Why what style of fitness you practice doesn't matter...and the SECRET equation that our $1M+ facility owners understand that your sales people dont. Ep 70

Summary Notes


Alex Hormozi discusses the common pitfalls gym owners face by believing their fitness business is unique, which limits their revenue potential. He emphasizes that the location and style of fitness offered are irrelevant to success, as demonstrated by the variety of his "Gym Launch" clients who have surpassed the million-dollar run rate across diverse markets. Hormozi argues that the key to profitability lies in understanding that humans have consistent behaviors and desires, and as long as a gym provides a transformational fitness solution, it can thrive. He outlines tested price points for group and individual training and stresses the importance of focusing on outcomes rather than processes. Hormozi concludes by advising gym owners to meet clients where they are and prioritize psychological needs to ensure long-term adherence and success.

Summary Notes

Introduction to Gym Business Content

  • Speaker A introduces the topic by mentioning an ongoing list of content ideas that come to them unexpectedly.
  • The video is intended to address common limitations gym owners place on themselves.
  • Speaker A references their motivation to create the video based on observations of successful gyms.

"So I wanted to make a video for you guys about something that just comes up all the time."

This quote explains the reason for creating the video, indicating that the topic is a recurring issue in the gym business community.

Gym Owners' Self-Limiting Beliefs

  • Gym owners often limit their income by telling themselves stories about why their gym is unique or faces unique challenges.
  • Speaker A criticizes this mindset, suggesting it's a self-imposed barrier to success.

"They give themselves this reason, the story that they tell themselves about why their gym is different or why they're a special snowflake, et cetera."

The quote highlights the self-limiting narratives that gym owners create, which Speaker A believes hinder their potential for growth.

Success of Diverse Gyms

  • Speaker A mentions their inability to share pictures on Facebook but directs viewers to their page to see successful gyms.
  • Over 24 or 25 gyms have surpassed a million-dollar run rate, and owners are rewarded with swords to celebrate this achievement.
  • Successful gyms are diverse in location and demographic, suggesting that success is not limited by these factors.

"So if you guys have seen those pictures with the gym owners who have swords, that's because they hit a million dollar run rate, which is 83,000 in a month or more."

This quote provides a tangible measure of success (a million-dollar run rate) and a unique form of recognition (swords) for achieving it, illustrating the diverse success of gym businesses.

Irrelevance of Fitness Style and Location

  • Speaker A asserts that the style of fitness and gym location do not determine success.
  • They argue that human behavior and needs are consistent, and as long as a gym offers a fitness solution with a transformation aspect, it can be successful.
  • The success of these gyms is attributed to the implementation of specific steps and frameworks outlined in "gym lords."

"The reason that your style of fitness does not matter and the reason that your location does not matter is because humans are the same, right?"

The quote emphasizes the universal nature of human behavior and needs, which Speaker A believes are more critical factors for gym success than the style of fitness or location.

Effective Business Models and Pricing

  • Speaker A discusses the importance of responding to promotions and offers that convert customers.
  • They outline the ideal price points for large group training, providing specific figures for profitability.
  • Speaker A mentions the existence of different buying segments within the market and the willingness of people, particularly women, to pay for weight loss results.

"And for most people, $200 a month is going to be where you should be. And if you're not there, you're not profitable."

This quote presents a clear pricing guideline for gym owners, suggesting that a $200 monthly fee is optimal for profitability based on market research and customer behavior.

Speaker A's Personal Journey

  • Speaker A shares their personal background, detailing their transition from a management consulting job to the fitness industry.
  • They moved to California and reached out to 40 gym owners to learn the business, but only one responded.
  • This anecdote serves as the origin story for Speaker A's involvement in the gym industry and their understanding of the business.

"Six or seven years ago, I don't know the math. I moved out to California. I emailed 40 gym owners because I was quitting my management consulting job where I did strategy at a marketing firm in DC."

The quote provides context for Speaker A's expertise and experience in the gym business, explaining their motivation for changing careers and the proactive steps they took to learn the industry.

