Max Client Value Extraction Ep 172



In the Gym Secrets podcast, the hosts discuss strategies for maximizing client value in the fitness industry. They compare the upselling techniques of rental car companies to potential practices in gyms, emphasizing the importance of offering multiple revenue streams through choreographed experiences. They outline a process involving initial goal-oriented sales, followed by nutrition and supplement upsells, and subsequent offerings of additional services or accountability measures. The hosts argue that by asking for sales multiple times and providing real value, gym owners can significantly increase revenue per customer. They encourage listeners to share the podcast and stress the importance of overcoming negative attitudes towards upselling in the fitness community.

Summary Notes

Introduction to Gym Secrets Podcast

  • The podcast focuses on strategies for gym owners to gain more customers, increase revenue per customer, and retain them.
  • It also shares failures and lessons learned in the fitness industry.

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.

The quote sets the stage for the podcast's theme, indicating a focus on business strategies within the fitness industry.

Content Creation Philosophy

  • Speaker B mentions breaking rules to create more content in a burst of inspiration.
  • The approach suggests a spontaneous and flexible content creation strategy.

I am breaking lots of rules and making more pieces of content one day because I'm feeling it.

The quote reflects Speaker B's unconventional approach to content creation, emphasizing spontaneity.

Maximizing Client Value Extraction

  • Discusses the importance of extracting maximum value from customers for business success.
  • Differentiates between small business owners and large enterprises in terms of value extraction and customer ascension.

So one of the other pieces on my mind was about max client value extraction, which is just a, I guess, fan way of saying how to get the most money from people who are coming through your business.

This quote introduces the concept of maximizing client value as a key business strategy.

The Importance of Selling in Business

  • Speaker B emphasizes that selling is essential for business success.
  • Suggests that reluctance to sell is a reason why some small business owners struggle financially.

Most small business owners feel bad about selling people and that's why they're broke and can't make money and blah, blah, blah.

The quote highlights the common issue of small business owners' aversion to selling, which is critical for revenue generation.

Upselling and Ascension Process

  • Speaker B plans to share examples of upselling outside the fitness industry and their own refined process.
  • The process is choreographed to effectively increase customer spending.

And so what I want to do is give you an example of something that's not in the fitness space and then give you an example of what we have as a pretty refined process for upselling and ascending customers in a pipeline.

This quote indicates Speaker B's intention to provide practical examples of upselling techniques from different industries.

Goodwill and Revenue Equation

  • Speaker B shares a formula for making money that involves goodwill and frequency of sales requests.
  • The rental car industry is used as an example to illustrate this equation in practice.

The amount of goodwill you have times the number of times you ask for a sale equals revenue, equals how much money you make, right?

The quote presents a fundamental revenue generation formula, emphasizing the importance of goodwill and sales opportunities.

Observing Sales Processes

  • Speaker B recounts a personal experience with a car rental company's sales process.
  • Highlights the simplicity and effectiveness of the process, even with a new employee.

I just recently rented a car because we were on vacation in Utah. And so it was just for me, I was smiling the whole time because I enjoy selling processes in general and seeing what they're doing.

The quote shares Speaker B's appreciation for well-executed sales processes, drawing from a personal anecdote.

Upsell Opportunities

  • Speaker B describes two upsell attempts during the car rental process: a larger car and insurance options.
  • These examples show how to present upsell opportunities without being offensive.

So right there, upsell number one. Okay? [...] Then next thing that she says when we're going through this, she's like, so would you like the standard insurance, or would you like the minimum?

This quote gives specific instances of upsell opportunities, demonstrating how they can be integrated into customer interactions.

Upselling Tactics

  • Upselling is a common strategy used to increase the value of a transaction.
  • It involves suggesting additional purchases to customers, often presented as benefits or solutions to potential problems.
  • The conversation highlights several instances of upselling during a car rental experience.

"Okay, so that was upsell number two that happened. And this is just in a matter of, like a four minute conversation, all right?"

This quote illustrates the rapid succession of upselling attempts within a short period, emphasizing the aggressive nature of the strategy.

"So I ended up getting the insurance, okay? Which was an egregious, ridiculous amount, which was like, I think it was like $20 a day right now for insurance."

The quote points out the high cost of the insurance upsell compared to typical insurance rates, suggesting it is a high-profit margin item for the company.

"Number three. Thank you. Ari Lewis. Right. Upsell number three was, hey, would you like to just prepay for gas?"

This introduces another upsell tactic, prepaying for gas, which may not be economical for the customer if they do not use the full tank.

