Podcast Relaunch And Introductions

SPEAKER_00 0:00

Welcome to the Fitness Business University Podcast. This is episode 535. You sure? Episode 535. Today we're going to be talking about why your gym is stuck under 20K a month and what to do about it. All right. So we say episode 535. By the way, I'm Tom Langton. Who? I'm here with I'm here with Vince Gabriel. All right. So this is episode 535. But it's really episode one of like the relaunch of the podcast.

SPEAKER_02 0:26

There definitely should be an asterisk next to that 535. Wow. The way we got that number is very choppy. It's close though. It was close. It was close.

SPEAKER_00 0:34

It was over 500 episodes. For sure. Okay. Yeah. And they've been all different for I was on the first one ever. I can I know that for sure. I was on episode one. Now I'm back. And now I'm back about 400 episodes later. I don't know how many we did together, but I'm back. Why did we stop? COVID. Right. COVID, so we were doing them for about three years. Right. And then COVID hit. And then when COVID hit, we stopped doing it and you started doing them by yourself. Right. And that's when the ratings plummeted. Plummeted ratings. So now we're back. And now we're back.

SPEAKER_02 1:03

Broad in Leo for a little bit.

SPEAKER_00 1:05

That was when it got really bad at one point. It got dark for a little bit there. But we're back. So why why are what are we doing here?

SPEAKER_02 1:14

Well, I it's funny. I told the we had a CEO mash amount a couple weeks ago, and I spilled the beans on you're back, right? That we're doing this podcast together. And for those of you that don't know, I just looked at the camera. For those of you that don't know who Tom is, Tom worked for Gabriel Fitness for 13 years, was the very first employee of Marlene Gabriel.

SPEAKER_00 1:36

Your mom was the first. Well, she was she never had a W-2. Okay. I was the first that was official.

SPEAKER_02 1:41

Okay. You're the very first official team member and you know worked together for 13 years. Yep. And you know, the cool thing was I told the CEO guys that, and they were like, wow, that's really, really cool that after now 18 years, that you know, we're still doing stuff together and friends, and you you came down and did an amazing job as the MC for the Gym Pranos. Absolutely. Mastermind was super fun. And you know, we got to go out to dinner that night. We had an O Lyman style. That's right. O-Lyman style. We did a little bit. We did a little bit. We waited a little bit. It was just you and me too. Everyone else had left. That's right. It was just you and me, and we had a great time, and then we just basically started talking about hey, let's you know, do the podcast again. And you know, we'll and you had something big happen in your life. Well, you worked for us for 13 years. Yep. You moved on to some different stuff, but then you found your way into becoming a gym owner yourself. Yes, sir.

SPEAKER_00 2:32

Tell how was that? It was great. It was great. I was a gym owner for about three and a half, four years, and got a great opportunity to sell my stake in the gym and kind of kind of step away from that. So I got the opportunity to be a gym owner for a for a period of time. How'd you like it? There were some really good things and really just like anybody else, really good things, really bad things. Yeah. So it was great. It was a good experience, though. Yeah. Yeah.

SPEAKER_02 2:53

And now you're retired, or you sold the gym and you're retired to retired life now. You came in at you know, rolled in at 10 o'clock with your chock full of nuts coffee. Right. You know, life is good.

SPEAKER_00 3:01

If I'm retired now, you've you've been retired, you've been retired for about 15 years, if this is considered if this is considered retirement.

SPEAKER_02 3:09

Oh man. Well, anyway, it's awesome you're back. It's great to be. I honestly do. I and I say this all the time, and and people like bust my chops all the time when whenever we would have like an anniversary party, and I had to like introduce all the different staff members, and like, and I always get to you, and I never could hold it together. I would always like cry and do uh and uh it's just really very, very grateful to be doing this with you. I consider you a very good friend, but also you know your shit. You've been around for a long time. You've been doing this. And the cool thing is like, you know, for the listeners, like you've been in leadership positions here at this company. Yep, you've owned a gym, you've been a head coach for forever, you are a vast knowledge of training clients. So it's like you've kind of walked the path in multiple ways. So I think you're gonna, I'm excited of your perspective. Because I think the podcast, you know, it's been me yakking into the butt of my phone for the last, you know, five years, right? And so I think what you're gonna bring to these shows is one, you're really good at asking questions, right? Two, you're somewhat funny. A little bit. I can be funny. But two, you have like you kind of come from different angles. Like I, you know, you come from an angle of a team member, you come from an angle of a leader, an owner. So there's multiple things that you you're gonna bring. So I'm super excited to do this with you, man. Beautiful.

Why 20K Is The Threshold

SPEAKER_00 4:28

Well, we're not gonna talk about many more. We're gonna that we're kind of stuck here. You were weird, you're weirded out of it. I I don't love to talk about it. I would love to talk about it. I don't love it. You did not like it. But let's let's get into why why we're here. All right. So today's the title of today's podcast is Why Your Gym is Stuck Under 20K a month. Now, there's I we talked about this before we went live, before we started recording, and I said, Why is that why is that the number? Why is 20K the threshold?

SPEAKER_02 4:54

Yeah, and I'm gonna lead in with the book I'm writing right now, like to kind of set the stage for this. So I I wrote a really, really small pamphlet of uh of a book probably you know eight years ago, right? I think it was when I was with R. Yeah, yeah. And it was called The Four Stages of Fitness Business Success. And basically, certain, you know, revenue levels cater to businesses being in a certain stage. And there's four stages that I kind of have mapped out, right? And what we're talking about today is stage one. And stage one is anywhere when a gym over is between zero and twenty K. And the problem with stage one, the beauty and the problem at the same time, is that it's you know, you spend a lot of time, you know, working for someone else or kind of being a trainer at a gym or stuff like that, and now you've taken the first step into owning something for yourself. And there's a lot of things you don't know, and a lot of stress, and a lot of pressure, and a rent that you never had before, and insurance that you had to buy, and there's a lot of uncertainties, you know, throughout this whole stage. And I think that I see a lot of gym owners that stay in this stage too long. Everyone's got to go through it, right? Right? I went through it, you went through it. Any business owner that started a business has gone through this stage. So never, there's nothing wrong with being in this stage. The thing I want to talk about today is staying there too long, right? And if you are stuck below 20K and you're doing all the sessions yourself, and you're responsible for every new customer, and you're responsible for talking to the landlord when he comes in, and you're responsible for setting everything up on mind body, and you're responsible for watering the plants, it's like everything lives and dies with you. And in the beginning, it's cool, after a while, it's just too much. And I think that's the biggest reason why I see a lot of people fail is they just get burned out.

