Are Gyms Failing or Thriving? Five Takeaways from “State of the Industry” Fitness Report

January 4, 2023 by
Photo Credit: CrossFit, LLC.
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Since its inception, CrossFit has evolved to try and meet the needs of athletes and keep up with the ever-changing fitness trends. However, as most know, it takes a lot to keep a gym afloat and many factors come into play when it comes to overall success. Which is where Two-Brain Business “State of the Industry” report comes in. 

Two-Brain Business is a mentorship company that works to increase the success of gyms, including CrossFit affiliates. It also puts out reports periodically on how the industry is fairing by using their own data with the addition of other sources like Wodify, TeamUp, and PushPress. In this third edition of the “State of the Industry” the company collected qualitative data from Aug. 16 to Sept. 1, 2022 from 10,657 gyms worldwide.

As with any industry it’s always a good idea to take stock of where things stand and especially for CrossFit affiliates it can be helpful to see the latest trends both positive and negative in the fitness industry. 

Here are five key takeaways from the report: 

  1. Marketing Plans Show Profitability: Out of the gyms surveyed 81% of them run ads, according to the report. The most successful gyms had a marketing plan often with paid ads and other funnels. The majority of these gyms have found that they have to do something other than “waiting and hoping” to obtain and maintain members. 

“This is a massive improvement from five years ago, when “marketing” was often ignored and sometimes criticized,” said Chris Cooper, the owner of Two-Brain Business, in the report. 

Which also found on average CrossFit gyms acquired 22 leads per month. And regardless of how the gyms generated leads they all are “getting better at attracting potential clients to their website.” 

  1. Offering Nutrition Coaching: While many gyms offer personal training, there’s been a much bigger interest, as of late, in nutrition coaching. So, it’s no surprise that CrossFit gyms topped all gyms, with 73% offering the service.

“This is a good step forward; even in 2016, when we started posting podcasts about nutrition coaching, fewer than 10 percent of all CrossFit gyms listed a separate service,” said the report. 

On the flip side, however, the nutrition service hasn’t translated into more revenue. A reason for this might be CrossFit and other gyms offering a hybrid membership that includes nutrition and fitness coaching at one price. 

“Gyms in all categories could take steps to increase their nutrition revenue. On average, all gyms generate just 5 percent of revenue from nutrition coaching, and this number is down from 6.4 percent in 2021. It’s a clear area of opportunity,” said the report. 

For CrossFit specifically, the report found just 4% of revenue from nutrition coaching. This could be a potential spot for big profitability and something CrossFit gyms should consider. 

  1. Average Retention is Too Low: The industry average length of engagement or LEG is 7.8 months, which the report says is much too low. While there isn’t a breakdown by gym type, the report includes some habits the most successful gyms offer.
    1. They have a consultative process instead of a free trial class. 
    2. They make every client a prescription that includes a 1:1 on-ramp period but varies in delivery after the first 90 days. 
    3. They constantly track client progress, update their prescriptions and show clients the plan for the next 90 days. 
    4. They consistently get results for clients and share their clients’ success stories. 

And lastly, the community and culture aspects are “present but not measurable.” 

  1. Full vs. Part-time Employees: The report found the average number of full-time staff at a CrossFit gym is 1 and is part of an ongoing question for affiliates as they decide to bring on part or full-time coaches. The report also found the average number of part-time staff at a CrossFit gym was 6. 

In September 2022, Morning Chalk Up conducted a survey in an affiliate owners forum asking gym owners how many full-time coaches they have, among other full-time staff questions. 

The results showed 113 out of 190 owners said they didn’t have a single full-time coach. And another 33 of the respondents said they had just one full-time coach. Experts in the industry agreed that in order to have long-term sustainability and profitability full-time employees are essential. 

“There is definitely a sweet spot for the number of employees in a business: too few and your staff members get burned out and lose energy. Too many and your team members lose alignment, sometimes with declines in quality of service,” said the report. 

“In our survey, the numbers varied widely, from “I’m the only person working at my gym” to “we have 14 part-time coaches doing 1-2 classes per week each.””

  1. CrossFit HQ Approval: The last few years have brought about a lot of change at CrossFit Inc. including structural changes to the Games seasons in 2021 and 2022. In addition, top executive Eric Roza, the former Chief Executive Officer after Greg Glassman, stepped down from the position to board chairman. 

Despite this and many other newsworthy shake ups, 77% of gym owners in the CrossFit category currently an affiliate approve of CrossFit Inc.’s direction, according to the report. 

“As a CrossFit aficionado, I love tracking what HQ is doing. With so much upheaval in the ecosystem over the last two years, I wanted to get a real sense of how the affiliate community feels about the brand,” said Cooper. 

Cooper adds, a 77 percent approval rating from affiliates “seems like a low score.” However the figure is actually slightly higher from 2021 when the approval rating was 75 percent. 

The bottom line: There are a number of factors that come into play when it comes to running a successful affiliate, and sometimes it might mean changing your normal regimen and being open to new strategies. 

A link to the full report can be found here.

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