WEBVTT 1 00:00:00.000 --> 00:00:03.480 What's up, everyone. Welcome to the gym secrets podcast. My name is Alex 2 00:00:03.480 --> 00:00:08.160 Burmose and I will be your host for this afternoon or morning or whatever 3 00:00:08.160 --> 00:00:13.400 time it is where you are. So the first two episodes that we're talking about, 4 00:00:13.400 --> 00:00:16.960 I'm talking about some serious equations about how you run this gym business. So 5 00:00:16.960 --> 00:00:21.040 what I want to talk about this time is probably the most central 6 00:00:21.040 --> 00:00:25.520 equation to how you can calculate your gym type that go max. I thought about 7 00:00:25.520 --> 00:00:29.040 that this would keep growing but you can literally calculate exactly where your 8 00:00:29.040 --> 00:00:34.160 gym is going to top out at if you just know a few numbers. So the easiest way to 9 00:00:34.160 --> 00:00:38.080 describe this is a pie. That's the way I like to describe it because I like 10 00:00:38.080 --> 00:00:44.200 pie. But I guess I think I'm funny. But the easiest way to think about it in 11 00:00:44.200 --> 00:00:48.240 terms of the slices of the pies, if you were to think about a peacetime, I think a 12 00:00:48.240 --> 00:00:53.320 peacetime is the one in the middle and two down the lower parts but top left 13 00:00:53.320 --> 00:00:59.280 third, top right third and then the middle bottom third. Okay. So top right 14 00:00:59.280 --> 00:01:04.400 third and these three numbers are going to be the things that that are the 15 00:01:04.400 --> 00:01:07.360 three pieces that we focus on when we're trying to grow gym. So a gym comes 16 00:01:07.360 --> 00:01:10.960 into our world and we're like, okay, this is how we're going to attack the gym 17 00:01:10.960 --> 00:01:15.800 with these three areas. Okay. So first top right is going to be your cold 18 00:01:15.800 --> 00:01:20.360 market or cold traffic marketing system. So whatever things that you do to go 19 00:01:20.360 --> 00:01:24.320 out of the world, get people who've never heard of you to come in to your 20 00:01:24.320 --> 00:01:29.000 business. Okay. That's the cold traffic stuff. The second number is going to be 21 00:01:29.000 --> 00:01:33.240 the top left, which is your warm traffic marketing stuff. What do you want 22 00:01:33.240 --> 00:01:37.120 to do just in case to ascend those clients across the hall and then generate 23 00:01:37.120 --> 00:01:40.760 referrals and ultimately retain them and give them a superior experience. 24 00:01:40.760 --> 00:01:44.720 That's all warm traffic marketing. Most gyms don't do anything there, which is 25 00:01:44.720 --> 00:01:46.720 just leaving tons of money on the table, but I'll leave that in the other 26 00:01:46.760 --> 00:01:52.920 time. But so you have cold traffic, which you have far less variety than you do in 27 00:01:52.920 --> 00:01:56.480 your warm traffic plays. And then the last thing is the bottom piece of this pie, 28 00:01:56.480 --> 00:02:01.040 which is attrition percentage slash retention percentage, depending on what 29 00:02:01.040 --> 00:02:03.960 side of the coin you're looking at. I usually talk about attrition percentage 30 00:02:03.960 --> 00:02:08.640 because the equations that we talked about, that's the number that that 31 00:02:08.640 --> 00:02:12.840 percentage would be that would be to use to calculate hypothetical maxes, 32 00:02:12.840 --> 00:02:20.640 things like that. Okay. So what I want to do for you is simply just give you 33 00:02:20.640 --> 00:02:26.280 a number example of the power of each of these things. Okay. So here's a 34 00:02:26.280 --> 00:02:30.520 normal example of something of a gym that would come to me across it or a 35 00:02:30.520 --> 00:02:35.880 boot camp that has a hundred members around. And most of them don't know 36 00:02:35.880 --> 00:02:38.720 what their nutrition percentage is, but I'll be like, what do you guys average 37 00:02:38.720 --> 00:02:42.440 insiders from? And they're usually saying like 10th about that two or three 38 00:02:42.440 --> 00:02:45.360 weeks, right? So it's usually about 10 a month. Like, okay. And they're like, I've 39 00:02:45.360 --> 00:02:48.640 been stuck in a hundred for a year, two years. How long, right? Well, 40 00:02:48.640 --> 00:02:52.880 okay. So you've been stuck yet a hundred and you're selling up 10 people a month. 