SPEAKER_00 6:57

And they get burned out in this stage.

SPEAKER_02 6:59

Yeah.

SPEAKER_00 6:59

Now, one thing to hear I want to say though is like for people listening to this, if you are in stage one, like you said, it's not a bad thing. Like, if when we we uh we're like story, we love to tell stories back in the day, and everyone that's been around, like most of the great stories that we tell are from stage one, pretty much the nostalgia of like looking back, like even though that was a hard time, but that was also maybe like the most we learned, we were learning the most. It was like the so like I don't think it's a terrible thing to be in stage one because it's like a lot that's that's when you're getting better when you're that's like the rapid growth, right?

SPEAKER_02 7:33

Right, yeah, and again, the whole purpose of this podcast is how do we not stay there too long? So I have this I have this theory, and you know, poke holes in it if you want. Yeah, but I I I presented this theory and I've totally made this up myself. No one has taught me this. I'd never learned this anywhere, but uh it's called the 1.33. Okay. And I believe that training a session is takes 1.3 human energy hours, okay? Not one. And so the example is if I'm training 30 sessions a week, it's not 30 hours of work. Right. It's 30 times 1.3, which ends up being 39. Okay. Right? Yeah. So that's almost like now, technically, in time, it's not, it's still 30 hours, is 30 hours. Right. But even if you added, you do a session, and after the session, client hangs around and talks to you for 20 minutes, right? But you know this better than anybody, there's a lot of energy that goes into training a client from a physical energy, from emotional energy. And I believe that when we compound an owner being in stage one, doing every session, and say they're only doing 30 sessions, but that's 40 sessions. Right. And now I have to do all the other stuff. I'm working, you know. I I had a guy in the other day, and I'm gonna talk about him in a second. A guy in the other day, he's like, I'm working 60 hours a week. He wasn't working 60, he was really working 80 from a human energy standpoint, and so that's why I think like we we were you and I both have done the grind of being an employee and working 40 to 50 hours a week. But that's all we were doing, right? We didn't have the stress and the pressure of paying the bills, of managing employees, of doing all the other stuff. And I think that that's where this stage gets so hard on people. It gets so hard on people with the compounding of the training, because we're still doing all of it, and then the compounding of all the other business stuff that one, we have to do. If we don't do it, it bad things are gonna happen. But but two, we have no idea what the hell we're doing.

SPEAKER_01 9:45

Right.

SPEAKER_02 9:46

Right? And the right, like I had no idea what the hell I was doing in the very beginning. And that adds a whole nother, that uncertainty adds like a whole nother layer of pressure and stress and burnout. And and and that's what we want to get away from.

Working In Versus On Business

SPEAKER_00 9:59

Now, do you think gym owners stay here because of what you just said is because they do what they're comfortable doing? Like the training is so comfortable for them, and they're experts at training, and the other side of stuff, stuff that we're gonna talk about in a minute here, they know nothing about. So it's like this is what I'm good at, and and but because uh we've heard people talk about like this is what I'm I'm really, really good at training, so this is what I want to do. Yeah, but are they like are they lying to themselves?

SPEAKER_02 10:21

So, did everything tell you about that uh meeting I had with Mike Boyle before I opened my gym? Yeah, yeah. So I went to uh Ganis, I get that wrong. Aganis Arena, it was a Boston University hockey facility, and I basically sat with Boyle for three hours before I opened my gym. And he told me so many things that are like game-changing, change me. That meeting changed my life, right? Totally changed my life. But he gave me one nugget of advice, and it was read the book, The E-Myth, Revisited, right? And the main premise of the book is a business owner can have the decision to work in their business and on their business. And if a business owner spends all of their time working in their business and no time working on their business, there's a good chance that they're gonna go out of business. And so I think I was very, very lucky in the very beginning to have read that book before I even opened my gym. And actually, you know, the one I read it was when Vanessa and I moved from San Diego back to New Jersey. Yeah, we had a CD.

SPEAKER_00 11:26

You listened to it. You listened to it on CDs. You're showing your age, right?

SPEAKER_02 11:30

And we're so we're driving back and I'm listening to and I and I and I was very, very grateful to Boyle that I got it. And I knew that it's like, all right, and again, we we still had the grind. We still stayed in stage one for a while, maybe a little longer than we should, but I always knew that hey, this is not gonna work out well for me if I'm only training sessions and I'm only I gotta learn some things about how to run a business and how to run a company. And I think that's that's what some people don't do. A lot of people, they they open the business, they work in the business, they do all the sessions, they do all the sessions, and they don't learn the business skills that they need to learn to break out of stage one. So that I think that's really it's about skill sets.

SPEAKER_00 12:11

Okay. It really is. So let's talk about what are those skills they need to learn. So we brought you we broke it down into three three big things we're gonna talk about today of like the the three key things. Where if you're in this point and you're and you feel that that feeling of being stuck, like where the hell do you start? Yeah. Because I think you could talk, like you listen to all these different shows and all these business experts, but really you're telling me there's three things someone can do to jump out of this. So what's what's the first thing?

SPEAKER_02 12:34

And again, what I want to direct this to also is not like the person, I mean, this will be very valuable to someone just just starting out, but I'm really kind of directing this towards someone that's kind of stuck, right? Or like someone that you're at like 9K or 10K or whatever you're at, and you've kind of been there for a while, and it's kind of not moving. Like you're gaining a couple clients, you're losing a couple clients, you're kind of stuck in that rut. And and the cool thing is, is like we're recording this on a Friday, right? We have these things called SPF meetups, where once every couple months, a small group of SPF gym owners come to the back room here and we sit and we do mini masterminds. Okay. Okay. And there was a guy that came, and I give each person like a challenge to like present to me. Like, and his challenge was I'm at 13K. All right, and I'm stuck at 13K, and I've been stuck here for a little while, and I don't know what I'm doing, you know, to break through. And I was like, Well, what do you think you need to do? And he said, All right, well, if I just get this, it's not like horrible, like his churn rate's not horrible, right? But so overall, two two new people every month. Yeah, and he was in business for about a year and a half, right? And with that pace, he, if he kept everything the same, with that pace, he was gonna go from 50 to 75, so from 13k to 20k in 12 months. If all just if everything stayed the same, right. Okay. That's too long, Tom. Too long. That's too long. Why? Because he's already been at it for 13. He's telling me he was working 60, 70 hours a week. Now we're gonna add another year of that? He's gonna kill him, he's gonna he's gonna burn stuff out before he's gonna go. Because he's not gonna get to 20k in a month, he's gonna get to 20k in 12 months. Okay, so what's his financial thing is not gonna change too quickly.

