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The Unexpected Gym Strategy That Boosts Revenue by 38% · Gym Business Coach Podcast

• 0:00
  [SPEAKER_02]: All right, welcome back to the gym business coach podcast and my host Tim Lines joined back in studio in the wood wall with a V-neck Zackelumbia.
• 0:09
  [SPEAKER_02]: Hey, thanks for having me.
• 0:10
  [SPEAKER_01]: Hey, I was your family part of the Columbia outerwear brand man.
• 0:16
  [SPEAKER_01]: If it weren't, I wouldn't be working for you
• 0:20
  [SPEAKER_02]: think you get it or is it Columbia pictures Columbia pictures yeah maybe Columbia cocaine is it Columbia house member Columbia house the Columbia yeah it was before your time with the dollar they won't when penny CDs oh Columbia house nobody remembers that they won't so Columbia house when I was in early in high school probably in junior high
• 0:41
  [SPEAKER_02]: They would do you could for one penny you would get 13 albums, okay?
• 0:47
  [SPEAKER_02]: And then they hook into this recurring thing, you're cutting cars on file, but like if you did return all of them by starting them out of time, you're hooked in.
• 0:55
  [SPEAKER_02]: And they were a multi-million dollar, like it was this, yeah, look at that, I'm coming out.
• 0:59
  [SPEAKER_02]: I think it's coming out.
• 1:01
  [SPEAKER_02]: Brian, Brian's our new video guy, give him a round of applause for us.
• 1:03
  [SPEAKER_02]: Hey, go check out Columbia House, one penny promotion and tell me what you find.
• 1:11
  [SPEAKER_02]: We'll bring that in on the next clip.
• 1:13
  [SPEAKER_02]: Alright, so listen guys.
• 1:15
  [SPEAKER_02]: About 10 years ago, I had a little bit of a scare in the business.
• 1:19
  [SPEAKER_02]: It's not not a scare because we were failing, but because we were like, almost making it.
• 1:23
  [SPEAKER_02]: We kept hitting the ceiling and like getting to our revenue numbers and then we'll lose members and then we get our team good and then we lose a coach.
• 1:31
  [SPEAKER_02]: And this like everything was close, but it wasn't there yet.
• 1:35
  [SPEAKER_02]: And it wasn't because we weren't skilled or didn't know what we were doing.
• 1:39
  [SPEAKER_02]: Or
• 1:40
  [SPEAKER_02]: lack of effort or care.
• 1:42
  [SPEAKER_02]: It was because we were in the wrong model and as so I said like what am I going to do like I added take a step back like We keep hitting this ceiling.
• 1:52
  [SPEAKER_02]: What's else going on and I had to say like
• 1:55
  [SPEAKER_02]: what are we doing?
• 1:57
  [SPEAKER_02]: I was ready to give up and it's many times like not just this one time, a bazillion times.
• 2:02
  [SPEAKER_02]: Like what are we doing?
• 2:03
  [SPEAKER_02]: We're working our ass off.
• 2:04
  [SPEAKER_02]: We just never get there and every time we get close, we just drop down.
• 2:07
  [SPEAKER_02]: And what was it?
• 2:08
  [SPEAKER_02]: So I sent on an omission to kind of like understand the data a little bit better.
• 2:13
  [SPEAKER_02]: Like not the data that we all look at that like the gross revenue and the member count, but like the data behind the data.
• 2:19
  [SPEAKER_02]: the data of who our clients were, how much were they spending with us, how many, how much really worth what services did they do that stayed the longest and paid the longest and what it found was.
• 2:32
  [SPEAKER_02]: It was super clear after I ran, we figured out of the numbers.
• 2:35
  [SPEAKER_02]: It was the two numbers I kind of bubbled up to the top was 9.8 in 36.2.
• 2:38
  [SPEAKER_02]: What does it really mean?
• 2:40
  [SPEAKER_02]: 9.8 was the amount of months, amount of time in months that our large group training members were staying with us.
• 2:50
  [SPEAKER_02]: The large group training members were paying between 1.59 and 1.79 a month.
