Latest / Daxko Fitness Forward / Small Club, Big Moves: How One Independent Operator is Winning with AI | Fitness Forward Ep. 06

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Small Club, Big Moves: How One Independent Operator is Winning with AI | Fitness Forward Ep. 06 · Daxko Fitness Forward

• speaker-1: This is Fitness Forward. All right, welcome to the next episode of the ⁓ Fitness Forward Podcast. Today I'm excited to have Abraham Gerving on with us. ⁓ you know, Abraham, welcome to the Fitness Forward Podcast. speaker-0: Conversations shaping the future of fitness Yeah. Thanks, I appreciate it. speaker-1: Yeah. So Abraham, I'd love for you to talk to the audience about ⁓ yourself, ⁓ how you got into this industry. So Daxco services thousands and thousands of, you know, fitness operators, ⁓ many like you, you know, who are ⁓ running smaller, ⁓ relatively ⁓ fitness ⁓ organizations. What I think what's interesting about you is you're doing ⁓ that, but also ⁓ you're very tech savvy and we had a chance to ⁓ you know talk on a panel ⁓ at HFA about AI and things like that. And we'll get into some of that. But yeah, we'd love to just ⁓ have you share with the audience a little bit about yourself, how you got in the industry, and then a little bit about your clubs. speaker-0: Yeah, okay. So ⁓ start way back in my twenties, used to work out a lot, thought, boy, wouldn't it be cool to to own a gym, right? ⁓ from that though, I g I went into a sales career, I was selling office solutions for for quite a while, doing the cor corporate grind, starting to get burnt out on that, and ⁓ just kind of rekindled the idea of ⁓ man, it would be be cool to own a gym. So I started looking at some of the franchise models, and as I was going through that process My wife says, Hey, do you think the guy who owns the gym down the street would be willing to sell? I was like, Yeah, I mean I don't know. Let me let me cold call him. So I I reached out to him and ⁓ the gym was failing. He was actually ⁓ in the process of of getting ready to shut it down. So ⁓ reached out to him, he was very interested in selling. We came to a a pretty good pretty good price on that. And then I stepped into the fitness industry with zero experience speaker-1: Okay. speaker-0: Right. So I just I had a vision of what I wanted to do and ⁓ and I thought you know, I had managed retail locations, you know, when I was younger and I thought, ⁓ this you know, this is just like ranaging a retail location, this would be no mo no big deal. ⁓ jumped in and there was a steep learning curve, ⁓ for sure. ⁓ but yeah, so that that's kinda how I got involved in it or i in it. ⁓ we were operating our club for about three years and then there was there's a really small town east of us. And we decided to open a second location out there. Right. ⁓ and did that. So we we've we've been in business. I've owned the clubs for ⁓ a little over fourteen years now in total. And you know, we're we're we're actually hitting record numbers right now, so we're so we're doing pretty good. speaker-1: Yeah, fantastic. It's funny, Abraham. I ⁓ in addition to this role, I've owned clubs. That's how I got into the industry and still own a number of clubs and I I have friends and when I'm with them, they're like, Your job, it's amazing. You just go to work and you work out all day. Like what what a cr incredible job. And it is incredible. I I know you you'd probably agree with that, but ⁓ there's a lot more to that and and I always tell ⁓ people like, ⁓ your customer is inches from your face. You know what I mean? And the Like you have to be on all day every day. 'Cause yeah, there's no escaping it. There's no like I won't answer that email right now or I'll do that phone call later, like they're right there in front of you. So speaker-0: I mean, yeah, Jeff, great example. Yesterday my club manager was off so I covered for her. I got to the gym at four thirty in the morning and I was there 'til six PM last night. And the thought is, ⁓ what are you doing? You're just hanging around at a gym or whatever But you are always on. Yeah. Right? And so at the end of the by the time I got home, I was pretty white. speaker-1: Yeah. Yeah, so deep appreciations to our audience. I know we we collectively can say that, you know, for the work everyone is doing every day. It it's interestingly enough, I don't know if you've had this, like, ⁓ there'd be times where I'm like, ⁓ I'm gonna be home ⁓ you know, at seven o'clock for dinner and six o'clock for dinner and at the time had four little kids and my wife would, you know, inevitably know like, Where are you? ⁓ and I would try to explain like you can't just leave. Like there's someone right there next to you, you're solving a problem. You can't just be like, Hey, you know, I got other plans right now, you know, I'm gonna leave the club and I'll talk to you tomorrow. You know? speaker-0: It's definitely not a nine to five where