Latest / Gym Business Coach Podcast / 7 Habits of Winning Gyms – Habit 4

Transcript

7 Habits of Winning Gyms – Habit 4 · Gym Business Coach Podcast

0:08
[SPEAKER_00]: You are listening to the built-to-grow podcast delivering the knowledge in all things, fitness, business We help jimmers win, hear your hosts, ten lions, and Randy Axton
0:29
[SPEAKER_01]: All right, welcome back to the Bill's Grove podcast where host Tim Lyons joined in studio by Randy angston with subdued let's go We're there number four
0:41
[SPEAKER_01]: Seven habits of winning gyms were on habit number four winning gyms protect recurring revenue.
0:46
[SPEAKER_01]: That is the habit of this episode, and it should go without saying, but I think we need to say it, that we have a really big advantage in the fitness industry with recurring revenue.
0:57
[SPEAKER_01]: It's just a part of doing business.
0:59
[SPEAKER_01]: People are used to it.
1:00
[SPEAKER_01]: It's not like we have to force that onto our consumers.
1:05
[SPEAKER_01]: However, some gyms, the way they position their cells in their packages, squander this benefit of what they have of recurring revenue.
1:15
[SPEAKER_01]: There's many, many, many businesses that are outside the box that try in successfully,
1:24
[SPEAKER_01]: get their consumers on to recurring revenue.
1:27
[SPEAKER_01]: We have that as a benefit.
1:28
[SPEAKER_01]: It's just it's just part of a gym.
1:29
[SPEAKER_01]: You're going to pay a monthly subscription to be a gym and that's it, right?
1:34
[SPEAKER_01]: So there's no like there's no like educational gap to the consumer.
1:38
[SPEAKER_02]: Yeah, we don't have to change the marketplace in that regard.
1:41
[SPEAKER_02]: Yeah.
1:42
[SPEAKER_01]: So with recurring revenue, you make a sell once and you continue to keep that customer happy over the long term.
1:48
[SPEAKER_01]: You don't have to continue to sell in order to make money.
1:53
[SPEAKER_01]: The most extreme example of that would be,
1:59
[SPEAKER_01]: clients that we have here that signed up at our grand opening in 2009 that still and have never quit or still paying and there have been members ever since.
2:09
[SPEAKER_01]: So we sold them 16 years ago but we're continuing to collect on revenue even today.
2:16
[SPEAKER_01]: And that's our benefit.
2:18
[SPEAKER_01]: So
2:19
[SPEAKER_01]: winning gyms protect that they protect everything they can in a decide early on in their business or now whenever whenever you want to become a winning gym this is what you would do.
2:30
[SPEAKER_01]: You focus 100% on building up your recurring revenue base.
2:35
[SPEAKER_01]: Call it EFT call it MRR whatever you want to call it it's that subscription base that revenue.
2:42
[SPEAKER_01]: that's going to build over time slowly, typically.
2:45
[SPEAKER_01]: Unfortunately, it's not big cash injections.
2:49
[SPEAKER_01]: It's a decision that you're going to have to make when somebody wants to pay you in full, and you say no.
2:53
[SPEAKER_01]: Yep.
2:54
[SPEAKER_01]: It's a decision that you have to make when somebody wants to discount to buy 50 sessions instead of buying the monthly plan or the weekly plan.
3:02
[SPEAKER_01]: Yeah.
3:04
[SPEAKER_01]: And over time, we track this number, the scroath or decay of that recurring revenue with a number we've called it delta and that's the growth or decay of that number.
3:16
[SPEAKER_01]: It's the growth or decay of your recurring revenue base winning gems will focus on that number and that number only until at a very very minimum that number exceeds the expenses of the business.
3:31
[SPEAKER_01]: And when you get to that tipping point and some of you are there now and some of you that's going to be your next goal after hearing this.
3:38
[SPEAKER_01]: When you do that, when you get to a place where your expenses are 30,000 in your recurring revenue is 30,000, you don't have to make a sale that month in your bills are paid.
3:49
[SPEAKER_01]: So you're not coming out of desperation.
