What I Would Do If I Had My Gyms Ep 194



In the Gym Secrets podcast, the host discusses strategies for gym owners navigating the challenges posed by COVID-19. He emphasizes the importance of adapting to a remote model, leveraging government support, and renegotiating leases to reduce overhead. The host advocates for maintaining a strong client relationship through accountability services rather than focusing solely on workout programs. He outlines a plan to retain key staff by restructuring their roles to include client outreach, workout facilitation, and sales generation. He also stresses the significance of providing hope and a positive outlook to both clients and staff during these trying times, suggesting that the current situation presents an opportunity to transform traditional gym operations into a more profitable, remote business model.

Summary Notes

Podcast Introduction

  • Speaker A introduces the topic of the podcast, which is about strategies for gym owners.
  • The podcast aims to discuss customer acquisition, increasing revenue per customer, and customer retention.
  • Speaker A shares a personal anecdote about sleeping well and feeling refreshed.
  • Layla's question about how to handle a hypothetical situation if it occurred during the time when Speaker A owned six gyms is mentioned as the inspiration for the podcast episode.

"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 sets the stage for the podcast's focus on gym business strategies and introduces the episode's theme, which is informed by a question from Layla.

Business Philosophy

  • Speaker A emphasizes tailoring advice to the audience instead of a one-size-fits-all approach.
  • The principle of achieving a good result for a large number of people versus a perfect result for a few is highlighted as a key to success.
  • Speaker A references Elon Musk's philosophy on making a significant impact on a large scale.
  • The approach of creating offers and sales processes that are universally applicable and easy to sell is discussed.

"I would rather have a solution that I can get 90% of the marketplace to get an 80% win, rather than have 5% of the marketplace get 100% win."

Speaker A explains their strategy of aiming for widespread, substantial success rather than exclusive, perfect success, reflecting a business philosophy of broad impact.

Hypothetical Response to COVID-19

  • Speaker A outlines a hypothetical plan to address the challenges posed by COVID-19 for gym owners.
  • Exiting leases and transitioning to remote services are suggested as strategic moves.
  • The opportunity presented by the pandemic to change business models without repercussions is noted.
  • Speaker A advises on negotiating rent relief and reassessing the financial model based on current circumstances.

"If I have the opportunity to flip my facilities in an environment where I'm being encouraged by both government and my clients to make the flip and remain open, then I'm going to take that opportunity and flip to a more profitable model."

This quote explains Speaker A's willingness to adapt their business model in response to external encouragement and the pursuit of profitability during the pandemic.

Financial Adjustments and Member Retention

  • Speaker A calculates the potential loss of revenue due to the transition to a non-owner operated model.
  • A realistic expectation of membership retention is discussed, with an estimate of losing 25% of the customer base.
  • Speaker A emphasizes the importance of engaging the most dedicated trainers to maintain member engagement and loyalty.

"So now I've got 180,000 a month that I have in recurring. Now, let's be realistic. Let's say 25% of those people drop off because it's not an owner operated facility... So now I'm down to like 140 ish or 135 per month."

Speaker A provides a rough estimate of the financial impact of losing a quarter of the member base due to changes in the operational model and stresses the significance of having committed trainers to mitigate this loss.

Business Model Adjustment

  • The speaker discusses changing the business model to adapt to a situation where certain personnel are nonessential.
  • A new model is proposed where value is provided differently, likely due to a change in circumstances such as a pandemic or economic shift.
  • The focus is on maintaining recurring revenue while minimizing overhead costs.

"sonnel would be considered nonessential because in this new model they would not be able to provide value."

The quote indicates a shift in the business model that renders some staff nonessential because they cannot contribute value in the new context.

Staff Retention and Compensation

  • Twelve staff members are retained at a cost of $3,000 per month each.
  • The speaker suggests that this compensation might be higher than what the employees previously earned in person.
  • The primary role of these employees is to provide accountability.

"Now, let's say conservatively, I pay each of these people $3,000 a month, right." "Now that's a great. For some of these guys, that might actually be a big paid jump from what they were doing in person."

The quotes detail the speaker's plan for staff compensation, implying that the shift to remote work could result in higher pay for the retained staff.

Remote Workouts and Overhead Reduction

  • The speaker introduces the concept of remote workouts offered every hour during the workday.
  • Centralizing the workouts allows all gyms in the network to reduce their overhead.
  • The speaker emphasizes the strategic advantage of centralizing services to cut costs for individual gym locations.

"Starting on Monday, we're running 16 remote workouts per day."

The quote outlines the new initiative to offer frequent remote workouts, which serves as a cost-saving measure and a service for online clients.

Lease Management and Revenue Model

  • The speaker advises getting out of leases or negotiating free rent as a cost-saving measure.
  • The revenue model shifts to focus on remote services like nutrition and accountability.
  • The speaker emphasizes the importance of customer service and relationships over the actual workouts.

"I'm going to get out of the leases that I can because right now you have a pretty good opportunity to be able to break leases and or at the very least get three to six months of free rent right now."

