Secondary spend in a gym is where the margin actually is

3 days ago
3 min read

Updated: 2 days ago

Introduction

Gym membership is a heavily competed, price-anchored product. Everybody in the area is advertising a monthly figure, and the pressure on that figure is permanent and downward. Secondary spend — personal training, classes, physiotherapy, nutrition, retail, guest passes — is neither price-anchored nor easy for a competitor to copy, and it carries better margin.

Operators nonetheless spend nearly all of their attention on the membership number. The result is a business competing on the one line where competition is fiercest while leaving the profitable lines to happen by accident.

1. Secondary spend in a gym should be measured separately

A single revenue figure hides the part of the business that actually earns.

Split the revenue lines

Membership, personal training, classes, retail, other. Monthly, as five numbers rather than one. Most operators have never seen it laid out this way. Add a column each month and the pattern appears within a year.

Calculate secondary spend per member

Total non-membership revenue divided by active members. That single figure is the one to move, and a plausible target is a quarter of membership revenue again.

2. Personal training is the largest line and the worst managed

It is usually left entirely to the trainers, with predictable results.

Make the introduction part of joining

A complimentary session in the first fortnight, booked at sign-up rather than offered vaguely. Conversion from that session is far higher than from a poster. Put the booking on the joining form itself.

Decide the commercial model deliberately

Rent-a-space, revenue share or employed trainers produce very different incentives. Whichever you choose, know what the gym earns per session. An unmanaged rent-a-space model usually earns the gym least.

3. Classes drive both spend and retention

Members who attend classes stay materially longer, which makes this two levers at once.

Charge for the specialist ones

Not everything needs including. Small-group specialist classes support a fee and fill otherwise quiet studio time. Keep the core timetable included so the membership still feels complete.

Watch attendance per class, not per timetable

A class with four people is costing you an instructor and a room. Cut or move it rather than leaving it on the timetable out of habit.

4. Retail should be small, obvious and functional

Gym retail fails when it tries to be a shop.

Stock what people forgot

Water, a shaker, a towel, a resistance band. Three or four items at the desk, not a merchandise range. Anything that needs a size is usually a mistake.

Price for convenience, not for margin percentage

The customer is buying because they are standing there without one. Reasonable pricing protects goodwill and still earns well on cost.

5. Ancillary services fill the quiet space

Most gyms have hours and rooms earning nothing.

Rent space to complementary practitioners

Physiotherapy, massage, sports therapy. Rent is straightforward income and the practitioner brings their own clients through your door. Some of those clients join.

Use off-peak capacity deliberately

Daytime hours, corporate arrangements, older members' sessions. The equipment is already paid for and sitting idle. Daytime capacity is the cheapest growth a gym has.

Conclusion

Split your revenue into membership, personal training, classes, retail and other, look at it monthly as five numbers, and calculate non-membership revenue per active member — that figure is the one worth managing, and a quarter of your membership revenue again is a realistic place to aim.

Book a complimentary training session at the point of joining rather than advertising one, know exactly what the gym earns per PT session under whatever model you use, charge for specialist small-group classes and judge every class on attendance rather than leaving it on the timetable, keep retail to three or four things members forgot, and rent your quiet rooms and hours to practitioners who bring their own clients with them.