3:51
[SPEAKER_01]: You're not coming out of like, oh my gosh, I got to do something now to get money because we're coming from behind every single month.
3:59
[SPEAKER_01]: when you get to a point where you at least equilibrium.
4:02
[SPEAKER_01]: Let's say, that's a way to off of the gym owner's shoulders.
4:04
[SPEAKER_01]: You can see, okay, we got the revenue coming in.
4:07
[SPEAKER_01]: Now let's focus on growing that even further.
4:11
[SPEAKER_02]: Yeah, I mean, we've historically always said that clarity sets in.
4:14
[SPEAKER_02]: You know, when you reach that mark, right?
4:16
[SPEAKER_02]: I like that you said desperation doesn't, you don't longer have that desperate feel, because it's quite often that's the case that most gym owners find themselves in, right?
4:24
[SPEAKER_02]: You have to do something today.
4:28
[SPEAKER_02]: And then you go off-script, you go grasp it, whatever you can do in order to make some money coming into the business.
4:35
[SPEAKER_02]: Sure, at the expense of the systems of the business, your normal delivery, what you believe to be true, you know, and desperation is a dangerous place to be.
4:44
[SPEAKER_02]: And I love MRR because of the, it's like the exponential growth factor, right?
4:49
[SPEAKER_02]: You sell today that clients paying you next month without you having to resell them.
4:53
[SPEAKER_02]: Everything you do that, that's second month, they build on top and build on top.
4:57
[SPEAKER_02]: And then it's almost like every month you're just adding to that bucket if you may.
5:01
[SPEAKER_02]: And it seems like, obviously, you know, it's not all the, you said that's not that cash injection with like a high ticket program or a challenge or whatever else, you know, you're doing to grab it at revenue.
5:13
[SPEAKER_02]: That's the path that creates like a long-term stable consistency.
5:20
[SPEAKER_02]: And even from just looking at your projections, like looking at where am I going to be at the end of the year?
5:26
[SPEAKER_02]: You know, when you have people on terms and agreements,
5:30
[SPEAKER_02]: you have the ability to kind of forecast what the business is going to do, you know, by the end of the year.
5:35
[SPEAKER_02]: Yeah.
5:35
[SPEAKER_02]: And there's there's something to be said about that just that ability as opposed to, and I understand him whenever it was work with a Jim owner yesterday who's coming on with our springboard, he's selling packages.
5:45
[SPEAKER_02]: You know, he's selling up to 30 sessions at a time.
5:48
[SPEAKER_02]: But.
5:49
[SPEAKER_02]: that business is so dependent upon the resale, right?
5:52
[SPEAKER_02]: Every month, he's got to be thinking about sales as like a big portion of the responsibility of what he's got to get done, that the delivery has to take a hit.
6:01
[SPEAKER_02]: You know, the retention might become an issue.
6:04
[SPEAKER_02]: All of that type of stuff that comes with just having to resell to your client, all of the time, just for the main thing, right?
6:11
[SPEAKER_02]: Good luck getting ancillary sales, good luck getting, you know, supplement packages or stretch therapy, additional profit centers, you know, with that sale, because you're still, you still gonna sell in the membership of the training on top of it every single.
6:23
[SPEAKER_01]: Yeah, once, and you look, the selling of packages has been around since the beginning of time with personal charging.
6:30
[SPEAKER_01]: I was like, you know, you had a gym membership, and then you'd just buy these packages.
6:33
[SPEAKER_01]: It'd be 10, 12, 15, and it was so funny because,
6:37
[SPEAKER_01]: The more you bought, the less it was procession, it's like, well, what's your rate?
6:40
[SPEAKER_01]: Is it this or is it that?
6:41
[SPEAKER_01]: Well, when you buy more, you get a little bit of a bulk discount.
6:44
[SPEAKER_01]: Okay.
6:44
[SPEAKER_01]: Well, what are you doing there?
6:46
[SPEAKER_01]: What are you telling the consumer?
6:48
[SPEAKER_01]: Are you telling the consumer that it's worth worth worth what you're selling it for?
6:52
[SPEAKER_01]: Because you'll give them a discount.
6:54
[SPEAKER_01]: That's one thing.