SPEAKER_00 14:21

So what is a time frame? If if I'm a business, if I'm if if if I'm watching this and I'm just opening my business, or like what is the what is the what is a good time frame? How long should you be in stage one?

SPEAKER_02 14:32

I it it's totally, it totally is, it's a hard question to answer. But I'm gonna go on a limb here and I'm gonna say, get out of there in 12 months. 12 months. Yeah. You know, and you know, I've seen some people do it way faster than that. Okay. But it's like after a year of doing, I mean, you you know, yeah, right? After a year of doing it, it it bur it breaks you down.

SPEAKER_00 14:53

Okay, so then so if so that guy that you talked to, how quickly can you get so you're telling me it's gonna take him a year to go from 50 to 75 at the pace he's going out? At the pace he's going to be. Keeping a positive flowing positive flow of clients to a month, right? Yeah, but it's too long. So how quickly can someone, if you're let's say you've been stuck there for a year or two years, how quickly can we flip it?

Pricing Fix That Changes Everything

SPEAKER_02 15:11

So let me show you what I did with him. Okay, I'm pulling out my notes to, you know, kind of I actually wrote down and bullet pointed exactly what I did with him. So his name is Jacques, right? And he he was at 13k and he wanted to get to 20k. He currently had 50 clients, and he, as we said, he needed 75 clients to hit 20k, and we said all that. Okay. Oops sorry. Shit, I got a phone call. So instead of doing that, gaining four, losing two, we addressed the price. Which is the number one.

SPEAKER_00 15:46

The number one thing we're talking about is price.

SPEAKER_02 15:47

The number one way that you can get out of stage one, get past 20K, is to change your price. Well, you're talking about to accelerating it.

unknown 15:55

Correct.

SPEAKER_00 15:55

Because like he was gonna get there.

SPEAKER_02 15:57

Right. But not very quickly. My plan that I created for him gets him there in about a month.

SPEAKER_00 16:02

So instead of 12, we're so we're cutting this down big time. Yeah. So we're accelerating the process.

SPEAKER_02 16:08

So the first question is one, he was well undercharging for what he was doing. And a couple things that told me why he was undercharging. One, he had almost a hundred percent close rate, meaning almost everybody was closing. He had a consult, they would close. What if he was really consult? What if he was really good at sales? What's that? What if even if he's really good at sales? Yeah, but it doesn't matter. It means that it's since everybody is closing, the price is too low.

SPEAKER_00 16:36

Right. But do you think people get caught in that illusion of like I'm a great salesman? And I'm gonna tell you he's not a good salesperson. He's been doing it a year. Right. That's but do you think people get caught in that illusion of like, I'm just really good at sales, that's why my closer is.

SPEAKER_02 16:49

It's possible, but I've yet to hear a gym owner that's doing this for a year say, I'm really, really good at sales.

SPEAKER_00 16:54

Okay.

SPEAKER_02 16:54

Yeah.

SPEAKER_00 16:55

But he's closing. He's closing at a too good of a rate.

SPEAKER_02 16:58

Yeah, and and the reason why he's closing is because he's not getting many people. All of his clients are coming from referral.

SPEAKER_01 17:03

Okay.

SPEAKER_02 17:03

Right? All of his clients are coming from you know, people like you know, that he knew or something like that. He's not running ads on Meta or anything like that. Right? If all of a sudden he tripled the amount of leads that he was getting, he wouldn't be he wouldn't be closing everybody, right? But it just goes to show me that when everybody is closing, we should raise the price. The other thing that told me was he had a good retention rate. Okay. And so his retention rate was solid. So the product's good. So the product is good. Okay. And so those are the two things I look for in should you raise price on either current members or new members going forward? Because if you all of a sudden adjust price and you have a high churn rate, yeah, that's just an invitation for more people to lose. And if you're have a a poor close rate, meaning you know, you're closing like 30% of the people that come in, you raising the price is probably gonna make that actually worse.

SPEAKER_00 17:57

The you always, and and I've been working with you, you know, coaching gym owners for years, and you always say it very nonchalantly. And I've heard you say this to so many gym owners, like, you gotta raise your prices, you gotta raise your prices. And you're pretty this freaks people out. Yeah. Probably more than anything else. This one and whether they should fire somebody. Are probably the two biggest ones that freak people out. Having that hard conversation and raising your prices. Yeah. Like, how do you do it where you're like, is there a way to do it where you're not freaked out? How do you raise your price? Because everyone's like, we're gonna everyone's gonna be pissed off, everybody's gonna leave. Like all these fears creep into your head.

SPEAKER_02 18:32

Yes. So how do you do it? So the first thing is there's there's three things to do. The first thing you do is you do math. What do you mean? Math. I asked him, what's the worst case scenario? Right? How many people do you think? It's funny, he had a staff member with him, too. Okay. And actually, I asked them both. And I said I had them write down their number separately. I was like, all right, you write down how many people you think if you raise your price, and the proposal was to raise the price by$40, which was about a 10% increase.

SPEAKER_00 18:59

Now, is that roughly is that roughly what you suggest?

SPEAKER_02 19:02

Yeah, I think 10% it's you know, anywhere from five to twenty percent, twenty percent on the high end, but you know, we just raised our prices at Gabriel Fitness, and it was a 12% price increase. So it's kind of like in the middle there. Okay. And that that was a substantial one. It was fit, it ended up being$50 per month. Right. So it's a big jump. Big jump. Yeah, a big jump, but very successful. So worst case scenario, you go back, go back, you're like, so basically I said, write down your worst case scenario. Meaning how many, what's the most amount of people you're gonna leave? Correct. Okay. His number was five, her number was three. Okay. And so I averaged it together and I said, all right, we'll take four. Four. And so worst case scenario was you're gonna lose four people if you raise your prices. Okay. Okay, we did the math. And I took he had, I think, 50 clients. So if he lost four, that would take him to like 46, right? And we did the math at the new price raise. Making more money. He's already making a thousand dollars more. Making more money with less people. Right. So the first way is you do math. Right. And you you put together, you know, it's it's a hypothetical, right? But most people are pretty, you know. I think people are very way they overestimate, you know, the loss. For sure. Right, for sure. Because that's our you know, lizard brain kicking in.

