The Oh Shit Moment Ep 199



In the latest Gym Secrets podcast, the host emphasizes the need for gym owners to adapt to a changing fitness landscape. He predicts a challenging recovery post-pandemic, as consumer behavior shifts towards convenience and remote fitness options. The host draws parallels to the fall of Blockbuster due to underestimating digital streaming, suggesting that gyms must evolve similarly. He presents compelling data showing that remote gyms have higher lead conversion rates and suggests that gym owners should consider transitioning to online models to maximize reach and profitability. The host stresses the urgency of leveraging current opportunities to build a successful online fitness business, warning against complacency and encouraging proactive adaptation to the evolving market demands.

Summary Notes

Introduction to Gym Secrets Podcast

  • The podcast focuses on strategies for gym owners to attract and retain customers.
  • The host shares personal experiences and lessons learned in the fitness industry.
  • The podcast is aimed at gym owners facing challenges due to changes in the 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 have learned along the way."

This quote introduces the podcast's main objectives: customer acquisition, maximizing revenue per customer, customer retention, and learning from past mistakes.

The 'Oh Shit' Moment

  • Gym owners are currently in a state of denial about the impact of external changes on their business.
  • The host predicts that fewer people will return to gyms than owners expect once they reopen.
  • A slower recovery for gyms is anticipated due to ongoing consumer wariness.

"So I'm calling this the oh shit moment. Because right now, I think that there's still a certain sense of hope, right? I think that when they turn the lights back on, when they turn the economy back on, when they let gyms back... I think a lot fewer people are going to come back than you think."

The "oh shit" moment refers to the realization gym owners will have when they notice the customer turnout is significantly lower than expected once they reopen.

Denial and Rationalization

  • Gym owners may be rationalizing their situation to avoid facing potential negative outcomes.
  • Comparisons are made to how Blockbuster executives dismissed the threat of online streaming services like Netflix.
  • The host suggests that gym owners, like Blockbuster, may not be adequately considering the shift in consumer behavior.

"Because it's so easy to rationalize our, like, human beings don't want to think of bad case scenarios, and so we rationalize that we don't need to change, right? And so Blockbuster executives... They were fucking wrong."

This quote highlights the danger of rationalizing away threats to one's business, drawing a parallel to the failure of Blockbuster to adapt to the rise of online streaming.

Consumer Behavior and Convenience

  • People generally prefer more convenient options, even if it means sacrificing certain experiences.
  • The shift to online fitness is likened to the preference for Netflix over the Blockbuster experience.
  • The pandemic has accelerated the adoption of online fitness services by a decade.

"And so the reality is that people will always choose their convenience... It took all of the remote services and dragged it ten years into the future in terms of mass adoption. It was forced adoption."

The quote emphasizes the preference for convenience in consumer choices and how the current situation has rapidly advanced the adoption of online services.

Economic Impact and Job Market

  • There is a concern that companies may not rehire all employees laid off during economic downturns.
  • The host implies that the demand for services may not return to pre-crisis levels.
  • The gym industry, like other sectors, may face a 'oh shit' moment when economic activity resumes but fails to meet previous highs.

"Here's the others oh shit moment is that some of the companies that did layoffs may not rehire everyone, right? Because the demand is not going to be what it was at the single greatest moment in economic history."

This quote presents the concern that the job market may not fully recover, which could affect the demand for gym services and other industries.

Market Shifts and Opportunities

  • The host acknowledges that the reduced attendance at physical gyms could benefit businesses that offer online fitness solutions.
  • The host hints at using aggressive marketing strategies to capitalize on the shift towards remote services.

"Which transparently will be great for me because I'm just going to market the shit."

The quote suggests that while traditional gyms might struggle, there is an opportunity for those who can adapt and offer online services to thrive in the changing market.

Marketing Importance in the Fitness Industry

  • The importance of marketing for gyms will increase post-crisis to differentiate and stand out.
  • Effective marketing strategies are essential for recovery, especially for gyms that have lost clientele.

"Because that will be when marketing is more important than ever. Because you're going to have to differentiate and get your name out there more than anyone else is."

This quote emphasizes the heightened importance of marketing strategies for gyms post-crisis to attract and retain clients.

Building Strong Gym Communities

  • Strong communities contribute to better recovery for gyms.
  • Good operators with strong communities, engaged coaches, and positive culture are likely to fare better.
  • The strength of a gym's community can be a determining factor in its resilience and success.

"If you're an amazing operator and you haven't lost anyone, then you'll probably recover better than people who have lost people, right? Because you have a stronger community, you have more bought in coaches, you have a better culture, et cetera, right?"

This quote highlights the advantage that gyms with strong communities and operational excellence have over those that have lost members and have weaker community ties.

