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The Race to the Bottom: How to Set Your Gym Apart From Competitors

A smiling gym owner and the words "how to set your gym apart from the competition."

Mike Warkentin (00:02):
Are you in a race to the bottom of the fitness industry? Now, I know you just said no in your head because I said it too, but the fact is I was racing to the bottom of the fitness industry, and I didn’t even know it until a mentor explained what it means. So, I’ve got today Two-Brain founder and CEO Chris Cooper to help us figure out how to rise to the top of the fitness industry. This is “Run a Profitable Gym.” I’m your host, Mike Warkentin. Please hit “subscribe” wherever you are watching or listening, so you don’t miss a show just like this. Now, Chris, welcome to the show. I’ve got to know, what does it mean to race to the bottom of the fitness industry, and how did it affect me when I thought I was doing such a great job, yet I was not doing that at all? What are we doing here?

Chris Cooper (00:39):
When we say racing to the bottom, what we’re really talking about is the client’s perception of value. So, the easiest way to explain it is with a product. So, let’s say that you are buying this fork from Amazon, and today this fork might cost you 40 cents. And then tomorrow, you see another ad for a fork that costs 38 cents. And then it becomes this downward spiral to the bottom, and we call this commoditization. People who are looking at the forks on Amazon can’t tell the difference between the forks. The only thing that makes them look different is the price. And so, obviously we’re going to choose the lowest price option. And so, what happens over time is that the margin gets thinner and thinner and thinner until somebody folds, somebody goes out of business. And if you’ve ever followed the Walmart story, Walmart has done this to a number of companies, including Vlasic Pickles, including Rally bicycles or Schwinn bicycles, like they bankrupt these companies because the company keeps saying, “Oh, we’re going to sell it for less, but we’re going to make it up in volume.” And so, their margin gets thinner and thinner and thinner. And unfortunately, we’re really seeing that in the fitness industry right now, especially with group coaching. We used to see that in the fitness industry with gym memberships where I would price mine a dollar less than you and just get you to sign up on a long-term contract. And now we’re seeing it more than ever, especially with group coaching.

Mike Warkentin (02:00):
So I thought I was building value, like I thought I was doing this great job. I was staying extra, giving people extra instruction, doing all these things that I thought were building value, but I don’t think I was actually doing it. So, what are some of the common things that gym owners think build value, but maybe don’t at all and push them into this commoditization problem?

Chris Cooper (02:18):
Well, we fool ourselves because we don’t understand what the clients actually value. And so, either we project what we value—certifications or master’s degrees, or whatever, or a certain equipment maybe, or we have extra space, or we have this great community. We value those things because we’re on the inside. We know all about fitness; we’re already experts, and so we think that our clients value the same things, and they don’t. In fact, from the outside looking in, a client can’t tell you what the difference is between two certifications. And a client, if you took the brand off your website, they probably couldn’t tell the difference between your CrossFit gym or your Fit Body Bootcamp or the F45 down the street or even Orangetheory. And so, when they can’t tell the difference on something, it becomes a commodity in their head, and they’re going to choose the only differentiator they know, which is price, which means that boxes just keep pricing themselves lower and lower, and they are racing to the bottom and then dying.

Mike Warkentin (03:13):
I survived this mistake because when I started making it, it was like 2010, and there were maybe two gyms that were doing what I was doing. So, I was able to get away with a lot of mistakes because it was a city of like 800,000, 2 gyms, and you either go to that one or mine, and it didn’t really matter what we did at that point. So, what’s causing this trend now? Why is this showing up, and why is this becoming an increasing problem in the coaching business?

Chris Cooper (03:35):
Well, when you and I opened our gyms in 2008, and we were both CrossFit affiliates, we were the first to market. And so, we captured all these early adopters: firefighters, military people at my gym. A lot of women who had done P90X for example or Beachbody I think it was called, and now they wanted to try the next thing, right? So, they’d all come in and they would try CrossFit with me. And so, it felt really easy. Like we didn’t have to do marketing; we didn’t have to do lead gen. The leads were already being generated because they were just interested in novelty, and we didn’t really understand that. Like these early adopters are always looking for the new thing. And so, they’re not going to stick around for very long.