41 00:02:52.880 --> 00:02:57.080 I already know, based on that three part equation, that their 42 00:02:57.080 --> 00:03:00.400 tuition percentage is 10% to the losing 10% of a hundred is 10 a month. 43 00:03:00.400 --> 00:03:02.800 They're selling up 10 a month. That's why they're staying there, right? That's 44 00:03:02.800 --> 00:03:07.720 why they're they're staying solid at that percentage. So with that number, 45 00:03:07.720 --> 00:03:12.280 like we're cooked to do a lot of things. Now, here's where it gets really cool. 46 00:03:12.280 --> 00:03:19.560 Let me just demonstrate how powerful that top number is. So if you sign up, let's 47 00:03:19.560 --> 00:03:23.640 say, if you change your inflow from 10 to 20, sign up some month, and you keep 48 00:03:23.640 --> 00:03:26.520 your tuition percentage to 10, you've instantly doubled the gym over the 49 00:03:26.520 --> 00:03:29.920 long term. It's not going to double overnight. But over time, it's going to cap 50 00:03:29.960 --> 00:03:34.600 out at hypothetically 200 because the moment that 200, the 10% of 200 equals 20, 51 00:03:34.600 --> 00:03:38.120 the top number, then it will no longer grow. So we know that as soon as you 52 00:03:38.120 --> 00:03:42.280 double that, you can get to 200. Now, here's a sneaky one that people don't 53 00:03:42.280 --> 00:03:48.960 think about. If you cut your tuition percentage from 10% to 5%, and you keep 54 00:03:48.960 --> 00:03:52.640 your sign up the same. So that did keep a little gym, right? Who was signing up 10 55 00:03:52.640 --> 00:03:59.600 people per per month can get to a gym with hypothetical max of 200 just by 56 00:03:59.600 --> 00:04:03.040 hitting just a tuition percentage by 10% and 5%. Here's where it gets really 57 00:04:03.040 --> 00:04:09.140 cool if you really think about this. It costs less to cut a tuition percentage by 58 00:04:09.140 --> 00:04:16.640 10% from 10% to 5% than it does to increase sign ups from 10 to 20 a month. Let 59 00:04:16.640 --> 00:04:20.840 that sink in. So if you're trying to grow your gym, one of the least exploited areas 60 00:04:20.840 --> 00:04:25.680 is actively trying to retain numbers. It costs so little to retain a number just 61 00:04:25.720 --> 00:04:29.960 by carrying. It's anything like a just because package gives 100 notes, things 62 00:04:29.960 --> 00:04:32.600 like that. The little things just to call once a week for someone who's dedicated 63 00:04:32.600 --> 00:04:36.120 to doing that. Like it costs you less to pay that person for 10 hours. We've 64 00:04:36.120 --> 00:04:39.720 taken on all your customers. Then it does for you to run an entirely marketing 65 00:04:39.720 --> 00:04:42.600 campaign. And if you're not losing people from your gym, here's a hypothetical 66 00:04:42.600 --> 00:04:46.400 like great mental example to think about this. If you never lost anyone from 67 00:04:46.400 --> 00:04:51.360 your gym ever, your gym would grow forever. It would have no acts. It would 68 00:04:51.360 --> 00:04:55.640 continue to go for your whole life. That's how powerful cutting that tuition 69 00:04:55.640 --> 00:04:59.960 percentage is. Okay. And that's how we focus on it. 70 00:05:02.160 --> 00:05:05.400 Real quick guys, if you can think about how you found this podcast, somebody 71 00:05:05.400 --> 00:05:09.000 probably tweeted it, told you about it, shared it on Instagram, or something 72 00:05:09.000 --> 00:05:13.120 like that. The only way this grows is through word of mouth. And so I don't run ads. 73 00:05:13.120 --> 00:05:16.400 I don't do sponsorships. I don't sell anything. My only ask is that you 74 00:05:16.400 --> 00:05:19.760 continue to pay it forward. Do whoever showed you or however you found out about 75 00:05:19.760 --> 00:05:23.720 this podcast that you do the exact same thing. So if it was a review, if it was 76 00:05:23.720 --> 00:05:26.280 a post, if you do that, it would mean the world to me, and you'll throw some good 77 00:05:26.280 --> 00:05:27.600 karma out there for another entrepreneur. 