you clock out, that's for sure. speaker-1: Yeah. But super meaningful. ⁓ and and so Abraham, what I'd love to do is just ⁓ talk a little bit. ⁓ you know, a couple of things I'd love to cover with you. ⁓ in in the goal of this is to be real, right? We've the people listening to this are operators, they're in the day to day and and our hope with these podcasts is that people take something away from it that they can apply, you know, ⁓ to the way they operate their clubs or some strategy. So l let me just start with ⁓ I do want to get into technology 'cause I I I think ⁓ Obviously AI is a big thing and and we're rolling out some things with AI. You're doing some interesting things with AI, you know, and the goal of AI should be it helps automate tasks or do things that, you know, ⁓ enhance the experience of the member ultimately. And and and you and I have had this conversation before. But first I'd love to talk about, you know, you you've said something to me before in the past. ⁓ you know, the the difference between customer service and a customer experience. And so maybe just elaborate on that and and how you're trying to implement that at your clubs. speaker-0: Sure. So I I get this question a lot for people who who aren't familiar with the key card access club and ⁓ maybe I should have explained that a little bit more. I run it like a key card access club. So we're only staffed certain parts of the day and then the rest of the time we're not staffed. So I d I do get a question a lot of like, well, you know, w how do you you don't have a front desk staff, how do you greet people and and and you know, keep people engaged and all that. And I like to think of that there's a difference. I mean they're they're There's definitely some sim similarities and some overlap, but there's differences between customer experience and customer service. And what I mean by that is like ⁓ think about the difference between Ritz Carlton and Amazon. When you show up to a Ritz Carlton, you're paying a premium price, you just expect this high level of customer service. The concierge, the whatever on your pillow, the you know, this the whole experience versus when you go to Amazon, you just wanna order something, have it delivered, and be done. But it's really important that it works and that it's easy to do. And so I think of that in the club format, like what are some things that people really expect that they want from my club? I mean they they want ⁓ they want their key tags to work, right? That's that's a big part. They want to be able to get in when they can and when they can't, but they want the equipment to work. They want they want it to be clean, especially the bathrooms. They just expect there to be just this level of ⁓ like competency in the club. And so we We really lean into that. When something goes down, we are right on it and try to fix it as fast as we can. ⁓ we definitely you know, we do have a cleaning schedule. I mean I have staff, you know, during the day and we make sure that the the bathrooms are clean for the most part. Sometimes you'll come in early in the morning and somebody overnight's done so but you know, for the most part it's pretty much better than what I hear the big box gyms gyms have, that's for sure. And then ⁓ I just have this f this thought I I want people to leave feeling good when they leave my gym. Like when they leave I want them just to like feel good. Like I'm I'm making a good investment here. Like I like this place. I like these people. I like the members. Like the community. Like so that's so that's where I think the difference between customer service and customer experience. So I try to lean in that customer experience and and ⁓ I think we do pretty good. We have ⁓ our we have an MPS score that I do. I use ⁓ MXM for that and we range between sixty five and seventy five. All the time. So yeah. speaker-1: That's great. So so let's go like a le a level deeper. So there's people on in the audience listening, ⁓ they're running, you know, maybe a facility your size or bigger, right? what is your staffing strategy? So you have staff at certain times, and then when you don't have staff, how do you maintain that, you know, kind of connection and service ⁓ at the level you want it? speaker-0: So we're we're staffed ten thirty to six Monday through Thursday, ten thirty to five on Saturday and then ⁓ ten to ten to noon on Sunday. and I mean I I try I try to keep it at that. I I've thought about expanding the hours. I mean honestly, ⁓ just haven't seen a need to do that. ⁓ we definitely want to look at payroll. That's that's definitely ⁓ I mean I'm sure anybody who's run a company understands that that aspect of it. So do our best to create a maintain a level of consistency with that. Every now and then emergency comes up and we have to be non staffed. but ⁓ so so those are the those are the staffed hours. And then everything else I just try to lay lean on some form