The quote suggests a proactive approach to managing fixed costs through lease negotiations in response to current market opportunities.

The Importance of Accountability Over Workouts

  • The speaker asserts that the value proposition is not in the workout itself but in the accountability and service provided.
  • The speaker stresses that the long-standing rules of the fitness industry remain unchanged, with personal attention being the key selling point.
  • Workouts are seen as a commodity, with many apps available, so differentiation comes from personalized service.

"No one cares about the workouts. ... What matters is the relationship that you have with these people, that they feel like someone is checking in on them."

This quote emphasizes the speaker's belief that the true value lies in the personal connection and accountability provided to clients, not in the workouts themselves.

Staff Responsibilities and Profit Calculation

  • Each trainer is responsible for leading one remote workout per day and checking in on customers.
  • The speaker calculates the total overhead for trainers and subtracts it from the recurring revenue to determine profit.
  • A significant portion of the revenue becomes profit after overhead reductions.

"So I'm paying 36,000 a month in overhead for those trainers, right? ... I have 100,000 a month that's left over in all profit."

The quote provides a financial breakdown showing how the new business model results in substantial profit after accounting for reduced staff overhead.

Time Management and Lead Generation

  • The speaker plans to use their time more effectively by focusing on closing sales.
  • The retained staff are tasked with performing cold reach outs to generate leads.
  • The goal is for the staff to generate enough leads to fill the speaker's schedule with sales appointments.

"They want to pay for themselves. Cool. 100 cold reach outs. ... I'm going to fill my day up with appointments that my team, my twelve people doing reach outs are going to set for me, all right?"

The quote explains the speaker's strategy for having the retained staff contribute to their own costs by generating sales leads for the speaker to close.

Additional Content and Resources

  • The speaker promotes their YouTube channel as a resource for visual and graphical content that complements the podcast.
  • The channel is offered as a free resource that may appeal to listeners who prefer visual learning.

"If you ever want to have the video version of this, which usually has more effects, more visuals, more graphs, you know, drawn out stuff, sometimes it can help hit the brain centers in different ways. You can check out my YouTube channel."

The quote serves as an invitation for listeners to engage with additional content on the speaker's YouTube channel, potentially providing a more in-depth understanding of the topics discussed.

Cold Traffic and Lead Costs

  • Lead costs are currently 50% to 75% off, which is unprecedented and considered very low.
  • The current environment is favorable for scheduling phone calls to sell services.

e beyond that I'm going to start turning on cold traffic and I'm going to run because right now in this hypothetical environment, which is the real environment currently, lead costs are like 50% to 75% off.

This quote emphasizes the speaker's strategy to capitalize on the reduced lead costs by targeting cold traffic, which refers to potential customers who have not interacted with the business before.

Trainer's Daily Schedule

  • Trainers start their day with 2 hours of cold reach outs, aiming for 100 contacts and one scheduled call.
  • The message used for outreach is crafted to sound genuine and leverage the current goodwill towards small businesses during the quarantine.

FirsT 2 hours of the DAy, all they're doing is doing cold reach outs. They get their daily 100 in. You give me 100 reach outs. That's what you owe me. All right, get me one schedule today.

This quote outlines the expected daily routine for trainers, focusing on outreach efforts to generate new leads and the target of securing at least one appointment per day.

Messaging Strategy

  • The outreach message is designed to indirectly solicit business by asking for referrals under the guise of helping others stay in shape during quarantine.
  • The strategy banks on the zeitgeist of supporting small businesses and the increased willingness to help during the pandemic.

What are they going to say? They're going to say, hey, name, do you know anybody who's trying to stay in ShapE during the quarantine?

This quote provides an example of the script used by trainers for outreach, emphasizing the indirect approach to avoid appearing as if they are fishing for clients.

Adding Value and Utilizing Resources

  • Trainers are required to conduct their own workout for an hour, which they should record and share with clients.
  • The virtual setup allows for increased availability, variety, and access to the best coaches, adding more value than before.

And then 1 hour of the day they're required to do their workout. Now, most of the time you'd want to have your trainers are working out anyways at home.

This quote explains part of the trainers' daily requirements, which includes performing and recording their workout, serving both their personal fitness needs and as content for clients.

Business Adaptation and Focus

  • The speaker would consider renegotiating or breaking gym leases to shift to a 100% remote model.
  • Nonessential personnel who are not generating or maintaining revenue would be let go.
  • The focus is on generating revenue through new calls and fulfilling existing clients' needs.

I would renegotiate my leases, I push them out or I break them. I take my recurring, I would get it into 100% remote.

This quote discusses the speaker's strategic business shifts in response to the current situation, prioritizing a remote service model and cost efficiency.

Sales and Marketing Prioritization

  • The speaker emphasizes the importance of sales, especially during times of strife, and suggests that the best salespeople should focus on selling.
  • The speaker's own day is dedicated to marketing and taking sales calls to 'make it rain' and 'feed the machine.'