• 2:54
  [SPEAKER_02]: And they would stay at just under 10 months and they would recycle out, we'd replace it on,
• 2:59
  [SPEAKER_02]: you know, like a constant battle.
• 3:01
  [SPEAKER_02]: And then over on the other end, we had some of my private train 10 years ago.
• 3:05
  [SPEAKER_02]: It's not what it is today in regard to like how great it is, but it was a service that we had.
• 3:12
  [SPEAKER_02]: And those clients were paying about 350 to 450 a month.
• 3:16
  [SPEAKER_02]: And there were staying three years, 36.2 months to be exact.
• 3:20
  [SPEAKER_02]: And I was like, well, these clients are paying more and staying three, wait, three and a half times longer.
• 3:28
  [SPEAKER_02]: And that's not intuitive.
• 3:29
  [SPEAKER_02]: Like you would think they're paying more.
• 3:30
  [SPEAKER_02]: They couldn't afford it and they would cancel.
• 3:33
  [SPEAKER_02]: They started looking like at the people at the human beings that were taking the service and it was just it was nine and day.
• 3:39
  [SPEAKER_02]: Like there was just a different human being, right?
• 3:41
  [SPEAKER_02]: Our, our semi-private training clients were a little bit older.
• 3:43
  [SPEAKER_02]: You know, usually well over 40, probably mid 60s or 50s, and they were settled.
• 3:50
  [SPEAKER_02]: They weren't, you know, there were some of them were retired, so this area, they retired early.
• 3:56
  [SPEAKER_02]: They weren't moving around the country to find their place and their footing.
• 3:59
  [SPEAKER_02]: They had kids, and they weren't going anywhere.
• 4:01
  [SPEAKER_02]: Whereas the larger training members, the ones that were, you know, paying 159, they were younger.
• 4:09
  [SPEAKER_02]: Um, you know, early 20s, maybe early 30s, they would get married and move and take a new job and move and or, where times got tough and they would lose a job and they couldn't afford anymore.
• 4:20
  [SPEAKER_02]: They were canceled their membership and they would bounce around and try to keep a stay.
• 4:23
  [SPEAKER_02]: Group bomb was big in that demographic and there was these other ones kind of about the same time I remember the names of those kind of offers and so when we realized this it was pretty easy to make a decision Like hey, we've got to get rid of large retreating and go all in on semi-private training
• 4:45
  [SPEAKER_02]: And really, that's what we did.
• 4:47
  [SPEAKER_02]: It took a while, a couple of years to be exact, that we're kind of fumbling around.
• 4:51
  [SPEAKER_02]: We would cut a couple sessions out and not to piss everybody out because there was $20,000 a month coming in on this one line item of large retraining.
• 5:00
  [SPEAKER_02]: It was like, we're gonna do this, we gotta do this.
• 5:03
  [SPEAKER_02]: And so thankfully,
• 5:06
  [SPEAKER_02]: You know, as bad as COVID was, the best thing that happened was it was a great excuse to get rid of it once and for Or we had already been trending that way.
• 5:15
  [SPEAKER_02]: We weren't signing up anybody like new.
• 5:17
  [SPEAKER_02]: We were just kind of serviced in the people that we had You know, it's funny because you know the large group 20 people in a class was down to like five or six anyway
• 5:28
  [SPEAKER_02]: And then we start looking at like, man, there's only five people in that class and then there's six people into some of my private training and they're paying like double and triple the mountain.
• 5:38
  [SPEAKER_02]: So we finally got rid of it once and for all and at that point in time it's really where everything kind of like shot up obviously we had taken a huge loss with the COVID and everything else, but like.
• 5:50
  [SPEAKER_02]: Coming out of it, we were established for success because we got rid of it.
• 5:54
  [SPEAKER_02]: We did a rebrand and we did everything at the right time.
• 5:56
  [SPEAKER_02]: We were training that way and then it shot up.
• 5:59
  [SPEAKER_02]: And what we see in today is people are still holding on to like a service category for that reason.
• 6:04
  [SPEAKER_02]: It's like, hey, I'm making a 12 grand a month like it's tough to just let that go.