SPEAKER_00 20:13

I think you I think people imagine that one client. We all have that one client who bitches about everything. Yeah. And then you you think about that conversation of like, oh no, you gotta talk to Vince and he's gonna he's gonna be so pissed off. And it's like, but this it's gonna happen.

SPEAKER_02 20:26

The the the it is always bigger in our own minds. For sure. Right? It's so for me to tell him to raise their price, it's so easy, right? Why? Because I'm not emotionally invested. Right. I don't I don't have to deal with the client. I just say, hey, on paper, this is a smart business decision. You deal with the rest of the shit, okay? But I'm not, I just know it's a smart business decision.

SPEAKER_00 20:46

Now, as you as you move through the stages, has it gotten easier for you to raise prices as you've come off the floor? Because you don't have to see people every day, do you think? Yeah. Do you think it's because you're you're less emotionally attached to the clients here? When was the last time you trained a session? Oh, years. Okay. So you haven't really been faced, I mean obviously you see the clients, but you're not as emotionally invested in them. So now for you to raise 12%, is it kind of like, yeah, it's not really a problem?

SPEAKER_02 21:08

I'll be honest with you, it was it wasn't the easiest thing in the world to do. Okay. Um we we definitely did it because you know, here's the thing we had we had run this company for a really long time without a price raise, and it didn't raise it during COVID and anything like that. So it was kind of like it wasn't as hard, but it was still like there's like stuff, even me that does this for a living, even me, there is a little bit of stuff that's gonna be. The demons creep up a little bit. Okay. So that's the first thing is to do math, is just to realize that, hey, even if you lose a bunch of people, you're probably still gonna be ahead of the game. And that's a big fear in stage one, Jim's. I don't want to lose anybody, right? Because if I lose anybody, we're gonna like go out of business. That's the irrational fear in stage one.

SPEAKER_00 21:46

So this but this always goes back to I think this is the one thing you say more than anything else is like know your numbers. Yes. Got to know your numbers. This goes back to knowing your numbers. Yes. How many people you have, how much can you make in a month, lifetime average, like all that stuff. You gotta know your numbers.

SPEAKER_02 21:59

Yeah. I mean We had a a a client for GFP for a long time, remember? Peggy.

SPEAKER_01 22:03

Yeah.

SPEAKER_02 22:04

Yeah. And so Peggy was she she you know created this very, very large consulting company, sold it for a bunch of money, now retired. She's and she was our client for a really long time at GFP. She she I hired her to sit down with me for a day to help me with marketing. Way back. I mean, this is like a long time ago. And she started asking me all these questions. She's like, Well, what's your lifetime customer value? And I was like, uh, I don't know. She's like, well, what is your cost per lead right now? And I was like, I don't know. And she's like, she stood up and she goes, I'm sorry. You know how her. She's a very sweet lady. Very late. And she goes. She looked at me dead in the eyes. She was like, I'm sorry, Vince. I can't help you. You don't know your numbers. And legit, she canceled the meeting. That's all. And she like got up. I was like, that's a gangster right there. Like, that's like, she's like, this little lady. Yeah. Right? Little 50-year-old lady. And well, she wasn't, she was a little older than that at that time, but amazing person. And she taught me that is how she. I think that that's a good one. Like, that's why I like to give Jim Owens a little tough love. Yeah. Because that was harsh what she did. Yeah. And it really spurred me into action. It really made me just be like, oh, I got to get this shit together. So you're right. 100%, you gotta know your numbers.

SPEAKER_00 23:14

Okay. So do you do the math. Okay, we're talking about raising prices. You pick your number, you do the math. We're gonna raise the price 10%. Yeah.

SPEAKER_02 23:21

And the math, and doing the math should make you feel a little bit more confident that even if you did lose some people, that you're probably gonna end up making more money.

SPEAKER_00 23:29

And that's worst case scenario.

SPEAKER_02 23:31

Worst case scenario.

SPEAKER_00 23:32

Okay. And most of the time that never happens. Okay, so now we've done the we've done the math. We know. Worst case scenario, I piss off 10% of my customer base. 10% of people leave. I'm still making more money.

SPEAKER_02 23:43

Yep. What's the next step? Second thing you do is you call someone. Do you ever remember Regis Philbin, uh, what's the show? Who wants to be a millionaire? Yeah. The member of the thing, foreign friend. Yeah. Right. You call someone that's done this before. And so now I bring guys in for consulting days all the time. Almost every consulting day, I have them raise their price. And almost every consulting day, they fight me on it. They're like, I don't know if I can do it. I don't want to do it. And we have a we have a guy in SPF named Marty Mutt M Marty. Yeah. Right. And so Marty was one of those guys that promised his customers that he would never ever raise their prices. And I got him to raise his prices. He was petrified beyond petrified. And I was like, dude, we we yeah, we did we promised that how many years ago? Right. And we went through a global pandemic, and most of the people that he promised it aren't even there anymore. And so, but he had it in his mind that he couldn't, and he did it, and it was massively successful. Right? I think he lost like one person. Right. And so I I have Reverend call Marty. And I just have Marty on the I have Marty on the Marty on the speed dial. And I just be like, all right, call Marty. And Marty picks up, and Marty's like, yep, yeah, we did it, and everything was great. And they they talk to Marty, and I'm telling them, and they're like fighting me on it, and they talk to Marty, and they're like, All right, I'll do it. Right? Because he did it. Third party third party endorsement. When I show them what I did at Gabriel Fitness, it's also very helpful as well. So, right, because I did it. But that's the second thing, is talk to someone's other. Yeah, talk to someone that's up. The third one is read through all of your Google reviews and testimonials. And remember that you deserve this. You deserve to make more money. Right. You're changing people's lives. People's lives are better because you're in it, people's lives are changed. People are alive because of the job that you're doing. Is that not worth$3 more a session? And so I think one of the other pieces is they have to kind of get grips with that they deserve it. For sure. That you deserve to make more money because if you continue to grind and in you, if you continue to be in this place, that is not good for you. That is not good for your staff, and that is not good for your clients if you are not successful financially.