6:54
[SPEAKER_01]: Sure.
6:55
[SPEAKER_01]: And look, I understand the dopamine hit of seeing a $15,000 injection.
7:00
[SPEAKER_01]: I know it.
7:00
[SPEAKER_01]: I've had it.
7:01
[SPEAKER_01]: I, you know, it's cool.
7:02
[SPEAKER_01]: I get it.
7:04
[SPEAKER_01]: But that one set wears off and usually it's you know, this this 60 day lag where it's like oh crap.
7:10
[SPEAKER_01]: I got to do it again.
7:11
[SPEAKER_01]: I got to do it again.
7:12
[SPEAKER_01]: I look at Jim owner's numbers all the time and sometimes it's like glaring.
7:17
[SPEAKER_01]: I can see a $20,000 drop month over month.
7:20
[SPEAKER_01]: And you go back and say, well, what what happened?
7:22
[SPEAKER_01]: Did you lose X amount of people in one month and they just didn't build an X month?
7:27
[SPEAKER_01]: Well, no, those were paid in fulls that renewed or no, we sold the one time high ticket thing and he kind of like, well, what if you didn't do that?
7:36
[SPEAKER_01]: What if you just took those people and put them in recurring and you just grew, yeah, your big chunks would go down.
7:42
[SPEAKER_01]: But what would have was, here's like literally year over year, this happens like all the time.
7:50
[SPEAKER_01]: You'll have you, let's just say year one, you're doing patent foles, packages, you're not really focusing on recurring, you have a little recurring base.
7:57
[SPEAKER_01]: Let's say recurring base is 10,000 and then, you know, let's say it's 30,000 so I can use better numbers.
8:03
[SPEAKER_01]: Say you're recurring base is 30,000, but then like in, you're
8:07
[SPEAKER_01]: January you have a $50,000 month and then February it's 40, then you're back to 30, 30, 28, you lost some people and then it's like a $50,000 month and then like a $30,000 and then 60 and then 30.
8:23
[SPEAKER_01]: Then the next year you say, hey, you know what, we're going to get all these people from Peyton Fools when they when they expire, we're just going to sell them into membership.
8:32
[SPEAKER_01]: So then your month start becoming like 38 and then 44 and then 39 and then 37 and then 42 and then
8:50
[SPEAKER_01]: And then by the end of the year, you're doing your highest months, every month, every month.
8:54
[SPEAKER_01]: Then you were doing those every other third or fourth months.
8:57
[SPEAKER_01]: It's just, it takes time, though, guys, because those people got to come off of this paid and falls instead of selling them to another one.
9:05
[SPEAKER_01]: You do a, you do recurring and then all the people in between.
9:07
[SPEAKER_01]: And then by the time you fast forth three years down the road,
9:13
[SPEAKER_01]: All of your months are at 65 or 72, and that's just there.
9:17
[SPEAKER_01]: And you're not seeing these huge spikes like 55, 30, 47, 28, you know, that, and that's the reality.
9:24
[SPEAKER_01]: It is.
9:25
[SPEAKER_02]: And in part of it comes back to like the average, you know, I think it's real great to have those months.
9:30
[SPEAKER_02]: But if you take your average revenue, you know, divide, take the whole year, divide it up by 12.
9:35
[SPEAKER_02]: What is your average revenue per month?
9:37
[SPEAKER_02]: It's probably going to be less than what you can build.
9:39
[SPEAKER_02]: I know it's going to be less than what you can
9:42
[SPEAKER_02]: And it reminds me of the old penny double every day, or the penny doubled analogy, where that is the benefit that this industry has.
9:52
[SPEAKER_02]: One of few things that other industries want, that we have, and like you said, we kind of piss it away sometimes, because why, I don't know, I mean, obviously feels good to have that dope, I mean, dumped a big ticket sale for the one month, but
10:07
[SPEAKER_02]: It comes with the work on the back end.
10:09
[SPEAKER_01]: Well, resell what it does is it, um, you're treading water, treading water, you get a $15,000 injection now you're in the boat.
10:17
[SPEAKER_01]: Now you're floating, you don't, you're not struggling anymore.