• 6:08
  [SPEAKER_02]: But until you can get rid of it and go all in on one thing, you're always going to be mediocre across the board and I always felt like,
• 6:17
  [SPEAKER_02]: No, not us.
• 6:18
  [SPEAKER_02]: We're great at everything.
• 6:20
  [SPEAKER_02]: And we were better than most, but like not great great like what we are today.
• 6:24
  [SPEAKER_02]: And so, so that's kind of like the story on how we just went all in, but the problem I'm seeing is there's a lot of jim owners.
• 6:32
  [SPEAKER_02]: We've got about 20 of them coming out here this week for our MBM and most of them have multiple service offerings.
• 6:40
  [SPEAKER_02]: One in one in large group in small group in semi-private and open gym in less like all in one.
• 6:45
  [SPEAKER_02]: And then you look at the revenue.
• 6:46
  [SPEAKER_02]: It's like, uh 22,000.
• 6:47
  [SPEAKER_02]: It's like really what's coming from each one.
• 6:50
  [SPEAKER_02]: And it probably is usually like when we really pull the curtain backs, choose the 80, 20.
• 6:55
  [SPEAKER_02]: 80% still coming from near semi-private and 20's coming from
• 7:01
  [SPEAKER_00]: So, I mean, there's a lot of different, you know, different things to touch on here.
• 7:07
  [SPEAKER_00]: I will just, I remember, you know, in 2015, when I started working here as a coach,
• 7:18
  [SPEAKER_00]: doing both, right?
• 7:20
  [SPEAKER_00]: Like we had our coaching staff, and coaches would deliver both the semi-private and the large group, and they're completely different deliveries.
• 7:30
  [SPEAKER_00]: You know, I remember you're in this semi-private coaching environment where I'm not yelling at the clients,
• 7:38
  [SPEAKER_00]: you know coming over and I'm coaching you and I'm you know correcting your form and it's very very like you know high touch and individualized and then you just as a coach is you just have to shift gears from one hour to the next where it's like
• 7:56
  [SPEAKER_00]: bring the energy, get everybody fired up.
• 7:59
  [SPEAKER_00]: I'm yellin' at you and there's 20 people in a room and then all of a sudden like that hours over and boom, I gotta go right back to being the high touch coach again.
• 8:09
  [SPEAKER_00]: And I remember just from a coaching standpoint, it was very difficult, especially at the end of the day, we had large group, a large group class that I would run at 6 p.m. and then a semi-private at 7 p.m.
• 8:26
  [SPEAKER_00]: And it's like, those are my last two hours of the day and man, like, I was poor in my heart and soul into screaming at those people and burpees on the floor and the energy and I'm like smoked by the time that's seven.
• 8:38
  [SPEAKER_00]: I was constantly really hard to bring the same level of energy and quality in a different way to that group.
• 8:47
  [SPEAKER_00]: So just from a coaches standpoint, I mean, how does that impact them in their ability to deliver the same consistent experience for the clients?
• 9:01
  [SPEAKER_02]: Well, I mean, I don't know if I knew there were some difficulties there.
• 9:04
  [SPEAKER_02]: I didn't know like, energy-wise, you're smoked and stuff, but yeah, I mean, at the end of the day, if you're offering one thing, you can really become a master.
• 9:13
  [SPEAKER_02]: at that style, but yeah, bouncing around.
• 9:16
  [SPEAKER_02]: And then on top of that, there were some one on one, it's not for us, but like there's gems that do this, large group, and one on one.
• 9:22
  [SPEAKER_02]: And then they'll sit down and do an nutrition consultation, and then they'll go over that, it's just crazy, right?
• 9:27
  [SPEAKER_02]: Yeah.
• 9:28
  [SPEAKER_02]: And it's so difficult to, as a gym owner, to say, we're not going to offer that anymore.
• 9:35
  [SPEAKER_02]: Even though I've got people that will pay me money in this market,
• 9:39
  [SPEAKER_02]: Um, and I, it's kind of easy to sign those people up sometimes too because they, they're very tribe, like we're talking large group training, very tribe mentality, they're gonna bring a friend, they're gonna come to your happy hour, they're like very, you know, bought in and they're fun and it's like it's a, like I remember being, I used to do in boot camp style training, how he's to jump in and have a good time.
