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5 Myths That Keep Gym Owners Stuck Under $30K (Pt. 2) · Gym Business Coach Podcast

• 0:08
  [SPEAKER_00]: You are listening to the built-to-grow podcast delivering the knowledge and all things, fitness, business.
• 0:16
  [SPEAKER_00]: We help jimrollers win, hear your hosts, ten lions, and Randy Axton.
• 0:27
  [SPEAKER_01]: All right, welcome back to the built-to-grow podcast in your host Tim Lines.
• 0:30
  [SPEAKER_01]: Join in studio Scottsdale, Arizona.
• 0:35
  [SPEAKER_01]: by raining so what's up it is it's we are currently in Scotchellers correct that's a fact correct lots going on let's go and on let's get into myth number two
• 0:46
  [SPEAKER_01]: In the five myths that are keeping Jim owner stuck below $30,000 a month now, guys, we said on the last episode, $30,000 is a line in the sand.
• 0:55
  [SPEAKER_01]: It's from survival to growth.
• 0:58
  [SPEAKER_01]: It's from just getting the bills paid on the one side of the line and the other side, you can actually save and grow and invest in all these things, right?
• 1:08
  [SPEAKER_01]: Obviously, it all depends on your base operating expenses, but I'm just throwing averages out there.
• 1:14
  [SPEAKER_01]: Speaking of averages, $25,000 around give or take, a couple hundred bucks, is the national average for micro gyms, generating revenue, $25,000.
• 1:24
  [SPEAKER_01]: So if you're below that number, we got work to do if you're above it, but still not above 30, this is for you.
• 1:32
  [SPEAKER_01]: So somewhere along the lines, this myth number two, somewhere along the lines, Jim owners
• 1:44
  [SPEAKER_01]: What we sell is too difficult that we have to discount.
• 1:51
  [SPEAKER_01]: So the myth is discounting brings growth, but really what we're going to tell you in this episode is what it really signals about your business and your product.
• 2:03
  [SPEAKER_01]: So I've seen it all.
• 2:05
  [SPEAKER_01]: Founders rate discounts, family membership discounts, military versus responder discounts,
• 2:14
  [SPEAKER_03]: Well, while I'm just discounting your trial, just because we don't know what else to do.
• 2:19
  [SPEAKER_01]: Free week, free, yeah, yeah, yeah, we've seen it all.
• 2:24
  [SPEAKER_01]: You've tried it all.
• 2:25
  [SPEAKER_01]: In the grand scheme of things, it never works out for some reason.
• 2:31
  [SPEAKER_01]: That free week that you gave to a hundred people and five people took you up on it, everybody disappeared.
• 2:39
  [SPEAKER_01]: I'll give you a great example.
• 2:40
  [SPEAKER_01]: We comp some tickets to the gross some of this year.
• 2:42
  [SPEAKER_01]: Yep.
• 2:43
  [SPEAKER_01]: We did because we did some partnerships with wellness and another company performed better.
• 2:49
  [SPEAKER_01]: We did these, I spoke at the gross at the Long Beach.
• 2:55
  [SPEAKER_01]: perform better summit and I just said hey guys I'd love to invite you the you know here's here's the ticket had a claim and we had a bunch of people claim tickets yep the end of the day every single person that did not show up to the gross on we had a stack of badges were all those people so just case and point the free week that you give out and to try to get leads there's no doubt they don't have any skin in the game and
• 3:20
  [SPEAKER_01]: We all try things to try to get the engine started, but never works out, right?
• 3:26
  [SPEAKER_01]: And so like here's another example, this comes up all the time.
• 3:31
  [SPEAKER_01]: The husband brings the wife in.
• 3:33
  [SPEAKER_01]: So we discount the wife's membership, okay?
• 3:36
  [SPEAKER_01]: Because it's 20% off for the second person, right?
• 3:38
  [SPEAKER_01]: Like whatever you decided, somewhere along the way, that that was what you're gonna do.
• 3:42
  [SPEAKER_01]: And you know, four or five months goes by in the husband cancels.