78 00:05:29.760 --> 00:05:33.280 Okay. Now just as a thought experiment, the reason that so many gyms can 79 00:05:33.280 --> 00:05:36.640 start off strong, or at least they believe to be strong. And they're like, man, 80 00:05:36.640 --> 00:05:40.880 we start off so good. Some 10 people first of all, 20, say, you know, we're at 81 00:05:40.880 --> 00:05:45.120 we're at 20 and 30 and 40. And then it just just slowed down. Their signups, 82 00:05:45.440 --> 00:05:49.240 never stayed the same. It's just that when you're losing 10% of eight people, 83 00:05:49.640 --> 00:05:53.120 you're losing, you know, next to nothing, one person or zero, right? They get 84 00:05:53.120 --> 00:05:56.680 another 10 people the next month. They get up to 18. They lose 10% of that. 85 00:05:56.680 --> 00:06:00.800 They lose 1.8. Another down to 16 or 17. They get another 10. They're 26. You see 86 00:06:00.800 --> 00:06:05.720 this growth, right? But it's an asymptote. You remember from calculus and math, 87 00:06:05.720 --> 00:06:10.360 guys, it just approaches a hypothetical mass of 100. That's why they usually, 88 00:06:10.680 --> 00:06:16.480 you know, they fluctuate, right? That space. So this is sort of the math behind 89 00:06:16.480 --> 00:06:20.040 how we look at gyms. And we'll go to strategies specifically how do we attack each 90 00:06:20.040 --> 00:06:24.040 piece of these. But if we're going back to the pie, so that was a fraction, right? 91 00:06:24.040 --> 00:06:28.880 That was a starting signups over nutrition percentage. But the third 92 00:06:28.880 --> 00:06:32.160 play here that we were that that I was talking about was, what's your warm 93 00:06:32.160 --> 00:06:34.960 market play? Now it's like, where does that fit? Is that on the top side of the 94 00:06:34.960 --> 00:06:38.000 equation, the bottom side of the equation? Well, warm market plays are a little bit 95 00:06:38.000 --> 00:06:41.960 both. And they're really important on both sides of the equation for a couple 96 00:06:41.960 --> 00:06:47.280 reasons, right? So let's say you run, you know, an accountability or a, you 97 00:06:47.280 --> 00:06:50.800 know, booty proof, whatever you want to call it, okay? And you run that type of 98 00:06:50.800 --> 00:06:53.720 program, you run it to your nurture list, right? So you're, you know, list for 99 00:06:53.720 --> 00:06:57.280 that you generate from culture. So you need to have an email list, obviously. 100 00:06:57.280 --> 00:07:04.040 And here's what that does. One, it's going to react to the old people who signed 101 00:07:04.080 --> 00:07:08.560 up at your gym and life. First thing, second thing, it's going to allow people 102 00:07:08.560 --> 00:07:12.280 who've never been to your gym to say that specific problem is something that I 103 00:07:12.280 --> 00:07:15.200 would like solve. So general fitness wasn't something that was compelling 104 00:07:15.200 --> 00:07:17.720 enough, but that specific problem was enough for them to come out of the 105 00:07:17.720 --> 00:07:21.560 woodworking signal. I'm going to sign up for that. Okay? So it works as a side of 106 00:07:21.560 --> 00:07:26.320 play. But it also works as a retention play, because the more time someone 107 00:07:26.320 --> 00:07:30.000 spends money with you, the more problems you can actively solve for them. 108 00:07:30.000 --> 00:07:32.240 And then you do exactly what you say you're going to do, the more 109 00:07:32.240 --> 00:07:34.800 consumer confidence trust that person is going to have with you and the more 110 00:07:34.800 --> 00:07:38.280 likely they are, say a little more likely they are to refer more people, right? 