SPEAKER_00 26:02

I I think that the majority of people members don't even notice. Because like you think about like we drink, we have coffee here, like we I drink Starbucks every day. And in the time I've drank Starbucks for the last 20 years, they've probably raised the price 30 times.

SPEAKER_02 26:16

It is ridiculous.

SPEAKER_00 26:17

It's ridiculous. For like a it's like$7 for now, this is a chop loan. But I stopped at a gas station, I stopped at a gas station. There's a gas station call. But still, like I've never noticed what the price, what the price, but I know that's like that's part of my day. I need a cup of coffee. People, once you're once you're part of their life, it's like prices are going up and then they may have a comment, but it's like, okay, whatever, whatever.

SPEAKER_02 26:38

And that's why I go back to the retention being like I I do believe that you gotta earn this. I do believe that. I don't just tell everyone to raise their prices. I look at those two metrics. You gotta have a price. And I look at that and I and I just say, You you have to earn this. You have to be providing a good value, providing a good service. Is the soup good? Exactly. Yeah, soup good.

SPEAKER_00 26:58

Okay. So now we've so is that is that all you gotta do? You check your numbers?

SPEAKER_02 27:01

Well, we did two things. So we raised price on current members. Okay. Right? So that that got us, uh we raised for him, we raised price about$40 a month, which equated to I can't remember how much it was uh from a math standpoint.

SPEAKER_00 27:17

You said it was about a 10% increase?

SPEAKER_02 27:19

Yeah, it was a 10%, it was about$40 a month per person. Okay. Okay, and then the second thing we did was we took his regular prices, okay, the current prices that he was offering new people, and we raised those by$40 as well.

SPEAKER_00 27:33

Okay.

SPEAKER_02 27:33

Right? So I think he was charging, you know,$280 or something. We brought that to$320 or something like that. Right. So now we have a double whammy where, hey, all of our we get we get the hit right away from the current members. From the current members, but now every new per people, every sorry, every new person that we add is another$40 higher than what we were getting before. And when we did the math, he needed to go from, and I actually kept it in there, 46. So he lost four, right? Right? He needed to go from 46 to 56 to get to 20k.

SPEAKER_00 28:10

So it wasn't 75 anymore.

SPEAKER_02 28:12

Nope. So it's left. Yeah. So now all he needs to do is get 10 new clients. We can do something quick and get 10 new clients right away. We're accelerating the process. So we literally can get there in a month. Okay. Whereas before he was gonna get there in a year. Okay. And that gets you out of stage one. That move right there, 46 to 56, with adjusting the price and changing the price, that gets you past it. And what does that do? That gives you money. What do you need to get and do it to get out of stage one? You gotta get everything off your back.

unknown 28:43

Right.

SPEAKER_02 28:44

You can hire people. Yeah, you can hire someone, you can invest more in marketing, so you're not doing everything yourself. You can hire an admin, you can do you when you're strapped for cash, it's like you gotta do everything yourself. When you have money, you can start to delegate things, you can start to outsource things, you can start to get everything off your back. And that's the goal out of getting stage one. All right. Anything else on pricing? I think that's that's all I kind of had for that for pricing. So number one, you're stuck in stage one. Do you remember? Oh, and and and and you know, here's the here's how you raise prices on new members going forward. You ready for this? Yeah. Open Microsoft Word. You go to your price sheet, change the numbers, change the numbers, you click save, right, and then you click print. And then at the next sales consultation, you present the new prices.

SPEAKER_00 29:37

That's it.

SPEAKER_02 29:37

Simple as that, big time.

SPEAKER_00 29:39

Simple as that. Is there is there the uh uh a simple process to raise for current numbers?

SPEAKER_02 29:47

Yeah, so that is a very, very important process. It's a little more delicate. It's it's yeah, and I I I honestly I don't think we have the time to get into it today, but it's 100%. You I had a Jimmer a long time ago, and he he said, due to inflation, we'll be raising our prices.

unknown 30:06

Yeah, I know.

SPEAKER_02 30:07

That's pretty bad. Yeah, yeah, real bad. And there is an art to it, and actually, Joe Hashey, Joe Hashey, who's the head business coach at SPF, he raised his prices after COVID and raised them on 800 members and did not lose a single person. And I looked at his price letter, price raise letter, and I looked at his video that he did to his cons, and I was like, that is the most textbook way to execute a price raise I've ever seen. Right. So what I did is I asked Joe to create a guide to raising prices based on his successful price increase. Yeah. And there's a template for a letter and stuff like that. So we've created that as a resource, SPF mastermind.

SPEAKER_00 30:47

So the so there isn't there is an art to this. Oh, yeah, 100%. So for new members, it's easy. Change the number. Yeah, yeah. For current members, you don't just you don't change it and fill them and don't tell them anything. You gotta do that.

SPEAKER_02 30:58

And I will tell you, well, the big thing you need to do is you do have to say what value you're you're bringing to for the justification of raising your prices. Okay. Right? You do you don't want to just say, we're raising our prices because I want to make more money or because of inflation. You should, there's a great book by Joel Polish, what's in it for them. When someone reads a price increase letter, what do I get out of it? What do I get out of this? And that's the angle from the letter.

SPEAKER_00 31:22

So there is an art to that. So don't you don't just jump it up, don't just bill everybody.

SPEAKER_02 31:26

I would I I would 100% if you are a rookie at this, get some advice on how to raise your price and how to communicate that. That's that does matter.

SPEAKER_00 31:35

Okay. So step one getting out of stage one, raise your prices.

Time Block Sales And Marketing

SPEAKER_02 31:38

Yes. Stage step two. Okay. So kind of we can stay with this same case of this guy John, right? Yep. All right, what is now so now we got this open road where like, hey, we go from if I go from 46 to 56, I go from 13K to 20K, like almost overnight.

SPEAKER_00 31:54

So how do I get those 10 people as quick as possible?

