More BJJ Leads Is Not The Answer To Your Problems, This Is

I do a year-end review with after each December with many of my clients and it often reveals some hard truths. 

Most of my clients pay me to get them leads, but the final numbers rarely show that leads are the problem.

Instead, it’s often deeper than that, and something that happens after the lead has submitted a form.

Tracking important KPIs is the first step in exposing the bigger issue.

That’s because it’s easy to blame the lack of your gym’s success on generating new business, when in actuality you have another issues, like a “hole in the bucket.”

Let’s explore.

The Hole In The Bucket Problem

There are two main problems I often uncover when doing a year-end review. The first is a retention problem, or a ”hole in the bucket.”

The analogy is of pouring water into a leaking bucket. Without fixing the leak, you’ll never fill the bucket. You’ll just have to keep pouring in just to maintain water in your bucket.

The same goes for members. If you have a retention problem, meaning too many people are leaving every month, you’ll never be able to grow.

You’ll have to keep getting more leads just to stay at the level you’re at.

At first glance, this could appear like a leads problem, because if you don’t get more leads you’ll be bleeding money every month.

 But, if you plug the hole, and are able to keep more members, then your leads will actually help you grow.

The first step is to identify the churn problem you have by tracking cancellations each month, then engaging strategies to reduce turnover.

An acceptable benchmark is 5% churn every month, but 3% is better.

Low Closing Rate

The seconds problem is a sales problem. Gym owners often don’t want to come off too aggressive when attempting to close a new member, so they rely on the trial class experience alone to do their selling.

But this often falls short.

Each person who comes into your gym has a specific reason they are there. Without first, identifying that reason, then showing them how your gym will create value around it, you’ll struggle to consistently close new members.

Again, the biggest part is tracking your conversion rate in the first place. Many gyms I’ve worked with linger around a 20% conversion rate of total leads.

With such a low rate, yes you would need more leads in order to grow.

 But, if you could increase that rate just 5 or 10%, with only 30 leads per month you would close 2 or 3 more members each month.

That equals thousands of dollar over the lifetime of the memberships.

However, you can increase your sales just by getting more leads to book and show up. So improving all of your lead KPIs is a smart idea too.

Then, work on testing new sales and closing tactics to lift your conversion rate, like countering common sales objections.

(If you want a list of counters to common sales objections just email me and I’ll send it over.)

The Importance of Sales & Retention

To drive home the importance of fixing your retention and sales problems, consider the revenue implications of each. Let’s start with retention.

When a member cancels, you pay twice. First, in the lost monthly dues, second in the costs to acquire a new member to replace them.

On average it costs around $150-$500 to acquire a new member, this is called CAC, client acquisition cost. So every time you lose a member you’ll have to pay this much plus lose out on their recurring revenue.

But, if your conversion rate was higher, meaning you converted more of the leads you got from paid advertising, that CAC would be lower. 

So, if you converted 9 or 30% of 30 leads per month, instead of 6 or 20%, and you spent $1000 dollars each month on advertising, your CAC would fall from $167 to $111.

See how they work together?

Then, the longer you can retain members, the higher their lifetime value. 

If you push your length of engagement (LEG) from 18 months to 24 months, you would make an additional $1,200 per member if a member way paying $200/mo.

That means you could actually make more money with less leads over time.

Final Thoughts

There was a lot of math there, but that’s ultimately what all businesses come down to.

Remember, the data doesn’t lie.

If you can simply lift your sales and retention rates, you will make much more money long term and require less leads every month to do so.

That means less money spent on advertising, or, if you really have things dialed in, the freedom to spend as much as you can on new leads because you know you’ll have a high likelihood of converting them into members AND keeping them for the long term.

When sales are high and churn is low, leads become much more valuable. 

Make retention and sales a priority this year and watch your business reach new heights in 2025.

If you need help with these, just book a call.