Chris Cooper (04:14):
And by now, 15 years later in North America, those early adopters are long gone, or they’ve opened up their own CrossFit gyms, or they founded their own F45s. And you are starting to see this cycle repeat itself. So, three years ago, if you opened up a CrossFit gym in Stockholm, let’s say, you would have a big influx of new people, and you’d feel like “I know a lot about business; I’m successful.” And they were the early adopters. Now, if you’re just running the same group classes as everybody else, you’re starting to see this commoditization problem. And if you look at, you’re heading east, you look at Switzerland, Germany, Spain, France, you’re seeing gyms open up in those markets. And I’m not just picking on CrossFit here, but CrossFit gyms are exploding in those markets. They open their doors, and they immediately have 30 clients on day one and a hundred clients at the end of day 90.

Chris Cooper (05:05):
And then they have 300 clients their first year. And they think like, “Wow, I get it. I know this business.” But if they carefully look at the history, they’ll see this cycle repeating themselves, and they should be setting them up against this commoditization problem that’s sure to follow. And it’s killed tens of thousands of small gyms. And it’s across the board, like it’s FitBody Bootcamps, the F45s, CrossFit—these all have high churn, and it’s mostly because of this commoditization effect, and they’re racing to the bottom on pricing. I can remember even four years ago a gym in Atlanta telling me that you can’t sell CrossFit for more than $79 a month in Atlanta. But some did, and there was this small group of independent gym owners, they were all CrossFit affiliates. They came to Two-Brain, they changed their rates, and they were selling CrossFit at like $200 to $250 a month in the same market as these gyms selling it for $79. And the difference, the primary difference, is they understood their value, and they understood how to teach clients how to differentiate them from everybody else. And those are really the keys. That’s what stops the race to the bottom.

Mike Warkentin (06:12):
I was really scared when more CrossFit gyms came into the market, right? Because you’re like, “Oh, there’s two, now there’s seven, now there’s eight, now there’s nine.” I started to get really panicky about that, and that was like a really stressful time for me. I got even more stressed when I started to see the Orangetheories and the big franchise corporate ones show up because they were kind of doing the same thing that I was doing, but they had better marketing, they had better systems, they had cooler stuff, they had more equipment, they were cleaner, and I was like, “How do I compete on this?” And I got really nervous. And that’s kind of about the time that I hooked up with you and Two-Brain because I needed to figure out, “What am I actually doing here?” So, the question I’ll ask you, Chris, is if you’re an independent functional fitness gym or CrossFit affiliate or any of those things, what are you actually selling? Like a lot of us thought, like I thought it was my program. I’m like, “You’re going to do Fran,” and that’s what I’m selling, but when I saw someone else doing thrushes and pull-ups and maybe not calling it Fran, I was like, “I can’t compete with this.” So, what are people selling?

Chris Cooper (07:05):
There’s always somebody who can starve for longer than you can. What we’re actually selling is coaching, and coaching is more than programming. Programming is the workout that you put up for your group classes every day. And if that’s all that you’re selling, like if that’s what people can buy from you is group class programming, they are going to be jumping around between you, F45, the HIIT gym down the street because they don’t understand the value of coaching and you have to show it to them. So, the number one step is you need to talk to clients the first time they come in the door. You need to sit down with them and ask them about their goals, and then be a good enough coach to map out, “Here’s what it’s going to take to get there,” not “Here’s what we have to sell,” or “Here’s a free trial,” or “Here’s a sample of what we have. Come and try it for a week and tell us if you like it,” because all that does is it exaggerates the commoditization effect. You’re offering them a free trial. They can’t wait to get bored and try the next thing. So, the very first thing that you need to do—

Mike Warkentin (08:04):
But you can’t show them a fork, right? To go back to your analogy, you can’t just show them a fork. It’s $100, right? Because they’re like, “I can get that fork for 40 cents,” like you said. So, you actually have to show them, you have to educate the market to know what you are actually providing. And it’s not just the fork; it’s how to use the fork and get the food in your mouth to get the results that you want. Is that accurate?

Chris Cooper (08:26):
Yeah, man. And there’s some steps to doing that, but the first step in person with the client is not a free trial because that’s just—

Mike Warkentin (08:34):
That’s using the fork.

