[02:22] Why gym owners should use SaaS metrics

[03:20] Why Monthly Recurring Revenue iS your baseline metric

[04:10] Tracking MRR growth as an indicator of health

[06:55] How ARPU (Average Revenue Per User) drives growth

[9:43] Reducing churn and creating long-term value

[13:00] Calculating LTV (Lifetime Value) and its impact

[14:21] Why gyms get stuck at certain member counts

[16:30] Bonus metrics for serious gym owners

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Nick Reyes: [00:00:00] Oh, spoiler alert. On all the data points, one of the most important ones is not customer count. 

Dan Uyemura: None of them. 

Nick Reyes: Welcome to the PushPress Podcast. 

Dan Uyemura: Where gym owners learn to dodge bad advice, crush the competition, and actually make money doing what they love. Let's get after it. But before we start, today's episode is brought to you by Just For Fun CrossFit.

Dan Uyemura: I love that shirt. Out of Fremont, California. One of our funnest clients, I would say. Look at this shirt. I'm 

Nick Reyes: jealous. I want that shirt. Yeah. Come on now, Just For Fun. Send your boy a shirt. JFF. All right. So, we've been doing some 2025 planning over the last several months. Uh, and, you know, we, at PushPress, we have a very, like, complex business model.

Nick Reyes: As you well know… 

Dan Uyemura: Overly complex. Oh my lord. 

Nick Reyes: Uh, multiple tabs, thousands of rows in a spreadsheet. Um, I built our very first version several years ago. Uh, we call it [00:01:00] the Blueprint. Uh, and then, I met with you in Denver, uh, to work on our book. Dan and I are writing a book in case you didn't know.

Nick Reyes: More about that later. Anyways, uh, we started building a model for gyms. As part of that, and I quickly got into like levels of detail that were probably unnecessary where they were unnecessary. Right. And that's just kind of how my mind we're spiraling into all these different data points that every gym would need to really hone in on.

Nick Reyes: And if they wanted to create just the most kick ass business in the world. And one of, one of your gifts, Dan, that I really appreciate is like you were able to pull me out of that spiral. And focus on like, what's the, what are the most important data points for gyms? And I, you know, that's kind of what I think inspired this episode a little bit is like, how can we help provide some focus here?

Nick Reyes: And so, uh, so yeah, uh, I'd like to maybe dive into this and see, uh, what are, oh, spoiler alert [00:02:00] on all the data points. One of the most important ones is not customer count. 

Dan Uyemura: None of them –

Nick Reyes: None of them. 

Dan Uyemura: – are, are member counts, so. 

Nick Reyes: That's the bench press of. Hey, hey, hey, some of us like the bench, 

Dan Uyemura: but yes, member count that means jack shit.

Nick Reyes: It doesn't it doesn't at all. So kick us off Dan. 

Dan Uyemura: Yeah, cool So the first one we're going to talk about is the I guess I want to say but it's it's your back squat of metrics If you will or maybe you're a deadlift. It's just simply your MRR ARR and one thing we're gonna do as we talk about metrics is we're gonna try and get gym owners talking in Uh, the types of metrics that software companies are measured by, because there's been a crap ton of like thought and process put into SAS metrics.

Dan Uyemura: SAS is software as a service for those of you don't know. And what I've come to realize is I'm building out our financial models and our metrics is like gyms are. Service as a service. Like what we're doing with software is just a virtual value delivery system that people pay monthly [00:03:00] recurring for same thing in a gym, except people are showing up in your gym.

Dan Uyemura: And if you do well for them, they keep paying you monthly. So the entire business model is exactly the same. So let's use the same terms. 

Nick Reyes: One, one also note here. Going to have a lot of acronyms. We'll try to break them down for you as we go. 

Dan Uyemura: Good point. I would have blown right by that. MRR, ARR, monthly recurring revenue, annual recurring revenue, right?

Dan Uyemura: Why are these important? This is important because this actually measures your predictable, reliable, recurring revenue stream from the customers that you have. Okay. And so one of the easiest ways to kind of model your business is on your recurring revenue growth and your recurring revenue levels. Now, we like to typically think of these as monthly, monthly recurring revenue.

