The Oh Sht Moment Ep 209



In the latest Gym Secrets podcast, the host discusses the challenges facing gym owners in the wake of the COVID-19 pandemic, emphasizing the need to adapt to a changing market where online fitness services have surged in popularity. He predicts a slow recovery for physical gyms due to lingering safety concerns and shifts in consumer behavior, comparing the situation to the fall of Blockbuster in the face of Netflix's rise. Using statistical models, he argues that gym owners should consider transitioning to or augmenting their business with online services, highlighting the potential for increased reach, lower lead costs, and higher profit margins. He urges listeners to act now, leveraging the forced adoption of online services to build a lucrative, remote fitness business, rather than waiting for a return to normalcy that may not favor traditional gyms.

Summary Notes

Introduction to Gym Secrets Podcast

  • The Gym Secrets podcast is focused on strategies to attract and retain customers in the fitness industry.
  • It provides insights on increasing customer value and shares lessons from past failures.
  • The host encourages gym owners to adapt to changing market conditions, especially in light of recent shifts towards remote fitness.

"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."

The quote introduces the podcast's themes and objectives, emphasizing the importance of customer acquisition, revenue maximization, and retention in the fitness business.

Denial Phase Among Gym Owners

  • Gym owners are currently in a denial phase, expecting to resume normal operations soon.
  • The belief is that once restrictions are lifted, things will return to how they were pre-pandemic.
  • The speaker expresses doubt about this approach, suggesting that waiting passively for the end of restrictions is not a viable strategy.

"Right now everyone's in denial phase... they're in the phase of I'm going to hold out. I think I can wait a couple more weeks for this to be over."

The quote captures the current mindset of gym owners who are in denial about the long-term impact of the pandemic on their business, expecting a quick return to normalcy.

The "Oh Shit" Moment

  • The host describes the "oh shit" moment as the realization that the recovery will be slower than anticipated.
  • There is an expectation that fewer people will return to gyms once they reopen due to persistent health concerns and changes in consumer behavior.
  • The host warns that gym owners need to be prepared for a different reality post-pandemic.

"I'm calling this the oh, shit moment... a lot fewer people are going to come back than you think."

This quote underscores the anticipated shock gym owners may face when they realize the actual number of returning customers is lower than expected.

Comparison with the On-Demand Economy

  • The host compares the situation with gyms to the shift from Blockbuster to Netflix.
  • There is a belief that convenience will always win over traditional experiences.
  • The pandemic has accelerated the adoption of online fitness services, a trend that is likely to continue.

"Everyone thought that... all this online fitness stuff is going to go away... They were fucking wrong."

The quote highlights the misconception that online fitness would decline post-pandemic and draws a parallel with the failure of Blockbuster to adapt to the rise of streaming services.

The Convenience Factor

  • The preference for convenience is a powerful driver of consumer behavior.
  • The pandemic has forced a rapid shift towards online services, including fitness.
  • Many consumers have adapted to online training and may prefer to continue with it due to convenience.

"People will always choose their convenience... a huge piece of the marketplace... would have tried online training... It took all of the remote services and dragged it ten years into the future."

The quote emphasizes the lasting impact of the pandemic on consumer preferences and the accelerated adoption of online fitness services.

Economic Impact on Employment

  • The host speculates that some companies may not rehire all employees laid off during the pandemic.
  • This could be due to a permanent shift in demand, which may not return to pre-pandemic levels.
  • The fitness industry, along with others, may need to adjust to a new economic reality.

"Some of the companies that did layoffs may not rehire everyone because the demand is not going to be what it was at the single greatest moment in economic history."

This quote raises concerns about the long-term economic consequences of the pandemic, suggesting that the job market may not fully recover, affecting consumer spending and the fitness industry.

Marketing Strategy for Gyms

  • Importance of marketing for gyms, especially when competition is high.
  • Differentiation and visibility are crucial in a crowded market.

"I'm just going to market the shit out of the gyms that want to work with us. Because that will be when marketing is more important than ever."

This quote emphasizes the speaker's commitment to aggressively market gyms that partner with them, highlighting the increased importance of marketing in competitive times.

Preparing for the Ownership Moment

  • The ownership moment is imminent; preparation is key.
  • Stronger communities within gyms lead to better recovery post-crisis.
  • Good operators with loyal customers and solid culture will fare better.

"What do you need to do now? Because the oship moment will come now."

