$314 Average Revenue Per Member—How Jennifer Dawson Did It

20201116-dawson-blog

Mike (00:01):

$29 gym memberships? Three months free? 80% off? Micro gym owners know the race to the bottom of the pricing pile will destroy a coaching business. Coaching is a high-value service. And when your members know it, you can run a very profitable business without chasing 200, 300 or 500 clients. At Northglenn health and fitness in Colorado, average revenue per member per month is over $300 and climbing steadily. Jennifer Dawson will tell us why next.

Chris (00:29):

Back to the show in just a minute. The people at Incite Tax know you’re working long hours to improve health for the world, but it can still be hard to turn a profit. You can’t focus on your mission without money in your account. So Incite, founder John Briggs wrote “Profit First for Microgyms” and created a system that increases your cash flow so you can be home at dinnertime with a thriving fitness business. Bookkeeping, profit first cashflow consulting, taxes, whatever your financial needs, Incite can help join their free five day challenge at profitfirstfor micro gyms/fivedays to get a snapshot of the financial health of your gym. That’s profitfirstformicrogyms/five days.

Mike (01:09):

This is Two-Brain Radio. I’m Mike Warkentin, and I’m here with Jennifer Dawson of Northglenn Health and Fitness. At Two-Brain, we track everything, and Jennifer’s gym, which she runs with her husband Patrick, was one of our August leaders for average revenue per member per month. We call that ARM for short or ARM. It’s one of the most important metrics in a micro gym. Northglenn’s number? $314 in August. And it’s been rising since then. Jennifer, welcome to Two-Brain Radio and congratulations on being one of our ARM leaders for August.

Jennifer (01:38):

Thanks, Mike. Really great to be here.

Mike (01:40):

So we’re going to get right into it because this is such an important metric for gym owners. I want to know first off how you calculate ARM at your gym, because a lot of people don’t have a clue. Is it software, spreadsheets, something else? What do you use?

Jennifer (01:51):

So we use the Two-Brain dashboard I wish I could get it to work with Zen planner, but for the way we do things, it just doesn’t work for me. I only count dollars that have cleared my bank. So, let’s say that somebody pays me, I’m just making this up, for a PT session on September 28th and they pay with a check. That’s not going to clear till October so that money doesn’t come till October. So I definitely have to manually calculate it using the Two-Brain dashboard.

Mike (02:19):

I think that’s probably wise. And the dashboard is a new tool that we’ve rolled out to help gym owners see things very quickly and very clearly, it helps them work with a mentor to just see the same numbers and take action to improve those numbers. Some software platforms will do this for you. Not all of them do so if you’re making a decision on software platforms and you want this metric, that could be a deciding factor for you for you. Jennifer, do you recall what your ARM score was the first time you ran the numbers? Or do you have any idea what it was when you started?

Jennifer (02:48):

Yeah, actually the first time I ran it, it was really high, but that was because we had just opened. So I started off with Two-Brain, which I gives me a competitive advantage or at least I feel it does. Because I’ve learned so much, but so it was 273, but then it corrected itself. And it was around 180 I’d say.

Mike (03:11):

  1. Did you run, like when you opened, did you, Two-Brain has a plan called the founders club. Did you run that plan or do you, what did you do specifically there?

Jennifer (03:18):

Yeah, so, at that time our mentor was Jeff Larsh and he was very clear on no discounts and, you know, things like that. So we did do the founders package. So we got a decent amount of folks from that. And, because of that, you know, we walked in day one. There’s no discounts, there’s no free trials, there’s no free weeks. There’s none of those gimmicks that other gyms do. We definitely believe in, you know, if someone’s looking for free, they’re going to keep looking for free. If there’s some looking for a discount, they’re going to keep looking for a discount. If you’re coming to our gym because it’s the cheapest gym, first of all, we’re doing something wrong then because we provide a very valuable service and it should be priced accordingly. And then secondly, they’ll just, you know, like I said, continue searching for the next big deal. So I like to think of it as a long-term relationship, right? You can’t be in a successful long-term relationship with someone while dating other people. Put your full effort into your current members. That’s your relationship?

Mike (04:17):

That’s great. And you avoided a ton of mistakes that I made, you know, and a lot of gym owners have made with discounts and other things. This is slightly off topic, but I’m going to ask it anyway. When you opened with that founder’s club plan in place, how many members did you have when you opened?

