The 6 Things Gym Profit Leaders Are Doing Right That You Might Not Be...🏆🏆🏆 Ep 85

In a video by gym launch expert Speaker A, the key strategies for successful gyms are distilled from a Zen Planner report. The report identifies six practices that distinguish market-leading gyms from average ones: higher pricing with minimal discounts, efficient space utilization, strategic payroll management, and performance-based commissions. Leaders charge an average of $172 per month, rarely discount, and use half the space per customer compared to less successful gyms. They also tend to operate in highly competitive markets, which Speaker A argues fosters excellence. He advocates for premium pricing to fund superior services and advises against discounting, as it devalues the service and creates a culture of negotiation. Speaker A also recommends optimizing space by selecting appropriate exercises and partnering clients to increase capacity. For payroll, he suggests a lower base pay with commission incentives to keep costs manageable and motivate staff performance.

• Gym Launch has implemented "No Talk Tuesdays" to focus on productivity.
• This initiative eliminates meetings allowing staff to concentrate on their tasks.
• Speaker A finds this beneficial for getting work done.

Happy Tuesday. We're actually on no talk Tuesday, which is a new thing that we started at gym launch, meaning we don't have meetings going on, which is awesome, because then everyone just gets to GSD, get stuff done.

The quote explains the concept of "No Talk Tuesdays" at Gym Launch, emphasizing its effectiveness in improving productivity by eliminating meetings.

• Industry reports are valuable for understanding the broader industry trends.
• Zen Planner's report provides insights specific to the fitness industry.
• Speaker A encourages checking such reports for valuable data.

And so one of the things I have my agenda today was actually, my agenda yesterday was to make this video for you guys. And this comes directly from a report that was released by Zen Planner, which I highly encourage you guys to go check out different industry reports, because they're very telling just to see where the entire industry as a whole is.

The quote highlights the significance of industry reports, like the one from Zen Planner, as a source of valuable insights for businesses.

• The report identifies six practices of market leaders in the gym industry.
• Speaker A opts to share all findings in one video rather than multiple ones.
• The report's findings align with Gym Launch's advice, providing validation.

But anyways, there were six things that were outlined that market leaders do that the average gym does not do.

This quote introduces the key findings from Zen Planner's report, which distinguish market leaders from average gyms.

• Successful gyms tend to charge more than the average gym.
• The report states an average charge of $172 per month.
• Speaker A believes in charging slightly higher than the reported average for more profit.

So gyms that make the most money charge more. What a concept. And the average gym charges $132 a month.

The quote summarizes the pricing strategy of successful gyms as highlighted in the report, indicating that higher charges correlate with higher profitability.

• Industry leaders offer fewer discounts, maintaining higher average membership fees.
• Average members at leading gyms pay $142 per month, versus $72 at less successful gyms.
• Speaker A suggests that offering lifetime rates can negatively impact average earnings.

Industry leaders didn't really discount. And so the average member at their gym was paying 142 per month. Now, guess what the average laggard was paying or having their members pay. It was $72 a month on average per member.

This quote addresses the impact of discounting strategies on revenue, showing that less discounting results in higher average payments from members.

• Speaker A discusses two approaches to increase rates: filling up the gym or immediate price hikes.
• Both strategies have been employed, with the latter providing instant financial benefits.
• Adjusting rates is necessary to maintain profitability and manage capacity.

There's two ways to approach it. One is you can fix it by filling up your gym first, and then going back to those people and raising it and saying, sorry, we're at capacity. Like, I have to make these changes, or you can make money tomorrow and just tell them that you want to raise the prices.

The quote outlines two strategies for adjusting membership rates to increase gym revenue, emphasizing the need to manage member pricing effectively.