Dan Uyemura: But in reality, since these are recurring members, as long as you're doing good by them, you can actually extrapolate these into annual numbers. And this will help you in budgeting for your rent, like how much rent you're going to pay, how much money should a coach make, both as a salary annually and monthly, that you're going to pay them if you break it back down, [00:04:00] uh, stuff like that.

Dan Uyemura: So it really helps with your financial planning and valuation. And consider it like the bread and butter or the back squat or deadlift of your gym metrics, if you will, and kind of like tailed right closely onto that, like kind of a one a I would say is your MRR growth rate. And I think this is important because I haven't met a lot of gym owners to date who think in terms of growth.

Dan Uyemura: That would be like someone coming into your gym and just saying like, Hey, I want my back squat to be 225 forever. Like it makes no sense, right? The whole point of doing this is to grow, have growth. So if you're not thinking in terms of MRR growth rate, then you're not thinking about things correctly. And so the way I try and frame this, it's going to vary over time and it's going to decay over time because it's hard to grow when you get bigger.

Dan Uyemura: But when you're under 20, 000. You know, the smaller you get, this number should be bigger, but let's just say five to 10 percent a month as a healthy growth rate, and once you get over 20, 000, especially once you get over 50, 000, you could be growing anywhere from like two to three to four to 5 percent a month, [00:05:00] those could have a good, good growth rate, but give yourself a goal and shoot for it.

Dan Uyemura: Uh, we're all competitive as hell. So like, again, if someone came to your gym and they're like, Hey, I don't, my back squat can just stay at two 25. You probably wouldn't want to coach them. You know what I mean? Like you want to work with people who want to grow and you should want to grow as well. 

Nick Reyes: A hundred percent.

Nick Reyes: I mean, uh, When you talk about ARR, uh, you can also compound these and look at annual growth rates, which, you know, obviously the numbers will change there and what Dan's not suggesting is, you know, just only look at this monthly, right? So make sure you look at those metrics on how they stack over the course of an entire year.

Nick Reyes: Oh, 

Dan Uyemura: let's, let's talk about that for 30 seconds. Okay. Here's the beauty of it. If you actually can grow at 7 percent a month, that's actually a lot, but if you can grow at 7 percent a month, you double. Every year, right? So the numbers of compounding growth work in your favor when you think of monthly. So if you're like 5 percent doesn't sound like a lot, but if you grow 5 percent a year, you're almost doubling every year.

Dan Uyemura: And that's a lot. Yep. So that's why it's. And, and, and when you look at the numbers, like 5 percent month by month, doesn't feel like [00:06:00] a lot. So it actually feels achievable. So even growing 3 percent a month is significant to your growth. 

Nick Reyes: Right, right. Yeah. I mean, and. You know, shameless plug here, like part of what our job here at PushPress is to do is create the tools that will help you to do these things.

Nick Reyes: And so investing in those tools, investing in the technology so that you can focus on growing the business is really critical. So using tools like grow and not, you know, going through and building your own damn website, uh, so that you, you know, hand off those things to the experts and then you focus in on growing your business.

Nick Reyes: So you have a chance at compounding 7 percent months, right? Yep. So, 

Dan Uyemura: and honestly, I think the most important thing in this, like, if you take one thing from this whole episode is this, if you focus on a monthly growth rate and you set yourself to that expectation and standard, you'll probably grow your business faster than anything you've ever expected before, just because you've never focused on it.

Dan Uyemura: So just do that. 

Nick Reyes: Yep, absolutely. Yeah. Uh, the third one is ARPU, Average Revenue Per User. You could go average revenue, average revenue per user. Remember, [00:07:00] ARPU 

Dan Uyemura: is a SAS term, but it could be a member. 

Nick Reyes: Exactly, exactly. Uh, and essentially that's the average rate that if you took all your members, that's what they're paying when stacked over the course of a membership in a month, right?

Nick Reyes: And so what really, what you want to try to do is stack enough value over time to where you're going to slowly have upsell opportunities and that ARPU should be lifting each and every, you know, couple of months. Whether I'm buying more personal training because I'm getting more value out of it, I'm buying additional services, buying additional retail, whatever it might be, right?

Nick Reyes: And so, uh, if you think about that in terms of just, again, what's the input for that metric? It's how much value can you drive? Yeah. 

