The Game with Alex Hormozi Average Cost & Revenue per Member -- Industry Averages | Ep 141
Aug 1, 2019
This discussion dives into the stark profit contrasts among small, medium, and large gyms, revealing that higher prices lead to larger profit margins. Alex emphasizes the importance of strategic pricing and discourages discounting as a harmful trend. He suggests that gym owners can determine their revenue by understanding the financial metrics, insisting that math, while tedious, is essential for success. By leveraging data, owners can significantly improve profitability and effectively scale their businesses.
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Pricing Drives Gym Profit
- Gym profit hinges primarily on pricing, not member acquisition or churn.
- Higher gym prices correlate directly with higher profit margins, regardless of gym size.
Small Price Increases, Big Profits
- Small profit increases per member significantly impact overall profit.
- A $10 price increase per member can represent a substantial overall profit boost.
Avoid Discounts, Price Like Leaders
- Avoid discounts; leading gyms rarely use them.
- Match your pricing to industry leaders if you want similar success.