Whether a gym is for sale, up for acquisition, struggling and in need of a turnaround, or poised for its next level of growth, the first step in evaluating the opportunity is always the same: we look at the financial reality of each member.
This boils down to two numbers that often tell us everything we need to know about the health of a gym business:
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Acquisition Cost per Member (CPA)
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Revenue per Member (RPM)
If you understand these two metrics and how they interact, you’ll know where your gym stands—and more importantly, what it’s going to take to fix, grow, or sell it.
1. Acquisition Cost per Member (CPA): How Much Does It Cost You to Get a New Member?
Your CPA is the total marketing and sales expense required to get one paying member through your doors. This includes:
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Paid ads (Google, Facebook, IG, etc.)
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Agency or creative fees
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Software/tools used for marketing or lead capture
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Staff costs tied to converting leads (salesperson commissions, front desk wages)
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Promotional discounts or free giveaways
Example:
You spend $3,000 in one month on marketing and generate 60 new members.
Your CPA = $3,000 / 60 = $50 per member
The Common Problem:
A lot of gyms think they’re doing well because leads are coming in and memberships are being sold—but they’re losing money because CPA is higher than RPM. That’s a treadmill you don’t want to be on.
2. Revenue per Member (RPM): How Much Does Each Member Bring In?
This is the average monthly revenue generated from each active member. It includes:
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Membership dues
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Personal training
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Supplements or merchandise
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Class upgrades or premium packages
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Other ancillary services (tanning, massage, recovery rooms)
Example:
You generate $20,000 in monthly revenue from 250 members.
Your RPM = $20,000 / 250 = $80 per member
Why These Two Numbers Matter So Much
Let’s say your CPA is $100 and your RPM is $80. On the surface, that doesn’t look bad. You “earn back” your acquisition cost in 1.25 months.
But here’s the critical question:
How long are those members staying?
If your average retention is only three months, you just brought in $240 in revenue per member, but spent $100 to get them. Factor in overhead, payroll, and debt service, and you’re in the red—despite “good” sales numbers.
This is why we look at these two numbers first—before examining staffing, systems, or aesthetics—because they expose the engine behind your gym’s success or struggle.
Case Study: What Happens When This Goes Wrong
A boutique studio reached out to us after months of “doing everything right”—Facebook ads, compelling offers, a modern space, and charismatic instructors.
They were acquiring members at a $120 CPA and had an RPM of $85.
Members were dropping off after 3 to 4 months. Despite their best efforts, they were losing money on every new member.
No amount of great classes or smiling staff could fix that.
How We Fix It: Developing the Right Strategy
Once we identify these metrics, here’s how we build a roadmap to turnaround or scale:
🔹 1. Lower the CPA
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Improve lead-to-tour and tour-to-sale conversion rates through better training
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Improve targeting and message relevance in paid ads
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Test high-leverage, low-cost marketing like referral campaigns, influencer partnerships, or corporate outreach
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Create a field marketing rep program to build local presence
🔹 2. Raise the RPM
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Introduce or repackage personal training, small group training, or semi-private sessions
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Upsell supplements, branded apparel, recovery services
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Review your pricing structure and positioning. Are you charging what you’re worth?
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Add back-end offers or continuity-based services (nutrition coaching, online training, etc.)
🔹 3. Increase Member Lifetime Value
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Focus on onboarding systems that increase engagement and commitment
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Offer milestone rewards (3-month, 6-month, 12-month retention gifts or challenges)
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Build community through social events, accountability programs, and ambassador incentives
How This Applies in Different Scenarios
Selling a Gym
Buyers want to know that the business they’re acquiring doesn’t lose money on every new member. If your CPA is low and RPM is high, you have leverage—and possibly a very salable asset.
Buying a Gym
If you’re looking to acquire, these metrics will tell you whether you’re walking into a goldmine or a grenade. CPA and RPM are your first due diligence filters.
Turning Around a Gym
Before investing in better signage or rebranding, you need to fix the unit economics. If your customer acquisition system is broken, nothing else matters.
Growing to the Next Level
If you’re already profitable, understanding your CPA and RPM allows you to scale safely. You can now project growth with confidence, invest in advertising, or even open new locations.
Final Thoughts: Metrics That Matter Most
There’s a lot to evaluate in any gym business—leases, payroll, staffing, programming, competition—but before you go there, ask:
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What does it cost me to get a new member?
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What do I earn from each member, and for how long?
If you can’t answer those questions, or if the answers make you uneasy, now is the time to fix it.
The good news? These numbers are completely within your control.
And when you get them right, everything else gets easier—from marketing to member experience to profitability.
Need help building systems, improving your facility, or turning around your gym business? Contact Jim here.
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Is Your Gym in Need of a Boost?
Whether you’re facing declining sales, need a fresh marketing strategy, require a complete business turnaround or ready to start a new gym, we’re here to help. With over 25 years of industry expertise, we offer a free initial consultation to explore solutions tailored to your unique challenges. Don’t wait—contact Jim Thomas at 214-629-7223, or gain immediate insights from our YouTube channel. Connect with us on LinkedIn. EMAIL NEWSLETTER. Join for FREE.
Meet Jim Thomas
Jim Thomas is the Founder and President of Fitness Management USA, Inc., a premier management consulting, turnaround, financing, and brokerage firm specializing in the leisure services industry. With over 25 years of hands-on experience owning, operating, and managing fitness facilities of all sizes, Jim is an outsourced CEO, turnaround expert, and author who delivers actionable strategies that drive results. Whether it’s improving gym sales, fostering teamwork, or refining marketing approaches, Jim has the expertise to help your business thrive. Learn more by visiting his website or YouTube channel.
