Advertising Strategies for Acquiring New Clients for your Gym Business
By Sean Greeley
If you’re not currently advertising to bring new clients in the door… let me tell you why you should be.
Advertising is awesome. It’s the process of showing off your brand and the value you deliver to the marketplace. And that’s something that YOU as a business owner should take great pride in. In fact, you should fall in love with it.
Only a few years ago, you needed a large budget to learn how to advertise effectively. And most business owners had to factor on losing a lot of money as they learned how to find good media, create a good message and offer, and get things working.
But thanks to the tremendous growth of digital advertising platforms in the last few years… there is virtually no barrier to entry for EVERYONE to become an effective advertiser.
You can start with as low as a 10.00 advertising budget. Test your ad, test your message, test your offer… and you’ll know within hours whether your ad is getting results or not.
You don’t have to lose money. And if you’re diligent about following the steps I’m going to lay out in this article for you… then you’ll shorten your learning curve fast.
Why else should you care about this?
Well here’s the most important reason: While there are dozens of low cost (and no cost) fitness business marketing strategies… advertising is one of the only strategies that you have direct control over (without hoping a partner comes through on promoting you to their database) that holds tremendous opportunity to accelerate your business growth quickly.
And once you’ve got advertising working for you… you can go as fast as you’re able to keep up with onboarding new clients for your business!
Alright, let’s dive in…
There is one question that when answered will allow you to grow your business AT WILL.
“What can you afford to spend in profitably acquiring a new client for your business AND staying cash flow positive in doing so?”
Here’s why this changes EVERYTHING in the growth of your business:
When you can profitably acquire new clients for your business AND stay cash flow positive in doing so… there is virtually nothing holding you back from bringing many new clients in the door and growing to the next level fast.
You’ll generate revenue that allows you to pay off debts, build your savings, raise your personal income, and make continued investments in staff, equipment, a new facility, and more.
But with any great power comes great responsibility.
I DO NOT recommend you flood your business with new clients… UNLESS your business is ready to fully serve those clients and deliver great value to them.
It’s critical to focus on growing at the pace with which you can still ensure quality in the services your company delivers.
Clients must be happy in working with you and your business.
There is no point in growing any faster than that.
Unhappy clients leaving your business will do much more damage than simply having patience with a more conservative (but steady) growth rate over time.
I can’t overemphasize this point enough. Please reread the above section again and heed my advice… or be prepared to learn this lesson the hard way.
Here are three more questions that you need to have a complete understanding of in order to make good advertising decisions:
1. What’s the average client worth to your business?
It’s important you know this number because the more a client spends with your business, the more you can afford to invest in bringing them in the door.
Take some time and look at the total clients your business served in the last 12 months.
Then look at the total revenue generated in the last 12 months.
Divide the revenue by clients served and this will give you the average annual client value.
Once you’ve got clarity on that number, it’s time to look at…
How can you increase your average annual client value?
There are several ways you can increase the value a client delivers to your business. Here are three simple strategies:
A. You can raise your session rates. When was the last time you raised your rates? If you’re not currently generating at least 60-75% gross profit margin on the services you’re selling… then it’s imperative to raise the rates if you want to continue growing. Only with profits can you afford the reinvestment necessary to continue growing your business.
And if you don’t know, gross profit margin is the rate at which you sell a session (or class), minus the cost in labor to fulfill it, divided by the rate at which you sell it again.
Get that number to 60-75%+ if you want your business to make it.
I can’t tell you how many businesses we’ve seen fail because the business owner tried to out market and sell bad margins. Fix the margins and fix your profits. THEN (and only then) does it make sense to bring more people in the door.
And even if you are in those ranges but it’s been more than a year since you last raised your rates AND you’re providing great value to your clients… then it may also be time to look at raising your rates.
B. Sell bigger packages. This one is simple. If you work with the typical overweight adult fitness client, then chances are good it’s going to take them 6-12 months minimum for your client to reach their goals. Yet most fitness professionals focus on selling tiny 10-packs of sessions. Don’t do that. Focus on selling your client what they need and what will truly best serve them in reaching their goals. Most of the time that’s going to be a commitment to the length of time required to achieve their goals, and it’s going to be a while.
C. Add additional product or service offerings to your business. Now fair warning, I don’t recommend you look at doing this until you are generating at least 10k+/month in revenue for your business. Too many business owners run around trying to create “multiple streams of income” when their energy would be best served focusing on growing their core business. However, when you’ve got a decent client base… then it makes sense to look at other ways you can serve the people in front of you. Nutrition coaching and/or supplementation are great options that can make a big impact on your business quickly.
How can you accelerate cash flow with new clients within the first 30 days?This strategy is one that is very smart to use because it instantly changes the economic model of profitable advertising. Simply adding a joining fee to new client memberships (typically an additional 100-200 one-time fee) gives you more cash to invest in advertising while staying cash flow positive with bringing new clients in the door.The joining fee provides cash that can be invested directly into your advertising budget.
Alright, now that we’ve worked through those pieces… here are four steps to putting all these numbers together and then making some good decisions about what you can afford to spend.
1. Once you know what a client is worth to your business, have maximized annual client value, and have taken advantage of opportunities to accelerate cash flow received from a new client in the first 30 days… it’s time to set some advertising goals.