• 3:47
  [SPEAKER_01]: But the wife is still on the discounted membership.
• 3:51
  [SPEAKER_01]: What do you do?
• 3:52
  [SPEAKER_03]: Yeah.
• 3:53
  [SPEAKER_01]: Do you raise the rate of the, well, then she cancels.
• 3:56
  [SPEAKER_01]: Yeah.
• 3:56
  [SPEAKER_01]: So now you're stuck with not one full price, one 20% off.
• 4:00
  [SPEAKER_01]: You're stuck with one 20% off membership.
• 4:03
  [SPEAKER_01]: Everybody listen as I yell.
• 4:04
  [SPEAKER_01]: That's happened.
• 4:06
  [SPEAKER_01]: So we don't discount here.
• 4:08
  [SPEAKER_01]: And we haven't for years.
• 4:09
  [SPEAKER_01]: And it's just we, we believe the value of what we offer is no, there is no.
• 4:16
  [SPEAKER_01]: economy of scale when it comes to what we do, you know, like a lot of times, well, if you do the second garage door, we're already out there, we'll give you a slight discount on the second garage door, because we drove out there and our guys already committed and we already have our tools out and we're going to, okay, we'll just,
• 4:34
  [SPEAKER_01]: In the gym business, there's no economy of scale.
• 4:36
  [SPEAKER_01]: There is no discount because the second person's there.
• 4:39
  [SPEAKER_01]: Everybody's individualized and everybody gets the same tension.
• 4:43
  [SPEAKER_01]: Therefore, there is no logical reason that you would have to or could even discount.
• 4:48
  [SPEAKER_03]: Yeah.
• 4:48
  [SPEAKER_03]: From a service from delivery side, the only reason that I could see James doing that is because of the friction point of the sale.
• 5:00
  [SPEAKER_03]: uh... you know a tool when it comes to acquiring another body and back to the last episode though you're that's focusing on the member count not to the revenue generated sure which again if we're building upon these myths you're you're breaking myth one
• 5:16
  [SPEAKER_03]: when you're breaking myth too, you know what I mean?
• 5:18
  [SPEAKER_03]: And so, yeah, I absolutely think it's, it should be quite the opposite.
• 5:22
  [SPEAKER_03]: I mean, I think everybody should be paying full price for the services that we bring to the table because I ultimately believe that regardless of what we're charging, it's still undervalued.
• 5:31
  [SPEAKER_03]: Yeah.
• 5:31
  [SPEAKER_03]: And, you know, there's no, it hurts me to see Jim's at discount.
• 5:38
  [SPEAKER_03]: And I think it hurts most because,
• 5:41
  [SPEAKER_03]: Do we, do we know that sure if you give a free week, you're going to get some leads, you use some portion of that's going to come in and they're going to do a trial probably free week, right?
• 5:51
  [SPEAKER_03]: Or if we, I don't know, a couple of sessions, one session, whatever it may be, but the whole reason that you're marketing is to move somebody into a membership.
• 6:00
  [SPEAKER_03]: And if you're devaluing the services right out of the gate for somebody and saying, hey, you know what, normally we're this, but I'm going to give you the service for this price and lower rate.
• 6:09
  [SPEAKER_03]: What is that saying about the value and how you value the service that you bring to the table?
• 6:14
  [SPEAKER_03]: Right out of the gate, you're telling the person, I can I can do this for less than what I'm charging off, you know, we'll figure that out later.
• 6:21
  [SPEAKER_03]: Yeah, but
• 6:23
  [SPEAKER_03]: then you have another conversion person or current conversion that takes place and they're coming in a discounted rate, then you're going to bump up the rates for full value and then they have to make the decision that
• 6:36
  [SPEAKER_03]: without any skin in the game, I valued the service that I showed up for free if they did it all.
• 6:41
  [SPEAKER_03]: And then you're gonna try and resell them again.
• 6:43
  [SPEAKER_03]: Why are we doing it that route?
• 6:45
  [SPEAKER_03]: Why are we doing it that way?