Chris Cooper (08:35):
Exactly. Yeah. It’s like, “Here’s the fork. Do you want to buy it?” And I did this for the first five years. It was like, “Come in on Saturday. We have this free community WAD, and come in with your friend.” And they would come in and try it, and then I’d go stand at the desk like this waiting for them to come over and be like, “I can’t wait to join. Here’s my credit card.” Like that doesn’t happen. Instead, and we were doing this with our personal training clients at the time, is you sit down with them, you talk to them about their goals, you draw like, “OK, here’s your goal. Here’s where you are. Here’s the journey it’s going to take to get there.” And then you say, “Would you be more comfortable doing the workout portion in a small group setting or one-on-one with me?”

Chris Cooper (09:15):
And they’ll tell you. And then from there you can build your own prescriptive model, and you can decide what services that you need to sell because the clients are going to tell you what they value. It’s not the programming you have. It’s not 2007 anymore. It’s not the community, the smiling faces that they see on their website. Nobody is out googling “best community in Sault St. Marie.” What they’re buying is like their individual goal and the benefits or your coaching to get them to that goal. They’re buying your solution to their problem. They’re not buying the next thing in fitness. If that’s what’s dragging them in, they want to try the new thing, they’re going to try the next new thing three months from now too. They’ll be gone.

Mike Warkentin (09:55):
So the prescriptive model, that’s what Chris just explained. You ask about goals, you give them a prescription, there’s a lot of steps in there. I’m going to put a link in the show notes to an article that will lead you step by step, how to use this thing to build value when you talk to new clients and when you work to retain your current clients. So, the link will be in the show notes for you. But Chris, here’s an interesting thing. You’ve mentioned the value of coaching a bunch of times. There’s a missing link between the value of coaching and the client’s perception of that value. Because I thought forever that if I was the best coach, everyone would just regard me as the best coach, and they would run over, like you said, and throw their money at me because I had so many certifications, so many credentials, and I was so good at it. What’s missing there? Because it didn’t happen like that.

Chris Cooper (10:33):
Well, it is that the client can’t tell the difference. And to be honest, it’s a fallacy that the more certified you are, the better coach you are for every single client. What I would challenge you to do is walk into any gym—let’s use CrossFit because we’re really familiar with their certification levels—walk into any CrossFit gym and go to a different class every day for a week. And at the end of the week, write down the coach’s name and what credential you think they have. Like there’s no way you’re going to say, “Well that guy clearly has his Level 4, and Mike clearly has his Level 2, but Chris only has his Level 1.” And the reality is that what actually provides value to the client might be enhanced by the credential, but that’s not the value.

Chris Cooper (11:18):
You know, when I was struggling to get clients from my personal training business, when I first started back in 2001, I said, “I’m going to go get my master’s degree.” And an instructor at the local university said, “For what? How is this going to possibly make you more money?” And he was right. Like, that’s not it. That’s not what brings the client value. So, the other thing is equipment, and selling access is a completely different story. You need to know what brings the client value, and you are a bad guess of that. So, you need to sit down at a No Sweat Intro and say, “What is your goal?” And then you need to tailor your service to getting the client to that goal. Now that’s not to say you shouldn’t use group classes. Group classes can be awesome. The majority of the people in your gym will probably want to do their workouts in a group, but not on the first day. Not when they’re nervous, not when they’re debating. And it shouldn’t be your only option. You should have a one-on-one option. And more and more of us are doing semi-private or small group options too.

Mike Warkentin (12:18):
Now, you’re seeing stuff that’s different than a lot of other groups are saying, right? So, I hear a lot of times when I go online or look on social media, “Oh, get more credentials, do more stuff, build value. You need to have more credentials to be a better coach.” What are you seeing? Like what kind of data have you got that gives you this position, and who benefits from the other position?

Chris Cooper (12:38):
Well, we have a ton of data. We have the biggest data set in the world. We publish a report for free every year with 15,000 gyms called the “State of the Industry.” And what we see from that is that there’s a certain breakdown of client retention. So, client retention is one really important metric that can show you the difference between a prescriptive model or just selling a commodity big group class that looks the same as everybody else. So, number one, retention in the average Two-Brain gym is about 21 months. Now, there are people listening to this right now who say, “Oh, my retention is five years.” If you think that your retention is five years, you have a problem because you’re either not measuring your retention, or you’re not getting any new customers in, and you haven’t had any new customers in five years because that pulls your average down. When you’re just selling these big group models where people come in, they do group workouts, and that’s the option, you’re churning out a client in just under eight months.