• 9:59
  [SPEAKER_02]: It was great.
• 10:00
  [SPEAKER_02]: But the end of the day, the 9.8 versus 36.2, there really is no question.
• 10:07
  [SPEAKER_02]: It's not, if the numbers were inverse, meaning the large group training class date 36.2 months and the summer private state 9.8 months, be a very difficult decision.
• 10:20
  [SPEAKER_02]: You're like, ah, they're worth more, but they don't stay as long.
• 10:22
  [SPEAKER_02]: These ones are, they do stay forever, but they're not worth as much to what do you do.
• 10:27
  [SPEAKER_02]: But in this situation, it was like, there is no question.
• 10:30
  [SPEAKER_02]: We got to get rid of large group.
• 10:32
  [SPEAKER_02]: We got to pull this band aid off, even though we didn't.
• 10:36
  [SPEAKER_02]: Many of our gym owners that we helped coach to kind of transition into some of my private.
• 10:40
  [SPEAKER_02]: They do do it faster and they're glad they did we we've had both sides like we're cost, you know We slow-played it and I wish I would have just done it sooner and some that are like man I just ripped the band aid off it was perfect because I you know out with the old and in with the new and they're You know all fired up and their business are exponentially better not like They got a nice 8% increase dude.
• 11:05
  [SPEAKER_02]: I'm talking like
• 11:06
  [SPEAKER_02]: Do we're making 38% more this year and profit this year than last year and all we did was change in some of my private now the key to this and you know something that a lot of jimmers miss is how to do it
• 11:20
  [SPEAKER_02]: this is what to do.
• 11:21
  [SPEAKER_02]: The how is that's the details that that's the thing where I've seen too many gyms fail.
• 11:28
  [SPEAKER_02]: In fact, there's a very well known industry leader that we're working with and helping right now that failed trying to bring some of my private in because he just thought
• 11:42
  [SPEAKER_02]: that maybe we just do the same thing with less people and people will pay more for that.
• 11:47
  [SPEAKER_02]: And it just kind of fizzled out after a couple months.
• 11:50
  [SPEAKER_02]: And that's what I see a lot of Jim owners do.
• 11:53
  [SPEAKER_02]: It's let's just put it on the prices sheet.
• 11:55
  [SPEAKER_02]: We'll present it as a more intimate option.
• 11:59
  [SPEAKER_02]: But then when you actually look at the delivery, it's literally the same thing as their large group with just less people.
• 12:06
  [SPEAKER_02]: And people don't pay for that.
• 12:08
  [SPEAKER_02]: In fact, that argue they
• 12:11
  [SPEAKER_02]: then less in that style of workout because it's more energy so you're gonna actually take the one thing that is a benefit.
• 12:19
  [SPEAKER_02]: of a large group training, which is the energy and you're going to take it away and charge more for it and give them the same delivery doesn't make any sense.
• 12:26
  [SPEAKER_02]: And that's what we see.
• 12:27
  [SPEAKER_02]: It happens all the time and they just fall apart and they just don't go anywhere.
• 12:30
  [SPEAKER_02]: Whereas the gyms that can create a differentiation in the product, the delivery, they smell different, look different, they use different equipment that's clearly different.
• 12:41
  [SPEAKER_02]: They use our semi-private pro.
• 12:43
  [SPEAKER_02]: software tablets that are living on it like that's clearly different that's clearly worth more than what I'm getting over here where everybody's doing the same thing I can see my workouts and everything's different that to me is worth the money that I'll spend four hundred five hundred dollars a month versus you know large group of pain you know under two hundred so any words of wisdom here would be like don't just lob it out there you have to have a set plan of attack
• 13:10
  [SPEAKER_00]: Yeah, and I think that if you just follow, you know, if you look our industry and look at the trends, it's obvious that
• 13:19
  [SPEAKER_00]: gym owners are recognizing the math of the model.