Jennifer (04:31):

So, we had about 17 members. Not very many, no, not very many because I’ve heard gyms of opening with a lot more, but then it does trickle down. Right. So 17 members, and I’d say a good group of them are still here and more would be here if it wasn’t for COVID, but I’m sure we’ll talk about that later.

Mike (04:53):

Yeah, we sure will. But that’s still 17 members and you had a high ARM back then though. So that’s starting, you know, with a great bit of momentum, right?

Jennifer (05:00):

Correct.

Mike (05:00):

Excellent. Cause I know there’s so many gyms that have started with a discount and they’ve got 250 members, but they’re all paying 30 bucks a month or they’re on free months. And then when the bills come due, they all vanish and all of a sudden you’re in a huge problem. So anyways, I love that you started off the right way. And it’s really interesting to see what happens when gyms do that, because I started on my own in 2010 and we made a ton of mistakes and Chris Cooper’s talked about the mistakes he made and it’s really cool to see, how people do that. What year was it that you guys opened?

Jennifer (05:29):

Just 2019. So about six months before all this happened. Yeah.

Mike (05:33):

  1. Very cool. So we’ve got about a year. Yeah. OK. So we have a little bit of data ready to go through here and it’s really cool. So you said there was a correction, you started high and then there’s a correction. Did you make a concerted effort after that to improve that number? Or were you just generally working on the business as a whole and saw the number go up? What was the plan there?

Jennifer (05:52):

So we’re always focusing on a couple things, because when I try to focus on everything at once, I’m just frazzled. So honestly we’re trying to increase revenue. We’re talking to our members about what they want. We have regular goal setting sessions with them. We get to know them really, really well. And we’re starting to do that again as things are, I want to say the COVID situation is flattening out, but there’s other things that have happened recently where we’re talking to them about what they need and consistently offering something extra. And that is a way to bring in revenue. We’ve got a lot of trust with our members. So when they come to us for help and we give them a solution, you know, nine out of 10 times, they’re listening to us. For example, a couple months ago we had a six week strength building session because everybody felt they lost some strength while they were at home, that sold out. We charged about $300 for that six week session. We’re offering a nutrition challenge now and props to my buddy April at Golden Age CrossFit for giving me that idea, by the way,

Mike (06:56):

I know April, she’s good.

Jennifer (06:57):

She’s awesome. But 36% of our group training members opted into that nutrition challenge. So things like that, where we want to offer things for our members, not just throwing things at them to get their money, but throwing things at them that will actually help them. If that makes sense.

Mike (07:11):

Yeah. Yeah, it sure does. And you mentioned one of the things goal review sessions, and it’s such an important part of the prescriptive model that Two-Brain teaches. You’re just talking to your members, the short version listeners, if you don’t know, is just, there’s this whole model where you’re talking to your members, learning about them. And then in the help, first philosophy that Chris Cooper has talked about, you’re just offering them the things that will solve their problems. And, you know, as a gym owner, I didn’t do this for years and years and years. And the more I talked to people about it, the more they tell us that if you sit down with your members every 90 days, and you can do it at different intervals, depending on where your client journey is at. But if you sit down with your members and talk to them about what they need, you’re going to find they need different stuff. And in some ways they might just make a switch from say like a personal training program to a running program. In other cases, they might say, I need nutrition, health, and fitness and personal training as opposed to group classes. And this is a way for you to give your clients the services they need. And inevitably this we’ve heard this across the board. People want more stuff and they’re willing to pay for it. Has that been your experience when you’ve run goal review sessions?

Jennifer (08:16):

Absolutely. And if I can talk about somebody specifically, this guy at my gym, his name is James. He is just fabulous. He started with us, pretty much in the beginning, I think, a month into us being open. And we had noticed that his attendance started going down a little bit and you know, James isn’t one of these guys that, he’s not one of these people that when he leaves the gym, he’s like, Oh man, I feel amazing. You know, those tire flips were amazing and he doesn’t feel that way. He enjoys the effects of the workout. He doesn’t enjoy the workout. So he has a hard time coming in. So we sat down, we talked a lot about accountability and how we can best help him and how we can help him maybe feel a little bit better, get better conditioned things like that.

Jennifer (09:02):

So he decided to do some personal training besides coming to the gym for two reasons. One thing is with personal training, he can get more of that one-on-one attention to really focus on what he needs to feel good about his gym progress. And the second thing is now he knows there’s a coach there waiting for him. And if he doesn’t show up, he’s getting charged for that session anyway. So he needs to make it into the gym. So that goal review session, he told us exactly what the issues were. We came up with a solution for him and now his wife comes in and his son is in our kids program.