Chris Cooper (13:35):
So what happens is that every eight months, you have to replace every client that you have, and you become this high churn marketing machine where you’re thinking about marketing, marketing, marketing all the time because you have to constantly get more and more clients in. And what makes it even worse is that when you’re running these big group models, you have to have a lot of space. So, your overhead is bananas. And so, if you aren’t getting a new client every single day, well you’re underwater, and that’s what’s causing these big problems and these boxes to fail. So why is this message out there? Like why do you see F45, Fit Body Bootcamp, CrossFit actively promoting these big group models? “Don’t have an on-ramp. Don’t do one-on-one. Don’t do semi-private. Don’t do small group.” And that’s because the model benefits them. If you think about—like somebody goes into a F45 gym, they try it, they love it, “I want to own this franchise.”

Chris Cooper (14:29):
That’s where the new F 45 gyms come from. If you look back in the history of CrossFit, where do all the CrossFit affiliates come from? From existing affiliates. And so, you see this big group model, you’ve got 10% of the people in that gym who are interested enough that they might want to go get their L1. Wonderful. They go get their L1. That benefits HQ; it might benefit the affiliate because the affiliate might get more coaches out of it, but then they find out, “Oh well, there’s 12 coaches here already. How am I ever going to make a living here? How can I make a full-time living? The owner isn’t even making a full-time living. I’m going to go start my own box.” Well, again, that benefits HQ. That does not benefit the individual affiliate because now you’ve got two people in the market who are both doing commodity pricing, and the race to the bottom speeds up and up and up.

Chris Cooper (15:15):
And so, you constantly have to be looking at, “What is the message that’s being given to me by my franchisor, my license, or my affiliate provider, and who does that message benefit? Does it benefit me, the affiliate owner, or does it benefit them, the company that’s making the money from the model?” And that’s why this myth of “We need to have big group training, or CrossFit is big group training,” like that’s why these myths keep getting perpetuated not because they benefit the individual gym owner; they benefit the person that’s selling the certifications and the licenses or the franchises.

Mike Warkentin (15:51):
And it’s hard, like from ground level, I needed 6,000 square feet at my gym for my 5 p.m. class only. But I had it for the other 23 hours a day, and it was never full. And that was bad because then when I started, I’m like, “OK, I’ve got to pay. I’ve got to get more revenue.” I look for more clients. We get more clients. They all come at 5 p.m. All of a sudden, I’ve got this gigantic 5 p.m. group that’s completely unmanageable, and I can’t even coach anymore, right? It’s just crowd control—you’re just like, “Don’t trip over that. Don’t do the snatch over there, over the guy doing pushups.” Like it’s crowd control. And that one class kind of devalues the coaching that I was selling. Then in the other hours of the day I’d be coaching—when I say coaching, what I mean is personal training two or three people in a group class.

Chris Cooper (16:34):
For $16, right?

Mike Warkentin (16:36):
Like I was losing money on those classes. The clients were getting incredible value there, and they knew it even though I didn’t; they figured that out. Because, like, “If I come to the 8 a.m. class, I get Mike one on one,” right? Like the same thing happened to you where people are like, “Hey Chris, are you coaching the 10 a.m. tomorrow?” And you’re like, “Yeah, just for you. It’s $7,” right? So that big group model, like, I mean, I interviewed recently Sarah Snellman over in Switzerland. She’s doing this. She’s got a big group model, but she’s like the only one that I’ve spoken to in a really long time. And it’s exactly like you said: She’s in that European market where it’s still a little bit early. She’s a great business owner, she’s got an amazing gym that’s just systems across the board.

Mike Warkentin (17:15):
But that didn’t work for me after like 2011 here in North America. It just didn’t go. And I got into such a bad spot because I had to keep trying to fill these classes, but I couldn’t fill the hours that, you know, the 10 a.m. slots, and it was a really, really big problem. Talk to me a little bit about how do we fix some of the errors. Like you talked about the Rx model to establish value. How do you establish value even before someone comes to your gym? And then how do you keep building value every single day for your current clients outside of that initial first prescription?