SPEAKER_02 31:56

Yeah. And so I think the big thing is in stage one, with the mistake people make that keeps people stuck in stage one is they spend their time that they're not training clients on the wrong things. Okay. I was notorious at this. You saw it. Yeah. Okay. So I said the book, The Emyth, before, right? Yeah. And there was a lot of good things, but there's also some misleading things. In the book you said. In the book, yeah. Okay. And so I think that when I read the book, I thought that I needed to create these large binders of systems for how to do everything. I spent hours and hours and hours on these binders of systems. And I was like, it was just you and me. Yeah. Like we just talked every day. We had a big communication. We had a big training. Yeah, and it's just like it was not necessary. And there was a lot of things that I did in stage one that were me not having clarity on what I needed to be doing at the time. And so I just filled time with what whatever, right? And the big shift that gym owners in stage one need to do is they need to block time to get new customers. That is the critical there's a there's a great book called, I'm mentioning a lot of books today. Yeah, it's good.

SPEAKER_00 33:12

There's a little reading list.

SPEAKER_02 33:14

Yeah. But and and and I don't think everyone should go read every book that I recommend, but this is just sometimes there's like little chunks. And this actually, this piece of advice came from the book Ready Fire Aim, which only read if you're in a especially in stage one, do not read anything beyond the first chapter. Okay, because it kind of talks about this. It's like the number one priority in stage one when you're just starting out, is to get to a critical mass of customers. Right. And so if we don't grow the business and we don't get more customers, we're not going to get out of this because we're not going to have the money to do anything. So it's kind of like what I was saying before. So that needs to be the focus. So this guy, John, now that we changed the price, now his focus of time needs to be all right, where are my next customers coming from? And so the first thing they need to do is put it on the calendar like an appointment.

SPEAKER_00 34:03

Put the time that they're spending on sales and marketing.

SPEAKER_02 34:07

I believe that sometimes it's not a lack of knowledge. I think it's sometimes they're just not spending enough time on it.

SPEAKER_00 34:14

So you put it on your calendar and say, I'm training, let's say I'm training from 6 a.m. to 9 a.m. Yep. From 10 a.m. to 12, sales and marketing. Sales and marketing. Now, how much of that time is dedicated to studying? Because you've given us all the books. None. You study at night, dude. Okay, so this is working. This is not, this is not listening to podcasts. This is not reading books. What are you doing? That's fake work. So what are you doing?

SPEAKER_02 34:37

So you're reaching. So let's say someone, I I think this is a really good thing for someone to do in stage one. Hopefully they're doing something on social, right? They're posting the client, you know, videos of the clients and stuff like that. This is a good one for people to write down listening to this. If you have more conversations with people that are prospects at your gym, you'll make more money. Whether those conversations are on the phone or in person, whether those conversations are on text message, whether those conversations are engaging someone that engaged with you on social, if you talk to more people, you'll make more money. And so that's really the emphasis of in stage one and this time block is like have conversations with people. Create things that create those conversations. So an example would be sending out an email, and at the end of the email, there's some of a call to action to reply to the email to get more information, and you they reply, and you have a conversation with them back and forth. That's moving the needle. Okay. When we talk to more people, we'll make more money. And I don't think people are blocking enough time to do that. So that's that's the first thing is legit. Hey, these are the activities that I know are going to help get me more customers. I need to now just make sure that I'm spending time every day on that stuff. I I think a minimum in stage one is one hour a day. One hour a day where you're focused on sales and marketing activity. And ideally it's two.

SPEAKER_00 36:05

And when you're it's I think that's the big, the big like holdup there is people are thinking, I I don't know anything about marketing sales. Most new gym owners are like, I'm not good at marketing, I'm not good at sales. So they're not, you're not learning about it, you're not going, you're you're doing, you're reaching out to people. So what if what if someone comes in and they don't know what they're doing? Just start reading emails? What's the what what how do how do you attack that?

SPEAKER_02 36:25

Yeah, well, I mean, I too, I think with AI these days, too, it's so much easier than it used to be. You do not need to be a marketing expert. You can go into Claude and you can say, Claude, write me an email that is, you know, for a 40-year-old person that's gonna help them get, you know, and so so I think there's no excuse these days, right? There we don't need to be a great marketer. You need to be able to plug something into AI. And again, you want it, you you you do want to learn the skills, right? You do want to learn, you don't want to just have AI brain where you're just really which is happening big time. For sure. It's crazy what's happening, right?

SPEAKER_00 36:58

Even on City writing emails for you and stuff.

SPEAKER_02 37:00

Yeah, you just know people aren't using their own damn brains. It's bad. It's really bad.

SPEAKER_00 37:05

Joint venture is a good use of time during this time, going out and reaching other positions.

SPEAKER_02 37:09

You're right, that's a good one. Like you don't need to be an expert marketer to walk down the street, walk into the salon, introduce yourself, and say, hey, I'd like to give out a couple free memberships to your salon people. Right. That doesn't take any marketing skill to do that, right? And so community stuff is is is really, really uh important. I will say this. A lot of people ask about like running ads in stage one, and like should you take ads out on Facebook? And I'm not here to tell you you should or you shouldn't, but I will say this an investment in a really good website is a game changer. Okay, and here's why. One, ask someone that markets on Facebook and someone that markets with a website, and ask them which people are more likely to show up to their consultation and more likely to buy. It's website all day long. Why? High intent. Someone's searching for specifically. Or they're going to your website and they're filling out a form. Okay? So the the volume is low, the intent is high, which means it takes us less time. And in stage one, we don't have a lot of time. Versus if you spend$3,000 a month on Facebook and you're getting 150 leads a month, now all of your time is spent having to field all of those leads, right? And I'm not saying that's wrong, but I'm saying a lot of times if you're training every session, that can overwhelm the hell out of you and cause even more stress. So that's why I love investing in a really, really good website in the very beginning. Like if I'm gonna spend any money on marketing, hey, you can probably get a really good website. Go to my friends over at GMM, GMM Machine. Like they'll build you a really good website and not charge a ton of money for what you're gonna get out of it. And this is this is not stage one. We can talk about it quickly, sidebar, but understanding lifetime customer value is really important, right? And the the way that you know the basics of lifetime customer value is basically what is a customer worth over the lifetime of your business. And if you can start thinking about the things that you do to get a new customer with not getting someone that pays you 200 bucks a month, but someone that pays you$10,000 over their lifetime, it makes you shift the way you think about it. So that website that costs$300, and you're like, oh my God. But if that website that costs$300 a month generates two clients a month, it's$20, it's$20,000. Yeah, if you're right, and so so just for those listening at home, the way you get the number is you you take the average value of what someone pays you, right? And basically what you would do is you would take the your total revenue and you divide it by the number of customers you have. So let's say you're doing$10,000 a month and you have 100 customers, it's a hundred, everyone pays your average is a hundred bucks. Right. Right? You would take that number and you would divide it by the churn rate. Okay. And so it's like if 100, you divide that by 0.03. That gets you somewhat of an accurate number of lifetime customer value. Okay. Right. And so, but but the point in saying that is, and I don't think anyone needs to do much with it. It's just the knowledge base of knowing that, hey, it's worth it to invest in that website. It's worth it to go down the street and shake the hand of the salon owner, it's worth it to ask my customer for referrals because I'm getting$10,000 bills and not getting$200 a month clients. Gotcha. Gotcha.

