457: Gym Marketing Budget: The Formula Most Gym Owners Get Wrong

There's a lot of opinions on how you should determine what your marketing budget should be every month. And like I've said in other videos, there's wrong ways to do it, there's the right way to do it, and there's the GSD way to do it. And GSD way is just the logical way that makes the most sense and will get you where you need to be. So what is the best way to determine the marketing budget for your business and how should this work? Well, I think the biggest mistake that a lot of people make is they listen to things like, "Oh, I heard it should be 10% of revenue," or, "I should spend everything I've got to go in there," or whatever is left in the bank. It doesn't really matter. You hear all different things. But in reality, you actually just wanna reverse engineer where you are against where you wanna be and then fill in the gaps. That's really what matters. You don't start with what's your marketing budget and then say, "Okay, now what do we wanna see happen?" We say first, "What do we wanna see happen, and now what does it take to get there?" So there's a couple things you've got to know first, and, um, and we're gonna figure out those things together. But at the end, it's gonna come out to this simple formula. It's gonna be your average CAC, which is your customer acquisition cost, multiplied by your sales target. And those two things together will give you your marketing budget. That's it. It's kinda like if you wanna learn how, how to... how much weight I should lose if, let's say, by the end of 52 weeks I wanna lose 52 pounds, I know that I need to lose a pound a week on average, right? So we're just gonna reverse engineer just like I did in that example. We're gonna do it here. So first thing we have to learn is, well, what are we paying per customer? 'Cause this formula is basically saying, all right, well, if I want 30 customers, and I learn that right now I'm paying $100 per customer, and I multiply these two, well, that gives me $3,000. So that would be my marketing budget, so long as I can continue acquiring customers at about $100 a customer like I've been doing. If I want my goal to move to 50, my budget would be 5,000. If I want my goal to be 20, it'd be 2,000, as an example. The same thing goes the other way. If our customer acquisition cost is $200, well, that means 200 times 30 is 6,000. So my marketing budget would be 6,000. So these two numbers are important 'cause you're basically saying, "All right, how many customers do I want, and how much do I typically pay to get one?" Multiply those two because that's what I wanna get, and that should be my marketing budget. Simple. All right. Let's determine what our customer acquisition cost is. So what you wanna do is you wanna start with what is your total marketing expense average on a monthly basis. And so when we do this, we're not just thinking about, like, our ad spend. I mean, that is one thing for sure. But we're also thinking about, like, okay, well, how much do we pay the agency fee, right? And then also, uh, are we paying this other company to help us with, like, socials? And are we also hiring a videographer to help out with stuff? Are we hiring a photographer to