Eyes Forward Looking ahead Ep 189



In the Gym Secrets podcast, host Alex Hormozi discusses strategies for gym owners navigating the challenges posed by the COVID-19 pandemic. He emphasizes the importance of adapting to remote gym services, detailing his company's efforts in testing ads and setting up remote client acquisition systems. Alex advises gym owners to pivot to one-on-one remote training to maintain revenue, offers practical tips for negotiating rent relief with landlords, and encourages taking advantage of lower advertising costs to attract new clients. He acknowledges the tough road ahead but urges listeners to view the crisis as an opportunity to innovate and potentially shift to a more profitable remote training business model. Alex's tone is one of tough love, stressing the need for resilience and an unyielding entrepreneurial spirit during these trying times.

Summary Notes

Introduction to Gym Secrets Podcast

  • The podcast focuses on acquiring more customers, increasing customer value, and retaining them.
  • Lessons from failures are shared to educate the audience.
  • The host encourages subscription and engagement with the content.

Welcome to the Gym Secrets podcast, where we talk about how to get more customers, how to make more per customer, and how to keep them longer, and the many failures and lessons that we have learned along the way. I hope you enjoy and subscribe.

The quote introduces the podcast's main themes and objectives, emphasizing the importance of customer acquisition, value maximization, and retention, along with learning from past mistakes.

Current State of Affairs and Updates

  • The host provides updates on the gym launch side, particularly on remote gyms.
  • There's an acknowledgment of past resistance from the gym community to the hyper program.
  • The importance of having an open mind is highlighted.
  • Testing ads in 35 markets for remote gyms with a 72-hour evaluation period.

So, first off, on the gym launch side, we are actively testing the ads for remote gyms.

This quote indicates that the speaker's organization is adapting to current market conditions by testing advertisements specifically designed for remote gym services.

Criteria for Success in Testing Ads

  • There are three main success criteria for the ads being tested:
    1. Lead flow should match the pre-COVID-19 21-day play.
    2. The Allen system for booking remote calls should work effectively.
    3. The offer structured on the phone should convert at the projected rate.

There's three main points of success that we're looking for, which is, one, that the lead flow is what we expected it to be, two, that the Allen system that we have set up for booking remote calls works as intended and as desired, and three, that the offer that we have structured on the phone converts at the percentage that we said it was going to.

This quote lays out the specific metrics the speaker's company is using to measure the success of their new advertising strategy for remote gyms.

The Need for Effective Solutions

  • The host criticizes superficial solutions and emphasizes the need to address core problems.
  • A commitment to providing real-time updates on the results of the ad tests is made.

And I think that a lot of what has been created for the community is good. I think it's all great stuff, but we need to solve the fucking problem.

The quote expresses dissatisfaction with past efforts that may have been well-intentioned but ultimately ineffective, underscoring the urgency of finding real solutions.

The Promise of Challenge

  • The host sets expectations for the audience, promising a challenging period ahead.
  • The audience is encouraged to find internal motivation and resilience.
  • An honest depiction of the current situation is presented, without false optimism.

So I want to make a promise to you, which is that what you're going to go through over the next few months is going to be some of the hardest that you're going to go through.

This quote serves as a bracing reality check, preparing listeners for tough times and encouraging them to muster their determination.

The Rationalization of Failure

  • The host acknowledges that failing during the pandemic would be seen as reasonable.
  • Listeners are encouraged to reject complacency and strive for success despite the circumstances.
  • The speaker empathizes with the audience, sharing his own financial obligations and challenges.

It would be incredibly reasonable for a gym to go under during this transition time, right? But what I'm asking you to do is not be reasonable, but be unreasonable, all right, and want more.

The quote challenges listeners to rise above the reasonable expectation of failure and to pursue success with an 'unreasonable' drive.

Solidarity in Adversity

  • The host expresses solidarity with the audience, sharing the burden of navigating the crisis.
  • There is a mutual understanding of the financial pressures faced by gym owners.

Everything that affects gyms affects gym lunch, all right? So I'm going through this shoulder to shoulder with you, trying to figure this out.

The quote emphasizes the shared experience between the speaker and the listeners, reinforcing a sense of community and common purpose.

Opportunity Amidst Panic

  • The host suggests that panic can be reframed as an opportunity.
  • The current situation is seen as a chance to solve problems and capitalize on market changes.
  • The increase in mobile phone use and decrease in advertising costs are highlighted as potential advantages.

Panic is simply an embodiment of intense pain. Whenever there's pain, it means there's something that can be solved. And that means right now, and here's the silver lining, there are going to be more people on their phones, holed up at home, health conscious, worried about their health, eating cookies, all these feeling fat, who are, like I said, on their phones, and the impressions on Facebook are already 50% off.

This quote reframes the current state of panic as a moment ripe with potential for those willing to see and seize the opportunities, particularly in digital marketing.