The speaker is urging gym owners to prepare for the critical moment of ownership, indicating that it is an immediate concern.

"If you're an amazing operator and you haven't lost anyone, then you'll probably recover better than people who have lost people."

This quote suggests that gym operators who have maintained their customer base and community throughout a crisis will have a better recovery compared to those who have lost members.

Remote vs. In-Person ROI

  • Statistical model comparing ROI of remote versus in-person gym services.
  • Decision between being a business owner or a gym owner affects financial goals.
  • Maximizing income may not be possible with a single gym facility.

"I did a huge statistical model looking at the difference between ROI on remote versus ROI in person."

The speaker indicates they have conducted a detailed analysis on the financial returns of remote services compared to traditional in-person gym operations.

"And the question is whether or not you want to be a business owner or a gym owner."

This quote presents a fundamental choice for gym operators, suggesting that the decision will impact the approach to income generation.

Building a Million Dollar Income Business

  • Opportunities for top operators to build high revenue businesses.
  • Remote gyms are experiencing a larger market reach and higher lead conversion.
  • Lead costs are temporarily lower due to market conditions.

"There is no way better than right now for the best operators to be able to build a million dollar income business."

The speaker believes that the current market conditions present an unprecedented opportunity for the most capable gym operators to build highly profitable businesses.

"Our remote gyms right now are closing a higher percentage of leads than they did in person."

This quote indicates that remote gyms are seeing a higher success rate in converting leads to customers compared to traditional in-person methods.

Advantages of Remote Gym Operations

  • Increased geographic reach for marketing.
  • Higher number of sales conversations leads to more sales, despite lower in-person closing percentages.
  • Lead costs are cheaper when drawing from a larger radius.

"You can have a bigger geographic radius. So the many people that I've talked to says, like, I want to have a bigger impact. Here's how you have a bigger impact."

The speaker highlights the potential for gyms to expand their impact by reaching a broader audience through remote operations.

"Lead costs are cheaper. Not because of the ad impressions and stuff, because that's temporary, right."

The quote explains that cheaper lead costs are a result of a larger marketing radius, not due to temporary market fluctuations in advertising costs.

Business Owner vs. Gym Owner

  • Urging gym operators to adopt a business owner mindset for financial efficiency.
  • Overcoming limitations of physical capacity and local lead flow.

"I would urge you to be a business owner and not a gym owner for the moment."

The speaker advises gym operators to think more broadly like business owners rather than limiting themselves to the traditional gym owner perspective.

"Right now, our guys are essentially breaking even on the first transaction."

This quote suggests that gym operators are currently managing to cover costs on initial customer transactions, which is a shift from the previous higher returns.

Understanding Quadratic Expansion

  • Quadratic expansion explains how area increases in a circular shape.
  • When the radius of a circle is doubled, the area increases by a factor of four (quadratic relationship), not two.
  • This concept is used to illustrate how increasing the radius of service or product reach can exponentially increase the potential customer base.

"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 4 12 inch pizzas inside of a 24 inch pizza because that's how circles work. It's called quadratic expansion."

The quote explains quadratic expansion using the example of pizzas, showing that a 24-inch pizza has four times the area of a 12-inch pizza, not double, due to the properties of circles.

Expanding Geographic Reach

  • Increasing the radius of your target market from 5 to 25 miles can expand your reach by ten times or more, significantly enhancing lead flow.
  • This expansion allows businesses to help more people and avoid difficulties with acquiring leads.

"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, or 20 or 50 or whatever the math is."

This quote emphasizes the impact of increasing geographic reach on the potential customer base, using a 25-mile radius as an example to illustrate the exponential increase in reach.

Importance of Audience Support for the Podcast

  • The podcast does not run ads or sell products; the only request from the audience is to spread the word.
  • Audience support through ratings, reviews, and sharing the podcast helps more entrepreneurs.

"And so the only ask that I can ever have of you guys is that you help me spread the word so we can help more entrepreneurs make more money, feed their families, make better products, and have better experiences for their employees and customers."

The quote is a call to action for listeners to support the podcast by spreading the word, which in turn supports the broader entrepreneurial community.

Online Business Revenue and Ad Spend

  • An average online business can generate $6,600 in front-end revenue from a $1,500 ad spend within 30 days.
  • This statistic is based on an average closing rate of 11% for leads, which is higher than most in-person rates.

"If you spend $1,500, you'll make $6,000 in front end revenue in 30 days. That's what the math is, right? That's the average."