Dan Uyemura: And if you think about it, there's only two ways to really drive ARPU, right? You can increase the, the value and thus the amount you charge on your core product, which would be probably your core membership or whatever the core business line you have is.

Dan Uyemura: And then you can also build add on ancillary or other things for people [00:08:00] to buy additional revenue streams. I would recommend. Don't worry about the additional revenue streams until you've kind of gotten a core value product to a very decent level. But those are really the two ways to drive ARPU. And going back to a recent podcast we did, um, grandfathering your clients rates is the fastest way to kill your ARPU, right?

Dan Uyemura: So, you know, you've got to make sure people are paying fair and current values, and as you increase the value in your business, you can raise your rates. 

Nick Reyes: Yeah, I mean, I think, uh, maybe to tie back some of the, what we've already discussed a little bit into ARPU here would be, you know, we said the spoiler alert was that the number of members was not the one of the most important metrics, okay?

Nick Reyes: Well, if the number of members is not one of the most important metrics and we want to also grow MRR, You're kind of out of ways to do that. If you're not adding a bunch of new members. Now, I'm not saying you shouldn't add, you should add new members, but what you should be doing [00:09:00] is working relentlessly around the clock to drive value to members, not sell services, drive value to services to two members.

Nick Reyes: I think there's a difference there. 

Dan Uyemura: If you want to play it out infinitely. There is no, there is no scalability or leverage in adding members, correct? Right. You cannot, there's a point where you can't take another member. So you have to, the addition of value to the existing member set is your primary goal.

Dan Uyemura: And then eventually you want to max out your, your efficient operational efficiency to the number of members you can support, but that is a finite number. And we'll actually go over that mathematically later. Um, cool. So we got MRR, MRR growth rate, ARPU, average revenue per user or member. Uh, the next one is one that I've beaten the drum on for years now, which is churn rate, right?

Dan Uyemura: Um, and the idea here is, you know, speaking to thousands of gym owners, I hear that speaking to thousands of small business owners, not even a gym thing. All I hear from people is I want to, I need more members. And the reality is, is like, Hey man, [00:10:00] you've got members. Um, and if you focus on them, Hey, maybe you might drive the ARPU up, which will solve your problems you're talking about, but if you've got, you know, the adult, that old adage, if you've got a leaky bucket and you keep throwing more water in it, all you're going to do is just increase the amount of flow of things coming out of your bucket.

Dan Uyemura: So we need to fix the churn rate first. Um, and really it's probably the thing that's most cost. It's most costly to you in your business. And it's actually the most impactful thing you can fix. Yep. Um, we'll go over this. In my favorite metric, which is going to be the magic ceiling, which later, um, working on your churn rate is the biggest thing you can do.

Dan Uyemura: How do you do that? 

Nick Reyes: Yeah. So it's like. You know, how are we, again, it's going to be anything that helps a member realize the value that they get from what you offer. So it'll be things like, are you highlighting their PRs? And I think this manifests in a bunch of small ways that members, that gym owners do, but maybe don't think about.

Nick Reyes: It's not intentional. Right. And it needs to become more intentional. 

Dan Uyemura: Yeah, I think, real quick, once you tie [00:11:00] what you do to why you do it, this becomes different. It's like a pfft. 

Nick Reyes: Yeah. Right? It's like Steve, is it the Steve Jobs meme, right? Yeah, 

Dan Uyemura: yeah. 

Nick Reyes: PR bell. Yep. You know the PR bell is just a big signal for, 

Dan Uyemura: I got value from this place, I'm stronger.

Dan Uyemura: And everyone to give you a, and everyone's like, same, same with like a belt, like when someone gets a stripe. In belt tracking. Absolutely. Yeah. Absolutely. 

Nick Reyes: It's a moment of recognition. It is a moment of recognition. Right. So level tracking, PRs. Um, are you getting people's goals and, and showing them how they, how they actually achieve them, right?

Nick Reyes: Like, uh, Rob Schwartz, again, in our conversation yesterday mentioned, um, uh, it wasn't goal tracking. It was connecting the client to what success look like in their head. Right. So anytime you can do that, you're going to help drive value. When you're driving value, you're going to drive down churn. 