Chris Cooper (17:48):
Well a lot of that is the media that you produce. I mean, you and I both worked in CrossFit, so we’re going to refer to the CrossFit example again. But the bottom line is you have to either be expensive or be free. And so, you want to be publishing content every single day.

Mike Warkentin (18:04):
What do you mean by that? Expensive or be free. Tell people what that means because sometimes people don’t get that one.

Chris Cooper (18:08):
Yeah, yeah. So, 95% of the work that I produce is free. This podcast, the books are as cheap as I can make them. I don’t make any money from books. We publish a blog every day. We’ve done that since June 12th, 2009. We publish YouTube videos twice a week. All of that is free, and it’s helpful information. The mentorship program by comparison is expensive. And that’s because that’s coaching, right? Knowledge is not enough to get people to the result. I wish it was. If that was the case, we’d just be selling courses and books. But the reality is that I sell coaching, you sell coaching, and everybody listening to this sells coaching. And so, what you want to do is be publishing, as often as you can, free information to help get people fit. Maybe it will help them get started on their own.

Chris Cooper (18:56):
Maybe it will inspire them to start, or maybe it’ll be mean that you have a better local brand. So, when the time is right for them to start at a gym, it’s going to be your gym. And that’s why Catalyst, which is going to turn 20 next year, is still not doing a lot of paid ads or any other type of marketing because we’ve been publishing free content for so long that when people are ready to start their fitness journey, they start with us. Two years later, they might be somewhere else, they might be riding bikes, they might be starting their own gym or selling personal training out of their garage. Wonderful. Mission accomplished, but they start with us. The gym stays busy, we have full-time staff and yeah, the rest of it.

Mike Warkentin (19:34):
OK, so if people are out there today and they want to start establishing value and stop racing towards the bottom of the industry, they’re going to do it by giving away free stuff and lots of it on their social media platforms, their blog, their podcasts, their YouTube channel, whatever they’ve got, and the idea there is they’re just defining their business and branding and saying, “Here’s what we do, and here’s why we do it, and here’s who we help, and here are some results and social proof and my happy clients.” Is that a decent summary of how they could start today?

Chris Cooper (20:00):
Definitely. We make it look good, and that intimidates a lot of people. And I think the reality is though, that all you have to do is a five-minute voice recording podcast twice a week to get started or you write a blog, and you and I are not big fans of AI, but if that’s what it takes to get started, then you start with that, and you use it if you need it. And the other thing is too, you can be highlighting how great your coaches are. Like I’d never ever want to say it’s OK to have a bad product or that your coaches should stop trying to be better. Having good coaching, a good product is necessary but insufficient for growth. So, you think about your coaching, having good coaching is a retention metric though.

Chris Cooper (20:45):
You can’t tell people we have better coaching than anybody else; that won’t sell them on anything. What sells them is showing that you have good coaching by bringing them in, sitting them down, having a conversation about their goals, telling them the best way to get there, and then meeting them again in three months and measuring their progress, and then changing that prescription if you need to. And you can do that in any kind of gym. You can do that in yoga, you can do that in barre, you can do that in Pilates, you can do that in spin class, you can do that in CrossFit, you can do that in F45. In fact, we work with some FitBody Bootcamps, we work with some F45s too. And sometimes what you get is the headquarters of these franchises, they start paying attention to what that affiliate’s doing.

Chris Cooper (21:26):
What are you doing with Two-Brain? Rx model? What’s that? Oh, you want to try selling personal training? Let us know how that goes, and then the smart franchisers say, “Holy crap, that’s working.” And they just onboard that system for everybody else. And you are starting to see that with FitBody Bootcamp, but other franchises, they don’t do that. You know, “It’s our way or the highway. We’re going to tell you you run classes; you don’t sell personal training. This is it.” And that’s why you see such a high churn, like 50% going out of business.

