“The Shop Feel”: Keys to $340 Average Revenue Per Member

The Shop Feel - Lisa Palmer

Mike Warkentin (00:02):

Can you believe that some gyms create enough value that the average member pays $340 to $522 per month? It’s true. We take a lot of crap on social media when we post about this stuff, “That’s impossible. You’re full of BS!” And so on. We see it all the time, but the numbers aren’t made up and I’ve got a gym owner on Two-Brain Radio today to tell you exactly how her business made our leaderboard. I’m Mike Warkentin. Please hit subscribe if you haven’t already, we’re always cranking out shows to help people just like you. And I don’t want you to miss a thing. So please hit subscribe. Now, a welcome to my guest. She is Lisa Palmer, she’s the owner and CEO of Gas Station Fitness and Nutrition in the United Kingdom. And we’re gonna dig into the average revenue per member per month or ARM. That’s the sexy acronym for it. Lisa, welcome to the show.

Lisa Palmer (00:49):

Thanks Mike. How you doing.

Mike Warkentin (00:50):

I’m doing well. And I’m really excited because this is a huge one. Like I said, we get so many people that don’t believe these numbers are possible. So you made our leaderboard with our average revenue per member of $341. And of course it’s pounds over where you’re at, so it’s a different number, but we often report US dollars just for ease of reporting. $341 is a huge number and yet people don’t believe these things are true. So people are skeptical about high ARM, but they’re common among Two-Brain clients. So I’m gonna ask you this. Were you ever skeptical that an ARM over $300 was possible? And how has your opinion changed over time?

Lisa Palmer (01:24):

Thanks. Yeah, for sure. I was, yeah. We’ve owned gyms coming up to 8 years now. When we first started sort of, we were kind of, our ARM was probably at about $120. Okay. We struggled to get past that point.

Mike Warkentin (01:40):

You’re almost triple now.

Lisa Palmer (01:42):

We’re almost triple now! And it hasn’t been, you know, looking back as to how we did it, it wasn’t necessarily sort of anything rocket science, it was purely just sort of refining the basic processes within our business, and really getting to know our membership base. I think one of the key things that’s worked well for us is filling our membership base with people who are serious investors in their health and fitness, and making sure that people are with us for the right reasons, and people who are within our gym are looking for more and more avenues to improve on their goals and the reason why they came to us in the first place. Beyond that, it was really quite simple for us as owners, myself and my husband. We just had to provide enough choice and enough resources and offerings for our members that they could pretty much treat us like a one-stop shop for anything health and wellness. So just getting to know our members, we’ve been really lucky to kind of keep putting on more and more offerings or specialty courses, different types of memberships, different offerings like nutrition or massage therapy. And because we’ve given our members even more choice, they’ve been able to kind of stick with their basic packages and then choose more and more on top of that, just to really refine what they want to achieve from their membership with us.

Mike Warkentin (03:03):

So we’re gonna dig into some of those things and talk about some specifics, so other owners can take some advice from you and then take action on it. But just to reiterate, so you started about eight years ago, your average revenue per member, probably about $120 and you were skeptical that it could make it higher than that. What was the thing that- when did you start to realize that $300 might be possible? Like, was there any moment or was there, like, what stuff were you doing that started to make that thing move? And when did you start to realize, “Hey, the sky’s really the limit here?”

Lisa Palmer (03:30):

I think when we started to realize that people put a different value on their health and fitness and their goals, we sort of had in our heads through the years, what we would be prepared to pay for a set offering. And what we’ve done is we’ve increased our offering and increased our value at the gym. And we have higher-priced offerings for those people who do want to pay a bit more and receive even more for what they get for their money. So, for example, in the last six months, we’ve spent a lot of time refining something called a transformation package.

Mike Warkentin (04:07):

Let’s just dig into that. Tell me about that. What is in that and what does it cost?

Lisa Palmer (04:11):

So our transformation package lasts for 12 weeks. You’ll have to excuse me. I can’t remember the exact figures, especially in dollars, but I think probably about $2,000 a month for our high end transformation package. And essentially what they’re getting is everything we have to offer. So they get sort of personal training, they get sleep therapy, they get daily mobility, they get classes, nutrition, biometric scanning, and then they get what we call the X factor whereby anything else within their lifestyle we hone in on and we try and make it better for them. So for example, a client we’ve had recently, he was a smoker. So although that’s not on our front end sort of spec as to what they get as part of the service, our coach spent a lot of time with him, sort of trying to wean down on the cigarettes, trying to give him other incentives in terms of how to cope with stress.

