Strap in, because we’re about to go on a wild ride!
You’re about to see how to increase your gym profits 3-5X. So you can easily cover your costs… afford more to acquire customers… and pay for the best staff and facilities.
Ultimately, more profit gives you FREEDOM and SCALABILITY.
This is the ultimate secret to compound growth that nobody teaches you.
Are you ready?
Then let’s begin. Pay attention. Turn off any distractions. Take notes and STUDY this newsletter.
You must know two numbers to build a sustainable coaching or consulting business.
Those are
1) your Lifetime Client Value (LTV), and
2) Your Customer Acquisition Cost (CAC)
Your Lifetime Client Value (LTV) is the revenue a client pays you for the duration you work with them.
For example, if the average client invests £200/month to work with you, and you keep them for 6 months, you get an LTV of £1200.
(£200 x 6 = £1200)
Your Customer Acquisition Cost (CAC) is the amount of money you invested to ‘buy’ that customer.
For example, if you invested £100 into a Facebook Ads campaign, and generated 10 leads and two sales – your CAC equal £50. You invested £50 to buy each customer.
(£100 divided by 2 new clients = £50 cost per client)
Following this example, you invested £50 to gain a client. You made £1200 from that client, over a 1 year period.
With me so far? Good.
Without knowing these critical numbers growing your consulting business will become very difficult.
How will you know your profit margins?
How will you know what you can afford to budget for advertising?
And most important, when you know your LTV then you’re able to increase it.
The key to increasing the profitability of your coaching business is to increase your LTV.
It’s far less about getting more clients.
It’s more about increasing the lifetime value of the clients that already know, like and trust you.
When you increase your Lifetime Client Value – and at the same time reduce your CAC, this changes the game. And you quickly get on the fast track to being a millionaire fitness entrepreneur.
A low CAC and a high LTV means you can invest far more than your competitors to get new clients. And you’ll make way more money from the clients you already have.
With a higher LTV per client, you can:
- Invest more in paid ads to grow
- Invest more in your existing clients with new bonuses
- Invest in prizes and incentives to get more referrals
- Invest in delivering a better experience for your clients (new equipment, or more social events)
- Invest in staff members to create time and location freedom
- Keep more profit to secure your business during hard economic times
So doesn’t it make sense to make increasing LTV your preeminent strategy for success?
The Life Time Value Formula
The great news is I’ve created a specific formula for increasing the LTV of a fitness coaching client.
There are 4 pillars that make up the LTV. Increasing any one of these will add exponential profit to your bank account.
But before we get into those, you must determine your “Baseline Life Time Value”.
This is the equation we used earlier:
Baseline LTV = (£££ client pays per month) X (number of months average client stays with you)
For example:
Baseline LTV = £200 X 6 months
Baseline LTV = £1200
Calculate this number for your current client base.
If you’re unsure of your average retention rate in months, then default to the lowest amount of time most clients stay with you.
If you know for a fact that the majority of your clients stay AT LEAST 3 months, but you’re not sure if most of them last more than 6 months, then use 3 months as your baseline.
Then, there are 4 ways to maximize your baseline client value:
1. Increase Transaction Value
2. Increase Retention Value
3. Increase Upsell Value
4. Increase Referral Value
Let’s look at each in turn.
How to Increase Transaction Value
Transaction value refers the amount of money you charge.
This is the easiest way to increase the LTV formula. Just charge more.
For example, if we increased our price to £250/month (and changed nothing else) then we now make £1500 after 6 months.
It may not sound like much. But when you multiply that across 10 clients, you’re making an extra £833 per month.
So the question becomes, if raising your fees is so simple… why do coaches find it so hard?
We can talk about that in another newsletter (its a deep, deep rabbit hole!). But for now, please consider raising your fees just 10% for new clients coming in.
If you currently charge £100 per month, raise to £110. It’ll make a huge difference to your bank balance in the long run.
If you need to add more value into your service to ‘justify’ the raise, so be it.
But to be honest? You’re likely overdelivering way more value than the £100 you’re charging now anyway.
Just add 10%. Do it!
How to Increase Retention Value
The second pillar of LTV is retention value.
Retention value refers to increasing the LTV by keeping a client for longer.
How do we keep clients longer?
It comes down to two things:
First, getting the results they were promised.
And second, receiving a great experience.
Here’s what I mean:
Let’s say you go to a steak house restaurant.
You order a medium-rare juicy steak.
10 minutes later, they bring it. It tastes as good as you would expect.
Brilliant.
However…
When you arrived at the restaurant, there was litter outside. It looked grubby.
The waiters never smiled when they greeted you. There were no cutlery laid out on the table when you sat.
After your meal the waiters never offered you desert, nor seemed to care if you were satisfied.
Overall, you might have received the result you wanted (the steak cooked to your liking), but the experience was poor.
What happens as a result?
Even though you got what you wanted, you likely won’t go back there.
That restaurant just destroyed their lifetime client value. All they earn from you is the £40 for that one steak.