of technology to to make it work. And we we did implement a ⁓ AI agent about a year ago. That gives one level of customer support. I've used ⁓ club automations. Well I guess your partnership with ⁓ Brivo for our door access system, ⁓ your web portal for online sales. So we have it set up though where you can really show up to our gym, join online, download the club automation app, and then have instant access to our club. So I I I lean into that. And I I have to tell you, Jeff, we really l being as small of a ⁓ operation as we are, I really do lean in on my ⁓ my software or just my vendors in general to to support us. It's It's a very important part of our of our puzzle, so to speak. speaker-1: Yeah. So Abraham, you you were ahead of the game on kind of the front desk agent. ⁓ we're releasing that technology now and ⁓ gonna really embed it into the whole ecosystem. Talk a little bit about that. You know, I think ⁓ there's always, you know, and again, being an operator, it's like, you know, how much are people open to talking to an agent? ⁓ how far do you go? Right? Do you is it just club hours and information, or are you actually going so far as to helping them join or buy? You know, so may maybe talk about that a little bit. And ⁓ I'm also happy to share with kind of where we're going on that journey and where I see this heading. speaker-0: Yeah, well that's great because I've actually been following what you guys have been doing and ⁓ I think at the end of the day I'd love to be able to consolidate to to to to one operation. I use my AI agent, you know, I honestly I I got it and I thought it would just be a customer support agent, but it's really turned out to be more of a prospecting and sales agent. Yeah. So where to start? So we've had so when I first got it, I was setting things up and sometimes I'm a little quick to push buttons. I thought I had set up something and I didn't realize that I was sending an ⁓ or text message blast out to everybody in my contact, one hundred percent of people. And ⁓ we got a lot of weird responses when we did that. But through that I also I started going through all the conversations and seeing what was going on and I started seeing people interact with it and have some deeper conversations than what you would think that somebody would would have. And from that I reached out to a couple of people and we actually have some pers long term personal training clients based on that. So that kind of changed my way of thinking about w what really does this do? So now we have it set up primarily when people join. I mean it does send some information out about here here's a link to download our app, do have any questions or things of that nature? But it's really trying to schedule some form of an appointment. Yeah. So if they filled out our lead form on our website, it's trying to schedule a club tour. If they filled out if they're a new member, it's trying to schedule a phone consultation so we can at least have a first step and and talk to people and guide them into the gym and ideally try to get them into a ⁓ an appointment with a personal trainer. And then we recently launched the voice agent too. So it answers our phone during non-staffed hours and I've looked through those and people have had some customer service questions and it will email them a link, like to log into their account to update their payment information or to join online. And stuff like stuff like that. And then it's scheduled tours of course. So yeah, so that's what we've done. We've li leaned into that and tried to make it work. speaker-1: Yeah, like like I said earlier, ⁓ you you definitely were kind of on the the the front end of that. You know, I think when we did our webinar at HFA, if you recall this, I asked the audience, how many of you are like releasing agents like that. And I think of the 50, 60 people in there, two people raise their hands. And I think I think people are nervous about that. You know, I I think there's two pieces of that. And I think ⁓ one of the things I'm really excited about at Daxco is, you know, we're we're now embedding all of this into our platform. You know, so I think when you We're starting, you know, you needed to go find something and do it yourself, and our hope is that we can you know give that to you and other operators out of the box. but there there is a tremendous value ⁓ to that being able to interact in real time with people. and what so in in terms of that, you know, kind of like interaction with your members, ⁓ have you gotten feedback of like ⁓ Yeah, I I really don't like the fact that it's an AI agent. ⁓ and I would say also at what point do you kick it to a human when it's like, okay, people have had enough? speaker-0: Yeah. I mean we I you know, this is some people don't mind it and they like it and lean into it and we have other members that I only want to talk to a person, I don't want to talk to, you know, a robot or