Lisa Palmer (05:05):

Other sort of coaching methods to try and work around cause he was a chef. So he obviously had a very stressful environment to work in. So we give everything we have at these clients and they pay a top premium price for it. Now I’m not saying that every client who comes through our door wants that particular package, but when we weren’t offering it at all before, we weren’t necessarily giving that option to those maybe small population that do want that sort of hand-holding. And that one to-one, that close contact with their coach. So it’s not really sort of, like I said, it’s not rocket science, but by giving people options, maybe one in every 20 clients, one in every 30 clients, they will choose that higher price offering. And last month I think we had about six, seven clients sign up to our transformation package. They get great value for it. They get amazing results. And because they’re so invested right from the beginning, you know, they’re really in that process with us. And we do get some incredible metrics and like I said, results from them.

Mike Warkentin (06:15):

So the first thing, if people are listening and saying, how the hell do I raise my average revenue per member is to figure out how can you add more value? And what that’s gonna be is programs that go beyond just group coaching, right? Group coaching. When I started my gym, that’s all we offered. That’s all we did. I thought that was a high value service because we were charging about $150 a month, which was too low, but that’s what we were charging. And it was more than the $30 gym membership. That is actually not a high value, offering group coaching in a group of 10. A coach’s attention is split 10 different ways. It’s an hour, it’s a big group. It is not personal attention. Even though you do get some personal attention, it’s not personal coaching simply by offering personal training. I would’ve added in a high value service.

Mike Warkentin (06:56):

If I had gone further to where you are at, and let’s take a few more steps. We leave a few in between there. If I had gone to high ticket coaching where- we’ll call it something like that- where it’s a high touch service, where you’re coaching them on all aspects of health and fitness and lifestyle, then I could include stress management, sleep, nutrition, mindfulness, all these different things, even habit stuff like stop smoking. That is a high ticket service. And I’m guessing you have really high levels of personal contact in this service, right? So then all of a sudden that is not $150 service. It’s not a personal training package of $600. This is like a lifestyle transformation. I love the name you’ve used and that’s worth $2,000 a month. People out there will say, I would never pay $2,000 a month for that. No one like that exists. And yet you tell me that these people do exist, and I know that they are out there. So let me ask you this. And we’ll segue back to some of this stuff before. Tell me, how do you find someone who’s ready to pay $2,000 a month for a transformation package? That’s gonna get into marketing and client avatars and stuff, but how do you do it? Where do you find these special people?

Lisa Palmer (07:58):

Well we don’t, it sounds cliche. We don’t find them. They find us.

Mike Warkentin (08:02):

Okay. But you put something out there that they see, right. That’s good.

Lisa Palmer (08:06):

You know, and, I think really the way we do our marketing is we show results and we show how much care, attention,

Mike Warkentin (08:13):

Social proof.

Lisa Palmer (08:14):

Social proof, you know, and that’s exactly. So our most recent transformation client came from another gym, five miles away. And he was working out in the gym and he was saying to his friends, I’m just not getting anywhere. And actually one of his friends said, you know where you need to go? You need to go to Gas Station Fitness and Nutrition. Now this guy, he’s not even a member with us. I don’t even know who he is as friends. But we’ve started to develop a reputation in our area of the go-to gym, if you want to see some results and you want a change in your lifestyle and your wellness. And don’t get me wrong. That’s not been something which has happened overnight. We’ve worked really, really hard as a coaching team over the last two, three years to build up our social media, to get client engagement, to get Google reviews, to do in-body scans before and after, you know, testimonials.

Lisa Palmer (09:04):

And I think that’s really starting to pay off now. We’re at a stage in our sort of, our business career where, exactly what I said, people are now finding us rather than us having to go out to them. And you don’t know these people. And I think the one thing I would say is: don’t assume that this person is not gonna sign up for a transformation package or the other way around, because I can’t- all of our transformation clients, they’re all totally different. They’ve come to see us for very different reasons. So unless you actually show every single one of your clients that particular offering, you’re never gonna be able to know which one is gonna go for that particular package. Now we have a pricing binder and the transformation packages start at the very beginning.

Mike Warkentin (09:48):

That’s the first thing you show them.

Lisa Palmer (09:49):

Yes it is. Yeah. So it’s the first thing we show them after we’ve listened to their sort of, their, we’ve got like a presentation to show our potential clients. So we’ve talked through what kinda offerings we have. We show various clients at different parts of our pathway. So this is a client who’s on a class pathway, this is a client who’s on a PT pathway, hybrid pathways. And then in terms of the pricing, the first packages we get to is transformation. And we let them just have a little read of it. And then if it’s not for them, they’re very quick, we’ll say, you know, what do you think? And they’ll say,  either they’ll say that’s the one for me, or they’ll just say, oh, it’s a bit too much, in which case we just quickly float on and we go through our other offerings.