The Shift to Remote Gym Operations

  • There is a significant difference in ROI between remote and in-person gym operations.
  • The decision to be a business or gym owner is personal and affects the approach to maximizing income.
  • Remote operations can potentially expand the business's reach and profitability.

"And the question is whether or not you want to be a business owner or a gym owner. And that's a very real question."

This quote introduces the idea that gym owners must decide whether their goal is to solely run a gym or to expand into broader business opportunities, potentially through remote operations.

Financial Realities of Gym Ownership

  • Making a million dollars a year from a single gym facility is unlikely without a massive client base.
  • Understanding the relative scope of the business and realistic financial expectations is crucial.

"But no, it's not from one facility. Unless you have a massive facility and typically group training, personal training set will be only a part of that, right?"

This quote conveys the reality that substantial financial success in the gym industry typically requires more than just one facility unless it's a very large operation with numerous members.

Advantages of Remote Gym Operations

  • Remote gyms are currently seeing an increase in lead conversion rates.
  • A larger geographic radius for marketing means more potential leads and a broader impact.
  • Lead costs are lower when drawing from a larger radius, but creating trust is a challenge.

"So in my belief, there is no way better than right now for the best operators to be able to build a million dollar income business."

This quote suggests that for top operators, the current market conditions are ideal for scaling up to a million-dollar income business, particularly through remote operations.

Sales and Lead Generation Strategies

  • Remote gyms are getting more sales opportunities ("at bats") and thus, despite lower closing percentages, are still netting more sales.
  • The cost per impression for advertising has returned to normal, but wider radius advertising remains cost-effective.
  • The challenge lies in creating a trustworthy environment for remote sales.

"But if you get twice as many at bats, you actually still net more sales."

This quote explains that despite a lower closing percentage for remote sales compared to in-person, the increased number of opportunities compensates and leads to more overall sales.

Business Owner Mindset vs. Gym Owner Mindset

  • It's suggested to adopt a business owner mindset, focusing on the math and economics of the operations.
  • Operators are currently breaking even on the first transaction, which is a shift from previous higher returns.
  • Capacity and lead flow are critical factors; a wider marketing radius can lead to higher and cheaper lead flow.

"But you are limited by your capacity to fulfill in terms of how many people you can have at each time. You're limited by your lead flow because let's be real. Like lead flow of a 25 miles radius is always going to be higher and cheaper than in a five mile radius because it's quadratic, right?"

This quote explains the logistical and mathematical considerations that impact lead flow and the cost of acquisition, emphasizing the benefits of a wider marketing radius.

Understanding Quadratic Expansion

  • Quadratic expansion refers to how the area of a circle increases quadratically with its radius.
  • A larger circle will have an area that is more than double that of a smaller one if the radius is doubled.
  • This concept is exemplified by comparing pizza sizes.

"If you have a twelve inch pizza and you have a 24 inch pizza, a 24 inch pizza is not twice as big as a twelve inch pizza. You can fit like 412 inch pizzas inside of a 24 inch pizza because that's how circles work. It's called quadratic expansion."

The quote explains the concept of quadratic expansion using the example of pizzas, demonstrating that a 24-inch pizza has an area much larger than twice that of a 12-inch pizza due to the quadratic relationship between the radius and area of a circle.

Importance of Audience Engagement

  • The host emphasizes the significance of audience ratings and reviews for the growth of the podcast.
  • The host playfully chides the audience for not reviewing but quickly reassures them of the jest.
  • Audience engagement is portrayed as a collaborative effort to reach more entrepreneurs.

"Hey, if you're a return listener and you have not rated or reviewed the show, I want you to know that you should feel absolutely terrible about yourself and everything else in the world. I'm kidding. But it would mean the absolute world to me."

This quote encourages listeners to rate and review the podcast, highlighting the importance of audience engagement in expanding the show's reach.

Expanding Business Reach

  • The radius of business outreach impacts the number of potential leads.
  • Increasing the geographic radius can exponentially increase lead flow.
  • Struggles with lead flow can be mitigated by targeting a larger audience.

"And so when you go to a 25 miles radius, you're talking ten times, you know what I mean? The amount of people that you would be reaching otherwise."

The speaker illustrates how expanding the business radius can significantly amplify the potential customer base, which is essential for lead generation.

Business Metrics and Profitability

  • Consistent lead generation and a high close rate of 11% are achievable online.
  • The host shares specific metrics such as spending $1,500 for a $6,000 front end revenue in 30 days.
  • High gross margins on the back end are possible, contributing to overall profitability.

"Breaking even on the front end and having an 80% gross margin on the back end. You're talking about spending right now. If you spend $1,500, you'll make $6,000 in front end revenue in 30 days."

The quote provides a specific example of the cost-revenue relationship in online business, emphasizing the potential for high profitability with the right strategies.