something. And I just you know, you gotta roll with the punches on that. I think as time goes on people are just gonna get more and more used to this. ⁓ the the agent will notify us. Now the the system that I have in place, it won't just kick it over to call us directly, right? Like I think that the one that you guys have recently launched will do that. So instead it'll notify us and then now we only have it set up to answer the phones during our non staffed hours, so it wouldn't kick it over to anybody anyways, right? So but ⁓ we get notified and then we we do the follow up. But no, you know, I mean there's there's ⁓ there's definitely people who are anti AI and they're getting you know, so and and the technology, you know, we're not using the I've found out that the most vendors out out there aren't at least the one I'm using, isn't using the frontier. You know, there's there's definitely things that it's yeah, you know, it's not working as well as I think it could. But ⁓ I will say though, I'll give you guys some kudos. I think that your guys' commitment to security is is ⁓ top notch. And what I what I noticed is when we were setting this up, I use one of your partners and they have an API a access integration. But and there was some things that I wanted the agent to do, like if somebody was past due to go out and s to message the person directly, Hey, you have a past due balance and blah blah But you guys locked your API down pretty tight to where you can't see any of that financial information and at first I thought, ⁓ what's up with that? But as I thought about it more, it's like, now that's some pr actually pretty s sensitive customer data. Yeah. And ⁓ I do like the approach that you guys take to making sure that, you know, security is top of mind. ⁓ and especially as we hear of all these, you know, these agent swarms are now hacking places and everything like that, right? And Every club operator knows we host a lot of very sensitive information for people. So I think that's something that you guys have done very well and and ⁓ I I from what it seems to me, not everybody some some people may may be a little bit more fast and loose with. speaker-1: Yeah. Well I I appreciate that and and I I think, you know, where we were I call it a couple of years ago was ⁓ wanting to go fast but wanting to make sure to to your point that we really were ⁓ protecting people's data, you know, and and I would say the the one thing that would bring a club down, us down, is data breaches, right? And so we've had massive investments in security. The beauty of AI is that there's all these cool things you can do. The bad part of AI is we have AI you know, trying to penetrate our software all day. You know what I mean? Okay. And so, you know, we've built up a lot of protections there and massive investments into that. but but I think the important thing for us is ⁓ again it comes back to getting you the outcomes you need. And so ⁓ whether we are developing AI products that are a part of a you know a front desk agent or you know embedded into our marketing automation suites, y you mentioned, you know, kind of quick follow up with people that are interested to schedule a tour, ⁓ building ML models for ⁓ retention and understanding how you can retain people and you know kind of a churn analysis, all of that I think is super cool. ⁓ but also we also know that ⁓ we have partners ⁓ that are doing great stuff with AI or you know we have customers that wanna, you know, ⁓ train and build their own agents. And so, you know, we we were kind of on this dual task of like, let's build this you know, kind of security layer where we're protecting data, ⁓ not only for how we're using agents, but also that we can have a way to get information to our customers and operators in a really safe way through MCP servers, et cetera, so that when they get that data, ⁓ as you know, it it's not just being thrown out into the public ⁓ kind of ether there. And you can't get that back. speaker-0: Yeah, yeah, absolutely. speaker-1: So so ⁓ Abraham, talk to me a little bit more. We talked a little bit about front desk agent, ⁓ kind of how you're interacting there. ⁓ are you using any AI from an operational standpoint, like ⁓ from a equipment sound or how are we gonna handle, you know, ⁓ responding to feedback on locker room, et cetera? speaker-0: ⁓ nothing for like equipment ⁓ well I mean so I I'm using you know the ⁓ Chat GPT a lot and and then Gemini. I'm a I'm a Google ⁓ we we're a Google Suite and so we have we have Gemini too. ⁓ but I'm using him for the ways I guess a lot of people are. Like I had to re repair replace a battery in an older ⁓ or in a an elliptical that we had. And ⁓ I'm just gonna give a couple examples. So just ask chat, you took a picture of it, say, hey, where's the battery at? It knew exactly where it was at. ⁓ saved me a lot of hunting around instead of in like, you know, being a low s I don't have a technician