Whereas, if you become a loyal customer for the next 10 years, buying one meal every two weeks, they could have generated at least £960 per year from you.
This is what you face with your own clients. Would you rather earn “£40”, or “£960” from each one?
The lesson is that you must give great results and an experience when you deliver that result.
Think of it like this:
“Provide the results the customer expected, along with an experience they didn’t.” – Justin Devonshire
This will blow them away and they’ll feel certain in your business.
Offer a great service and a strong relationship. Thats why people stay.
So let’s go back to our example to see the change…
Now we make these changes and increase the number of months a client stays on average from 6 months to 12 months.
Here’s the new equation, if we made that change:
£250 x 12 months average retention = £3000
Yes, you doubled the amount of money you earn per client.
But we’re only half of the way there. We have two more pillars you can improve to increase your LTV per client.
Next, let’s increase the client ‘Upsell Value’.
How to Increase Upsell Value
If your client buys more stuff, we make more money. Simples.
(But are you DOING it?)
This is why offering upsells is a critical way to increase your profits. And when done right, it helps your clients get better results.
A lot of trainers have a hard time offering upsells. They don’t want to be ‘salesy’. They don’t want it to look like it’s ‘all about the money’.
So the ethical and professional way to add upsells is to think about:
1) what extra products / services would help the client get the results she wants?
2) Where could I add convenience? They are going to find these products elsewhere anyway. By offering them in-house, its easier / faster for her to find them. Plus, she can rest assured she’s getting only the products that you recommend.
So what can you offer that would either increase the results your clients get, or will improve their experience?
The upsells I recommend you stock include:
- Trusted supplements
- High-quality workout gear and apparel
- Online / hybrid coaching (to help them in the 165 hours per week they are NOT in your gym!)
- Drinks and snacks they can consume before / after their workouts with you
The next step to successful upsells is WHEN you offer them
There are 2 places to offer upsells for maximum effect
The first is a ‘Point of Sale’ Upsell (PoS Upsell).
This is the upsell McDonalds made famous. Asking “Would you like fries with that?” when you order your meal adds millions of dollars to their revenue every year.
You can apply a similar process.
If you take money in person, or over the phone, then use a simple “Do you want fries with that?” script.
For example, when they’ve just purchased or given you their card info, ask:
“Hey, would you also like to get XXX, which helps you do ZZZZ. Because you’re a new customer we want to reward you with 25% off the price today only...”
Don’t overthink what to add. Just offer something – anything!
Plus add the urgency / deadline that they must get it NOW to claim the discount.
Here’s a crazy example of the power of a PoS upsell:
I’m mentoring a trainer who runs a men’s fitness bootcamp.
He does sessions outside, and had NOTHING extra to offer his clients.
So I advised him to ask the clients if they’d like to pay-in-full for 3 months.
(No discount nor incentive whatsoever, apart from convenience of having no extra payments, I suppose.)
Amazingly, 4/10 clients said, “Sure“.
That meant a huge surge in cashflow every month, which could them be used towards extra advertising.
Whats the risk of testing it in your business today?
The second upsell is what I call a ‘Progress Review’ upsell.
Give regular progress review sessions to your clients. At least one per month.
This could be an in-person weigh-in and sit down chat with a coach. Or it could be over the phone or Zoom (in person is always best).
Use this meeting to assess the client’s progress and how they feel about the service overall. If you identify gaps in their progress you can then offer additional services or products that could help them get back on track.
For instance, if a client says they don’t feel as capable of doing the exercises as the other clients in the group, offer them a pack of 3 personal training sessions to get them up to speed.
If they are not getting the protein they need because of a busy schedule, offer them a protein supplement.
If they are going through some personal challenges, offer mindset or performance coaching (if you’re relevantly qualified).
If they are struggling with nutrition, offer a more customized / personalized macro plan.
If they’re losing motivation, offer an Accountability program.
And if everything is going great but they could use a new challenge, offer them an advanced program to get “next level” results!
There’s always something else to offer. And there’s no harm in inviting them to try it. You’re not forcing it on anyone.
But as they say, only birds with open beaks get fed. If you don’t ask, you won’t get.
Another great point worth mentioning is that this strategy also dramatically improves your client Retention Value. Because often when clients fall behind on results they’ll keep it to themselves for fear of being judged. Then they phase out slowly. This method stops that happening.
You may be wondering, how do you quantify the Upsell Value of a client?
It’s pretty simple: at the end of each month, add up all the revenue you generated from upsell products and services alone.
Then divide that amount by the number of active members you currently have.
This gives you an average amount of upsell revenue per client.
Let’s do the example:
We add an upsell offer of a supplement bundle, for £100. This is offered on the PoS.
Then we add a “Hybrid Accountability Coaching Package”. This gives them personal accountability check ins 3x per week, plus customized nutrition to their exact macros. And we throw in a 1-1 30 minute PT session once a month too.
The client pays an extra £150/month for this.
Let’s run the numbers:
You have 100 active clients, paying a baseline of £250/month.