Mike Warkentin (21:53):
Yeah. And there’s nothing wrong with saying, “I have great coaches, or my coaches have credentials, and they’re experienced,” but there’s that second—there’s that link that you just laid out where it’s like, “My coaches have great credentials, and that means they’re going to be able to help you lose weight faster. They’ve done it with these 60 people on the wall behind me. We’ve lost 1,400 pounds in total,” or whatever it is. Because I see people saying, “We all have these credentials.” It’s like no one really cares what a CSCS is outside of the CSCS club, right? Like no one cares. I think you had it right. You got rid of it, did you not?

Chris Cooper (22:25):
Yeah, I did. And I was even like an exam proctor for ISSA for a while. And so, my business card had like alphabet soup, 25 letters at the bottom, and people would look at that and say, “That’s got nothing to do with me. How’s that solve my problem?”

Mike Warkentin (22:37):
And I’m not slamming any certifier out there because they’re all—like, all the education and professional development you get is very helpful, but it’s not helpful to bulk up your business card, which we thought it was, right? It’s like a Level 2, 3, 4, 5, 6, 7, you tack all this stuff on. No one cares about that. All they want to know is “Can you help me lose weight for the wedding?” or “Can you help me get stronger to pick up my grandkids?” And if you can do that, it doesn’t matter if you have a Level 6 or a Level 2 or whatever it is, it just matters that you can get the results. And so that’s where people miss that step: “I have these credentials, and I can help you get the results you want. And here’s the proof.” And that’s a really interesting way where I see some of these pictures of Two-Brain gyms with No Sweat Intros rooms, and they’re doing these free consultations in these rooms that have literally wall to wall images of their client’s first pull up, lost 30 pounds, accomplished my goal, high fiving it.

Mike Warkentin (23:21):
So, when someone says, “I don’t know if this is for me,” they’re saying, “You wanted to get your first pull up. There’s seven people right there who just did that. Why wouldn’t this work for you?” And that’s where the coaching and the value starts to be built. You touched on something, I want you to dig into it just a little bit further, establishing value for current clients. So, you went back to the prescriptive model and talked about this cycle saying, “Here’s how far we’ve gone. Here’s where you want to go. Here’s the progress we’ve made. Here’s what we’re going to do to make faster progress.” Dig into that just a touch so that people understand that you are building value for clients every single day and every single interaction. It’s not just a one and done thing after that first consultation.

Chris Cooper (24:02):
Yeah, so, as Brian Bott tells all of his clients, “The best program I’m going to write for you is the second program.” And what happens is it’s like buying a new rifle. You buy a rifle, and you think like, “Oh this rifle’s going to help me shoot straighter,” but you’re still going to have to sight it in. And so, nobody is under the impression that every program is the best. What you actually do to build value over time with your clients is you continually refine. So, you meet with your client, you make a prescription, “OK, I think on-ramp is best for you.” “OK.” They come back in three weeks, you have another consultation, it’s called a goal review, nd you say, “OK, now I think—like this program is going to be four days a week, two days of zone two aerobic, two days of high intensity interval training and weights is best for you.”

Chris Cooper (24:52):
“Do you want to do this in a small group setting, or do you want to do this one-on-one with me?” And then three months later you meet up again and you’re like, “OK, things are going well. Your body fat percentage is improving, but not as fast as I’d like. Your strength is going up, your performance is great, but I know your goal is to fit into that bathing suit. I would like to add another day per week of zone two, and I think it’s time to talk about your nutrition.” They might go for all of that depending on their budget and their time. But more than anything else, they know that the true cost of quitting is starting over with somebody else. Think about going to your doctor. and the doctor is trying to get the right prescription and the right dosage for your medication.

Chris Cooper (25:31):
Well, maybe they don’t get it right the first time. And so, you go back to the doctor and they’re like, “OK, let’s raise the dosage a little bit. OK?” And you come back in two weeks and it’s like, “OK, well it’s going pretty well, but it’s making you groggy. Alright, well, let’s try taking it every 30 hours instead of every 24 hours.” And the longer you spend with this doctor, the more dialed in your prescription gets, the less likely you are to seek a second opinion and go find another doctor because you’ve got all this time invested in finding the right answer with them. And a lot of coaches are scared like, “Oh, if I don’t get the answer right, what are they paying me for?” No client expects you to have the perfect program right out of the gate if you demonstrate value by consistently showing them refinements to the program or “Hey, you’ve made great progress on this, but now it’s time to go to another level.” They’re just going to trust you more and more and more. Like there’s a reason that I’ve had the same cycling coach for four years. He’s got all of my data. He knows where I’m at and what I should be doing for the next three months.