Referrals And Being Truly Referable

SPEAKER_00 40:44

All right. So what else, what else during that marketing and stuff?

SPEAKER_02 40:47

And I think I think community, I think you nailed it with community that. And then the last one would be referrals. And this is referrals are a slippery slope here because I think sometimes people expect too much from referral. There's most stage one gym owners don't have a lot of customers. Right. Right? This guy only had 50 customers. Can I expect 10 referrals a month from 50 customers? No way. That's way too many because not every customer is going to refer. If you get 20% of your customers to send you one referral every year, you're doing that's pretty good. Right. So when we have a low number of clients, I think sometimes people expect too much from referral generation. Even if you're doing a good job of like doing things like bring-a-friend days and referral contests and stuff like that, you ideally should be doing stuff to get referrals. But I think you also got to manage your expectations. It doesn't mean that you don't ask. You should ask. I would give every new customer that signs up a free one-month membership, like we call it the point-of-sale referral. You remember that we used to do all the time with black metal cards. Right. Yeah, we still do that. So having a few different strategies to generate referrals is very, very helpful because referrals don't really cost you much money. But understanding and managing, that's probably not the only thing that you can do, is just sit around and wait for referrals, especially if you have a low number of customers.

SPEAKER_00 42:12

But referrals, you got to be active in searching for referrals. I think that's a lot of people expect, like, oh, we have a really good product. Why is no one sending their friends? So is there a way, is there the what are what are the best ways to kind of drive referrals? Is it is it bring your friend day? Is that the Yeah, that's a good one.

SPEAKER_02 42:26

Yeah, I like bring your friend day. That that's a really powerful one. We have a whole playbook on that. But the the second way is the point of sale, which I just talked about every time you sign your customer. But the third one, I call it the referral habit loop. And that is essentially anytime someone says something to you like, hey, I really love it here, or I've lost a bunch of weight, or I'm feeling great. I love it. I'm training with so you almost have to have that on the on the on the top of your mind. Because I believe that everyone listening to this in stage one, especially if they're doing all the work, they're probably having that happen to them once a day.

SPEAKER_00 42:57

For sure.

SPEAKER_02 42:58

You should be.

SPEAKER_00 42:58

Yeah.

SPEAKER_02 42:59

Now, that does lead into a very important point, Tom. You gotta, you gotta, you gotta have a product good enough that you are makes you referable. You gotta be referable. It kind of goes back to saying, you know, we're saying, should you raise your price? Yeah. Only if the product is good. I mean, you're the master at this, right? You're the master, and and that's why you you you made Gabriel Finch great by how good you were on the floor. We were putting out a product that was superior to anyone else. Not no one was even close to us. And then all of a sudden we birthed all of our competitors. We did, right? We literally trained people that now like they were interns of ours, they came to our mentorships, and now they're opening up gyms all around here. But we birthed that and they came in and watched, and again, they're doing great, right? There's guys that are really talented business owners that I'm happy for, and I like to see them successful, but they came in and watched what we did. For sure. They came in and watched how we trained people, and that was like our thing. Like we were big on well before we knew anything about marketing and sales. Having a really good product. We just have a really good product. And that drove a lot of it. And so I think a lot of people can get I I don't I don't want to say, and I didn't want this to be one of the things, because I don't want to like say you suck and you're not good at what you do, that's why you're stuck in stage one. I don't believe that to be true. Okay? But I do believe if they got better, I do believe that they provided a better product, that they would probably get out of stage one a little faster. So if you're stuck, yes, do these things, but realize that hey, the better the food tastes at the restaurant, the more people are gonna come back.

Avoid Burnout With Better Priorities

SPEAKER_00 44:34

Right. I think that's a total separate episode of that. Yeah, the suit's got me, yeah. All right, so we got we have two of the three we talked about. We talked about pricing. Yeah. We talked about blocking time and of having specific time to get new people in the door. Like that is that is all you're doing during that time.

SPEAKER_02 44:50

Yeah. There's one more. Yeah. And again, this one is kind of really related to the other two. And it's really, you just can't get burned out. And that's the whole point of this whole episode is that the longer we stay there, the more likely are we are to get burned out. Right. And so I kind of hinted on a lot of this in the very beginning of like, hey, the pressure is real. Like the you now have a lease that you signed, you now have people that are depending on you. You you it's like a lot, right? And you got to be able to kind of handle that, you know, pressure. And the the biggest thing that burns us out is the grind, right? It's the grind over the long haul. And I mean, you know, the funny, the funny story is, you know, we were, you know, showing up at 5 a.m. every morning and leaving at nine uh o'clock at night, and you know, there was one time you you were never late, right? There you were never ever late. But there was one time, you remember the story?

SPEAKER_00 45:43

When your car got stolen? Yeah, yeah. Of course. Tell the story, right? That's funny. I got into a car accident during a lunch break. Right. So I was driving an old Jeep that got crushed during a lunch break, and I was working to 6 a.m. the next day, and I had no way to get up. I was living in Hoboken at the time. So you're like 20 minutes away. 20 minutes away, half an hour away. You loaned me your truck because you wanted to sleep in. So I was working this, I was working the early shift the next day. Right. So I took your truck back to Hoboken, parked it in front of my apartment, and I came out at 4 a.m., 5 a.m., whatever it was, and the truck was gone. And I thought it had gotten stolen. And I was freaking out. And I went to the police station and they towed it because you had California police. California, you never you had been in Jersey for it was probably two or three years at that point, and you never got it registered in New Jersey. So they towed, they towed the truck, and you ended up having to get up anyway and go train. Because I had no way, I had no way of getting back to the gym. Oh my god. But that was the only time I was that was the only time I was ever late. That's so funny. But that just shows like we were at that point, we were we weren't working a lot. And it was like it was a lot. It was a lot. So is there is there is there stuff? Okay, so let's say someone is in that, like it's still gonna take some time, right? It's gonna it's gonna take some time. So even this guy that we're talking about, John, right? Let's say let's say you have a three or four month plan to get him to where he needs to be, to the uh to stage two. Yeah, what are things that a business owner can do to minimize, to mitigate that burnout? Is there stuff you can do? Because they're like there that's gonna happen, right? There's at some point, especially in this business, you're getting up at 5 a.m., you're working split days, you have to go, like you said, you have to go through stage one. Yeah. So what are habits or things that gym owners can do to mitigate this a little bit?

