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The larger the scrap and see between the initiation fee and then the subsequent billings the stickier the billings become

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Welcome to the Jim Secrets podcast where you talk about how to get more customers how to make more

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Per customer and how to keep them longer and the many failures and lessons that we have learned along the way

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I hope you enjoy and subscribe

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Good morning, everyone. We guys are having an awesome start to your day

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I'm making a badass one of the next frameworks for the book on acquisition on

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How to make different offers? Pretty cool. It's like I'm actually really really excited

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I've got eight different ways that you can use free and monetize it

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Ethically, we've got

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Three I think four different ways that you can use discount offers and still monetize the acquisition

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And so one of the ones the ones I'm working on right now is is about discount offers and so

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One of the things that goes hand in hand with discount offers one of the ways to use them is a one-time fee and so

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What I wanted to kind of go over is

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One of the pros and cons of having one-time fees

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So that can typically in most businesses not just gyms, right?

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You have one-time fee which might be activation and it might be initiation and might be enrollment

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I could be service fee like you'll see it that fee appear in a lot of businesses

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Especially ones that are more established and that's because they understand the value of it. So

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We've at when um, I know that in the and and I fitness at least I'm not sure if they do it at 24, but I'm pretty sure

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They follow the same outline which is they usually give the salesman that fee

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So whatever the salesman is able to collect on the initiation and the enrollment fee

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Is actually their own commission and so

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Because it's so inexpensive to sign someone up if you can't get the initiation fee then it's like not worth

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Your like they don't want to pay commission on a $25 a month, you know contract

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And so for that they they made the initiation fee now

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Here's some of the benefits of the initiation fee when you have a big initiation fee and the the larger the scrappancy between the initiation fee

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And then the subsequent billings the stickier the billings become right and so for example

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A friend of mine owned a chain of tanning slots and

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He saw that the stickiest membership that he ever created was a hundred dollars down ten dollars a month

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So they'd have to pay a hundred bucks, but they were able to get half the monthly rate

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Of his normal thing which was I think it was it was 19 something or 1888

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I think was what is monthly monthly do's were now obviously he's dealing with significant volume

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You know 4,000 plus people who have membership said attaining slot. So that's you know how his his model worked

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That being said

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The nice thing about the initiation fee is one is you can use it to pay a salesperson

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So that's really useful because initiation for a lot of times is typically an incredibly high margin thing

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Right you're just adding somebody into a system or whatever your you know processes and so

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That's number one number two is that it also allows you to give really cool discounting offers

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So you could say

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88% off your first month and so when people come in you can have the 88% off the first month and then you have an enrollment fee

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Right and whatever that enrollment fee is

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Maybe in addition like let's say you have a two hundred dollar a month membership

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If you did 88% off then you know, it's 24 bucks for their first month, which is nothing

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But 88% off seems really attractive, right?

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But when the person comes in the door you can still have a one-time fee and you're you know your your compliant

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Obviously, you always want to be a compliant advertiser put the stuff on on your you know

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Thank you page etc

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This close etc

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But still most people will be attracted to the offer

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To come in and so what that allows you to do is still essentially sign people up straight into where we're recurring membership

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At almost you know, so really at that point the 88% off if you look at it from a pure number standpoint

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Would be you're making 124 instead of 200 so you're really only giving like 30% off

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If you were to factor those two pieces together rather than 88 but 88 is obviously a lot more attractive than just saying 30% off your first month

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We'll click wise you guys already know that I don't run any ads on this and I don't sell anything

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And so the only ask that I can ever have are you guys that you help me spread the word so we can out more entrepreneurs

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Make more money feed their families make better products and have better experiences for their employees and customers

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The only way we do that is if you can rate and review and share this podcast

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So the single thing that I have to do is you can just leave review

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Let's take 10 seconds or one type of the thug that would mean the absolute world to me and more importantly

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It may change the world for someone else

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Um, and so there's some of the benefits of using a discount discount offer plus a one-time fee

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Um, and the thing is is you can make that one toughy whatever you want

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And one of the ways that I justify that within a selling uh, you know the context of selling is that

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The you can also call it an onboarding fee

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Um, but it's essentially saying you're going to cost our company more time

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To get you going than you will on every subsequent month right and so

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If we charge to a thousand dollars up front and then it was two hundred dollars a month

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Then it's kind of understood that like even like a fitness college a perfect example right because in the beginning

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They don't know how to do anything right you got to teach him how to eat you got to teach him how to cook

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You got to teach him how to grocery shop you got to teach him how to log into your you know your your zen planner your mind

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Body or whatever your share aim is to get sketched for workouts. You got to teach them how to actually walk through the workouts

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And understand kind of how your system works at your facility all of those are costs that you encourage business

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That is taking away from the servicing of other customers and so um

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I for me whenever I had something that I had you know some sort of higher fee up front

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Um, it's always it's very easy to explain what people what is that it's like well you like the beginning

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You're not going to know how to do anything

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And so it actually going to take a lot of one-on-one time with us to help you get up to speed once you're up to speed you cost a significantly less

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Um to continue to maintain and so at that point you get to that's reflected in the fact that you're saving 80% on an ongoing basis

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So um that's that's how that way you can position it as like if I had to keep doing this you'd have to keep paying this thousand dollars a month

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Um, but instead once we put this initial time into you then at that point

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The the savings that we have are pass prayed on to you and so it's a different way of explaining it that I think most people

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um

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A get and be or not nearly as you know weirded out about

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But make my mistake

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If you've ever gone to any kind of especially bigger businesses that you've heard of

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Uh, I like using car rental companies because they're very big companies that most people have interacted with like

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Those fees are 100% pure margin and it's so that they can recoup the cost of acquisition and pay commissions to the person who sold you

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all right um

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So any who uh, that is just a little a little uh a little note on one way to use discounted offers

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I have four other ones that I have eight different ways that you can monetize free

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Uh, so very excited to um to release that it's going to be the new

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ebook infographics on frameworks for acquisitions. I'm pretty pumped about it. But anyways

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Um hook house value before you if it is you know drop a comment or like

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Uh, and if it wasn't then uh, just don't tell you all right. Anyways have an amazing day. Could you guys soon? Bye