Mike (09:34):

Yeah. So that’s a great example. I’ll throw one back at you, I can’t remember who I spoke to, but it was a gym owner who said they had a goal review session with a member and the member was saying, well, I’m traveling for several months or something. And I need to put my membership on hold and they talked about it. And the gym owner said, well, you obviously have goals. We can program for you on the road and give you workouts with whatever you’ve got access to. And the member said, I didn’t know that was a service. I’d love to sign up for it. And so I don’t think it was like an ARM improvement, but it was a retention score where that client didn’t cancel a membership. And I can’t remember what the services were priced, but that’s just an example of finding out what your clients want and then giving it to them. And it’s just, it takes the sales out of the process. Doesn’t it? Like now you’re not just selling things you’re actually helping. Is that what you’ve gound?

Jennifer (10:21):

Oh, a hundred percent. So anybody that knows me knows I hate salespeople. OK. So, buying cars. Yeah. And anything, I just, it’s kinda like just step off, man. Don’t don’t even come closer to me. I’m going to walk out the door. So when I, and I’ll tell you at my gym, I love selling. And because it’s not selling, I’m helping. I just can’t tell you how much I enjoy sitting down with a new person. And I almost want them to feel like a little defensive. I don’t know how to explain it. Like, it just feels so good to gain that trust. And the sales process has to be the help process.

Mike (11:01):

Listeners. If you don’t like selling, I’m going to direct you to our back catalog here on Two-Brain Radio as well as our YouTube channel, we have a lot of stuff there from Jeff Burlingame. He is one of our sales experts. He will tell you all sorts of different ways that you can sell more stuff by helping people, not by ramming crappy deals down their throats. So do check that stuff out in our archives and on YouTube, if you like. Talking specifically about ARM again, has your mentor at any point pointed to specific tasks to increase ARM, maybe besides goal review sessions?

Jennifer (11:33):

So we have had some really great mentors. OK. But I’ll tell you, you know what I think it is. I think it’s the office hours that have helped me the most. The mentors, I use very specific things that I need to work on. And we really hone in on those details. The sales office hours have been fabulous with Jeff and, that I I’d say 90% of my ARM increase is because of the office hours from Jeff. Chris’s relentless pursuit of drilling it into our heads that we’re here to help people.

Mike (12:09):

So guys, if you’re listening, if you’re a Two-Brain client, office hours are we have specialist mentors who come in every week and there’s one every day of the week and they come and they just talk about topics that will help Two-Brain clients do better things. And Jeff Burlingame, our sales expert is one of them. He’s usually there on Mondays. We have others related to nutrition and personal training and online coaching and so forth that you have access to that. If you’re not in the Two-Brain family, you can get the benefit of Jeff’s stuff on this podcast regularly and on YouTube. So I’ll direct you that one more time. OK, Jennifer. So we’re talking sales here as related to ARM. Do you have any tips from the sales process that have helped you increase ARM?

Jennifer (12:47):

Yeah. So one of the tips we got from office hours, it’s kind of two different things that will tie together. Jeff talks a lot about not being afraid to put these big packages together because when people come in, you know, not everybody comes in and needs group training, right? In fact, some people that’d be a giant disservice to them to provide them wwith group training. I have people come in and they, I can’t tell you, maybe 90, 95% of the people that come in, they say they want to lose weight. And now we know that that, I mean, while that’s probably true, but really what we feel most people end up wanting is something else fixed. Right? They need more confidence. They want to be happy in their relationship at home. There’s some other deep cause that they need help with.

Jennifer (13:35):

And the surface level is what their body looks like. Right. So when we’re talking to people, we ask them those questions, you know, we start off with like, Oh, what are your goals? Right. We don’t want to walk in and to start having this deep conversation with somebody that doesn’t know us. Right. So we have to gain that trust and kind of take it slow. And as we talk to them about their goals, we hear them say things and we just listen and we really just shut up. That’d be my first thing to say is make sure you’re sitting with them and talking to them about their goals and just shut up and listen. And they’ll say different things to you. We have people come in, there’s this one woman that came in and she’s going to school, her husband works, they have four kids.