And so the people who are not going to be able to succeed are the ones who don't want to roll up their sleeves and get dirty.

This quote underscores the necessity for a hands-on approach to sales during challenging times, implying that success requires active involvement and effort in selling.

Summary of Trainer's Responsibilities

  • Trainers have three main tasks: reaching out for new customers, maintaining existing customer relationships, and conducting one workout a day.
  • The speaker's role is focused on marketing and sales calls to ensure the business continues to grow.

So that's all trainers have to do. Three things. Reach outs to get new customers, reach out to existing customers to make sure they know we're paying attention. And then finally, that they're doing one workout a day, which they should be doing for themselves anyways.

This quote lists the core responsibilities assigned to trainers, highlighting the balanced focus on customer acquisition, retention, and personal fitness.

Remote Fulfillment and Revenue Stream Transformation

  • Discusses the advantages of converting physical facilities into a single remote operation.
  • Highlights the increased profit margins and recurring revenue potential.
  • Emphasizes that change towards remote operations is not inherently negative.

"I would have done and that would be the play that I would do because it would give me permission to overnight transform six facilities into one massive recurring revenue stream. That's 100% remote. That is way higher profit margin for fulfillment."

This quote outlines a strategic business move to consolidate physical facilities into a single, remote operation to capitalize on higher profit margins and create a recurring revenue stream.

Perception of Online Transition

  • Addresses the misconception that moving operations online is unfavorable.
  • Reiterates that remote fulfillment can be more profitable than traditional methods.

"Just because this has changed does not mean it's bad, right? Eight months ago, I walked through all the math about why having a remote fulfillment is a better solution. There's a reason people like going online, right? There are better margins."

The speaker is correcting the perception that transitioning to online operations is a negative development, explaining that they have previously demonstrated why remote fulfillment is financially advantageous.

Societal and Governmental Permission

  • Government and social circumstances are providing implicit permission to shift business models.
  • Encourages taking advantage of this opportunity to adapt and thrive.

"And now we're getting permission from the government and from society to do this for ourselves. So I would take that opportunity and run with it."

The quote suggests that the current environment, influenced by government and social factors, is conducive to businesses transitioning to remote models, and this should be seen as an opportunity.

Vision for the Future and Crisis Leadership

  • Advocates for guiding employees towards a positive future vision amidst crisis.
  • Stresses the importance of accountability and delivering results to clients.

"Just lead them through the crisis. I would also try and a vision or for a better future. It's like, guys, you liking this? You're staying at home, you can work out whenever you want. You're just actually getting people good results because we're making sure that they're just staying accountable and they need us the most."

This quote emphasizes the role of leadership in steering employees and clients towards a positive future, highlighting the benefits of the new remote working conditions and the importance of accountability.

Customer Stress Levels and Sales Approach

  • Notes that customers are generally more stressed during times of crisis.
  • Advises that the sales approach should focus on alleviating stress and making customers feel good.

"When you're selling or when you're talking to customers, everyone right now is at the airport. Have you noticed everyone at the airport is always just, like, immediately at three out of five stressed."

The speaker draws a parallel between the stress levels of customers during a crisis and the typical stress experienced at an airport, implying that sales strategies should account for this heightened stress.

The Power of Hope

  • Highlights the need for providing hope to employees, clients, and prospects.
  • Discusses the importance of optimism and confidence in leadership.

"And they're uncertain about their future, what they want from you, what your employees want from you, what your clients want from you and what your prospects, when you get on the phone with them, want from you is one word, hope."

The speaker identifies hope as a critical element that people seek from businesses and leaders, especially during uncertain times.

Optimism and Endurance

  • Links the ability to endure challenges with the capacity to inspire confidence and optimism.
  • Suggests that demonstrating endurance can be reassuring to others.

"So you have to be the hopeless motherfucker that exists, all right? And the way that you have hope is that you have optimism about what you are willing to do to endure."

This quote conveys the speaker's belief that embodying hope through optimism and a willingness to endure hardships is essential for inspiring confidence in others.

Value in Making People Feel Good

  • Emphasizes the importance of making clients feel good as a primary value proposition.
  • Suggests that the actual service provided (e.g., weight loss) is secondary to the emotional experience.

"The fact that you're going to sell them weight loss and that's going to be the vehicle that you monetize is almost secondary to how you will make them feel in that moment because they're just going to want to feel more of that."

The speaker is stating that the emotional experience provided to clients is paramount and can be more influential than the actual service or product being sold.

Personal Decision Making and Empowerment

  • Reminds listeners that they are capable of making their own decisions.
  • Encourages personal empowerment and the pursuit of success through determination.

"So that is what I would do by step. If I have my gym during COVID right now, I make no recommendations. You are all grown ass individuals and make your own decisions for yourself. But that is what I would do."

The speaker concludes by reinforcing that the advice provided is based on their personal strategy and that individuals should make their own informed decisions.

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