• 13:25
  [SPEAKER_00]: They're starting to understand, oh yeah, like they're seeing the retention, right?
• 13:29
  [SPEAKER_00]: They're going, okay, 36 months versus nine months.
• 13:33
  [SPEAKER_00]: They're looking at and going, okay, in order for me to, you know, for my, my gym to do good revenue, I have to have 500 large group members,
• 13:43
  [SPEAKER_00]: that are turning at 10%, like, how can I go get 50 new clients?
• 13:49
  [SPEAKER_00]: I can't do that.
• 13:50
  [SPEAKER_00]: It's a loss of volume.
• 13:51
  [SPEAKER_00]: So looking at that versus, oh, I need 200 semi-private clients that are paying me 400 bucks a month.
• 13:58
  [SPEAKER_00]: And so when they start looking at the numbers, they're going, man, this model makes perfect sets.
• 14:05
  [SPEAKER_00]: Then they lob it out there.
• 14:07
  [SPEAKER_00]: They think that,
• 14:09
  [SPEAKER_00]: They think that small group training is semi-private training, small group like you're saying, it's just a ward.
• 14:16
  [SPEAKER_00]: It's a workout of the day with less people.
• 14:18
  [SPEAKER_00]: It doesn't have the same value.
• 14:20
  [SPEAKER_00]: And so they're like, hi, just can never get it off the ground.
• 14:24
  [SPEAKER_00]: I put it on my prily.
• 14:25
  [SPEAKER_00]: She climbs to it, won it.
• 14:27
  [SPEAKER_00]: And it's like, well, yeah, of course they didn't want it, it's not, there's no added value for them.
• 14:35
  [SPEAKER_00]: There's a very specific strategy for how to implement this, how to differentiate it.
• 14:42
  [SPEAKER_00]: If you are going to phase it in versus if you are just going to rip that bandate off,
• 14:50
  [SPEAKER_00]: There's a way that we make it at decision to determine we're coaching somebody.
• 14:55
  [SPEAKER_00]: There's a way we make that decision to determine which option you should deploy here, which one's going to be the best for you.
• 15:04
  [SPEAKER_00]: Correct.
• 15:05
  [SPEAKER_00]: And so, you know, most Jim owners are one, they might not know that formula to determine which one to go with and like, well, we're just going to continue to offer both.
• 15:18
  [SPEAKER_00]: But then they're missing the components of semi-private, what makes semi-private semi-private?
• 15:24
  [SPEAKER_00]: Sure.
• 15:24
  [SPEAKER_00]: And then they're like, how that never got off the ground?
• 15:26
  [SPEAKER_00]: But then they're like, man, what do I do now?
• 15:29
  [SPEAKER_00]: You know, they're just searching for some other next.
• 15:32
  [SPEAKER_02]: Next greatest day in the next shiny ball, high ticket, you know, whatever transformation programs and, you know, the gyms, it's so interesting.
• 15:42
  [SPEAKER_02]: There's gyms that like in our iron circle mastermind, the boys from Kentucky come to mind.
• 15:49
  [SPEAKER_02]: They were kind of holding on to that large group training and they pulled a bandit.
• 15:54
  [SPEAKER_02]: It has to feel it feels like it's about four years now, four or five years.
• 15:58
  [SPEAKER_02]: Every year's been a record year since then and they're not like rookies in this industry They've been around decade plus years like at least 12 15 years and it wasn't until they finally ripped the Band-Aid off And not only that they implement as systems and it was good people and they take care of their clients They got a great team and all that stuff kind of came up with it like as they had more money coming in They could support you know better staff and all this stuff kind of bubbled up
• 16:27
  [SPEAKER_02]: Now, you know, it's not like it's a pro or a con, but like not long ago, they were like, hey, it kind of bored.
• 16:33
  [SPEAKER_02]: We don't know what to do.
• 16:34
  [SPEAKER_02]: We don't go to the gym anymore.
• 16:35
  [SPEAKER_02]: Just runs as kind of like what should we do next?