Lisa Palmer (10:33):

But like I said, until you actually show them what you have in your facility, they’re never gonna know. So you’ve got to put it out there. And what we say to these transformation clients is especially with our VIP package, they’re getting five coaches. So that’s how many coaches we kind of throw into some of these clients and their transformation packages. And we have a WhatsApp group with all those coaches on, and we are talking behind the scenes about how this client is doing. You know, actually I think we need to spend more time on this element, more time in classes and more time on personal training or nutrition. So it’s a real bespoke, dynamic kind of movement, and collaborative working between all these coaches to get this client through the first 12 weeks to make a really, really big difference to their lives. We know it’s powerful, but I appreciate it’s not in everyone’s budget. And that’s why it’s so important that although it’s at the front of the file, we do quickly move on if it’s not particularly something they’re looking for. So that’s-

Mike Warkentin (11:32):

So I’m gonna, for lack of a better term, dumb this down for people like me, who, as a basic gym owner, this would sound very intimidating, right? I’d be like, wow, it sounds like there’s just so much going on here. I don’t have a clue how to start this, but I’ll tell you it’s not that hard. And here’s how you do it. The first step is you have to have a high value offering that you can tell people about. So create a program that will solve problems for your ideal client. You need to figure out what your ideal client is, but then you create a program for that person and create the program that will solve all their problems fastest. If that program is not group coaching, then it’s probably personalized coaching with a bunch of other stuff.

Mike Warkentin (12:07):

Okay. So that’s step one. You gotta have a program. Step two, you’ve got to put that program in some sort of pricing binder so people can see it. If you just throw it on your website and assume people will ask for it if they find it, they’re never gonna find it. You need to show it to them. And in that you need a sales process. Sales processes sound intimidating, but they’re really not. The thing that I’ll tell you, the one tip I’ll give you right here. And there’s videos of about this in our archives. Don’t assume that the person sitting in front of you won’t buy what you’re showing that person. Okay? Because that’s a huge mistake. I might not buy a $2,000 personal training package. Cause I’m a personal trainer. I can do the stuff myself. Another person won’t feel like that. They’ll say, oh my God, I can pay $2,000 and get everything done for me?

Mike Warkentin (12:47):

Sign me up now. If you go into that sales meeting with your own budget in mind and project it onto the client, you’re going to not sell it, right? You have to show it to the client and let them make the decisions. Check out Jeff Burlingame’s sales videos in our archives, and you will find all sorts of ways to do this. Okay? So those are your steps. Those are your first steps. Have something, present something, and then back it up with a sales process that ensures that people see it and can make a decision on it. The fourth thing that you’re gonna do when you get someone into that program, document the heck out of it. Okay? Because you want that social proof. So the next time someone says- they go to that pricing page in your binder, all of a sudden, there’s a picture of Tim who signed up four months ago and had amazing transformative results and is only too happy to tell the world about it.

Mike Warkentin (13:33):

That person says, wow, I wanna be like Tim, signs up. Four easy steps. And again, it’s taken Lisa years to get to this point, but you, with these steps can accelerate that process and get there sooner. So don’t be intimidated by the stuff here, ’cause I would’ve been, but it is possible. And we’ll break it down to those easy, easy steps. So transformations, I love that one. That is a huge deal. Do you package other services like hybrid services? And one of the things that I’ve often found when I interview gym owners with high ARMS is that they’re packaging things. So it’s group training and maybe nutrition coaching, or group training and something else, maybe one PT session, or it’s a package of all three or four of those things, or it’s a bunch of other stuff. What other packages do you have that increase your ARM besides high ticket stuff?

Lisa Palmer (14:23):

Yeah. Yeah, for sure. So I think probably about 40% of our membership base are hybrid members. Yeah. So exactly that. So they could do like a three class a week package with one PT session in the week. So we offer hybrid packages, which either have three classes or five classes. And then we add on either four PT sessions a month, eight PT sessions a month, or 12. 

Mike Warkentin (14:45):

And what would the price of something like that be? And just ballpark it if it’s not, the conversion doesn’t go.

Lisa Palmer (14:50):

Probably around, anything up from- I’m just converting it into dollars. Oh, probably anything from about $400 and up. That’s one of our basic ones.

Mike Warkentin (15:04):

And so that’s a key part of your ARM number, which is over $340. If you’re selling hybrid packages to 40% of your members at $400, that’s a huge deal. Let me ask you this. In these packages, people are doing group classes. When they add in that personal training option and change to a hybrid program, do they get better results?