SPEAKER_02 47:26

Yep. So I think it it it it it's very much related to number two, in that you read the book, Jocko's book. Stream ownership. Yeah. Yeah. Uh one of the the one of the main principles of the book is prioritize and execute. Right. Right. And so I think one of the things that can prevent burnout is eliminating certain things for uh in in place of other things. Right. And so if I eliminate four hours a day of bullshit work and, you know, me building system manuals and me doing stuff that didn't matter, and I stopped doing all of that and replaced it with the things that actually worked. Right. Right. So I think that that one of the ways to get out of burnout is to identify the critical drivers of the business. What are the things that are gonna get me past 20K and out of stage one? Addressing price, spending time on marketing, improving the product. Like those are all the things that are gonna move the needle. And and and be okay not doing a lot of other things. Be okay just saying that's what I'm gonna do. Okay, so that's the first thing is prioritizing what's most important and only doing that. And we just did and we just did what we're we just gave you what to do. Okay. Yeah, we just gave you what to do. The second thing is you do gotta you manage your health and take care of it, you know, and you gotta sleep and you gotta work out and you gotta kind of find the time. And maybe you're not like working out for two hours a day. Right. Right. Maybe you're getting 30 minutes in or whatever, I don't know, right? But you gotta do prioritize that because there's probably some people that get burned out, and then the the stress of the business causes them to do things like drinking alcohol and you know, you know, picking up bad habits, right? Sleep's a huge sleep's a huge one in this business of getting up early and working like and maybe you gotta take naps. Like maybe there's I mean, you you you're the king of you're the king of like you can like on a dime just like lay your head on a foam roll. Or like there was times where you would sit in that black room, we had that like little padded room, head on a foam roll, you'd be out in like two seconds.

SPEAKER_00 49:19

Take a little nap in the middle of the day. Yeah, but if you're working split days and you want to have energy, you want to have energy for the afternoon, you almost I almost had thought I had to do it.

SPEAKER_02 49:27

Yeah, yeah. Um, so I think that's that so it's first is prioritize and execute, find the critical drug. Seconds, just you know, seconds, take care of your health, you know, make sure you're you're managing it. And third is like get out of it as fast as you can. Yeah, like get help. Plan it. You've got to be able to get help. And you know, the cool thing is too, is that with AI and all these other things, it's probably a little easier because you have a little bit of almost like an assistant with AI to be able to do things that normally would take you a lot longer. So it's getting to the point where you have enough money that you can get some help and then leveraging the things around you, whether that's creating you know simple systems, whether that's using AI. So I think people have a much better chance right now to not stay in stage one longer based on what's happening today. So that that that's really the third one is really just hey, don't get burned out. If you get burned out, it gets hard to recover from that.

Clarity Call Offer And Closing

SPEAKER_00 50:19

But I I I think one thing you can do here is get clarity, like have a plan. I think the guy John who came in here, he sat down and all of a sudden when you map it out for them and give them the clarity of like, okay, I can do this for three more months if we follow this plan. Right. Right. So that's how we're we're gonna wrap up today is say if you want help with that, yep. There's a like you guys, the SPF helps with that.

SPEAKER_02 50:40

Yep. So we have a clarity call. Yeah, we we have this thing that you know with with the four stages, and the four stages is kind of like our thing. We created it, we invented it. And one of the calls we do on the clarity call is one identifying what stage they're in, right? And we have them take a quiz. So once you opt in for the call, you're sent a quiz. And the quiz takes like three minutes, right? And it just answers and it'll tell us exactly what stage you're in, right? And so from there, we know when someone's in a certain stage, what are the things they need to be doing? And that's really what we do in the call. Is like, all right, you are here. These are the things that you get you from here to here, these are the critical tasks that you need to be doing on a daily basis. Here's your list of things to do. And all of a sudden the clarity is just like, holy shit. Right. Like, this is it. This is what I need to do. And that's like most people are like, just tell me what to do. Like your clients are like that. Just I want to show up. Tell me how what do I do? Bulgarians, how many? So eight. Okay, perfect. How many sets? Four. Okay, perfect, I'm done. All right. And that's clarity, and that's giving people certainty. And that's what we want to help these gym owners that are stuck on our 20K. And again, you can opt in for the call if you're not if you're past 20K, because if you're at 40K and you're stuck, it'll get you past.

SPEAKER_00 51:50

There's a but there's plans. There's a plan in for each stage to get you to the next stage. There's a plan. 100%. So if if someone wants to jump on this clarity call, there's a there's a link in the show notes.

SPEAKER_02 51:58

Yeah, link in the show notes. Just click that, fill out the form, and then make sure you fill out the quiz. We will cancel the call if they don't do the quiz.

unknown 52:05

Okay.

SPEAKER_02 52:05

Because the quiz.

SPEAKER_00 52:06

This is Peggy Mattel.

SPEAKER_02 52:07

Yeah.

SPEAKER_00 52:08

This is I I can't help you if I don't know what the hell's going on.

SPEAKER_02 52:10

Correct. Yeah. Yeah. And so if they don't do the quiz, we cancel the call. The quiz takes two minutes. And it gives us the val the value. So we're showing up to the call like, all right, this is a stage two guy. They've been in stage two for X amount of years or whatever. We can get our heads around what best advice we can give them to help break through the next level.

SPEAKER_00 52:30

Beautiful. So click the link in the show notes. Sign up for the clarity call. Yep. No matter what stage of the business you're in. Yep. Anything else? I think that's it. That's it. Thanks. Hey, good to be back. What did you think? Good to be back. I thought it was smooth. Good to be back. Let the people let the people tell us what they thought about the work and stuff. Leave a com leave a comment. Let us know how we did. Good to see you, buddy. Good to see you, brother.