Dan Uyemura: Yeah. I think one thing to call out here is everyone's success or value metric could be, is different.[00:12:00] 

Dan Uyemura: Like for me. I don't care if I PR things anymore, but I would like to connect with other human beings in my community and have, and have a build a community because I've just moved to a new, new area. So you can't just assume everyone that comes in wants to get bigger, faster, stronger, more skilled at whatever it is you train in.

Dan Uyemura: Some people just might want to have a second place to go to because they work at home all day. Right. Sick of their kids yelling at them. 

Nick Reyes: Right. So then what are those engagement data points or what is the engagement that you're looking to foster? And again, I think that's the, the kind of the power of that statement that I, that I heard yesterday, which was just.

Nick Reyes: Connecting clients to their vision of success. Exactly. Right. It's a really good way to look at it. Uh, and so when you, when you have members and they're, and they're getting value over a period of time, that becomes lifetime value, right? So then your lifetime value is essentially going to look at like, what is your MRR or sorry, your average, your ARPU over the course of however long you retain a customer for.

Nick Reyes: So if you can retain a customer for say, You know, 12 months, you take [00:13:00] that, you have your RPU, you start to get your LTV. 

Dan Uyemura: Yep. So LTV really is a combo and that's why it's on the list here. These are in stacking order to some degree. It's kind of a combo stat between RPU and, and, um, churn rate. The longer someone will stay at your gym and the more money that they will spend per month turns into a higher valued customer over the lifetime that they will be a customer.

Dan Uyemura: Your goal obviously is to maximize that lifetime by reducing churn and maximize that monthly spend by increasing value, which will be reflective in a higher LTV. What does a higher LTV mean? It actually will help you understand how much a customer is worth. Every time someone walks in the door, this is how you can start to do the math.

Dan Uyemura: Someone walks in the door. If I, if I know I sell 50 percent of them turned into a customer and a customer's LTV is 10, 000, every time someone walks in the door, it's worth 5, 000 to me every time. Now, if you can increase your sales rate, maybe that 5, 000 becomes 6, 000. Right. Um, but that, that's, that's a powerful way to think about it, right?

Dan Uyemura: Like every lead I get is 5, 000. If I don't email them back in time. I'd lost 5, 000. That [00:14:00] probably will light a fire under your ass to email them back or I don't know. Text them back and pick up the phone when someone calls the gym. Yeah. Like if that number, if literally I put 5, 000 in front of you and I said, you have three seconds to pick up this 5, 000 bill, you would pick that shit up.

Dan Uyemura: You know what I mean? Yeah. And that's that. So that's why LTV is a powerful driver in an action. 

Nick Reyes: Yeah, absolutely. 100 percent agree. 

Dan Uyemura: So the last one, this one, you're gonna have to bear with me. It is going to take a little bit of math in your head and a little bit of a, maybe a pen and a paper to work out, but it's basically the magic ceiling, the magic formula to figure out where you're capped.

Dan Uyemura: Every business is capped. Magically by math, unmagically, right? It's just science, actually. And the easiest way to explain this is you can take the number of new members you get per month, uh, actually, and then, and then factor that into your total member count and divide that by your churn rate. And that's going to give you a ceiling.

Dan Uyemura: So the example is, is this like, let's say you have, you get 10 new members a month and you know, you, your churn rate is 4%. Okay. [00:15:00] So all you have to do is divide. 10 by 4% and that'll give you 250 members. And this is because at 250 members, 4% is 10. So you're gonna churn. 10 gain, 10 stuck. Yep. All right. Now that's 4%.

Dan Uyemura: That is not the average in the industry. The average in the industry right now is about 8% churn. So 10 members a month, which I feel. Fairly aggressive. That's fairly aggressive. Fairly aggressive. Let's say you get 10 new members a month, churn rate 8, math says 125. So a lot of people look at me and they're like, I don't know why I'm stuck at 100, 120, 125 members.

Dan Uyemura: It's like magically every gym is stuck at 120 members and that's because their churn rate is about 8 percent and they're gaining about 10. 

Nick Reyes: And that has been the reason why the drive down the churn thing, because we just said 10 new members a month is fairly aggressive. Yeah. 

Dan Uyemura: Yeah, exactly. So, so you can play with the levers, but like, if you're stuck at 75, you might be getting five members a month, right?