Lisa Palmer (15:21):

Just insane. The level of results is incredible after. Usually when people convert onto a hybrid package, within two months, they’re hitting PRS that they haven’t hit for years of training. And I’d say that is, we don’t sell hybrid packages. So when you first join up with us, rarely do people go straight onto a hybrid. They don’t understand the value of it. You know, it takes a little, they just wanna get stuck into classes and get into some sort of routine or they just wanna do PT only. It’s usually the class members who start on class and then they see Julie next to them who start at the same time as them suddenly she’s nailing pullups and handstand breast ups. And it’s all down to the PT sessions that she’s been having with James or Frosty.

Lisa Palmer (16:07):

And we don’t really push the hybrids in our gym. It’s just that the fact that the clients, because we’re such a close community, they see exactly that. They see the results that others are getting from the hybrid packages. And they want to, obviously, I suppose you say accelerate their own growth and development within their fitness journey. So it’s an easy win for us because the clients are happier because they’re getting better results and quicker results. The coaches are obviously doing really well. They’re really engaged with business cause they’re really getting that one-to-one contact with these clients. So all of our coaches, probably about 80% of their salary is from PT clients. A lot of them are hybrid. And because they have gone to a hybrid package rather than what we used to do in just doing blocks of 10 PT sessions, there’s that element of commitment from the client as well. And what do we know commitment and consistency result in? Results. So that’s been a really big game changer for us. You know, the clients are really enjoying having that accelerated growth in their fitness.

Mike Warkentin (17:07):

The reason I ask is because we often see criticism of people saying, oh, I’m gonna have to gouge people to force them into personal training and spend more money than they want to. That’s not the case. Like what you’re doing here is you are offering a service that solves a problem for a client faster, right? And if the client wants that service, they’re gonna pay for it. If they don’t, it’s not forced upon them. And it’s not about gouging or finding ways to take their money. It’s saying, I have a faster path to get you from point a to point B. And so let’s say point B is I wanna lose 15 pounds or I want to learn double unders for our competition. That path is going to be shorter. You’re gonna get across the channel faster if you have a personal coach and direct attention.

Mike Warkentin (17:46):

And the example I’ll give you, very short, is I had a guy at my gym constantly. Very good athlete, very strong, very fit. Couldn’t do double unders. And you’ve seen these guys for sure. They just can’t do double unders. And so they practice a little bit in class. Then the workout starts and they’re terrible and they get frustrated and mad because they can’t compete with anyone else. All because of double unders. Had I offered a hybrid program where this guy could have signed up for five or eight personal training sessions, we probably could have fixed double unders in, I don’t know, three or four weeks. He would’ve been so much more happy. He would’ve stayed at the gym longer and I would’ve solved his problem. And he would’ve looked at the $400 as a great investment. So these packages are not gouging. They’re not trickery. It’s helping people get the results that they want. Do you agree, Lisa? Have I summarized that right?

Lisa Palmer (18:29):

I totally agree. And there are still people in our gym who are just on three times a week class membership, that’s fine. And we’ve been on it for two years and guess what? They’re very happy. They’re like, maybe a desk worker. And that just kind of ticks them over in terms of the general lifestyle and their wellness. And they’re happy with that. And because they are reaching their own goals, that’s absolutely fine. But if someone keeps coming to us saying, exactly what you said Mike, I’ve been trying to get my doubles for the last six months and I’m getting really frustrated. Then it’s so lovely being a gym where we have a wealth of solutions for them and they get to pick what they want to do. So we meet with our clients every 90 days to sit down with them and we’ve got a performer, which we fill out and at the bottom of this performer, it says good, better and best.

Lisa Palmer (19:18):

And that’s basically our solution for them. So they’ll say to us, I wanna get some doubles in the next three months and we’ll say, okay. So the good option is to maybe go to a gymnastics class more regularly. The better option is to go to the specialty course, which we’re gonna run in a month’s time. And the best option is to spend a little bit more one-to-one time with one of our coaches. So that way you are giving that client choice. And the only way we as a gym have been able to offer that choice to clients is by providing those services. So if we just stick with class only, we are doing our members a disservice, because there’s gonna be a point in time that they want more. And we have been able to deliver that.

