paying coaches by the hour isn’t what’s best for client retention, nor is it good for your ability to pay coaches, or for business success, here’s a bit of context about where I’m coming from:
I never thought coaching fitness could be a long-term career.
Editor’s note: This article is an op-ed. The views expressed herein and in the video are the author’s and don’t necessarily reflect the views of BarBend. Claims, assertions, opinions, and quotes have been sourced exclusively by the author.
My first experience coaching was at a Globo gym in London, Ontario, as I was pursuing my masters degree in journalism. I was paid $15 an hour to sit at the front desk and watch people scan their membership cards, show people how to use the machines, and coach some group classes.
It got really boring really quickly, and I could see there was no future working for $15 to $30 an hour at a Globo gym or other type of franchise gym.
When I graduated from university in 2008, traditional journalism jobs were incredibly hard to come by. I moved to Vancouver B.C. and found MadLab School of Fitness. (We are still affiliated today as CrossFit Vancouver, but we use MadLab School of Fitness).
The owner Craig Patterson quickly took me under his wing as his apprentice coach.
There were two concepts that really sold me on the way Patterson, a former mechanical engineer, ran his gym:
1. The coach co-op
2. Being paid on a percentage of revenue basis
1. Coach Co-op
The idea behind the coach co-op is that the gym runs kind of like a law or engineering firm. As coaches, we divide up group class responsibilities, social media responsibilities, blogging, etc., and we’re all responsible for our schedules, for our own client acquisition and client retention, and for our own billing etc.
Working together in this co-op fashion frees the owner up to work on business development, because he doesn’t have to hold our hands, nor does he have to deal with finding coverage for classes if a coach is sick. Finding substitutes falls on us, and it also lets us barter with each other, so we all are able to take four to six weeks of paid vacation per year.
Though uncharacteristic, an opportunity came up for me in France recently, so I am in France for four months (not exactly the experience I was expecting considering the COVID-19 situation).
That being said, I’m still in touch with my book of clients, and now that we have moved to remote coaching I’m able to contribute even more. It is also my responsibility to pay the other coaches out of my paycheck for coverage they do for me—a paycheck that comes from earning a percentage of revenue of my clients’ monthly fees.
Leaving for four months was, admittedly, a bit of a risk, but so far I haven’t lost a client yet, even amidst the pandemic, and I credit this to the coach co-op system—meaning, we’re all equally invested in client retention, because our livelihood is directly tied to it.
This brings me to the second point:
2. Percentage of revenue compensation
I will say this off the top: You do need the right kind of people to succeed in this model. On top of being passionate about coaching, you need to be humble and willing to grind it out in the short-term for the sake of the long term. You need to be entrepreneurial-minded. And you need to be willing to put yourself out there and embrace the sales process.
So yes, this system isn’t for everyone. Some people want to be part-time coaches who coach three group classes a week, and there is a very valuable place for them, as well.
My experience in the system looked like this:
I began shadowing senior coaches in 2009, receiving almost daily mentorship as I went through our apprentice education process, which has improved considerably since I went through it a decade ago. Today, we’re an accredited vocational college, registered with the province of British Columbia.
Then, I started working with my own clients and earning 20 percent of the revenue generated from their monthly fees, and 30 percent if the client was a referral from another client. Once I had 10 clients, my compensation jumped to 30 percent and 40 percent. And now, I earn either 40 percent or 50 percent of the ongoing revenue that my clients’ fees generate each month. In this sense, the incentive to retain my clients is high, because if one quits, my pay check takes a hit. Also, the better I do, the better the business does, and vice versa. Incentives are aligned for all three parties to succeed.
Our system also allows for a certain amount of creativity. In the early days, when I was desperate for clients, I started hosting other events and seminars as a way to boost my income (we earn 60 percent of revenue on any specialty program). Over the years, I have hosted rowing seminars—I was a college rower—and teen fitness camps, and even non-fitness related events like women’s clothing swaps and Valentine’s Day dating games.
I know people are always weird when it comes to talking about money, but I think it’s important to be transparent.
Bottom line is in order for coaches to stay at a gym, and remain in the fitness industry for years, we need to be earning a good living to be able to afford life. We need to be able to earn a professional wage. Unless the current pandemic turns out to be the beginning of the end of capitalism, this is just the reality of life.
And while cities around the world vary in terms of affordability, I live in a fairly expensive city in Vancouver. You learn pretty quickly in Vancouver that you’re never going to own a home and raise a family comfortably if you can’t earn close to six figures (maybe $80,000 if there are two people in your family who are working).
It took me two long, poverty line years to earn $40,000 coaching at MadLab School of Fitness—that’s the being humble part and being willing to work your butt off grinding it out in the short-term part. By my third year coaching, I took home over $60,000 coaching 20 hours a week. At the time, I was also working full-time for the CrossFit Journal.
After that year, I decided to scale back at the gym and become a part-time coach, as I was becoming more established as a writer. Since then, I have maintained my book of 25 clients over the last seven years, which allows me to earn around $36,000 each year at the gym working about 12-14 on-floor hours each week, including five group classes plus approximately seven to nine hours of personal training each week. This leaves me plenty of time to fulfill my writing contracts.