• Emphasize the importance of not offering discounts to close sales as it diminishes profitability.
• Discuss the misconception that market leaders are successful due to lack of competition.
• Highlight that market leaders often emerge in competitive environments.
• Suggest that operating in competitive markets can drive businesses to improve and succeed.
• Encourage adopting strategies from industry leaders, regardless of market saturation.
• State a belief in the correlation between higher pricing and the ability to reinvest in improving service quality.
• Assert that customers are willing to pay more for a better experience.
• Emphasize the responsibility of businesses to demonstrate the value of their service to justify higher prices.

Don't discount. A lot of people do these backdoor deals because they're really just trying to, like, they're desperately trying to close the sale. But what ends up happening is you just kill the profitability of your facility, and so you just perpetuate this issue.

This quote underlines the negative impact of discounting on profitability, suggesting that it is a short-term solution with long-term consequences.

The market leaders tended to be in areas that were the most populated with other facilities. What does that tell you? Tells you the best rise to the top.

This quote challenges the notion that market leaders thrive due to lack of competition, instead indicating that success often comes in highly competitive markets.

The best way to get really good is to go to the jungle and cut your teeth with the fiercest beast.

This metaphor suggests that facing tough competition is a way to improve and succeed in business.

My belief is that the higher your price is, the more money you'll have left over in order to reinvest in the experience.

The speaker expresses their belief that higher prices can lead to better service quality due to the availability of funds to reinvest in the business.

Most people are willing to pay more, especially when we're talking about 30, 40% more, to have a much better experience.

Here, the speaker suggests that customers value a superior experience enough to pay a significant premium.

• Criticize the practice of discounting as a sign of low confidence in the product.
• Discuss the importance of salespeople believing in the product they are selling.
• Emphasize that businesses should focus on selling results, not just the service.
• Underline the need for businesses to show customers the excess value they will receive.

Discounts. Don't do them. You're devaluing yourself. It's also a really bad habit because it just shows a lack of conviction in your product, lack of conviction in the salesperson, lacking conviction what you're actually selling, which is results, not the actual service.

This quote advises against discounting, stating that it reflects a lack of belief in the value of the product and the results it can deliver.

• Mention the speaker's willingness to assist large business owners in scaling their operations.
• Provide a call to action for business owners to seek guidance on growth.
• Reiterate the importance of maintaining a price point that reflects the value offered.

If you are a business owner that has a big old business and wants to get to a much bigger business, going to 5100 million dollars plus, we would love to talk to you.

This quote is an invitation for large business owners to engage with the speaker for advice on expanding their business.

Make sure that you're on the 170 plus range, which you probably heard in a bunch of videos from me anyways, which works out to like $39 a week or more if you're billing weekly.

The speaker suggests a specific pricing benchmark, implying that maintaining a certain price point is crucial for perceived value and profitability.

• Offering discounts early in the business can lead to customers perceiving all prices as negotiable.
• It can diminish the appearance of being an established company with firm pricing.
• Sticking to set prices increases respect and reduces problematic customer behavior.

"As soon as you make a discount early on, what ends up happening is that that person owns you, and now they think everything's negotiable."

This quote highlights the negative impact of early discounting, suggesting that it can lead to a customer's expectation that all future transactions are open for negotiation.

• Industry leaders use half the amount of space per customer compared to less successful gyms.
• Efficient space usage involves selecting exercises that are less space-consuming and partnering people up during workouts.
• These strategies increase customer capacity and reduce the need for larger facilities, cutting overhead costs.

"So on average, the industry leaders use half the amount of space per customer compared to the average kind of loser gyms."

The speaker compares industry leaders to less successful gyms, emphasizing that leaders are more efficient in using space, which contributes to their success.

• Choosing exercises that require less space and have a shorter learning curve is recommended for general population fitness.
• Exercises like double unders are discouraged in favor of more space-efficient options.
• The focus is on achieving fitness goals without unnecessary space or complexity.

"I totally demonize double unders, and I know everyone's like, what? And I know in the CrossFit world, my big point is this, is that for general population, which is what the majority of us serve, there are other tools, there are other exercises that we can use to accomplish the objective of conditioning someone that do not require as much space, as much complexity and a learning curve."