Now, 10% of your clients accept the offer for a supplement bundle. For bonus points, make it a recurring subscription where they get a new supplement stack each month.
This means 10/100 clients are now paying you £100 extra per month
10 clients paying extra £100 = £1000 per month extra revenue.
Now lets say 5% of your client base accept the Hybrid Coaching Offer for an extra £150/month.
5 clients paying extra £150 = £1500 per month extra revenue.
Total extra revenue from upsells = £2500
£2500 divided by total client base (100 clients) = £25 upsell value per client on average each month.
We now multiply this by the duration of their life time with you (12 months in this example)
£25 x 12 = £300
Now you know that on average, each client is worth £300 more to you over their lifetime.
Where does this bring our Average Client LTV so far?
Now, your average LTV would equal £3300 over 12 months.
And finally, we can increase the number of referrals you generate.
Here’s where things get really interesting…
How to Increase Referral Value
Think about this:
Right now your average client is getting great results and experience with you.
We increased their base fee from £200/mo to £250/mo (Transaction Value)
We increased your average Retention Value from 6 months up to 12 months.
Then we increased the average Upsell Value per client by £300.
We’ve taken the client LTV from a baseline of £1200, all the way up to £3300.
Here’s where we “quantum jump”.
But first, let me ask you something.
Do you think its possible to get your client to refer JUST ONE new client in that 12 month period?
No problem right?
Here’s what’s crazy…
If you get just one successful referral from that one customer in the 12 months they’re with you, you increase the average LTV of the original client by 100%
Because if one £3300-value client brings you one more client, whose also worth £3300 on average….
That brings the Lifetime Client Value to a whopping £6600!
You implemented a few simple systems that took your average customer value from £1200….to £6600.
And you’ve more than TRIPLED your average revenue per client (you’ve actually 5Xd it).
With ZERO new clients (except the referrals that came organically)…
Without increasing your advertising spend…
Without hustling harder…
“The overlooked secret to profits is that 90% of extra potential income is hiding amongst your existing client base” – Justin Devonshire
The results are jaw-dropping when you see this across your whole client base.
Let’s compare two scenarios to see the magnitude of difference in action:
Trainer A: starts up his bootcamp in January.
He has a baseline LTV of £1200. He implements none of the strategies I’ve given you here today (what a loser!)
He gets 50 clients this year. So by December he’s made a gross of £60,000. Not bad.
But, what about Trainer B (YOU!)
Trainer B also stars in January. He gets 50 clients. But he DOES implement the strategies to increase LTV.
His gross revenue from 50 clients by end of the year is £330,000.
Trainer A makes £60k with 50 clients.
Trainer B makes £330k with 50 clients.
Which would you rather end up with Christmas?
But let’s look even deeper.
Because trainer B focused on REFERRAL VALUE – and gains 1 referral per client on average, he ends the year with 50 additional clients.
So going into Year 2, Trainer A still has 50 clients, but Trainer B has 100 clients.
Which means, even if both trainers get ZERO new clients from advertising, Trainer B still ends up doubling his client base to 200 by the end of year 2.
(100 clients referring 1 more client each = 200)
So by end of year 2, Trainer A makes the same £60,000 again.
But Trainer B now makes £660,000.
By the third year in business, Trainer B will gross £1.3 MILLION.
(with ZERO outside advertising).
Are you seeing the power of LTV now?
Can you see how it’s a lot cheaper to make more money from current customers than from new ones?
Can you see the compounding effect this has over 12, 24, 36 months?
Final question:
What would happen in your business if you implemented these systems today?
Here’s a quick recap of action steps:
Steps to Increase Your Client LTV:
1. Can you increase your prices by just 10%?
2. Write down 3 ways you can increase client retention?
I have 7 Pillars of Retention that we build our business on to maintain a 97% retention rate. Message me to find out more about them!
3. PoS Upsells
What can you offer to enhance the client’s experience of using the product, or give them faster results?
4. What is your POS script? (think, “Do you want fries with that?“)
5. Progress Review Upsell
What are the sticking points your clients experience? What solutions could you give them the opportunity to try?
8. What is your script / template for this presentation?
9. Tracking
How are you tracking your upsell % and total revenue amount?
10. Generate Internal Referrals
What are you doing each week to help your customers refer new people?
11. External Referrals
What are you doing to create promotional partnerships with similar providers and create customers-swapping strategies?
12. Referral Tracking
How are you tracking the number of successful referrals each month? Who are your top referrers? What are you doing to reward them and condition that behaviour?
What’s Next?
Tracking these key metrics is only the beginning.
You also need to keep a close eye on your profit margins, by tracking how much it costs you to serve your clients & deliver the service.
If you can generate a lifetime profit per customer of at least 3-6 times your CAC, you’re looking good on that front.
The key is fast and massive action.
If you want the fastest results with this…
Gym owners and PTs inside my exclusive business Mastermind get my full systems and checklists , templates and scripts to action all these steps within days.
To learn how we can add £5000 – £10,000 per month to your recurring revenue in 90 days or less with my personal guidance – GO HERE <<