on staff. I have to call one in. And if it's something's simple, I'm gonna take care of it, right? ⁓ so that ⁓ gotta replace a fan rotor. You I'm using it for those kinds of things. But also I do use it as a business advisor. You know, one of the things that's that's really interesting, I think, is that you basically have a PhD level business advisor consultant that's that's built in right here. And if you prompt it right, it can give you some good data. And we went through we've done two expansions to our club since I've owned it. And we went through the last expansion and, you know, you have to grow into it. Well, we were growing into it. Margins were kinda tight and I was a little getting a little frustrated with that. Wasn't growing as fast as I'd hoped we'd fill into the second during our second expansion. So I just went to ChatGB G Chat GPT, I threw in my financials, I did everything, and it came back and said, You need to raise your rates. Wow. And I thought, I just did a rate increase three months ago. Yeah. So it's like, well, don't raise them on current customers. And we can get into that. ⁓ but it said, raise them again. And I c I you know, I here I am arguing with this computer, right? And I finally said, you know what? Let's try it. I did it. Zero impact to our sales. Yeah. Right? Sales stayed the same and I did a pretty decent price increase. And it just made me sit back and think, you know, the overall advice that you get from these, not when it's being a sycophant, like you need to like challenge it and face it or whatever. But it does it will look at your financials and it will tell you, you know, certain things. So I I've used it for that. ⁓ Creating just our you know, our employee handbook, like what needs to be updated, those kinds of things. So yeah, so I y I I lean on it like and then contract review, of course. I use it all the time for that too. speaker-1: Yeah, I think the the employee handbook is a really good one. ⁓ In and ⁓ so on that when you do your employee handbook and you put an AI on top of it, are you just creating a document which is pulling from your website all your information and like automatically? Are you having to update that manually? Like how do you do that? Because yeah, I think that's invaluable where someone calls your desk and they get a person or they walk up to the desk and it's like, I have this question. Like, we all are in this like we have some turnover there and we're training people up. Like, how can we give them kind of a a single source of truth? So wal walk Walk us through how you do that. speaker-0: So I basically I upload the documents and and then I have it review it and then see what what kind of you know, changes it r recommends, especially for like based on Washington law. And then f if we're talking about processes of procedures, ⁓ the same thing and then you know, you stress test it. You know, if somebody asks this question, what would you say? And th and all that, you know, based on the document, da da da da da and it allows you to kind of just just get things ⁓ and said more succinctly and sometimes I'll word something that I think's clear. But it's not clear to somebody else and it can r really help me with that kind of documentation. speaker-1: Yeah. All right. So you touched on a point and we've talked about this, like the human in the loop, right, with AI. And so as you're building out like yeah, the this document for your your workers and and knowledge base so they have all the information in one place. ⁓ Talk about how you treat AI, you know, and and we've we I've talked to people, it's like, ⁓ we treat it as a team member, right? Like we need to invest in that team member, it just happens to be AI, to make sure it's performing at its best. Like it's not like, ⁓ we just leave it there and it's just gonna work. speaker-0: Yeah. Yeah, it is absolutely a you need to treat it like it's an employee. I mean you need to review it, monitor it and constantly 'cause it's gonna say things that I mean, unless you're you know, unless you're better than me and you can get it to be right all the time every time. Right. There's times where I see it and I'm like, ⁓ that's not right and you know, I'll have to call the customer or or s or send them a follow up message. So it it requires constant monitoring and ⁓ ⁓ you know, I I found I have a tendency to kind of be a little more do it myself and I found sometimes that that's just not the right way of doing it. I need to r lend on lean on my partner vendors and have them fix the fix the issue because they they know the solution better than I do. And ⁓ so I've had to do that too. Like, hey, I keep on having this problem, don't know how to fix it, and and then they'll get they'll get involved. But yeah, but you definitely I mean it's you can't it's it's just like anything else. You can't just hire Hire a front desk person and just never never supervise them, right? speaker-1: All