The speaker criticizes the use of double unders, a space-consuming exercise, and suggests alternative exercises that are more suitable for the general population frequenting fitness facilities.

• Partnering clients during workouts doubles the number of people a facility can accommodate.
• This approach allows one person to rest while the other exercises, optimizing the use of space and equipment.
• Such strategies can lead to a significant increase in service capacity and a reduction in session times.

"I highly recommend you partner people up so that one person cheers and holds other. One person cheers, spots and rests while the other person does a strength-based movement, whatever."

The speaker advises on partnering clients in workouts to maximize space utilization, which can lead to increased capacity and efficiency within the facility.

• Efficient operations can lead to a decrease in payroll expenses as a percentage of gross revenue.
• By increasing prices and reducing space and payroll costs, industry leaders maintain a lower payroll to revenue ratio.
• Incentivizing staff with commissions on sales and memberships can further optimize payroll expenses.

"Their payroll was, on average, half of the laggard. So right now the laggard is half of their gross revenue went to payroll, whereas the industry leaders, it was 25%."

The speaker compares the payroll expenses of less successful gyms (laggards) with industry leaders, showing that leaders have a more efficient payroll structure, which is a significant factor in their financial success.

• A lower base pay with incentives for staff to perform well can lead to a more motivated workforce.
• Commissions can be offered for conducting semi-private sessions, selling products, and converting clients into memberships.
• This structure aligns staff interests with business growth, potentially reducing payroll costs and increasing revenue.

"I'm a big believer in having lower base pay and then having lots of incentives around semi privates, around selling other products that you have at the facility, like actually doing front end sales, converting people into memberships, like all of these different things."

The speaker advocates for a pay structure that motivates staff through incentives, which can lead to increased sales and efficient payroll management.

• Premium pricing allows for a higher quality product and service.
• Investing in the business, such as customer acquisition and support teams, is possible with premium pricing.
• Premium pricing contributes to a virtuous cycle of business growth.

"Make sure that your pricing is premium, have a reason to have premium pricing so that you can have a premium product, right?"

The quote emphasizes the importance of setting high prices to ensure the quality of the product or service, which in turn allows for reinvestment into the business to maintain and enhance quality.

• Never discount prices or negotiate with clients who demand lower prices.
• Maintaining firm pricing is crucial for the sustainability of the business and job security.
• Business owners must adhere to their own pricing policies to set an example for staff.

"Don't negotiate with terrorists. Like the price is the price for a reason. Because if it's not that, none of us have jobs, right."

This quote underscores the necessity of sticking to set prices to protect the financial health of the business and the jobs of those who work there.

• Efficient exercise selection and pairing clients can double facility capacity.
• Selling points for pairing include safety, motivation, and scientific benefits related to muscle gain and energy systems.
• Proper rest intervals are necessary for effective workouts.

"Consider partnering people up. I think it's a great selling point."

The quote suggests using the strategy of pairing clients during workouts as a unique selling point, which can improve workout effectiveness and facility efficiency.

• Implementing a lower base pay with higher commission potential can motivate trainers.
• A commission-based structure helps manage fixed costs and reduce financial risk during low performance periods.
• The actual pay to trainers can be higher due to commissions, incentivizing better performance.

"Have a lower base and then higher upside on the commissions and you'll be able to get more performance and ultimately keep your fixed costs lower."

This quote explains how a lower base salary combined with the potential for high commissions can enhance trainer performance while keeping the business's fixed costs manageable.

• Industry leaders often operate in highly competitive markets.
• Best practices are developed in competitive environments where businesses must excel to survive.
• Being in a competitive market necessitates adherence to effective business strategies.

"They were in the most competitive marketplaces and those are the places that you have to and where diamonds are formed and that's why the best practices are made, because if they didn't have those, they'd go out of business."

The quote conveys that operating in a competitive market forces businesses to innovate and adopt best practices to thrive, likening the process to the formation of diamonds under pressure.