• 6:46
  [SPEAKER_01]: Well, I mean, there's two sides to this story.
• 6:51
  [SPEAKER_01]: The free is just absolutely the wrong decision.
• 6:55
  [SPEAKER_01]: Discounted may be when it comes to a trial, but then when we go to a membership, that's what I'm really saying we can't discount membership.
• 7:05
  [SPEAKER_01]: because you get that second, the husband and the wife situation.
• 7:08
  [SPEAKER_01]: Or you get like the first responders for a while.
• 7:11
  [SPEAKER_01]: And now you've got all these different rates, right?
• 7:13
  [SPEAKER_01]: And I know it makes you feel good.
• 7:15
  [SPEAKER_01]: I know it makes you feel good to do a first responder, teacher, whatever discount.
• 7:21
  [SPEAKER_01]: I know it makes you feel good.
• 7:22
  [SPEAKER_01]: But at the end of the day, you're providing a service for X for a value.
• 7:27
  [SPEAKER_01]: And you're just discounting it for these people, but not those people.
• 7:31
  [SPEAKER_01]: And now it just,
• 7:34
  [SPEAKER_01]: I'll tell you what that feels weird about tell you what feels really good is when everybody pays the same rate.
• 7:39
  [SPEAKER_01]: Yeah.
• 7:39
  [SPEAKER_01]: You don't care if they talk to each other.
• 7:41
  [SPEAKER_03]: was going to mention that too.
• 7:42
  [SPEAKER_03]: What happens when your clients also are talking about it and then some are on a discounted rate and some aren't.
• 7:47
  [SPEAKER_03]: And now there's this chatter amongst you know, your client base, what are you going to do?
• 7:52
  [SPEAKER_03]: Drop everybody into the discounted rate?
• 7:54
  [SPEAKER_01]: Yeah, it just makes it, it makes it difficult.
• 7:57
  [SPEAKER_01]: So, I mean, look at the end of the day, guys, what you have to realize is the product that you're putting on the table is valuable.
• 8:03
  [SPEAKER_01]: Absolutely.
• 8:04
  [SPEAKER_01]: You shouldn't have to discount it.
• 8:07
  [SPEAKER_01]: You discount it, or you believe you should discount it because people aren't buying it.
• 8:13
  [SPEAKER_01]: So, therefore, your next thing is drop the price and hopefully it works, right?
• 8:18
  [SPEAKER_01]: Instead of explaining and educating and showing the value to the consumers,
• 8:25
  [SPEAKER_01]: whether it's through marketing or when they're in front of you that guys what we do here special what we do here is best in class we will solve your problem we will give you the solution that you've been yearning for for seven years and you don't feel good about yourself and all these medications or we can solve that and it's x amount of dollars it's not 50% off this month only and but you know and you bring a friend in and then the discount of that no
• 8:54
  [SPEAKER_01]: Stop doing it.
• 8:55
  [SPEAKER_03]: Yeah.
• 8:57
  [SPEAKER_01]: Here's the best analogy.
• 8:59
  [SPEAKER_01]: Go to your steak house tonight.
• 9:01
  [SPEAKER_01]: Take your family to dinner.
• 9:03
  [SPEAKER_01]: Go eat the steak and tell them you wanted it for free and we'll let them know if you liked it.
• 9:08
  [SPEAKER_01]: You'll pay them next time.
• 9:10
  [SPEAKER_01]: That's what we've conditioned the consumers to come into your gym.
• 9:14
  [SPEAKER_01]: They all ask for a free ex or a free session or a free week or free workout because we've been doing it for years.
• 9:24
  [SPEAKER_01]: Try that at the stake house, try that anywhere else.
• 9:28
  [SPEAKER_01]: Give me something for free, and not pay for it, and then I'll let you know.
• 9:31
  [SPEAKER_01]: It just doesn't exist.
• 9:33
  [SPEAKER_01]: I mean, the only thing that I can actually, there's Netflix, right?
• 9:38
  [SPEAKER_01]: Seven days free, put your card on file, we automatically start building you.