right, so I'm I'm imagining there's people that are listening to this thinking, is the amount of time I'm gonna spend, let's say, updating a knowledge base and doing some of these things and implementing this worth the value. It seems like a lot of work. You know, maybe Abraham's just a really smart guy, you know, and he can do it. Like, yeah, may maybe give the audience a an understanding of the time commitment, you know, and and I would say even like ⁓ most specifically to maybe smaller gym owners who are doing a lot of things at at at the facilities. speaker-0: Yeah, I would say that you definitely are gonna invest more time on it initially than than probably than you even think you're going to. But I think the investment long term pays off. Especially if you have ⁓ if you have an appointment setter, somebody setting appointments, setting setting phone phone appointments, setting personal training appointments for you when you're not there and there's not staff there. If you have a salesperson who whose job it is to come down and sit in front of a desk and you know Call people, you could make the argument, well, I already have somebody doing that. But if you don't have that structure in place, this is a good alternative for that. speaker-1: Yeah. Well great. All right. So ⁓ as we close here, you've now been in this industry fourteen years, right? And so you're you're not a newbie anymore. ⁓ what would be ⁓ something you would wanna share with this audience on? What what you've learned in terms of you know, building out a successful ⁓ operations at your club? speaker-0: So I I guess I'd say I've got a couple of things that it that ⁓ I can add. So first of all, ⁓ aside from owning Affinity Fitness, I'm also the board chair for an association of independent club owners called Fit Life. We we support the Northwest, so Oregon, Washington, Idaho, Montana, and Wyoming. I don't believe we have a club in that area right now, but yeah. speaker-1: Maybe maybe this ⁓ maybe this podcast will get you a few. Yeah. speaker-0: There you go. Yeah, absolutely. But, ⁓ like I said, I came into the industry with with no experience, no network, no no background and just thought, ⁓ I'm just gonna I'm gonna crush it and I struggled for the first couple of years. I was introduced by one of my vendors actually to to Fit Life, got involved in having that support network of clubs that you know, we have clubs who've been who've been a ⁓ around longer than I've been alive and and I'm fifty. Yeah. Right? So there's some there's some just people some deep rooted knowledge in there. And ⁓ so getting involved in some kind of a support structure if you're an independent operator, I think is absolutely important. Yeah. Right? That's I think I think that's one of the benefits that a franchise offers is you get the support structure. But if you're independent, that just doesn't exist. So we're we're attempting to to f to fill that need. And ⁓ so so that's so I would say like if you're in the Pacific Northwest highly recommend you at least come to one of our conferences or have a call with us. But also if you're not, ⁓ look for other support structures that are that are out there. Right? So that's number one. Th the second thing, this is might be somewhat controversial, but I really ⁓ resisted raising my rates on current members for years. Yeah. And it wasn't until ⁓ at a conference At a Fit Life conference, I started talking to clubs, some club owners who've been around for a long time, and they consistently do it. Yeah. And I had I had one guy tell me every time I raise my rates, I wish I had raised them more. Because the lack of the lack of blowback that you get is is is not what you think. Like we all are just s scared. ⁓ everybody's gonna quit and all that stuff. So I decided to do it. speaker-1: Yeah. speaker-0: And I did one, my first one, and I was just waiting for all the cancellations. And I had like four. It was just like it was it was almost like a just a just like a drop just a little drop in the ocean. I couldn't believe it. And so since then I've implemented this this ⁓ cadence of raising my rates and now I've got some people on some who were been there for a while who are pretty low rates, so I'm aggressively trying to get everybody up to where they're at. But what I also have come to to believe is that our facilities they typically can only hold so many people. Like of course we can you you you want to double in size and everything, but there becomes right the I was reading the number one reason why people quit a facility is because of overcrowding. Yeah. So once you get to a point where people can't get on trade, can't get on the equipment, they're just gonna quit and they're gonna go somewhere else. So you can only hold, let's say I'm just gonna use a number ⁓ you know, ten thousand people or a thousand people or whatever. If you've got a lot of your percentage that's down on the lower lower