Maximising Profitability: Financial Metrics Gym & Studio Owners Need to Track

Running a successful gym or fitness studio goes far beyond packed classes and post-workout selfies. To truly maximise profitability and scale sustainably, you need to keep a close eye on the numbers that drive your business forward. These metrics provide valuable insights into the health of your business and enable data-driven decision-making.

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Why These Metrics Matter

If you want to grow your business profitably, it is critical to have a strong understanding of your financial metrics. 

• Measure the health of your business: Metrics like Client Lifetime Value and Churn Rate offer a pulse check on your business. If your churn is rising or your revenue per client is dropping, it’s a red flag that something’s not working.
• Guide smarter decisions: Want to invest in marketing? Knowing your CLV helps you determine how much you can afford to spend acquiring new clients without losing money.
• Improve retention & increase profits: Small improvements in churn or client value can lead to major increases in long-term revenue. Harvard Business Review reports that increasing customer retention by just 5% can increase profits by 25% to 95%.
• Stand out in a competitive market: With more gyms and studios competing for attention, financial intelligence gives you a strategic edge and helps you build a stronger, more engaged community.

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Client Lifetime Value

Client Lifetime Value (CLV) lets you know the total revenue that your client generates from the time they sign-up to your gym or studio. This helps you answer big questions like:  

• How much should I spend to acquire a new member? 
• Which services are keeping clients engaged the longest?
• How long does a member stay with me?

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To calculate CLV, all you need to do is multiply your average revenue per client by the average client lifespan. 

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CLV = Average Revenue per Client × Average Membership Duration

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Here’s a simple example to show help - If a client spends an average of €100 per month as their monthly membership and remains a client for 12 months, their CLV would be €1,200.

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CLV = €100 × 12 = €1,200

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What can you do to improve your CLV?

• Boost client retention: Keeping your clients engaged is key to boost your retention rate for your fitness business. You could achieve this by offering personalised exercise programs and building a strong community. 
• Upsell and cross-sell: Can you get your PAYG members switched over to memberships? Do your members buy your merch? By getting your members to buy additional services or products, you can easily boost the average revenue per client. 
• Referral Programs: Encourage your clients to bring a friend or family member to their next class. Offer incentives for successful referrals to boost client acquisition and increase CLV while building an engaged community.

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Churn Rate

In simple terms, churn rate can be defined as the percentage of clients who cancel their membership or do not renew their packages within a given period of time. A high churn rate means you're constantly spending to replace lost clients, which eats into your profit margins.

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To calculate churn rate,  you divide the number of clients who left in a given period by the total number of clients at the beginning of that period. To show it as a percentage, simply multiply the answer by 100.

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Churn Rate = (Clients Lost During Period / Total Clients at Start) × 100

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For example, if you had 100 clients at the start of March 2025 and 10 clients cancelled their membership in March, your churn rate for March 2025 would be 10%.

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Churn Rate = (10 / 100) x 100 = 10%

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What can you do to reduce your churn rate?

• Improve your client experience: Provide a seamless and welcoming experience for every client (especially new ones!). With LegitFit’s marketing suite, you can simplify this process to give your clients a personalised experience.
• Monitor client engagement: Track metrics like bookings and attendance to get a better understanding of your client’s health score and take action on with automated messages to bring “at risk” clients back into your gym or studio.
• Get client feedback: The average industry churn rate for a gym or studio is between 20-25%. Getting regular feedback from your clients can help you to enhance your client experience.

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Average Revenue Per Client

Average Revenue Per Client (ARPG) gives you an average of how much money each client brings in. It’s a great way to track the impact of pricing and helps you identify areas of growth to increase revenue.

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To calculate your gym or studio’s ARPG, divide your total revenue by the total number of clients. 

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ARPG = Total Revenue / Total Client Number

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Imagine if your fitness studio made €10,000 in revenue for March 2025 and your total client numbers were 250. Your average revenue per client then is €40.

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ARPG = €10,000 / 250 = €40

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How do you increase your ARPG?

• Review your prices: Regular review of your prices is a good strategy to always ensure you align with market trends and your client’s expectations. A great way to show value is to offer tiered pricing options so you can cater to a wider market.
• Promote your high-value offerings: By showcasing your most profitable services, you can very easily increase your ARPG. To get clients to take up the offer, you can also offer special discounts or trial periods for these offerings.
• Create a loyalty program: By rewarding your loyal clients with special discounts or branded merch, you are creating a sense of community among your clients. This incentivises repeat business and increases your overall ARPG.

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Other Key Metrics To Track

Average Membership Duration

Although this metric is technically a competent of CLV, it is valuable to track on it’s own as well. It reflects the overall client satisfaction and is very useful for forecasting. A study from IHRSA shows that on average, a member stays with a traditional gym for about 6 months. However, when it comes to a boutique gym or studio, this metric jumps to 12 months which has a significant impact on your profitability.

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Client Acquisition Cost

In simple terms, Client Acquisition Cost (CAC) shows how much it costs to bring a new client to your gym or studio. This is a key metric to track if you are running any marketing campaigns or ads or even attending events. 

Note: When paired with CLV, you can get a complete picture of your return on investment!

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Net Promoter Score

While not a financial metric, Net Promoter Score (NPS) gives you a qualitative gauge of how satisfied your clients are and can help measure client loyalty. Happy clients will stay with your gym or studio for longer and can help improve all other metrics over time.

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If you're not measuring, you're guessing. By tracking the key metrics outlined above, you can be proactive and not reactive when it comes to growing your fitness business. With LegitFit’s built-in tools for reporting, retention and engagement, you have everything you need to help you maximise your revenues and growth easily.

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