Mike Warkentin (26:28):
If you establish value for clients every single day, your retention’s going to go up. And if you use this process, you’re going to sell more. Every time I have a gym owner on the show, and I ask them about the prescriptive model, they talk to me about these goal review sessions and how it’s the perfect time to say, “We can make faster progress with something else.” And it’s usually one extra PT session, three extra PT sessions, switching to one-on-one coaching, adding nutrition coaching. All of these take average revenue per member from in that 150 to 205 range into the $300 range, which is life changing for these gym owners. So, Chris, that’s an important thing that I want you to explain to people. When you start selling coaching and building value and separating yourself from the high intensity commoditization, what does that do for your client focus and the avatar of the person that you’re trying to get? Like you’re not looking for every single person who can afford 29.95 a month. You’re looking for something else. What is it?

Chris Cooper (27:20):
Well, over time you start to identify who your ideal client is because they’ll tell you, number one, and number two, you’ll start to see these recurring patterns. So, you’ll say, “OK, we brought these five people in.” At my gym, somebody who comes in and they say something like, I want to do CrossFit competitions,” we already know they’re not going to fit in with our culture in our community. 2014, I would’ve been so excited to have them, but now a decade later we’ve learned that’s just not our ideal client. That’s not who I like to coach, et cetera. So over time what we’ve learned is the people who they want to do an NSI, they’re eager for their new programs, they’re eager to get their progress measured, they actually become the best clients who refer other clients. And so, what’s interesting there is they understand our value almost better than we do.

Chris Cooper (28:09):
And so you have to ask them, “Hey, what do you like best about my gym?” And you’ll often be surprised at what they tell you. You know, the first time I ever did this exercise, I got results that shocked me. And this was five or six years ago. I had just read “The Pumpkin Plan” by Mike Michalowicz, and I grabbed my three seed clients. “What brought you to my gym? Why do you stay at my gym? And what turns you off working out at other gyms?” And I thought they were going to say, “Oh CrossFit, it’s so intense, or it feels like a game, or the community,” right? Because we had all those things and instead it was like, “This is the only time in my day that somebody says I’m doing a good job,” or “This is the thing that I talk about at the dinner table that my kids will listen to.”

Chris Cooper (28:53):
And what that immediately did was it kind of reframed “Who’s my ideal client?” It’s these people. Like there are people who will come into the gym, they’re going to stay five or six months, they’re going to hit the WADs really hard, they’re going to have a good time, and then they’re going to go. Good for them. But I haven’t changed their life. I haven’t made a dent in their habits. They had the habits, whatever. It’s the person who comes in, they’re absolutely terrified, but they’re at the bottom of the barrel. They think, “I’ve tried everything. I can’t lose weight. I can’t feel good about myself. I feel weak. I’m depressed. I need to do something. This is like my last effort.” And then three months later they love it, and six months later they built this habit, and nine months later they’re doing their first 5K.

Chris Cooper (29:35):
Like those are the people we want to attract. And now that we’re doing the prescriptive model, it gets easier and easier and easier to attract those people. And the last part of the prescriptive model that really helps is that you use affinity marketing to grow your business. And so, you’re not just attracting cold audiences because you’re not desperate for clients anymore. You’re keeping people longer, so you’re not on this constant churn cycle. And so, you can say like, “Hey, I know your husband, he came to watch you do that workout. What would it take to get him in the gym?” And then you can just make an in-person introduction to the husband. You can ask, invite them, bring them into the gym. You just don’t get these opportunities when you’re running this high churn, group-only model. Instead, you get the downward spiral of bring 30 people in, keep three, one of them gets their certification, then they quit and open a gym, and then you lower your prices, and they lower their prices, and you just keep going around and around until you’re going down the drain.