Lisa Palmer (19:59):

So we have, I call it a shop. We have basically a shop in our gym, a virtual shop in the air where members literally can just pick out what they feel they need at that moment in time to fit their goals. We obviously guide them on their choices, but it’s so lovely having that huge- so I think we offer about 25, 30 different offerings within our gym. And they’re all based on the fundamentals of nutrition, PT classes. But for example, if someone’s going away on holiday, why don’t you offer them online PT or remote accountability or remote virtual nutrition whilst they’re away when they need it most, because they’ve worked really hard for six months, and then they’re going away for a month. You know, we want them to stay consistent. We want them to keep up their results and their progress.

Lisa Palmer (20:49):

So if they’re really engaged with your gym and your process and their goals, they will snap your arm off if you give them choices in terms of how to carry things on. They don’t wanna stop, but they can’t see way past it when they go on holidays. So give them choices and they will snap your arm off. Admittedly, there are some people who do go on holiday, but then have an action plan in place that when they get back, what I would recommend is that you do maybe this, this, and this to either catch up, or we just have a goal review when you get back to make sure that you feel comfortable getting back into classes again. So you just have to coach them and wrap them up in a cotton ball and sort of tell them what they need in order to achieve their goals.

Mike Warkentin (21:30):

I’m gonna highlight a quote from you that you said a few minutes ago, because it’s really important. Listeners, Lisa said this: if I only offer group classes, I’m doing my members a disservice. Think about that for a bit, because you are not giving them the fastest route to their goals. Certain people may want group classes. And if that’s what they want, that’s totally fine. Checkbox. You’ve done that. But if they wanna move faster and you’re not offering hybrid programs, personal training, specialty courses, all the other stuff, you are doing a disservice to them because you could be helping them to a greater degree. And self-interest, it will make you more money. It will make your coaches more money. Key part that I wanna go over here, Lisa, that you mentioned, it’s called the prescriptive model. And this is so, so, so important to the ARM process.

Mike Warkentin (22:15):

You’ve mentioned Lisa, a ton of stuff that you offer. No client could come into your office or look on your whiteboard or whatever it is. And just be like, ah, there’s like 25 things up there, all these different options. They don’t have a clue. They don’t even know seldom exist. They’re not gonna navigate that path themselves. But in the prescriptive model, which is a whole process as laid out by Chris Cooper, who’s the Two-Brain founder. You are going to meet with clients at a minimum of every 90 days, three months. And you’re going to ask them, you’re gonna measure something, ask them, are you moving in the right direction? And then you’re gonna revise their prescription. And what that prescription is is to give them the best possible plan for them to accomplish their goals. Lisa has that broken down into good, better, best, which allows them to make decisions.

Mike Warkentin (22:55):

But what she’s doing now is taking the whole giant McDonald’s menu of all the burgers and fries off the wall, sitting down with that person and saying, what do you wanna accomplish? Here’s what you need to do to get there, prescribing that. And most of the time people are going to say, yes, I want that. And they’ll pick one of the three options or whatever it is. Then you’re going to do that process repeated again in 90 days. And as you keep doing this, this solves a huge problem for you. That problem is, your members don’t know what you’ve created and what you offer. If someone comes into your gym, they only do group classes. They only do personal training. They might not even know what you do. When I started offering hybrid stuff, and this was toward the end of when I had my physical space, I asked a member, said Hey- or my wife did- do you want some extra help on your muscle ups in a personal training session? And he was a group class member. He said, you guys do that? And I slapped myself in the head because I had no system in place to get this information to my members. The prescriptive model is that plan. Lisa, what happened when you put the prescriptive modeling in place? Did you notice your ARM move automatically?

Lisa Palmer (24:02):

I think it was more to do with what you just said, Mike. It’s more of an awareness. So we make a real, conscious effort that when we meet with our clients, it is not a sales process. It can’t be. Because if it’s portrayed as that, or it’s conducted like that, the members are not gonna engage with you. You know, it’s really important. And the members see that we have only their goals at the fundamental heart of our business. And so when we are meeting with them, for these client reviews, sometimes, we always try and make sure that one of the options that we give them is of course no extra cost to them. So, listen, I look back at your training and you are attending two classes a week rather than three, which is what you’re paying for.

Lisa Palmer (24:44):

So let’s see how we can get that third session into your timetable. But like you said, Mike, we then coach them and we say, you can carry on doing your three classes a week and you will get better. But if you are saying that you want to do your doubles within a month, then you will need to do something extra to accelerate that process. If you are saying you are happy to wait for six months to get your doubles, then three classes a week will probably be just fine. So it’s really important that you use the client check-ins to educate your members, not just on what other services you offer, but also in terms of timeframes and you are coaching them on their goals. It’s rare. In fact, we actively discourage our coaches selling in those kind of environments. Sometimes people just go away.