Business Model and Marketing Strategy

  • The camp owner successfully expanded from one location to a smaller second location.
  • The owner offered a weight loss challenge with a money-back guarantee.
  • The speaker introduced Facebook marketing as a new strategy to attract clients.
  • The owner was initially skeptical about Facebook marketing but was convinced to try it.
  • The marketing strategy proved successful, but capacity issues arose with the semi-private program.
  • The speaker suggested a workaround by offering nutrition plans and boot camp sessions instead of semi-private sessions.
  • The focus was on the end goal (weight loss) rather than the specifics of the service provided.

"And he was doing it as a semi private program. And when I came in, I was like, hey, do you want more of these? I found out Facebook marketing works and."

This quote explains the initial business model and the introduction of Facebook marketing as a new strategy to attract more clients.

"And he was like, you think people are going to pay $500 for that? And I was like, yeah, I like, they could come here and do puzzles with me three days a week, and if they lost 20 pounds, they'll be stoked."

The speaker is suggesting that the value proposition is not the process but the outcome, indicating that clients would pay for results regardless of the method.

Customer Focus and Value Proposition

  • The speaker emphasizes the importance of the end goal for the customer, comparing it to reaching a destination like Maui.
  • The journey (method of training) is irrelevant as long as the desired outcome (weight loss) is achieved.
  • Sales should focus on outcomes, not processes, to avoid highlighting the effort and pain involved.
  • The speaker discourages talking about the details of the service, such as meal plans or workouts, during sales.

"No one cares about the plane flight. They don't care. They don't care whether they take a train there or a boat or a plane."

This quote highlights that the customer's primary concern is achieving their goal, not the specifics of the service.

"No one wants to hear about your meal plans or your macros or the cutting edge workouts that you're going to do and how great the trainer certification case. No one cares."

The speaker is advising that sales pitches should avoid focusing on the detailed aspects of the service, as it could deter clients by reminding them of the effort required.

Effective Promotional Strategies

  • The speaker discusses the effectiveness of six-week challenges based on customer belief and commitment levels.
  • A balance is needed between a time frame that is long enough for significant results but short enough for customer confidence.
  • Twelve-week challenges are less effective for the general population due to perceived difficulty in completion.
  • The speaker stresses the importance of using a tested business model and knowing the market's price tolerance.

"We know six week challenges at this moment, for the last six and a half years, have run basically untested because it's a long enough amount of time that people believe that they can achieve the outcome that is significant but short enough that they believe in themselves that they can achieve it."

This quote explains the rationale behind the specific duration of the challenges and their success.

"And that's actually if you can look at different franchises that have been in the weight loss space."

The speaker suggests learning from adjacent industries to determine effective pricing strategies.

Networking and Industry Connections

  • The host takes a break to encourage listeners to connect on LinkedIn.
  • The host mentions studying other successful individuals in adjacent industries for insights.

"So you guys hear me talk about the Nik a lot, because Chris Poly is a good friend of mine."

This quote indicates the speaker values networking and learning from peers in related fields.

Upselling Strategy

  • An initial front end offer was priced at $600.
  • Upselling occurred on day five with packages ranging from $1500 to $6000 for the remainder of the year.
  • The strategy demonstrates that people are willing to pay more than expected for desired results.

"And then they ended up upselling people on day five to a $1500 to $6,000 package the remainder of the year."

This quote highlights the upselling aspect of the business strategy, where customers are offered more expensive packages after an initial offer.

Perceived Value and Cost

  • The process does not reveal the full cost upfront, focusing instead on simple actions like showing a food log weekly.
  • This approach minimizes the perceived cost and effort from the customer's perspective.
  • Fitness is recognized as important for long-term results, but mentioning it may increase perceived cost and lower value.

"The beauty of per process is that they don't tell people about the cost."

The quote emphasizes the strategic advantage of not disclosing the full cost to the customer immediately to manage their perception of value.

Value Equation

  • The value equation presented is: Significance of Outcome x Likelihood of Achievement / Time and Effort = Value.
  • A high value is achieved when the outcome is significant, the likelihood of achievement is high, and the time and effort required are low.