Jennifer (14:20):

She had gained, I think it was maybe a hundred pounds or so over the past year. She tries things and they just don’t work. And she quits cause they don’t work. And I’ll just say on a side note, you should quit if it doesn’t work right. The right solution will be right for you. So every place she’s been to, she ends up getting put into group training and because that’s the easy thing, right? That’s the discount option is a group training. Right. So, and when I say discount, you know what I mean? I mean, that’s the lower tier option for microgyms like ours is group training.

Mike (14:52):

In a coaching service, you’re absolutely right.

Jennifer (14:55):

Exactly. Exactly. So, she was very self-conscious and you know, very timid, this specific woman I’m talking about.

Jennifer (15:04):

And, we do these, we go through this process again, I should say this, our NSI takes between 45 minutes to an hour and it is not a 15 minute thing. And usually when we do sell somebody, when somebody does join, it’s towards the hour mark, it’s a very lengthy process. And we, I guess you’d call it motivational interview interviewing. I’m not sure if that’s the right term, but we talk about their whys and we get deeper and deeper. And one of the processes we go through once we’ve kind of gained a little bit of trust, and I will say, I’ve only done this with women. I haven’t done this with men. I just haven’t felt comfortable, but I literally sit there and I have them close their eyes and I close my eyes with them.

Jennifer (15:46):

And I talk to them about what their future is going to look like in five years if they’re on this same trajectory, and I’m talking slow and I’m calm and I’m kind of walking them through different struggles they have now. And I asked them, you know, how is it going to get better if they are still doing the same thing they are right now. And obviously it turns out it’s not a really good picture that they see in five years, right? And then we turn it around and we say, look, this is the plan that we think is going to be best for you. And for this person, it’s three times a week, you know, PT with nutrition, because that really is the all in, the right package for her. And then I talk about how will you look if you follow this plan and you get what you need out of it, what is that going to look for you in five years?

Jennifer (16:31):

Right? What are you going to see? How is your husband going to feel, how are your kids going to feel? And when we got into that, we heard the dreaded my husband doesn’t even know that I’m here. My husband is tired of me joining and quitting things. And it was really heartbreaking. Like I just felt all the momentum lose out of her. Like not the momentum, but the, you know what I mean? Like, almost like the life just left her and she just finally just let it all out and told us her whole story. And I know this, I’m telling you a story that we didn’t sell her. OK. We could’ve sold her on group training. I know that we could have just sold her on that because of the price point, but that wasn’t what she needed. So I’m much happier with her leaving and us giving her some advice and telling her that she’s really going to have to have a deep conversation with him.

Jennifer (17:21):

I still talk to her over text. Anytime a spouse comes in and the other person doesn’t know about it. It’s just not a good thing. We’ve had it and they don’t last. So I know it’s not like, yay, I got the sale, but I have had other people do that three times a week, PT with nutrition. It’s a wonderful package for people that don’t have a lot of confidence, that aren’t good for group training. And what would I have done to this woman? What would I’ve done to her? If I would have sold her on group training and she would have quit because she just, wasn’t confident in a group. And then her husband once again, I told you you’re going to quit everything. I would have set her up for failure. So I’d rather lose that client and hopefully get her back at some point. I told her, I would love to talk to her husband. That would have been the best situation. But that’s just an example of how we kind of get in deep with people and build that trust and give them the solution that’s right for them not, not what’s right for my pocketbook.

Mike (18:16):

Yeah. And you hit on something really important there. If you had made this sale to a group training, you would have sold one of your lower value offerings, your discount offering in a coaching service, and you would have lost her eventually because it wasn’t the right service for which would have driven your length of engagement number down.

Mike (18:33):

And we know that length of engagement and check our show archives for a show on that, right before this one, length of engagement and average revenue per member are two of the most important metrics in your business. Because if you have long length of engagement and high average revenue per member per month, you can run a profitable business, a very profitable business, with about 150 clients. You don’t need 500 clients, endless marketing and discounts. You need a small number of clients who love you and know you and buy your service and value it. So that’s fascinating that you’ve talked about that and actually finding success in not making a sale. And I guarantee, and I think you might agree with me, when that woman is ready for something that you offer. She’s coming to you, like when she’s ready for fitness, nutrition, or health, and she gets the partner on board, she’s coming to you first, do you think so?

Jennifer (19:15):

Absolutely. Yeah. And we do, like I alluded to before we do spend time with these people that when they do come in and we have these deep conversations with them, we don’t just drop them. I text her every so often. Keep in touch, things like that.