Mike Warkentin (30:34):
Affinity marketing listers. The essential definition: You’re using your current clients to get more people just like them. They’re better clients, they’re higher value clients, and your marketing costs are very, very low. So, you could definitely do that. As you start to focus on the right people, you can get more of the right people. I’ll give you this too guys, as you’re thinking about this, if you have on your website, “We have a great community,” or if you are constantly telling people you have a great community, that’s part of your marketing push, think about that. Is anyone really coming to your gym to look for friends? Maybe one person who moved to the city and needs to branch out. In general, what people are looking for: They’re self-interested, they want to solve their own problems, and it’s almost never community, right? It’s almost always weight loss, strength, knee pain, depression, things like that.

Mike Warkentin (31:18):
People are self-interested. So, solve their problems. Don’t promote stuff that you think is great. Yeah, the community is great, but I’m not going to come to your gym for that. I’m coming because I want to get stronger, right? So that’s an interesting one. Chris. Let’s give someone an actionable thing to do. Let’s focus them on one thing that they can do. They’re going to hit stop on this show. What would be a thing that they can do right now to stop doing the race to the bottom and start coming up to climb the value ladder? What do we got?

Chris Cooper (31:43):
There’s a few things, but the first thing that I would do is take your five favorite clients, go one-on-one for coffee with them, and say, “What are your goals?” And then measure where they’re starting from, and then just for a minute, forget what you’re trying to sell and think blank slate—money’s not a problem, calendar’s not a problem—“What would I tell this person to get them to their goals faster? What if there was a deadline? What would I tell them?” And that’s the services that you should be selling. Never mind what your franchisor tells you you should be selling or CrossFit HQ tells you that you should be selling. Sell the thing that will actually get the client the results. And if that’s nutrition, great. If it’s one-on-one, great. If it’s semi-private, if it’s big group, whatever, but ask the client, “How do you prefer to exercise?” after you tell them, “Here’s what you need to do.”

Chris Cooper (32:33):
So the process would be like this. Number one, stop offering free trials. Have everybody sit down with you, and then say, “What are your goals?” Measure their starting point. “OK, what are we starting from here?” And then say, “As a professional coach, the way that you’re going to get to these goals is you need to do three workouts a week, and you need to cut your calories by 10%.” You’re the coach, you tell them, and then you say, “I want to make sure that you can get to this goal. Are you more comfortable doing the workouts one-on-one with me or in a group setting?” Some will say group setting. “Wonderful, we can get you there.” Then you say, “Doing this nutrition, do you think that if I just check in with you every once in a while? Is that enough to keep you on track, or do you need a formal diet plan?” “I don’t think I need a formal diet plan.” “OK.” You tell the client when they have options, and you tell the client when they don’t. Like, “Here’s the path.” They’ll trust you more. You will build authority; you’ll keep them around because I guarantee nobody else is doing this in your town. They’re all running that same downward spiral race to the bottom, and you will stand out by being the only one who sits down with them and talks to them about their goals. I guarantee it.

Mike Warkentin (33:47):
So I’m going to put that link in the show notes. Again, the prescriptive model, click it. Everything Chris said is laid out there in very great detail, and you can use that to start making changes to your business right now. And they will have effects. Tour average revenue per member will go up; your retention will go up. Everything is going to get better. Your income and revenue and all those things will go up. This is not just stuff that I’m saying. We have data that shows once people start doing goal reviews using the prescriptive model, all the key performance indicators go up in gyms. Chris, thank you so much for this. Tell people where they can go now if they want to continue the conversation, ask more questions of you and the Two-Brain mentor team and hang out with people who are just like them.

Chris Cooper (34:25):
Gymownersunited.com is our free public group. There are 9,300 gym owners in there. It’s absolutely free. We publish free materials in there every single day. Every few weeks we publish a step-by-step guide on how to improve a part of your business. You really can’t afford not to be in there. And yeah, we filter out the bums and the critics, and it’s a very supportive group. You’re going to find answers that will solve your problems. I almost said it’s an amazing community.

Mike Warkentin (34:53):
It’s true.

Chris Cooper (34:54):
That’s what keeps people in the group, the amazing community. But it does not encourage you to join it.

Mike Warkentin (34:58):
It’s an amazing community because people are in there helping each other solve problems. That’s what it is. And it’s that self-interested thing. “Where can I find people who are going to solve my problems?” So, hit subscribe on your way out the door. Visit gymownersunited.com, and then click the link in the show notes about the prescriptive model, and we’ll see you next time on “Run a Profitable Gym.”

Thanks for listening!

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