Impact of COVID-19 on Gyms and Fitness Industry

  • The pandemic has forced gyms to close or lose members to other facilities.
  • Surviving gyms are predicted to emerge stronger and more profitable.
  • The crisis has changed beliefs about the viability of remote training in local markets.
  • Gyms are compelled to adapt to remote services due to the circumstances.

"And the gyms who make it through will be bigger, stronger and more profitable than ever." "Buying behavior is going to shift because as every single gym now has had, circumstances break their belief about whether remote training was possible in a brick and mortar facility in a local market."

These quotes underline the forced evolution of the fitness industry due to the pandemic. Gyms that adapt and survive are anticipated to become more successful post-crisis. There is a shift in perception towards the feasibility of remote training.

Consumer Adaptation to Remote Services

  • Consumers are becoming accustomed to remote services and transactions.
  • The pandemic has accelerated the adoption of remote training by 18 to 24 months.
  • Demand for remote training is expected to increase significantly.
  • The value of fitness professionals' skill sets is increasing, even if not yet widely recognized.

"And so with that choice now, consumers are going to be used to giving their card over the phone and having remote services." "I think there's going to be a lot of gyms who come out on the other side of this with a booming remote business because, like I said, demand for this is going to be huge."

These quotes highlight the shift in consumer behavior towards remote services, including fitness. The pandemic has expedited the trend towards remote training, creating opportunities for gyms to grow a remote business.

Strategy for Gyms to Adapt to Remote Training

  • Gyms must transition clients to remote training to stop revenue loss.
  • Preparing for quarantine measures is essential, regardless of current local conditions.
  • Gyms should offer one-on-one remote services to retain the value of memberships.
  • There is a need to over-deliver on value to compensate for the change in service delivery.
  • The transition from group in-person to one-on-one remote settings is crucial for maintaining membership value.

"And so the play is going to be simple. We're going to, one, stop the bleeding. You need to transition all of your existing clients into remote." "You have to over deliver on value to your clients because they're no longer getting what they signed up for."

These quotes suggest a clear strategy for gyms to mitigate the impact of the pandemic by transitioning clients to remote training and emphasizing the increased value of personalized one-on-one services.

Operational Changes and Workload Management

  • Gym owners and trainers will likely work more during the pandemic.
  • Working from home can reduce distractions and focus on sales calls.
  • Trainers should continue providing remote services to maintain their income.
  • Tough business decisions may be necessary, including potential layoffs.
  • Prioritizing valuable and adaptable staff members is essential.

"You are probably going to work more during this period of time than you probably ever have." "You need to make business decisions. You need to look at who are your most valuable assets."

These quotes acknowledge the increased workload for gym owners and the difficult decisions they may face, such as workforce adjustments. Emphasis is placed on identifying and retaining the most valuable and adaptable staff members.

Preparation and Hope for the Future

  • There is a need to prepare for a prolonged impact of the pandemic on the fitness industry.
  • The hope is for a quick resolution, but realistic expectations are for longer-term changes.
  • Engagement with the fitness community, including on social media platforms like LinkedIn, is encouraged.

"Now, my hope is that everything blows over and none of this matters, but I don't think that's going to happen on a short enough time frame." "Just to let you know that we've been starting to post on LinkedIn and want to connect with you."

The speaker expresses hope for a quick resolution but urges preparation for a longer-term scenario. They also encourage connecting with the fitness community online, indicating the importance of networking and community support during challenging times.

Stopping the Bleeding in Business

  • Identify urgent areas where financial loss is occurring and take immediate action to halt it.
  • Transitioning services or products to remote access can be a key strategy in reducing immediate financial loss.
  • Speaker A emphasizes the importance of swift adaptation to remote operations.

So number one, you stop the bleeding.

This quote highlights the first critical step in crisis management for a business, which is to halt any ongoing financial damage.

Cutting Overhead Costs

  • Overhead costs can be reduced by negotiating with landlords for rent relief.
  • Speaker A suggests that businesses can leverage force majeure clauses in leases due to extraordinary circumstances like a pandemic.
  • Landlords may be willing to negotiate due to difficulty in finding new tenants during such periods.

Number two, you have to focus on how you can cut overhead.

This quote addresses the second critical step in managing a business crisis, which involves reducing ongoing business expenses.

Rent Relief Negotiation Strategies

  • Emailing landlords to request rent relief is a primary strategy.
  • Free rent for a period of two to six months can be negotiated based on the impact of extraordinary events on business operations.
  • Structuring the deal can involve upfront free rent, lease extension, or amortization of the free rent over the lease term.
  • Combining different structuring methods can optimize the amount of rent relief obtained.

Now you have a facility. There are a couple of things that you can do. The primary one is that you can email your landlord and ask for rent relief.

This quote introduces a practical strategy for businesses to reduce their overhead by negotiating rent relief with their landlords.