"It is significance of outcome multiplied by likelihood of achievement. How likely that you're actually going to get that significant outcome divided by time and effort equals value."

This quote explains the components of the value equation used to determine the attractiveness of an offer to a customer.

Comparison of Products Based on Value

  • Xanax is used as an example of a high-value product due to its immediate effect with little effort.
  • Meditation is contrasted with Xanax, showing a lower value due to the effort and time required to achieve a similar outcome.

"If you were to give someone a pill like Xanax that helps someone go to sleep or relax... the time and effort required to do that is zero. And the likelihood that they're going to achieve it is basically 100%."

This quote explains why pharmaceuticals like Xanax are seen as high-value due to their ease of use and effectiveness, which contributes to their market success.

Industry Positioning and Pricing

  • The type of fitness service offered is less important than the outcome it promises.
  • Being in the weight loss industry means adhering to certain pricing standards.
  • Large group facilities should price between $150 and $225 per month, while semi-private sessions should range from $500 to $700 per month for profitability.

"The only thing that matters is the outcome that you are selling. And so as long as you have a fitness slant, then you're in the weight loss industry."

This quote indicates that success in the fitness industry is more about the results sold than the specific type of fitness service offered.

Maximizing Profit

  • Charging more for services can significantly increase profits.
  • Even if a business is making money, it could make more by adjusting prices according to the market standard.

"You'd make 50% more money if you charge 600, you're just not making as much as you could."

This quote suggests that businesses may be undercharging for their services, and by increasing prices, they could enhance their profitability.

Importance of Fitness Style Irrelevance

  • The specific style of fitness practiced is not important to clients.
  • Clients are more focused on the results (Maui) rather than the method (plane).
  • Overemphasis on the method can be counterproductive and lead to losing clients.

They do not care about the plane, they care about Maui. And don't talk about the plane because it's only going to lose you.

This quote emphasizes that clients are interested in the destination (their fitness goals) rather than the intricacies of the fitness method used to get there. Focusing too much on the method may result in losing the client's interest.

The Value Equation in Fitness

  • Fitness offerings should be simple enough for a large group to follow with minimal instruction.
  • Complex fitness regimes are not necessary for the general population, who may have basic health goals like reducing soda consumption.
  • Fitness professionals should avoid projecting their own advanced fitness routines onto beginners.

And that is why what type of fitness you have does not matter, provided you can have a sufficient amount of people in a space with a single trainer who says, do this and then they can follow.

This quote suggests that the type of fitness program is less important than the ability to effectively manage and instruct a group of clients in a simple and accessible way.

Meeting Clients at Their Level

  • It is crucial to start clients with manageable goals to avoid overwhelming them.
  • Offering immediate, attainable psychological wins is important for client retention and motivation.
  • Fitness advice and goals should be tailored to the individual's current understanding and needs.

You have to meet someone where they are. You don't talk to a five year old the way you talk to a 15 year old.

This quote illustrates the importance of adapting communication and fitness goals to the client's level of understanding, much like how one would adjust their language and expectations when talking to children of different ages.

Misconceptions in Nutrition

  • Many people have incorrect beliefs about what constitutes a good source of protein.
  • Educating clients about nutrition should start from their current level of knowledge.
  • Fitness professionals should correct misconceptions without overwhelming the client.

People in your family right now think that almond butter is a good source of protein... They have no idea.

This quote highlights common nutritional misunderstandings among the general public, implying the need for fitness professionals to educate clients starting from these misconceptions.

Gym Launch Model's Applicability

  • The Gym Launch model can be applied to any fitness business that aims to provide weight loss and fitness results.
  • The model is flexible and can be adapted to various gym types.
  • Success stories from the model demonstrate its effectiveness and help to normalize high achievement in the fitness industry.

And hopefully that explains somewhat for those of you who are like, I'm not sure if gym launch will work for my gym model. It will.

This quote reassures gym owners that the Gym Launch model is versatile and can work for different gym models, as long as the end goal is to provide weight loss and fitness to customers.

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