2. Let’s assume a client is worth on average 2,000 per year to your business, you add a new member joining fee of 200, and you can reasonably manage onboarding 20 new clients per month.
20 x 200 (joining fee) = 4,000
Total = 44,000 in annual revenue
added to your business each month at a
growth rate of 20 new clients per month
3. That means you can afford to invest 4,000 in advertising each month (revenue from joining fee) and still be “cash flow positive” in adding 40,000 of new annual revenue to your business each and every month. Here’s how those numbers play out over time:
12 months x 44,000 = 528,000 in annual revenue
4. With these assumptions your advertising GOAL is to then bring in 20 new clients for LESS THAN 4,000 in advertising spend. When you’re able to do this, you have achieved the “holy grail” of advertising and business growth with a negative customer acquisition cost each month for your business!
The days of “spray and pray” advertising are long gone.
Thanks to Facebook, Google, and others… you are now able to “micro-target” almost any prospect you want to reach.
This has forever changed the game in advertising because it reduces wasteful spend.
Knowing WHO you want to reach, WHERE they live (or work) and WHY they buy is mission critical for becoming effective with all advertising efforts.
All consumers are trained to be skeptical of advertising claims.
The market expects you to say nice things about yourself and your business.
Your job is to stand out from the competition. This process begins by crafting a strong company positioning statement.
Your company positioning statement defines how you’re different and why your prospect would be a fool to choose working with anyone but you!
Since 1999, CrossFit Tri-town has helped over 3,987 Fairfield county athletes smash their performance goals and set new PRs.
Unlike overcrowded group training facilities with aggressive programming that can leave you broken and injured, our clients say they most love our smaller group sessions that are customized to your specific fitness level and goals.
For over 17 years, Method Athletics has been trusted by local Scottsdale residents and over 30 LPGA and PGA tour professionals across the USA for providing complete golf conditioning and performance training that will have you performing at your personal best.
Unlike CrossFit gyms and large boot camps that put everyone into the same large group and give you “cookie cutter” workout templates, our private sessions are based on your specific fitness level and goals and give you personal attention to ensure you’ll be playing at your best at any age.
Positioning allows you to stand out in a busy category and this is VERY important.
Advertising creative is made up of several elements, but the three most important are:
A. The Offer – How are you inviting a prospect to move forward in your marketing lifecycle? Are you making a free or paid offer? How do they need to respond to take advantage of your offer? Do they call you or go to your website?
B. Copy – Copy represents your brand voice and message. What type of tone do you have when your brand speaks to a prospect? What type of headline format are you using? What does your body copy look like? Do you use the vocabulary of your prospect?
C. Design and Imaging – Design and imaging are how you “dress up” your ad to go to work… and appearances matter. Make sure your look and feel aligns with your target market and company positioning statement to best showcase your brand.
Once you’ve got your creative sorted, it’s time to…
Media buying is where you can directly influence the success or failure of all your efforts.
Spend too much and it’s tough to get a positive return.
Don’t spend enough and you won’t get your ad in front of the quantity (or quality) of prospects needed to achieve your goals.
But it’s important you understand there are many differences between online and offline media.
On digital platforms, you can start with small budgets and prove the success of your ad before increasing your spend.
Online media advertising includes sources like:
- Google Adwords
- Google Display Network
- Yahoo/Bing Network
- Banner ads
- Email list rental
- And many others…
With offline advertising, you have one shot to get it right before knowing the results of your efforts.
Generally this requires a larger initial investment, but many local print media advertisements are still much more effective at reaching older demographic target markets.
And with the rush to online media by so many advertisers, you can often get print media at a much reduced cost than just a few years ago.
Here are a few offline media sources you should test for advertising opportunities:
- Print newspaper ad
- Newspaper Inserts
- Local magazines
- Local radio
- Local television
- List rental and direct mail
- What else?
Regardless of the media you choose, the BEST advertising results come from consistently tracking, reviewing, and optimizing your advertising over time.
Reviewing your numbers will show the greatest area of opportunity to improve your advertising results.
Here are the metrics you should be watching and tracking with all advertising:
Digital Advertising Metrics:
- Total invested
- Total clicks
- Cost per click
- Total leads
- Conversion %
- Cost per lead
- Total sales
- Cost per sale
- ROI (return on investment)
Offline Advertising Metrics:
- Total invested
- Page views (for driving to web)
- Total leads
- Conversion %
- Cost per lead
- Total sales
- Cost per sale
- ROI (return on investment)
In addition to tracking, you should also be…
Testing is often where the biggest breakthroughs in your marketing and advertising results will come from.
What you THINK may work best will often be proven wrong. The ONLY opinion that matters is the market’s opinion.
Keep testing until you have “won the game” and are generating new clients at a negative acquisition cost.
Here are the most important elements to test:
- Offers – How can you vary this in branding, price point, etc.?
- Media – Once you’ve got a good offer working in one media, test it in another where you can find the same targets.
- Targeting – Can you narrow your target? Do you need to broaden it? Redefine it?
- Copy – Does your messaging need to be adjusted?
- Design and Imaging – Does your imaging represent your brand and connect with your target?
Bringing this all together… advertising is awesome.
There is no barrier to entry. Every fitness business owner can (and should) be using advertising for profitably acquiring new clients into their business each month.
While there are dozens of low cost and no cost fitness business marketing strategies… advertising is one strategy that holds tremendous opportunity to grow your business quickly.