Lisa Palmer (25:29):

And the fact that you’ve actually put in the best column, PT, you’ve just put it in the forefront of their mind that that is a potential offering. And it might be that by the time they come back, 90 days later, if they haven’t hit their goals again, they might be more receptive to going down that route if they’ve still got that same goal. So, you know, as opposed to the kind of the front end, where we have new leads coming in, and it’s very much focused on sales with our members, it’s much more nurture and coaching. And the nice sort of byproduct of that is because they trust you, when you suggest things like PT as an option, they’re more likely to adopt it. Either then, or certainly for the next goal review.

Mike Warkentin (26:07):

Concept that Lisa has just outlined. If you don’t know it, it is called Help First. Chris Cooper wrote a book about it. He’s often told that it is his best of all his books, which is a huge number at this point. “Help First”, the quick summary is that selling is not selling. If you are helping someone accomplish their goals, if someone says I wanna lose 10 pounds, it’s very important to me, I must have this. And you sell. If you offer them a plan to do that and they buy it, that is not selling, that is helping. Right. And again, obviously it is selling, but you get the concept. If this doesn’t make sense to you, or if you wanna learn how to change your mindset about this, “Help First”, we’ll put that link in the show notes, is Chris Cooper’s book, and you should read it.

Mike Warkentin (26:48):

It will change your entire approach to the fitness industry. Second thing that’s really important, Lisa, that you brought up is that people who are in your business and know, like, and trust you and are engaging with you on a daily basis are more likely to make purchases than cold leads, outside people. That doesn’t mean that you shouldn’t market and you shouldn’t build your audience. And you shouldn’t talk to people out there in the internet sphere. But the people that are in your gym are more likely to buy your stuff. They’re also more likely to refer friends who will buy your stuff. That process cannot be ignored. If you want to build ARM, you must put in a prescriptive process to talk to your current clients, alert them to stuff that’s out there and ask them who else in their life you can help.

Mike Warkentin (27:29):

And again, help. Right? Not selling, helping. They will almost invariably give you someone to speak to that is going to be a hot lead that will almost certainly sign up. You back that up with advertising and marketing and all the other stuff that touches people outside so that eventually they come and see you, but you cannot go wrong by talking to your current clients. Lisa, I need to ask you this. You talked about the shop mentality, I think you said, or what was the shop vibe that you had? Correct me if I’m wrong on how you said that, but tell me what that is and describe how it goes over there.

Lisa Palmer (28:01):

Well, we are lucky because we’ve got a really well rounded team. So we’ve got a team of 12 of us. We’ve got coaches who have more of a passion for mobility, nutrition, sports, massage therapy. And what we were able to do is draw on all those different areas of expertise and then make a service out of it. Now we haven’t just done it for the sake of it, that service would’ve been developed on the back of one of these athlete check-ins. Where more and more clients, we sort of almost developed themes that two or three clients are saying the same thing. Then there may be a need within our gym that we need to develop something.

Mike Warkentin (28:36):

I’m gonna interrupt before you finish that off. This is a key concept Chris has written about. It is creating products for your clients, not the other way. Not finding clients for your products, right? You are listening to what they want and need, and then giving them a solution. That is so different than saying, I am offering an Olympic weightlifting program. Come to me. That’s not the same thing. Sorry to interrupt. Key concept, continue with the shop feel.

Lisa Palmer (28:58):

Yeah. And that goes back to why these client check-ins are so important because it allows you the opportunity to really get to know your membership base and what they need and what they want. And that changes. So, you know, seven years ago, when we opened the current site, our membership needs were very different to what they are now. So by constantly checking with our membership base in the diary every three months, we really understand whether our members are getting what they need from us. And more importantly, are they getting what they came in for in the first place? Has that changed at all? And I can’t put a figure on how valuable those check-ins are in terms of getting to know our membership base. And it’s only been from those check-ins and the regular check-ins that we have mapped out exactly this virtual shop.

Lisa Palmer (29:43):

More people were saying, you know on the back of lockdown where people suddenly went on holiday loads, but they still had a little bit of weight to shift. And they’d been a member for three months with us, and then they decided they wanted to go on a month’s holiday and they were almost gutted to be going on holiday. So we had to quickly think of something that we could offer them that was still gonna keep them on track and keep them accountable in their training. So we then developed things like online programming and virtual accountability checkups, and we had loads of people on holiday shift onto those kind of programs. And then they came back into the gym again. So all of these services that we have on offer are all on the back of what members have been telling us.

