In this episode of the Sales Conversion podcast, host Riley Meek interviews Alex Z., the founder of Gym Launch, to explore the strategies behind transforming struggling gyms into profitable businesses. Alex shares that the key to success lies in understanding customer acquisition and creating a business model robust enough to eliminate traffic issues. By focusing on customer value and reversing engineering the process, Alex has expanded his expertise across various industries, including a multi-million-dollar software aimed at improving lead-to-customer conversion for brick-and-mortar businesses. Alex's holistic approach, detailed in his book "Gym Launch Secrets," is applicable across service industries and emphasizes the importance of offering superior products, upsells, and guaranteeing results based on customer lifetime value.
"So soon, he turned one failing gym into six profitable gyms. And as Gym launch continued to grow, they expanded over 24 million a year. And within three years, they have serviced more than 3000 gyms, made over 43 millionaires out of gym owners, which has allowed him to expand into other operations, which I'm sure we'll wrap about here as well."
This quote summarizes Alex Z's achievements with Gym Launch, emphasizing the rapid growth and success in the gym industry, including the creation of many millionaires and expansion into other business areas.
"Fundamentally, I think the skill set that every entrepreneur, to echo what you just said has to have is knowing how to acquire customers."
This quote highlights the fundamental skill of customer acquisition as essential for entrepreneurship, which is a central theme in Alex Z's approach to business.
"But it's kind of a holistic issue. And you need to fix the model from the back to the front to allow the front to explode."
This quote explains the holistic approach to business that involves addressing the entire model, from backend to frontend, to achieve explosive growth.
"And so we've really duplicated this not even across industry, but across business type because a lot of people would say, well, this won't apply to me. My niche is special or my business type is special. And I don't really think it's the case."
This quote emphasizes the versatility of Alex Z's business model, which can be applied across various industries and business types, debunking the myth that certain niches or business types are exceptions.
"And so that was really a big, fundamental shift for me because that's what took me from b to c to b to b, and that has been a great journey for me."
This quote describes the pivotal moment in Alex Z's career when he shifted from focusing on consumer-based gyms to providing business-to-business services, which aligned more with his passion for business.
"But being able to do it b two b at a national scale really allowed that to kind of, what is it? Like, unfurl your wings and kind of fly away."
This quote conveys the sense of liberation and growth Alex Z experienced by moving to a B2B model, which allowed for a broader impact and alignment with his business interests.
"My passion was people and being able to pour out, and you're able to really impact that many more."
This quote illustrates Riley's drive for making a positive impact on people's lives, which he finds more fulfilling than simply starting another company for profit.
"But when I decided that that business model was logistically difficult, it had hair on it. I could get into some of the kerfuffles, you know what I mean? But fundamentally, as soon as we stopped doing it for people and started teaching people how to do, it was when we had a much more scalable model."
Alex highlights the difficulties of the original business model and the benefits of shifting to a more scalable approach, where they teach gym owners the system rather than implementing it for them.
"They collectively did a billion and a half in sales using our systems."
This quote emphasizes the significant financial impact Alex's company has had on the gyms they've worked with, showcasing the effectiveness of their systems.
"I've never worked so hard in my life and made so little."
Riley's statement reflects the tough reality of running a gym business without the right knowledge or systems in place, highlighting the grind and low profitability he experienced.
"Now, if it's $2,400 over five years, most people still can't pay to acquire a customer in that setting."
Alex points out the challenge of customer acquisition when the lifetime value is spread over a long period, stressing the importance of strategies that address cash flow issues.
"There's kind of a four step approach that you can look at any acquisition system so that we can make it less capital constrained for them."
Alex describes a systematic approach to customer acquisition that is designed to be financially accessible for business owners, allowing for growth without significant upfront investment.
And so with that, we're able to pool cash up front on these customers. So that we can cash for the acquisition.
The quote underlines the strategy of pooling cash upfront from customers to fund further business acquisition efforts.
Because we've done this 3200 times, and we've tested all of the ideas you have thought of and the ones you haven't.
This quote emphasizes the extensive experience and testing that has gone into perfecting their sales process.
And so what the software does, and we saw the trends going over time, where pickup rates were going down over the phone, messenger and chat were blowing up.
This quote highlights the observation of changing trends in customer communication, leading to the development of the Allen software.
And so with that, we can pretty much double it. And because lead flow is variable, the cost is variable.
The quote explains the software's ability to improve lead conversion rates and its variable cost model that adapts to fluctuating lead flows.
On the flip side is that an ad tanks, right. And you're still paying this person to sit on their hands all day long.
This quote illustrates the problem of fixed staffing costs when advertising campaigns underperform.
There's no ability to fractionally hire, and the fractional hires that you would be able to have even if you were, aren't going to be as good.
Alex Z emphasizes the challenges of hiring part-time or fractional staff and ensuring quality, which the software solution overcomes.
And so they're able to get people with ad spend for $50. But if you are getting, let's say, 100 leads a month, and your front desk girl is getting 15 of those people in the door... we're paying for 15 shows, $2,500. Right. So we're paying $225 per show in labor.
This quote breaks down the cost of acquiring leads and converting them to actual customers, highlighting the high labor costs associated with conversion.
And so it makes it very simple for them to budget. It makes it really simple for them to actually run their operations because someone else is managing the lead gen, the nurturer is already being taken care of.
The quote emphasizes the benefits of outsourcing lead generation and nurturing, simplifying operations for small business owners.
All of these things are to make business owners more money... And so with the supplement business, there just wasn't really a solution that allowed you to drop ship to customers, sell big packages, go on recurring and then have a POS that was seamlessly integrated into the business model.
This quote explains the motivation behind creating a supplement line that addresses the needs of business owners for more efficient and profitable operations.
Just makes a big difference down the line with those small changes.
The quote underscores the impact of minor adjustments in business operations on long-term success.
The meals are 350 ish on the smalls, and then the larges are like 600, 650. And so that way they can replace one to two meals a day... It's not a super profitable business for us.
This quote describes the meal prep program's structure and acknowledges its role as a value-added service rather than a major profit center.
You have to do next day air if you want to be compliant, you want to be USDA, which no one is, but if you actually want to be legit, then you have to dry ice pack, you have to sell it in insulated boxes, and you have to do next day air for a 40 pound box.
The quote highlights the logistical challenges and expenses involved in the food industry, particularly in shipping compliant, perishable goods.