Lease Adjustment Options

  • Direct subtraction of free months from the lease.
  • Pushing the lease forward, adding free months to the end of the lease term.
  • Amortizing the free rent amount across the remaining lease duration.
  • Combining various methods to maximize free rent benefits during business interruptions.

One is they can just give it to you and they can subtract it from the lease. Number two is they can literally just push the lease forward.

This quote explains different approaches to structuring a rent relief deal with a landlord.

Transitioning to Remote Training

  • Rapidly moving to remote training systems is essential to continue operations.
  • Creating and implementing remote training systems can help maintain business continuity.
  • Speaker A indicates that their company has already transitioned to remote training and will share this system with others in the industry.

Transition people to remote training as fast as humanly possible.

This quote emphasizes the urgency of adapting to remote operations to maintain business continuity.

Accessing SBA Relief Loans

  • Small Business Administration (SBA) relief loans are an option to consider for financial support.
  • Although the chance of obtaining an SBA loan is relatively low, it is still worth applying.
  • Loans range from $5,000 to $2.5 million, which can significantly aid in financial recovery.

You can also look at SBA relief loans.

This quote introduces the possibility of applying for government-backed loans to alleviate financial strain on businesses.

Filling the Bucket Back Up

  • After addressing immediate financial bleeding and reducing overhead, focus shifts to regenerating revenue.
  • Running advertisements is suggested as a strategy to attract customers due to lower costs and higher online engagement.
  • Speaker A points out that the current environment has made advertising more cost-effective.

The third piece, which is the exciting piece, is you need to fill the bucket back up.

This quote signifies the phase of recovery where businesses must actively work to restore their revenue streams.

Opportunity in Panic

  • Economic downturns and crises can create opportunities for profit.
  • It's important to stay rational and look for ways to adapt and recover losses.
  • Speaker A encourages maintaining a positive outlook even when facing cancellations and emotional impacts.

"So with every panic, there's always opportunity." "You're going to lose some cancellations, okay? Paris off. Emotionally, it's going to happen." "But you're going to have a way to get it back."

These quotes emphasize the need to look for silver linings and opportunities amidst challenges and to anticipate and accept emotional responses without losing focus on recovery.

Gym Launch's Commitment

  • Gym Launch is dedicated to providing a complete solution to its clients, not just partial support.
  • The development team at Gym Launch is working tirelessly to create systems that generate remote appointments.
  • Speaker A highlights the importance of each team focusing on their strengths to maintain business cash flow.

"And that's everything that we're focused on at gym launch is, like I said, we need a complete solution." "Since the first announcement last week, for seven days, our entire development team has been working around the clock."

These quotes illustrate Gym Launch's dedication to their clients and their commitment to developing comprehensive solutions to help businesses adapt to new challenges.

The Shift to Remote Business

  • The pandemic is accelerating the shift towards online and remote business models.
  • Remote training is likely to become more commonplace and may be preferred by some consumers.
  • Speaker A suggests that businesses may find success and profitability in remote models and may choose to continue them post-crisis.

"But this is going to fundamentally shift the way consumers buy." "Giving cards over the phone and getting remote training for a few hundred dollars a month is going to be far more commonplace."

The speaker is indicating that consumer behavior is changing, and businesses should be prepared to adapt to more remote and online operations.

Mindset and Identity

  • The current situation is an opportunity to forge a strong personal and business identity.
  • Speaker A compares the challenges faced by businesses to the rigorous training of Navy Seals, emphasizing the importance of perseverance.
  • The narrative of overcoming adversity now will shape one's identity and story for the future.

"The next few months are going to be telling, and they're going to tell the story of who you are and who you choose to be." "The reason the Navy Seals training is so hard is not because one day, if it's hard, it's because they have to do it every single day, and it's voluntary."

These quotes highlight the importance of the mindset in shaping one's identity, especially in the face of voluntary and continuous challenges, like those faced in business or rigorous training programs.

The Work and Opportunity Ahead

  • Speaker A acknowledges the hard work required but also the significant opportunities available for those who remain vigilant.
  • The speaker encourages keeping existing customers and working hard on customer acquisition, especially through remote training.
  • Gym Launch is close to completing their system to help clients adapt and thrive in a remote business model.

"It's going to be a lot of work. It always is. But there's going to be a lot of opportunity for the people who keep their eyes open." "So keep your eyes open. Do as, like, work as hard as you can to keep the people you got."

These quotes stress the importance of hard work and attentiveness to opportunities during challenging times, suggesting that perseverance can lead to a more profitable business model.

Gym Launch's Support and Progress

  • Speaker A expresses love and support for their community and clients.
  • Gym Launch is utilizing all its resources and motivation to achieve its objectives.
  • They are optimistic about completing their new system and are nearly finished with its development.

"We're going to do everything in our power, like, truly everything in our power." "We're probably about 80% of the way there. We're just putting the finishing touches on, and we should have it live later this week."

These quotes convey Gym Launch's strong commitment to their clients and their confidence in their ability to deliver the promised solutions, which are nearing completion.

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