Member acquisition cost

Member acquisition cost (CAC) is what it costs to gain one new member. Spend $2,000 on marketing in a month and gain 20 members, and your CAC is $100. It’s the number that decides whether growth is profitable or just busy.

CAC = total acquisition spend ÷ new members gained

Include everything: advertising, promotions, referral incentives, trial costs, and staff time on tours and follow-up. Excluding staff time is the most common way gyms understate it.

CAC only means something next to lifetime value.

LTV ÷ CAC is the number to watch. A member worth $2,700 acquired for $100 is a ratio of 27:1 — excellent. At $900 CAC it’s 3:1, which is workable but tight.

Below about 3:1, growth is expensive enough that improving retention will almost always beat spending more.

CAC sets your growth ceiling. You can’t outspend it, and rising CAC with flat retention is the pattern that quietly kills gyms — more spend, same membership, thinner margins.

Retention improves CAC without touching marketing. Every member who stays longer raises LTV, which raises the ratio, which means you can afford to spend more per member than a competitor with worse retention.

We don’t do lead management — see the gym CRM entry for the straight answer on that. We do the other half of the ratio: keeping members longer, which is what makes any CAC affordable.