Building an Online Business

  • Starting an online business can lead to a significant income with proper investment and strategy.
  • The speaker shares the average numbers for online business success.
  • The importance of realistic expectations and accounting for customer retention is highlighted.

"If you spent $2,200 in ad spend over the first 30 days, you would be able to have 50 people in your online remote business after you lost 40% for not going into continuity."

This quote details a strategy for building an online business, including investment in advertising and managing expectations for customer continuity.

Decision Making Based on Opportunities

  • The current market provides opportunities for significant online income.
  • The speaker acknowledges that not everyone will pursue these opportunities due to personal choices or industry preferences.
  • The use of mathematical decision-making is advocated for business success.

"But what I can tell you is the opportunity is there. And so in the next 30 days, in the next 60 days, if you wanted to build yourself a six figure or multi six figure online income, you could do it."

The speaker emphasizes the presence of opportunities in the market for building a profitable online business in a short timeframe, encouraging listeners to consider the potential financial gains.

Embracing Remote Sales Skills

  • Selling over the phone is a critical skill for maintaining business during times when in-person contact is not possible.
  • Acquiring phone sales skills not only sustains the business currently but also enhances future in-gym sales by converting a higher percentage of leads.
  • Learning to sell over the phone is the gateway to establishing an online business.

"decisions with math right now and not let your emotions, and not let your fear, and not let your discomfort around learning a new skill, which is selling over the phone, because is the only thing you have to do, that's it."

This quote emphasizes the importance of focusing on logical decision-making and overcoming emotional barriers to learn phone sales skills, which are deemed essential for business survival and growth.

Impact of COVID-19 on Consumer Behavior

  • The pandemic has introduced the mass market to online training, a concept previously unknown to many.
  • Post-pandemic, consumers are expected to be more comfortable with making purchases remotely, including fitness services.
  • Businesses are encouraged to adapt to this shift and incorporate remote consultations as a standard practice.

"Now the mass market has been introduced to what online training is like. Most people don't even know what it was. Now they know what it is."

The speaker is highlighting the significant shift in public awareness and acceptance of online training due to the pandemic, suggesting a lasting change in consumer behavior.

The Importance of Recognizing Industry Changes

  • Underestimating the significance of the public's newfound recognition of the online training industry is a mistake.
  • This recognition is a pivotal moment for the fitness industry, as it expands the potential market and normalizes remote interactions.

"And so you're underestimating how big of a deal it is for them to even recognize that industry."

The speaker is cautioning against overlooking the impact that increased awareness of online training has on the industry's future.

Strategies for Post-Pandemic Business

  • Businesses should prepare for a future where remote services are a preference, not just a temporary solution.
  • The pandemic provides a valid reason for conducting business remotely, which can be communicated to customers as a benefit.
  • Prefacing sales calls with the context of the pandemic can smooth the transition to remote business operations.

"What if you have a business that just cash flows later and then you have your gym?"

This quote suggests the potential for a hybrid business model that combines remote services with traditional gym operations, leading to diversified income streams.

Leveraging the Pandemic for Remote Fitness

  • The pandemic has given businesses an unprecedented opportunity to explain the shift to remote services.
  • Government and media efforts have inadvertently educated consumers about online and remote fitness options.
  • The speaker expresses gratitude for this unintended assistance in consumer education.

"Because this has given us the biggest reason of all time. The biggest. Why am I remote? Why are you doing this over the phone? Why are we doing this online? It has now given everyone permission to have that reason that we never had before."

The quote captures the unique opportunity presented by the pandemic to justify the transition to remote business models, which were previously more challenging to explain to consumers.

Predictions for Consumer Behavior Post-COVID

  • The speaker predicts that once businesses reopen, many consumers will opt to continue with remote services due to convenience.
  • Convenience and speed are fundamental drivers of human behavior, especially in the fitness industry.
  • Proximity plays a crucial role in gym selection, and remote services can overcome geographical limitations.

"Convenience and speed always win with humans. Always."

This quote underlines the speaker's belief that the inherent human preference for convenience will favor the adoption of remote fitness services.

Call to Action for Fitness Businesses

  • The speaker urges fitness businesses to take proactive steps now rather than waiting for the pandemic to end.
  • Online fitness services are viewed as more profitable, lower risk, and better suited to the post-corona economy.
  • The businesses that will succeed are those with lower overhead, higher margins, and the ability to reach customers remotely.

"Take action now, start selling remote. I think it is incredibly, incredibly, incredibly awesome right now."

The speaker is advocating for immediate action in adopting remote sales strategies, emphasizing the urgency and potential benefits of doing so.

What others are sharing

Go To Library

Want to Deciphr in private?
- It's completely free

Deciphr Now
Footer background
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon
Crossed lines icon

© 2024 Deciphr

Terms and ConditionsPrivacy Policy