10:19
[SPEAKER_01]: And then all of a sudden that hole in the boat starts to fill up and you're back in the water again.
10:23
[SPEAKER_01]: You're treading water and then you get a 15, they get, they get a jump back in a new boat.
10:26
[SPEAKER_01]: That's got holes in that one too.
10:28
[SPEAKER_01]: Versus.
10:30
[SPEAKER_01]: You know, just get out of the boat and get on to a raft and now you're not treading water, but you're not killing it, but you're you're floating, you're not treading, right?
10:39
[SPEAKER_01]: And that's the difference.
10:40
[SPEAKER_01]: And it's weird to put all this into analogies, but the reason Jim owners do these things, these
10:47
[SPEAKER_01]: I haven't made a comment in a day.
10:49
[SPEAKER_01]: What is high ticket?
10:50
[SPEAKER_01]: What does it even mean?
10:52
[SPEAKER_01]: But like you do these paid-in-fold deals is because your recurring revenue is not at base operating expenses.
10:58
[SPEAKER_01]: If it were, or if it exceeds your expenses, you wouldn't be doing these things.
11:03
[SPEAKER_01]: The only reason you do them is because out of necessity.
11:06
[SPEAKER_02]: Like, I gotta get ahead.
11:08
[SPEAKER_02]: More desperation.
11:09
[SPEAKER_01]: That's it.
11:10
[SPEAKER_01]: I got to get ahead.
11:11
[SPEAKER_01]: I got to get in this little boat.
11:12
[SPEAKER_01]: It's got holes in it, but like at least I'm floating for a month or two.
11:15
[SPEAKER_02]: Yeah, but you know, we know it to be at the expensive of the future.
11:19
[SPEAKER_02]: You know, it goes back to like,
11:23
[SPEAKER_02]: You know, Parkinson's law, you know, you put that money in the bank account, you're going to find a way to spend it, you know, it's not like it's sitting in a drip account in your paying the expenses while you're servicing that client over the long haul.
11:33
[SPEAKER_01]: It just doesn't happen.
11:35
[SPEAKER_01]: I said that.
11:35
[SPEAKER_01]: I said that on stage.
11:36
[SPEAKER_01]: Yeah, never in the history of drip accounts is anybody actually put that money into a drip account.
11:41
[SPEAKER_01]: They all say they're going to do it.
11:42
[SPEAKER_02]: Well, with the best of intentions, right?
11:44
[SPEAKER_01]: But I don't never do like, look, guys, it's weird.
11:48
[SPEAKER_01]: It's boring.
11:48
[SPEAKER_01]: It's the 20 mile march, but when you, when you focus on recurring revenue, and just like I said, it's going to take time.
11:54
[SPEAKER_01]: But when you just grow your Delta month over, 1200, 4000, 3000, maybe take a loss in the summer for a couple of months, then you're back.
12:03
[SPEAKER_01]: What happens is at the end of the year, all of your Delta's positive and negative equals some number.
12:10
[SPEAKER_01]: And let's just say it's 10 grand.
12:12
[SPEAKER_01]: Well, that 10 grand goes into January and that 10 grand goes into February next year.
12:16
[SPEAKER_01]: And then you just keep growing on it and you're going to do several hundred thousand multiple six figures more.
12:23
[SPEAKER_01]: year over, but it's not a fixed today.
12:26
[SPEAKER_01]: That's the, that's the problem.
12:27
[SPEAKER_01]: That's the, that's the struggle that like if we're being honest, a profit that reason that Jim's struggle to jump on board with us, it's not a quick fix.
12:35
[SPEAKER_01]: They need now.
12:36
[SPEAKER_01]: Sure.
12:37
[SPEAKER_01]: But the ones that do,
12:39
[SPEAKER_01]: exponentially grow their business until record breaking months and years over the long term.
12:43
[SPEAKER_01]: If you want to play the long game, you jump in with profit because we are the long game gym coaches.
12:49
[SPEAKER_01]: Like we focus on systems and long-term growth, not a $50,000 month and then a zero month.