111 00:07:38.280 --> 00:07:46.160 So it's, it works on both sides of this. Okay? Now here's, here's probably what I 112 00:07:46.160 --> 00:07:51.680 think to be the coolest part of why I love the warm traffic place. I call them 113 00:07:51.680 --> 00:07:55.080 cash plays or meeting cash plays, you know, with me and my guys. And it's 114 00:07:55.080 --> 00:07:58.560 because they're pure profit. Because if you think about cautioning 115 00:07:58.560 --> 00:08:00.920 acquisition, and that's why it's not a cool traffic sign, because you have to 116 00:08:00.920 --> 00:08:04.120 pay for those, right? Warm traffic, you don't pay for it because you already own 117 00:08:04.120 --> 00:08:07.280 that media. And what I mean by media is the attention. You own that person's 118 00:08:07.280 --> 00:08:09.880 in class. You own that person's Facebook page. You own that person's cell phone 119 00:08:09.880 --> 00:08:13.240 number, whatever it is, whatever ways you're contacting them, right? And so if 120 00:08:13.240 --> 00:08:15.760 you already own that media, then it doesn't cost you anything to reach them. 121 00:08:15.760 --> 00:08:21.800 And so if you run a play and you make $6, $7,000, it doesn't, even though that 122 00:08:21.800 --> 00:08:27.840 doesn't sound super impressive, right? If you normally run 30, 20% 123 00:08:27.840 --> 00:08:30.800 margins, whatever margins you run, okay? I'm pulling this out of here because they 124 00:08:30.800 --> 00:08:35.280 they're very very dramatic. I would say average gym runs about 25% 125 00:08:35.280 --> 00:08:39.480 margins that comes to us. Actually, the ones who come to us usually are running 126 00:08:39.480 --> 00:08:44.080 like, you know, 0% margins. But anyway, that's another conversation 127 00:08:44.080 --> 00:08:49.240 over the time. But let's just say I have to think of you running 25% margins. Okay, 128 00:08:49.240 --> 00:08:54.600 I can't do that bath in my head. Let's say 30%, 30% margins. That means that you 129 00:08:54.600 --> 00:09:01.040 would need to generate $21,000 from a cold traffic plane or to net that $7,000. 130 00:09:01.040 --> 00:09:05.440 The $7,000 you're getting from a warm traffic plane just doesn't seem as sexy, 131 00:09:05.440 --> 00:09:09.640 but like it's still seven jeans, right? It's not bad. And you do that five, six, seven 132 00:09:09.640 --> 00:09:13.160 times a year. And like, it will add up. And I can promise you, when you run to one of 133 00:09:13.160 --> 00:09:16.560 these plays and all of a sudden you just take $7,000 out of the like, like, I don't 134 00:09:16.560 --> 00:09:19.760 be thinking, you know, could your pocket like, huh? That was actually pretty cool 135 00:09:19.760 --> 00:09:21.920 because that wasn't that much work. Because these are already people who know 136 00:09:21.920 --> 00:09:25.000 they can trust you. There's no sales process. It's very easy to sell these people. 137 00:09:25.000 --> 00:09:29.880 They're selling it at a charge of my heart. Really, really cool. But it's one of 138 00:09:29.880 --> 00:09:33.160 the most neglected pieces of business. So when you're thinking about your gym 139 00:09:33.160 --> 00:09:38.320 business, you know, do me a favor and think about it within these the three 140 00:09:38.320 --> 00:09:44.240 slices of this pie. Okay. Cold traffic signups, what plays you're doing to 141 00:09:44.240 --> 00:09:47.960 attract new customers that have never heard you? Warm traffic plates, what you're 142 00:09:47.960 --> 00:09:51.000 doing, what you're communicating to your existing customers to reactivate all 143 00:09:51.000 --> 00:09:54.800 leads. And then, and then upsell and ascend your current customers into higher 144 00:09:54.800 --> 00:09:59.200 levels of service and solving more problems for them, which is directly the 145 00:09:59.200 --> 00:10:05.040 bottom line. It also retains people better. And then underneath of that, what 146 00:10:05.040 --> 00:10:09.120 specific plays are you doing to cut nutrition percentage into increase 147 00:10:09.120 --> 00:10:14.400 retention in your gym? Because you now understand the value of going from 10% to 148 00:10:14.400 --> 00:10:21.960 5% is the same for your business as going from 10 signups a month to 20. And it 149 00:10:21.960 --> 00:10:26.880 usually costs less. So that is the main point for the gym secrets podcast of 150 00:10:26.880 --> 00:10:32.240 today. I hope that it was useful for you. I hope it was entertaining. And share 151 00:10:32.240 --> 00:10:38.760 it with a gym owner friend, gym owner buddy. I don't have to talk to you soon. Alex out.