Lisa Palmer (30:24):

Another example is, we had a member about a year and a half ago who said, “Listen, I’m gonna have to cancel my membership, I love it here, but I just can’t do it anymore because of my shoulders.” So what we did was we just transferred her class membership onto regular sports massage therapy for a couple of months. So no extra cost to her in theory, same sort of outgoings. But we worked out how many sports massage treatments she could have every month. And then after the two months, then she’d come back into classes again. And the great thing about having our head coach as a sports massage therapist is as he’s doing his treatment, he can be talking to her about recovery, good nutrition for tissue healing, good hydration levels. What we can expect when she goes back into the gym, do we need to support her on a graded program back in again? So it’s a bit like an orchestra. We kind of have lots of different things, kind of playing at the same time, trying to achieve the same thing. And it’s only because we have all these different offerings that we’re able to do that and give our clients the best service in our opinion.

Mike Warkentin (31:24):

Well, let’s not kid ourselves, either. We’re talking about ARM today, but everything that you just described is part of a retention strategy. If you did not have those things, and I’ll use the example of the person with the shoulder, that person would’ve just left the gym and said, it hurts. I’m not coming back. You would’ve lost the revenue. That person would not have improved health and fitness. Probably would’ve quit. That’s a loss for the client. It’s a loss for the coach. It’s a loss for the business. It’s bad for everyone. Because you spotted it and have a service in place, that person now works with another one of your coaches. There is a salary for the coach, stays in your business. That’s revenue for you. Improves health and fitness to the point where that person can keep working out. Okay. So all that is, is solving problems, huge retention, right? Like, that is a key.

Lisa Palmer (32:06):

Absolutely. And this wasn’t the intention, the sports massage, but on the back of that, that member then upgraded to a PT package because she acknowledged that maybe classes weren’t the best thing for her shoulder. And she wanted a little bit more one-to-one attention. So you’re absolutely right. You know? Yes, it’s for retention, but out of genuinely caring for your clients and giving them some solutions because you’ve built up that level of trust. They upgrade their services, or they add on. We kinda call it addons. Bit like the hybrid concept. We do offer hybrids, but it is like a shop. It’s like, I’ve got this base product of my classes, and what can I add on top of that? I’m gonna add on some PT, I’m gonna add on a specialty course this weekend, and I’m gonna add on some nutrition as well. And it’s a really nice way because they know we offer these services, they can do these addons. And that I would say with the transformation packages has been the biggest source of our ARM, and, you know, I think I was asked by someone else in Two-Brain, whether we could see that happening and carrying on. And yeah, absolutely. The more we offer, the more satisfied our clients are, the more they add on. Of course, the ARM is going to maintain the same sort of- in the same sort of range.

Mike Warkentin (33:16):

Think about it in the car sales world. So when I was- in 2008, I was looking for my first vehicle and I decided I was gonna get a Honda Civic. I didn’t have a lot of money, so I was gonna buy the cheapest version available. I looked on the website, it was this base model, no air conditioning, no features, nothing. Called the dealership. I said, I want this. They said it doesn’t exist. No one gets that car. That is just there for the base model we’re gonna build. And you have to get air conditioning and all these other things, the base model is almost not in existence. Okay? Because every car is customized with, like, seat warmers and leather, this trim or that trim or this button, or this feature. Gyms never took that approach. I essentially, at my gym, sold that base model Honda Civic and said, the only thing we have is group classes. And if you want anything else, that’s too bad. And my revenue, my ARM reflected that <laugh>

Lisa Palmer (34:02):

Yeah, right. Yeah. We did that.

Mike Warkentin (34:03):

Yeah. But when you go to a car dealer, they’re going to give you all these different options so that you can buy the exact thing that you want, that does the thing that you want it to do and solves your problems. And that can be anything from large upgrades, like the things that cost two or three extra thousand dollars, or it can be simple stuff like, do you want some extra floor mats on the way out? And every extra dollar added to that transaction is a benefit for the dealer and for the client who wants the stuff. So if you’re thinking about this and you just offer group classes, I am telling you, you can make your ARM number higher simply by finding out what your clients want and offering it. It’s not a hard concept.

Mike Warkentin (34:44):

It just gets lost because you’re stuck in the day to day of your business. So, Lisa, I’m gonna ask you this, as we get towards the end of this, I wanna know if there’s a gym owner out there- and you’re on our mentorship team now. So you’ve got a gym owner out there who’s like only offering group classes. Their ARM, let’s say, is in the $80 range, something like that, which- obviously their pricing is too low, but we will skip over that for now. What are like three simple steps you would give this person to take, to start getting that ARM off of $80 and moving north of $100?