The Economics of Upselling

  • Upselling significantly increases the profitability of a transaction, often with high margins.
  • Companies rely on the statistical likelihood that a certain percentage of customers will opt for upsells.
  • The conversation describes the insurance upsell as having a "98% margin" due to the low likelihood of an incident.

"Most insurance is like $20 a month, right? And so for them to charge that for that period of time is literally pure profit."

This quote highlights the disparity between regular insurance costs and the inflated daily rate charged by the rental company, demonstrating the profit motive behind the upsell.

"You're talking like 98% margin on that money. Because the likelihood that it happens, is zero."

Here, the speaker emphasizes the high profit margin on the insurance upsell, underscoring the low risk to the company.

Prepaid Gas Upsell

  • Prepaid gas is presented as a convenience but may not be cost-effective for the customer.
  • The customer is charged for a full tank regardless of actual usage, which can result in overpayment.

"But what they don't tell you is that you're prepaying an entire tank of gas, which means that if you only use a third of your tank, you still paid for the entire tank of gas."

This quote reveals the hidden cost of the prepaid gas upsell, where the customer may not use the full amount they have paid for.

Impact on Customer Spending

  • The accumulation of upsells can significantly increase the overall cost for the customer.
  • The speaker mentions a total added cost of $400 due to various upsells.

"All of these little things that they added on. And I looked at Leo, I was like, you realize that we just added $400 to this ticket right?"

The quote demonstrates the speaker's realization of the cumulative financial impact of accepting multiple upsells.

Upselling as a Choreographed Experience

  • The speaker suggests that upselling should be a seamless part of the customer experience.
  • Upselling can be beneficial for customers who value convenience and are willing to pay for it.
  • The rental company's success is attributed to its understanding of the upselling process.

"But the point is that you have to have a choreographed experience for upselling."

This quote suggests that successful upselling is integrated into the customer experience in a way that feels natural and unobtrusive.

Defensive Strategies Against Upselling

  • The speaker advises taking a video of the rental car to avoid charges for pre-existing damage.
  • This strategy serves as a record to dispute any unwarranted fees.

"Quick hack is just take a video on your phone of your whole car, rather than trying to mark it on the thing so that if they do try and ding you, you can show the time and date stamp that the ding was already there."

The quote provides practical advice to protect oneself from being charged for damage not caused by the customer.

Application to Other Businesses

  • The speaker draws parallels between the car rental upselling techniques and the potential for upselling in other industries, like gyms.
  • Understanding and applying upselling strategies can enhance profitability.

"Now what I want to do is now explain the process that most people have at their gyms and why they don't make money, the reason it hurts and budget and dollar and all these ones had been in business is because they understand the process."

This quote transitions the conversation to apply the concept of upselling to other business models, suggesting that the lack of upselling may be why some businesses struggle financially.

Initial Sales Approach

  • Selling to a customer's goals is crucial when they first walk into a fitness facility.
  • The excitement and commitment of a new customer are highest upon their initial entry, making it an optimal time for sales.
  • Offering memberships tailored to the duration needed to achieve the customer's goals is recommended.
  • Free trials are discouraged as they are seen as less effective for revenue generation.

"When someone walks in the door, at that point is when you sell them service. And you don't just sell them a membership, you sell to their goal."

This quote emphasizes the importance of understanding and selling to a customer's specific fitness goals rather than offering a generic membership, suggesting a more personalized approach to sales.

Upselling and Value Addition

  • Introduce a nutrition orientation to onboard new customers and reiterate their goals.
  • Use the nutrition orientation to upsell supplements and prepared meals, providing convenience for the customer.
  • Understanding that a significant percentage of customers will purchase supplements and meals.
  • Multiple revenue streams should be established, similar to other industries like the car industry.
  • Upselling is not a one-time event but a continuous opportunity to provide value and generate revenue.

"And at this point, you can upsell them supplements, right? And you can upsell them meals so that they don't have to."

This quote highlights the strategy of offering additional products and services during the nutrition orientation to enhance the customer's experience and increase the business's revenue through upselling.

Follow-Up and Further Upselling Opportunities

  • Schedule follow-up meetings around day 14 or 21 to assess the customer's progress and satisfaction.
  • Use these meetings to set further goals, review performance, and attendance.
  • Offer additional services like personalized accountability for those not meeting their goals as another upsell.
  • Recognize the potential for upselling even to satisfied customers who may be open to further offers.