tiers, you're kinda it's it's not fair for the people who are on the top upper tiers. It's just not fair for the business and and so forth and so on. So I really feel like ⁓ keeping up with rate of inflation, keeping ourselves on the on the on the ⁓ you know, we're we're in this, we're operators, it's it's expensive to maintain a gym. Yeah. This is a hard business. There's there's things that come up that you're not expecting. ⁓ Equipment's not cheap, right? So, ⁓ staying with that rate of inflation and and a lot of us if we're on a triple net lease in a yeah in a ⁓ in a shopping state Yeah, we have escalations and all that different kind of stuff. So I really feel like you there's a c and then just, you know, consistently keeping and don't don't get stuck there. Just raise your rates. And I've seen so many clubs do it with very little blowback. And it seems like the clubs that the independent operators who haven't done it The ones that I've talked to are the ones that seem to struggle the most. So speaker-1: Yeah, i you know what? It it is ⁓ having ⁓ been a club owner for thirty years, ⁓ it's interesting. ⁓ one of the founders of Ursa now HFA, ⁓ Alan Schwartz, who owns the Midtown Club, some of the most like successful clubs in the country, had mentioned to me early on when I started you have to raise your rates every year, every everything. And it was like, ⁓ that's daunting. And the point is if you don't, ⁓ then you can't reinvest either, right? And so, you know, we service a lot of you know clubs, nineteen thousand clubs that we serve. Service and you can see in a club when you can build momentum and let's say you raise your rates, but I think what you have to then is then you have invest, right? Take that money. as much as you and I and the clubs we own would love to put all that in our back pocket, it's like showing the value and then you get on this positive flywheel of like, ⁓ members feel like, ⁓ I see the value, I can live with that. It's the other way is also we see clubs go kinda in that negative, you know, ⁓ flywheel where it's just like, don't raise rates, so then you become very cost conscious, you can't reinvest, and then, you know, it it's kind of a race down where people are like, Yeah, I I don't want to be at this facility or I'm only attracting people who don't want to pay very much, right? So it's a really interesting thing. It's so it's like, yeah, that that fortitude to raise rates, but at the same time than offering the right level of value and investment in the facility that shows your members where that money went. speaker-0: Yeah. Yeah, absolutely. J Jeff, I have a question for you. ⁓ and I don't know I don't know if you can answer this or not off the top of your head, but because you guys see so much data from from clubs out there. I started an annual maintenance fee about ten years ago and it's we bill it on the second month and then we bill it annually after that. And I that that that event creates a lot of we get a lot of call and we we get con Cancellations off of that sometimes, right? So there's the revenue aspect, but then there's also the retention aspect of that. Are you seeing any any trends out there where people are moving away from that? I know the I know all the HVLPs are doing it, but they're you know, that's yeah, I think that's a different market. So do you have any thoughts on that? speaker-1: It's interesting, Abraham. ⁓ we're actually seeing more of a trend to adding an annual maintenance fee. ⁓ I added it at my clubs. ⁓ and and I think but it goes back to the same thing I just mentioned is if you're going to do that, ⁓ you have to show the value that you're producing through that fee. Right. And so ⁓ at the clubs I own, like we're very clear like, hey, as a part of this this year's capital improvements that's funded by the maintenance fee, we're speaker-0: Okay. speaker-1: you know, ⁓ replacing this equipment or we're adding this feature and functionality and ⁓ yeah, and so I think some of it's the messagings and then it's really the delivery. But I I think ultimately, ⁓ and obviously you're you're you're achieving this, you know, ⁓ people vote vote with their wallets, right? And are they receiving the value, you know, at your facility for what they're paying, right? So Then and I think that that kind of like ⁓ is impacted by rate increases or an annual maintenance fee. But but to answer your question, we actually are seeing a little more of a shift towards an annual maintenance fee and the clubs that do it well are the ones that really message what they're spending the money on. speaker-0: Gotcha. Okay. Okay. Good that's good. Yeah, thank you. speaker-1: Good. Well Abraham, thank you for your time. ⁓ thanks for being a customer at Daxco. We don't take the responsibility lightly and appreciate your insights here today. speaker-0: Yeah, for sure. I really appreciate being on. Thanks, Jeff. You two men. speaker-1: Thanks. Have a great day.