12:57
[SPEAKER_02]: And I mean, just speaking in some of those numbers, one of our iron circle clients to start with coaching with us about two years ago.
13:03
[SPEAKER_02]: I mean, she was under 200,000 gross revenue for the year, you know, this year in two years, she's going to be doing about 500,000.
13:09
[SPEAKER_02]: Yeah.
13:10
[SPEAKER_02]: And it was nothing more than just creating that system adhering to that play and just sticking with it, right?
13:19
[SPEAKER_02]: But that there was members that she has aren't coming and going.
13:22
[SPEAKER_02]: They're not, it's not cyclical buying cycle.
13:25
[SPEAKER_02]: It's the try and true membership and then every every bit of her attention that goes to adding to that is just building that number and building that number her whole life is different Of course, all right, and that's the thing is it's creates stability it creates the consistency You can then focus a lot more and actually delivering and retaining your clients because it's not reselling everybody every 30 60, you know 12 weeks 16 weeks whatever the hell, you know it equates to
13:55
[SPEAKER_02]: You've got the thing that everybody wants in this with the recurring model, don't squander it.
14:04
[SPEAKER_02]: Don't squander it.
14:05
[SPEAKER_01]: Yeah.
14:07
[SPEAKER_01]: That's it.
14:07
[SPEAKER_01]: That's the hell.
14:08
[SPEAKER_01]: I'm going to die on.
14:09
[SPEAKER_01]: It's that Delta.
14:10
[SPEAKER_01]: It's something that's so simple to focus on, but easy to disregard.
14:15
[SPEAKER_01]: Because you've got somebody wanting to throw money.
14:17
[SPEAKER_01]: You know, here's the thing I will say.
14:20
[SPEAKER_01]: if somebody won't sign up with you for unless you do a paid in full then take the money like I'm not stupid yeah take the money and but don't discount it I had that conversation many many many many years ago do you offer a discount in uh... if we if we pay in cash or pay in full
14:41
[SPEAKER_01]: The answers, no, I don't, I don't, we don't this count.
14:43
[SPEAKER_01]: I'm not going to do that.
14:44
[SPEAKER_01]: I'd rather have you runfully, you know, if you won't sign up, otherwise I'm going to take, oh, absolutely, so you're paid in full, but we're not in a discount.
14:52
[SPEAKER_01]: This is a value of the membership.
14:53
[SPEAKER_01]: Yeah, and they usually say, oh, yeah, make sense.
14:56
[SPEAKER_02]: Because you know what it does to, it does show that you was a gym owner value the service that you're bringing to the table.
15:01
[SPEAKER_02]: You're not willing to discount it, right?
15:03
[SPEAKER_02]: Like, hey, I respect everybody walking through this door.
15:06
[SPEAKER_02]: I'm not going to give you a discount because the value of what we bring to the table is this.
15:10
[SPEAKER_02]: right it's was priced according to that and I one of the big kind of overarching beliefs I think is it it also shifts the mindset of your business to more of a relational business as opposed to transaction.
15:24
[SPEAKER_02]: And I know a lot of Jim owners you know struggle because it's a it's a
15:31
[SPEAKER_02]: You know, cyclical situation where if you focus on building those relationships and and again, even there's so much that goes into this right like even the acquisition of a lifestyle client versus a short term transformational client right like all of this caters to building that monthly recurring revenue.
15:49
[SPEAKER_02]: in a way that he was the gym wins in the long haul.
15:52
[SPEAKER_01]: Yeah, absolutely, absolutely.
15:54
[SPEAKER_01]: So listen guys, have it for winning gyms, protect recurring revenue 100% guys.
16:00
[SPEAKER_01]: If you need help with anything, link will be in the show notes.
16:02
[SPEAKER_01]: That's it for this episode.
16:04
[SPEAKER_01]: Continue on for the next habits.
16:06
[SPEAKER_01]: We'll see you on the next show.
16:09
[SPEAKER_01]: Alright, thanks for listening to another episode of the built-grilled podcast.
16:12
[SPEAKER_01]: If you want more help growing your business, join our free Facebook group, Profit Accelerator, helping training Jim's grow to $30,000 a month and beyond.
16:21
[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.