"At day 14 or at day 21, typically in that range is when you can actually meet again with the person, establish how they're doing, provide more value in terms of goal setting, and really just looking back at their performance up to this point, looking at their attendance, et cetera."

This quote outlines the process of conducting follow-up meetings to review customer progress and introduce additional upselling opportunities based on their individual needs and satisfaction levels.

Addressing Misconceptions in the Fitness Community

  • There is a negative perception of upselling in the fitness community, which is seen as detrimental to business growth.
  • The speaker encourages entrepreneurs to view upselling as a positive and necessary aspect of business.

"And in fitness, because we have poor views about money as a community, we say it is bad to upsell people."

This quote points out a common misconception within the fitness community regarding upselling and money, suggesting that changing this mindset is crucial for business success.

Leveraging Customer Success

  • Discusses how to capitalize on customer success by offering advanced programs.
  • Highlights the importance of using customer satisfaction to promote further sales.

You give them at this point because they're already so thrilled with the results. So either scenario actually works to your advantage because if they're struggling now, you can solve the pain. And if they're succeeding, then you can have the goodwill that you can bank on to say, hey, if you're getting results on this, imagine the results you're going to get with our more advanced program, with more accountability, more coaching, et cetera.

The quote emphasizes the strategy of using the customer's current success or challenges as a springboard for introducing additional, more advanced offerings, thus enhancing customer experience and increasing sales.

Creating a Choreographed Experience

  • Emphasizes the necessity of guiding customers through a structured experience with multiple revenue streams.
  • Differentiates between the ease of certain sales (like renting a car) versus the challenge of selling gym memberships, which often requires more persuasion.

And so to recap this, the choreographed experience that you need to take someone through has to be multiple revenue streams. Many times in the gym space be multiple conversations.

This quote outlines the concept of a "choreographed experience," which involves a series of strategically planned conversations designed to introduce various revenue streams to the customer.

Sales Strategy in the Gym Space

  • Details the sales approach of selling to a customer's goals rather than simply selling a product or service.
  • Discusses the importance of commitment to long-term programs for increased customer lifetime value.

All right, so sale number one is going to be your service sale, where you sell to goal, not sell them a membership or sell them a trial, but you send them all the way to the goal.

The quote explains the initial sales strategy, focusing on selling the end goal to the customer rather than just a membership, which leads to higher commitment and sales value.

Diversifying Revenue Streams

  • Outlines the strategy of introducing additional revenue streams, such as supplements and nutrition, during follow-up consultations.
  • Suggests the timing for upselling additional services to enhance customer value.

Then after that, you establish two other revenue streams from supplements and food at the second consultation that you have, which is for nutrition.

This quote discusses the expansion of revenue through additional offerings, specifically supplements and nutrition, which are introduced in subsequent consultations.

Upselling and Maximizing Value

  • Discusses the strategy of upselling higher levels of service to increase revenue.
  • Highlights the importance of regular campaigns to re-engage past customers and promote special programs.

And then if you want to be even sexier as a gym owner, once a quarter, you're doing an entire campaign to your whole list, your current customers and your list of past customers and reactivations to get them back in the door and upsell them into a defined period program like a 28 day belly fat blast or a six week challenge, or big booty boot camp, or an accountability challenge or whatever.

The quote suggests the use of regular marketing campaigns to re-engage customers and introduce them to new, time-bound programs that can lead to upsells and increased participation.

Business Growth and Revenue Enhancement

  • Stresses the importance of utilizing multiple sales tactics to avoid missing out on potential revenue.
  • Encourages implementation of the discussed strategies to see an increase in revenue per customer.

And so overall, after having your first service sale and then your supplements and nutrition sale, and then you have your higher level of service, upsell for semi private, for one on one, for accountability, for remote training, all those things on conversation number three. And then on a regular basis, you kind of catch with a big net anyone else who slipped through the cracks, get them to bring friends, reactivate.

This quote summarizes the multi-layered approach to sales, which includes initial service sales, follow-up sales for supplements and nutrition, and further upselling of personalized services to maximize customer value and revenue.

Call to Action and Implementation

  • Encourages listeners to apply the discussed strategies in their own businesses.
  • Invites feedback and engagement from the audience to gauge the value of the content provided.

So anyways, I hope this was valuable for you. If you did like it, tag someone or comment or leave a kind review on the podcast if you're listening and hope you guys have an amazing day and implement this. And don't be afraid to make more by providing.

The quote serves as a closing statement, encouraging listeners to implement the strategies discussed, engage with the content by tagging and commenting, and not to hesitate in seeking increased revenue through providing value.

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