The quote provides specific numbers on the potential return on investment for online businesses, highlighting the efficiency of online lead generation and conversion.

Building a Six-Figure Online Income

  • To build a recurring revenue stream and achieve a six-figure income, one needs to consider ad spend, conversion rates, and customer continuity.
  • By spending $2,200 on ads and achieving a 39% close rate, a business can obtain 50 customers in 30 days, even after accounting for a 40% drop-off rate.

"So 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."

The quote details the calculations required to build a significant online business, taking into account various factors such as ad spend, customer acquisition, and retention.

Evaluating Future Opportunities

  • Entrepreneurs must consider the unknown future and decide whether to capitalize on current opportunities.
  • The speaker suggests that the potential for building a lucrative online business is present and should be seriously considered.

"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."

This quote motivates entrepreneurs to seize the current opportunity to build a successful online business, emphasizing the potential for rapid income growth.

Personal Reflections on Entering the Online Business Market

  • The speaker contemplates re-entering the online business market due to the attractive acquisition numbers.
  • There is a suggestion to hire gym owners affected by business closures as salespeople.

"It has been very difficult for me to not throw my hat back into the ring and start sonic fitness at large, because when I see those types of numbers in terms of acquisition, I was like, how many sales guys we got?"

The quote reveals the speaker's personal temptation to start an online business based on the promising financial figures presented and the idea of leveraging the current market situation to build a sales team.

Embracing Remote Selling in the Fitness Industry

  • The importance of adopting remote selling skills, especially over the phone, to sustain and grow a fitness business.
  • The ability to sell over the phone is seen as a critical skill that will continue to be valuable even after returning to in-person gym operations.
  • Selling over the phone can lead to higher conversion rates of leads compared to in-person sales.
  • The pandemic has introduced and educated the mass market about online training, increasing comfort with remote purchases.
  • The speaker expresses a belief that remote selling will remain a preferred method for many consumers even after the pandemic.

If you are able to make 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 this the only thing you have to do.

This quote emphasizes the importance of making decisions based on logic rather than emotions and highlights the necessity of learning to sell over the phone as a key skill for business continuity and growth.

Because if you can sell over the phone, you convert a higher percentage of leads, always, right.

This quote suggests that phone sales are more effective at converting leads than other methods, implying that mastering this skill can lead to better business outcomes.

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 points out the increased awareness and understanding of online training among the general public due to the pandemic, which has potential long-term implications for consumer behavior.

Potential Shift in Consumer Behavior Post-Pandemic

  • The speaker anticipates that buying behaviors learned during the pandemic will persist, with a greater acceptance of remote services.
  • The convenience of remote interactions may lead to a preference for them over traditional in-person engagements.
  • The pandemic has served as an educational moment for consumers regarding online and remote services.
  • The speaker warns against waiting for a return to pre-pandemic norms and instead encourages proactive adaptation to the new consumer landscape.

And I hope, and I think my hunch is that that buying behavior will not change.

The speaker expresses the belief that consumer behavior patterns established during the pandemic, such as comfort with remote purchases, will continue in the future.

Because convenience and speed always win with humans. Always.

This quote highlights the speaker's view that convenience and efficiency are key factors in consumer decision-making, suggesting businesses should cater to these preferences.

I think a lot of people are going to turn the lights back on and a lot of people aren't going to come back.

The speaker predicts that even when businesses reopen, many customers may choose to continue with the convenience of remote services they've grown accustomed to during the pandemic.

The Strategic Advantage of Remote Fitness Services

  • Remote fitness services offer strategic advantages such as virtually unlimited lead flow, cheaper leads, a larger geographic radius for marketing, and higher profit margins.
  • The speaker argues that businesses with lower overhead, higher margins, and the ability to reach customers remotely will have a competitive edge in the post-pandemic economy.
  • Emphasizes the need for fitness businesses to take action now and adapt to remote selling to avoid being left behind.

And I think in the post corona economy, the businesses that will win are the ones that have lower overhead and have higher margins and have a higher ability to reach customers where they're at.

This quote outlines the speaker's vision for successful businesses in the post-pandemic economy, emphasizing adaptability, lower costs, and an expanded customer reach as key factors.

You get all of those things on top of everything I said. So anyways, don't let the o ship moment happen to you. Take action now, start selling remote.

The speaker concludes with a call to action, urging businesses to start selling remotely to capitalize on the current market opportunities and avoid being caught unprepared for industry shifts.

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