• 16:39
  [SPEAKER_02]: So of course, they probably go and break something in the gym so they could
• 16:43
  [SPEAKER_02]: get to something to do, right, but that's a great example because they were following a bunch of different kind of like gurus in the past and in different coaching programs and it was always just kind of like they could never just go all in and finally they just pulled the band it off and it was like probably the best decision that they made and it's awesome to see how amazing how far they've come and you know and they're probably one of our top gems in our
• 17:10
  [SPEAKER_00]: Well, I mean, you look at them there, they, yeah, like you said, implementing the systems.
• 17:15
  [SPEAKER_00]: Yes, and my private pro.
• 17:17
  [SPEAKER_00]: So, so each of their clients, you know, programs is personalized.
• 17:22
  [SPEAKER_00]: They even started a podcast now and they've got that.
• 17:26
  [SPEAKER_00]: Their director has been in my director circle by coaching him.
• 17:30
  [SPEAKER_00]: You know, they really,
• 17:32
  [SPEAKER_00]: they really go, they have, they've gone all in on the model and the systems, you know, router, and that's why you see the success.
• 17:41
  [SPEAKER_00]: That's really the thing that differentiates gyms that continue to like grind and struggle and they just keep banging up against that ceiling and the gyms that scale and thrive is, is the model is the foundation.
• 17:57
  [SPEAKER_00]: but then the systems to support that model.
• 18:01
  [SPEAKER_00]: And like you could go and implement some of my private training in your gym tomorrow and it could not go anywhere.
• 18:09
  [SPEAKER_02]: It could fail.
• 18:10
  [SPEAKER_02]: It could fail.
• 18:10
  [SPEAKER_02]: It has failed.
• 18:11
  [SPEAKER_02]: Yeah, for many.
• 18:13
  [SPEAKER_02]: And then the excuse is my clients won't then I'll want the exact, that's true.
• 18:16
  [SPEAKER_02]: That's true.
• 18:17
  [SPEAKER_02]: Maybe those current clients don't, but there's a whole slew of clients in your market that are begging for this.
• 18:23
  [SPEAKER_02]: And we've even had clients that you've signed up at this gym when you were the director that had come from another semi-private training gym in another state and They're looking for it like you're the only gym in town that has this style that I've been looking for so semi-private training So there's you know, it's not large group.
• 18:41
  [SPEAKER_02]: It's on a class.
• 18:42
  [SPEAKER_02]: They definitely know the difference now, and even though we've been doing it for 15 years
• 18:48
  [SPEAKER_02]: It's finally, hopefully, starting to become a little bit more, well, no work clients are actually looking for this.
• 18:54
  [SPEAKER_02]: They all know classes.
• 18:55
  [SPEAKER_02]: They all will Google classes.
• 18:56
  [SPEAKER_02]: I am in a fitness class, like, but they don't understand yet, but when you introduce it to them and they experience it, they can't go the other way anymore.
• 19:05
  [SPEAKER_02]: It's just too good, it's too, too good of training.
• 19:08
  [SPEAKER_02]: So, listen, Jim owners, I guess the,
• 19:12
  [SPEAKER_02]: the synopsis or the message of this podcast is you can't really ever get to true potential unless you go all in on semi-private on that one thing so you can't split like from everything from the clients are different to like burns the coaches out when you're switching back and forth through to just like have any identity in the gym you just don't have it so
• 19:33
  [SPEAKER_02]: Hopefully that helps you guys make that switch.
• 19:35
  [SPEAKER_02]: If you do need help, we've got links in the show notes.
• 19:38
  [SPEAKER_02]: We also have a podcast channel like you guys check us out over there.
• 19:42
  [SPEAKER_02]: I would love to love to be able to help you and work with you.
• 19:44
  [SPEAKER_02]: Hold your hand to make sure that you guys finally can realize like, hey, there is a million dollar model in this training industry.
• 19:50
  [SPEAKER_02]: And it lives in the center of private and done the right way.
• 19:53
  [SPEAKER_02]: So hopefully that helps you guys, that's it for this episode.
• 19:56
  [SPEAKER_02]: Until next time, keep changing lives.
• 19:57
  [SPEAKER_02]: See you on the next show.