Lisa Palmer (35:13):

Three steps. So athlete checkins. So absolutely sit down regularly with your members to discuss how they’re getting on and whether they need anything more from you as a gym. Two: Transformation packages. If it’s not in there, then they don’t know you offer it.

Mike Warkentin (35:29):

So something high ticket?

Lisa Palmer (35:31):

Something high ticket. Yep. And then the third thing is choice. So even when we talk about our Onramp, so a lot of CrossFit gyms, they do kind of fundamentals, but they only offer one package. And actually sometimes people need a little bit more attention. So for example, you know, with our sort of fundamental, we call it start package. We have three different choices, so they can either start with 12 PT sessions, eight PT sessions, or six PT sessions. Now, if you are a real kind of gym bunny, and you are really fit and healthy, you probably actually only need six sessions to start with, just to kind of get familiar with our style of training and to make sure you’re safe with the bar, etcetera. But if you are someone who hasn’t exercised in 20 years and you are kind of holding a bit of an injury somewhere and you just need a little bit more tuition, then they will go for the 12 sessions.

Lisa Palmer (36:23):

But if you don’t offer those three different arms, I wouldn’t probably go more than three in my personal opinion. Cause then it gets really confusing. But if you don’t offer those three different arms, then you’re never gonna know whether people will go for that higher offering or not. And that’s exactly what they need in order to start their fitness journey with you. You are once again, going back to doing a disservice, you’re doing that person a disservice if you’re expecting them to be engaged and fully embraced within the class environment, after only six sessions of PT. ‘Cause they will feel overwhelmed and we’ve all probably seen it before, they get re-injured quite quickly. And then guess what, it’s on you as a brand. It’s on you as a company as to whether it was anything which you guys could have obviously helped them better with. So I say offer choice within your front end processes, high tech offering and athlete check-ins have been incredibly useful for us.

Mike Warkentin (37:18):

You have three action steps right there that are guaranteed to increase your ARM. I would encourage you to take them, but I know many of you aren’t going do it and it’s going to be difficult for you to do that. It’s just, it’s one of those things where you get overwhelmed and I’m sure the phone’s gonna ring and you’re like, ah, forget about it. If you need something, some help, you can work with someone just like Lisa. All you have to do is go to TwoBrainBusiness.com and book a free call. If you do that, you will talk to one of our people who will give you an exact prescription to make your gym better. And it’s exactly what we’re talking about here. Prescriptive model, you will learn how to improve your gym super fast and you’ll work with a mentor to do that. And that mentor will provide everything a fitness coach would provide to a client to get the results that they want. So I would encourage you to go over there and book that. You would be able to work with potentially you Lisa?

Lisa Palmer (38:06):

Yes please! Yeah, I’m here to help.

Mike Warkentin (38:07):

That would be awesome. So Lisa’s in the UK. She’ll work with people anywhere, but if you are in the UK and you want someone on home turf, you could absolutely talk to a person who would put you in touch with Lisa. Our goal is to help you guys improve stuff. One final question. Lisa, do you tackle on things like the floor mats and cupholders in terms of supplements and things like that, T-shirts. Do you do retail in this package as well?

Lisa Palmer (38:30):

We do. Yeah. We don’t do packages, but we do have retail, yep, for sure.

Mike Warkentin (38:33):

Yeah. Every dollar counts, right? And it’s again, solving client problems.

Lisa Palmer (38:37):

We even do our own coffee, and it’s really good. So if you’re ever in our area, make sure you get yourself down and buy a bag of beans.

Mike Warkentin (38:44):

I will 100% do that. I’m a coffee fanatic. So I will be by your gym if I’m ever so lucky as to be in the UK. That was Lisa Palmer on Two-Brain Radio. She is an ARM leader, average revenue per member per month for May. And she just opened her book and shared her secrets. Take action! But if you need more help, go to TwoBrainBusiness.com and book a free call. Thank you so much for listening to Two-Brain Radio. Please hit subscribe on the way out, wherever you’re watching or listening. Now here’s Two-Brain founder Chris Cooper with a final message.

Chris Cooper (39:16):

Hey, it’s Two-Brain founder Chris Cooper with a quick note. The Gym Owners United Facebook group has more than 5,600 members and it’s growing daily. If you aren’t benefiting from the free tips and tactics and resources that I post daily in that group, what are you waiting for? Get in there and grow your business. That’s Gym Owners United on Facebook or www.GymOwnersUnited.com. Join today.

Thanks for listening!

On Monday, Two-Brain Radio presents marketing tips and success stories. Chris Cooper delivers the best of the business world on Two-Brain Radio every Thursday. 

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