Dan Uyemura: If you're stuck at 150, you might be getting your, your turn rate might be 6%, [00:16:00] but whatever the numbers is, you can do the quick math and you can say, okay, if I have 250 max members and I make 200 members a month, the most money I can ever make is about 50 grand a month. That's it. You know, if you want to increase that max ceiling, you've got to either drive your churn down or increase your lead flow.

Dan Uyemura: And that's how you look at the levers of your business. And to me, this is why these metrics are so important because they turn into levers. They turn into action. If you know how to control them, 

Nick Reyes: I a hundred percent agree. Uh, let's go into the bonus round. I know we're already getting along on time here.

Nick Reyes: Bonus round. One of my favorite metrics. CAC, cost of acquiring a client, cost of acquisition, uh, not widely talked about. I'll only give it a quick rundown here, but it's essentially if you had to spend money to get a client, how much do you spend in order to acquire that client? And so when you're in a, a growth based role, like I am here at pushpress.

Nick Reyes: A big part of what you have to understand is how much can you afford [00:17:00] to spend to acquire a client. And so as a gym owner, if I go to Dan and I say, Dan, you can acquire me as a client, it's going to cost you 500. Dan needs to know whether or not that's a good deal for him or if he's going to lose money in that equation.

Nick Reyes: That's one bonus metric. 

Dan Uyemura: Yeah. And, and so why this is kind of a level two metric is because once you know your LTV, um, and once you know this other thing, which is next called a gross margin, you can actually do the math to figure out if it's worth spending. Most gym owners, if you say, Hey, it's going to cost you a thousand dollars for, for this lead, we'll say, no, But if your LTV is 8, 000 and your gross margin is eight, you know, 50%, that's a Forex return on investment and it becomes a no brainer, right?

Dan Uyemura: Actually, it depends on your sales rate. There's, there's more to this, but you see where we're going with this. So gross margin is one of those. Now we're talking about. Like we're getting into profitability margins in general is like, you have to take out your costs, your expenses of running the product.

Dan Uyemura: So coaches pay rent, things like that. [00:18:00] So as we start to get deeper into the metrics and this was bonus level two, cause we could do a whole nother, we could do an episode on margin. We can do an episode on CAC and LTV, right. And go to our. But gross margin is you need to start thinking about gross and net margins.

Dan Uyemura: Net will be profit. Gross will be like after cost of delivery of service. We have to start thinking about like, what is this stuff costing us to deliver? Because if those things are out of whack, if you're, if it costs you a dollar one to deliver a dollar of service. You're doomed. It doesn't matter what you do, and you've got to figure that out.

Nick Reyes: Uh, last bonus one, uh, NRR, net revenue retention, uh, I feel like people's eyes are going to gloss over, but we'll just essentially say, like, it's your, it's your ability to retain and increase value out of your customers. Yeah. 

Dan Uyemura: So the simplest definition of NRR, and to me, this is one of the most impactful metrics you can look at in your business once you get there, is because NRR, most people think of churn just as loss.

Dan Uyemura: But the people that do stay might spend more money, right? So it's about like, think of it this way. If you have a gym and you lose 10 [00:19:00] members, so you lose, let's say they each pay you a hundred dollars each, that's a thousand dollars you lose, but the 90 people that stay pay you 10 more. You actually may, you only lose a hundred in the month.

Dan Uyemura: So it's a 1 percent loss, not a 10 percent loss because you're expanding the, the nine that stay. So NRR is basically a combination of your gross revenue retention rates. So like the amount of churn revenue you're losing, but then you add back any churn that you're, or any revenue that you're gaining from the people that stay.

Dan Uyemura: So it actually makes you optimize churn and increase ARPU. That's kind of the stacking of that. Yep. Yeah. Anything else to add? Put a bow on this one? Uh, no, that's it for me. I think the question we can ask people is what is the most impactful metric you guys are playing with in your gyms or what are the one that you feel is the most?

Dan Uyemura: Did we miss one? Is there a metric that we just completely missed that you think is the most important in your gym? Hit us up, podcast at pushpress. com. We'd love to hear it. Uh, we will do a follow up and just showcase anything you guys feed us. Thank you.

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