I am the only part-time coach at my gym. We also have two apprentice coaches and five full-time coaches, who have been at the gym between eight to 14 years. The average take-home pay amongst the five of them in 2019 was $77,000, while the gym took a 21 percent profit.
I’m not suggesting our system is immune to a worldwide pandemic. This is a stressful time for us all—we’re all going to suffer because of it—but here’s why I think the coach co-op and percentage of revenue compensation model has a better chance of buffering the damage.
I have spoken to dozens of gym owners in the last three weeks, who have been scrambling to call each and every one of their 150 members themselves.
One gym owner I spoke with said that approximately half her clients called her to either cancel or hold their memberships within the first couple days of shutting her doors, and now she’s in a position where she’s essentially trying to take care of her 50 or so remaining members on her own, all the while trying to single-handedly convince the members she lost to come back. So much work and stress for one human to take on.
In Vancouver—and me working remotely from France—our coach coop has carried on as usual, ensuring no one person is overly burdened. We divided up our new tasks evenly—filming demo videos for at-home programming, executing our weekly blog posts, dividing up our Zoom class workload and schedule, taking turns going to the gym to distribute equipment etc. In terms of the clients, as always, we are still responsible for our own book of clients. This has meant reaching out to each one individually to ask how they’re doing, offering individual programming options, telling them about the services we’re offering, asking what they need and how we can service them.
I have always believed human beings are best under pressure, when they’re truly feeling the heat. Considering our livelihoods depend on ensuring we keep our clients, we are feeling the heat, together, united. I sure as hell would rather be figuring these things out in this uncertain time with a team equally committed to the cause, than be a gym owner on my own without the investment and support from my staff.
As OPEX CEO Jim Crowell told me on a call last week: “Owners need to start thinking about how they’re actually going to care for their clients remotely in a one-on-one way…They need to actually be spending time on these people…What people remember the most about what happened during hard, emotional times is who was there to help them. They need to know you’ll be there when this thing ends.”
If you have 100 members, that’s almost impossible to do without a team of coaches. And considering you probably aren’t 100 percent sure how much revenue your gym is going to be bringing in during the upcoming weeks, maybe even months, it makes no sense to pay those coaches by the hour, as that makes your business even more vulnerable.
As for our owner, Patterson has called just two clients—his financial planner and a client of 14 years, and his lawyer, a client of 16 years, which has allowed him to focus on big picture items, such as delivering booze to each coach’s doorstep on Friday nights, and staying two meters away as he gets the debrief of what’s happening at the gym.
Jokes aside, this brings me to coach compensation through COVID-19.
Like most gyms, our focus is on client retention, as opposed to client acquisition, at the moment.
Of the dozens of small gym owners I have spoken with, some say they will continue to pay their staff as long as they can, but admit they will be in trouble to make payroll should this pandemic continue to keep their doors closed for longer than a few more weeks.
Others are continuing to pay full-time staff, but have let part-time coaches go for now.
They all agree the longer this drags on, the more members they will lose and the harder it will be to continue paying their coaches.
Like most other gyms, we, too, have had a handful of holds from our 300-plus clients, and have reduced some rates in certain circumstances. So far, I haven’t lost any of my 25 clients, however; I did reduce two clients’ rates—a couple who were each paying $265. They were reduced to $200 each for the time being.
Our paychecks will take a bit of a hit. One coach, for example, took home $9,000 in March (we were closed half of March), and since he has now cancelled his specialty program temporarily and reduced a few of his clients’ rate, he will earn closer to $6,500 in April—not where he wants to be long-term, but I don’t know many fitness coaches who will still be able to $6,000-plus this April.
From a business standpoint, because payroll is tied to overall gross revenue, our business doesn’t have to worry about not being able to make payroll, or having to temporarily let go of coaches, like so many small gym owners are going through right now.
What can you do now (in my opinion)
While switching to a new business model entirely takes time, COVID-19 isn’t waiting three years for you to slowly make the changes. In the meantime, the MadLab Group, the business consulting group associated with my gym, suggests doing this:
1. Divide your clients up (based on who has a relationship with which client, and how the client came in) and assign them each a personal coach.
2. Each coach now becomes responsible for looking after their book of clients—for being in touch with them regularly. Keep running your group online Zoom classes, offering at-home programming, equipment rentals and whatever else you’re doing. On top of these services, clients now all have a personal coach in their corner, should they want nutrition advice, individual program design etc—a huge value add for the client.
3. Compensate your coaches a percentage of their clients’ monthly fees—what you can afford, but probably between 25 and 40 percent of the revenue generated from each client of the coach’s clients each month.
As I said from the outset, I’m not a COVID-19 gym business expert.
But I have been coaching in this system for 11 years. It’s the only reason I’m still coaching, and in today’s climate more than ever, it just screams common sense.
Featured image courtesy MadLab School of Fitness