Average Revenue per Member (ARM) is total income divided by total members, but who counts as a member matters. A gym might count full-time personal training clients differently than drop-ins, changing the number. Keep it simple and consistent so you can track whether ARM trends up over time.
Today's tip, I wanted to go over a specific key performance indicator, KPI, called average revenue per member, or ARM for short. This is a really important metric because you want to see that it's trending up. As it says, it tracks the average revenue per member. Um, it's pretty easy to calculate. You take your total income and you divide it by your total members. Now, what can get tricky, if you want to get really nerdy about it, what is really a member? I know at our gym, uh, I only want to count people who are paying for personal training sessions, Uh, like consistently personal training sessions. 12 times a month, uh, and then unlimited. We have— don't judge me, um, but we do use a service called FreePlay, and, um, they are allowed, if they're part of that, they can have, you know, up to 5 classes. I don't count them— 5 classes per month. I don't count them as full-time members, so I would not include their income in the calculation. But that also means I need to subtract out the income I get off of them from my total income in order to really have a true average revenue per member. Now that being said, that's total geeky and honestly could be overkill. I just wanted to point out how crazy you can get with some of these things. Uh, it's totally fine if you just take total income divided by total members, as long as you're consistent with the way you calculate what total members are. I could include these free play members if I wanted. I could include drop-ins. Um, I could, I could do that if I, if I really wanted to. The point is you don't want to make your KPI too complicated because if it is, it becomes too big of a burden and you're not going to track it anymore. So potentially total income divided by total members is the best option. And you just want to make sure that every month you see that income, that number, average revenue per member or ARM, increase. Because it— whatever it is right now, that's your baseline. You want it to be better in the future years. And so that's one metric that we like to look at. For our clients and for ourselves. If you enjoyed the tip, please share with others. If you've ever had a friend ask you, what exactly is that? Hopefully this video can explain what ARM is. And, uh, subscribe to our YouTube channel if you'd like. And then go ahead, have an enjoyable rest of the day. Bye.
