Gyms and studios
Churn rate, and the mistake nearly everyone makes
Three per cent a month sounds small. It is about a third of your members a year.
The short answer
Monthly churn = cancellations during the month ÷ active members at the start of the month, × 100. Australian gyms typically see 25 to 40% annual churn. Do not multiply monthly churn by twelve: it compounds, so 3% a month is closer to 30% a year, not 36%.
The formula
Monthly churn = (cancellations this month ÷ active members on day 1) × 100
Worked example
You start March with 500 members. Fifteen cancel.
15 ÷ 500 = 0.03 0.03 × 100 = 3% monthly churn
The compounding trap
The instinct is to multiply by twelve and call it 36%. That is wrong, because each month you are losing 3% of a smaller number. Compounded properly, 3% a month leaves you retaining about 70% of members over a year, so annual churn is nearer 30%.
This matters when you set a target. A gym aiming to “halve churn to 1.5% a month” is aiming at roughly 17% annually, which would put it among the better performers rather than merely average.
What normal looks like
- Australian gyms generally: 25 to 40% annual churn.
- Strong performers: closer to 15 to 20% annually.
- By segment: boutique studios tend to retain best, budget gyms least, with mid-range in between.
The 90-day window is where it is won
Roughly half of new members quit before the six-month mark, and early attendance is the strongest predictor. Members who come fewer than four times in their first month are overwhelmingly likely to cancel.
Which means churn is a lagging indicator, and chasing it directly is chasing the wrong number. The number to put on a board is first-month visit count for new members. It is leading, it is actionable this week, and it moves churn three months from now.
See it on your own numbers.
Thirty days, no card. Start with your figures or a template for your trade.