• 9:42
  [SPEAKER_01]: But like in the grand scheme of things, there's a lot of margin and that's a big difference.
• 9:47
  [SPEAKER_01]: In the Netflix and software space, there's a lot of margin.
• 9:50
  [SPEAKER_01]: It costs them zero to give you that free week.
• 9:54
  [SPEAKER_01]: It doesn't cost you zero to train a client for five sessions.
• 10:00
  [SPEAKER_01]: and take up your time and all that stuff to pay or coaches and lower the delivery service to everybody around them because you're paying attention to the new person just for them to say thanks and never pay you for that service.
• 10:13
  [SPEAKER_01]: You just don't have the margins that software companies do.
• 10:16
  [SPEAKER_03]: Yeah.
• 10:17
  [SPEAKER_03]: Yeah, and you know that the reason that it's done in this industry is because that's the way it was done.
• 10:22
  [SPEAKER_03]: That's where it's been done.
• 10:23
  [SPEAKER_03]: I think this is one of the myths and one of the things that we want to bring to the table and educate you guys on.
• 10:29
  [SPEAKER_03]: And let you know that just because it's been done that way doesn't mean you have to continue.
• 10:33
  [SPEAKER_03]: and the choice is yours.
• 10:34
  [SPEAKER_03]: I mean, we do it with Jim's every single day.
• 10:36
  [SPEAKER_03]: I just had a conversation before this episode that one of the takeaways from a client that was at the girl summit was to stop giving away her services for free.
• 10:45
  [SPEAKER_03]: She's had nothing but great success moving that, you know, out of that seat and doing it and charging what she deserves for the trials and the membership and so forth.
• 10:55
  [SPEAKER_03]: And
• 10:56
  [SPEAKER_03]: The free thing really kills me, but yeah, this kind of rates membership wise, having people all over the place.
• 11:02
  [SPEAKER_01]: Yeah, I'm just making sure a messy business.
• 11:04
  [SPEAKER_01]: Very much so.
• 11:05
  [SPEAKER_01]: In a look, guys, if you're going to go down the route, especially for the founders' rates and this grand opening specials and stuff, if you're ever going to do that, which, by the way, is a strategy, never forever, never a grandfather rate forever, never
• 11:21
  [SPEAKER_01]: founders rate for even a year do it for a few months to get the get the place full and then everybody goes to the normal rate that's that's what we suggest you do but I do I do understand the the methodology of getting people in the doors for the very first time as a founder because that word founder is powerful in marketing it's just people like to be the founder right like to be the one that started the gym off on the right foundation
• 11:47
  [SPEAKER_01]: but it's not a forever thing.
• 11:49
  [SPEAKER_01]: It should never be a forever thing.
• 11:50
  [SPEAKER_01]: Never forever discounts, right?
• 11:52
  [SPEAKER_01]: So hopefully that helps you guys stop discounting.
• 11:55
  [SPEAKER_01]: You deserve to be paid for the product that you deliver.
• 11:59
  [SPEAKER_01]: It's great.
• 12:00
  [SPEAKER_01]: It's health.
• 12:00
  [SPEAKER_01]: It's longevity.
• 12:01
  [SPEAKER_01]: It's more years with their kids and spouse, like think about how valuable that is.
• 12:05
  [SPEAKER_01]: You don't need to discount it, guys.
• 12:08
  [SPEAKER_01]: That's it for this episode.
• 12:09
  [SPEAKER_01]: Hopefully that helps you guys until next time.
• 12:10
  [SPEAKER_01]: Keep changing.
• 12:11
  [SPEAKER_01]: I'll see you in the next show.
• 12:12
  [SPEAKER_01]: Bye.
• 12:13
  [SPEAKER_01]: Alright, thanks for listening to another episode of the BuildsGrow podcast.
• 12:16
  [SPEAKER_01]: If you want more help growing your business, join our free Facebook group, Profit Accelerator, helping training gyms grow to $30,000 a month and beyond.
• 12:25
  [SPEAKER_01]: We'd love to see you there, go check out the show notes for the link, and keep building something great, and we'll see you in the next episode.