Mike (19:28):

We’re going to get back to more data on ARM, right after a word from Chris Cooper,

Chris (19:33):

This is Chris Cooper, and I founded Two-Brain Business to make gyms profitable. Over the last years, as we’ve compiled more and more data, more and more tools, gotten better and better at mentorship, we’ve really made a lot of gyms, hundreds around the world, thousands over the years, profitable, doing better. What hasn’t kept pace is the quality of coaching in a lot of gyms worldwide. There are great programs out there that will introduce you to a method like bootcamp, kettlebells, Olympic lifting, powerlifting, CrossFit, running, whatever that is. And so we can make coaches who know the subject matter, but that doesn’t make them a great coach. To be a great coach, you have to be able to change somebody’s habits. You have to be able to change their behavior and to do that requires deep understanding of their motivations to do that means amazing adherence by the client. And it means amazing retention because as gym owners, we know it’s harder and harder and more expensive than ever to get a new client. Retention is more important than ever. Referrals are more important than ever. Peer to peer marketing, word of mouth is more important than it’s ever been. How do you get those things? Through client results. So I founded Two-Brain Coaching with Josh Martin to get coaches the skills they actually need to make a career in fitness instead of just familiarity with a methodology. Twobraincoaching.com has courses to help you start a career with personal training, to scale up with group training, both in person and online, and to diversify with nutrition, coaching, and mindset coaching. We have the best programs in the industry that will prepare you and your coaches to deliver any method that you love now or you might love 10 years from now. Twobraincoaching is really a project of love for me. And if you visit twobraincoaching.com, you’ll get a ton of free resources, just like we produce every day on twobrainbusiness.com.

Mike (21:31):

  1. And we’re back with Jennifer Dawson. As we’re reviewing data and we always talk about data. Tell me a little bit, what have you found has had the biggest impact on ARM? Have you been able to put your finger on anything?

Jennifer (21:42):

I think it’s a lot of what we talked about with the sales process and something you mentioned the length of engagement is very important. How we talked about having a relationship with your customers. I think the trust that you build with people, when you do offer solutions, they realize, you know what, this is going to be fun. The last thing was fun, right? I’m going to do this one or this thing really helps me. So I want to sign up for this package, right. So, I think it’s building the trust. And, so while I would like to have, you know, 150 members, that’d be great. And then on the other hand, it wouldn’t be great because the amount of time you spend to getting to know the members to develop real relationships with them, you know, when I check in on people, for example, we have a teacher that unfortunately has to be in person.

Jennifer (22:38):

It’s not what she wants right now. And, one of her students tested positive, so she had to go home and she was upset about it. She doesn’t want to miss the gym, but she’s doing the right thing. She stayed away. I texted her last night and I said, Hey, hasn’t it been long enough? And have you had a test and can we get you back in? And, you know, things like that, just those personal relationships that we have means so much to us. And they mean so much to our members, which are just wonderful. If we have this huge amount of people, we couldn’t keep up with them. And they would feel disconnected.

Mike (23:11):

The interesting part about that is that Chris has written about this and it’s called Dunbar’s number. And it’s the number that is theorized the maximum number of like real relationships you can have with people. And it’s 150, and we’ve heard from lots of gym owners who can’t get past that 150 member mark. And one of the reasons is because you just can’t maintain relationships with more people. You have to, at that point, have staff and systems who can then manage those relationships for you. And you have to level up as a gym owner. But the magic part about kind of this link between length of engagement and ARM, is that you don’t need 500 members. You can make a good living at 150 or even less. We have gyms that are doing it with less, if they’re selling the right stuff to the right people and providing the right value.

Mike (23:53):

So it’s just, it’s an incredible kind of system that changes the whole game in fitness, where it’s no longer about mass numbers of people. It’s about coaching, high value services, the right price and satisfaction with your clients. Right?

Jennifer (24:05):

Correct. Yep. Exactly.

Mike (24:06):

Let’s get to the big C-word that’s always around here with the COVID crisis. You guys are just North of Denver, I believe. Is that correct? Yeah. So tell me specifically about ARM and the COVID crisis. Like what sort of restrictions has your gym been over in the last little bit and how have you managed to increase ARM when big, big boxes are just literally dying in this pandemic?

Jennifer (24:27):

So the restrictions have been masks, so we have to wear masks inside the gym. And I think that’s to be said for a lot of places. The other restriction we have right now is that you can be at 25% capacity. And let’s see here 25% capacity and no more than 25 people, whatever’s less. So our capacity is seven people at a time in the gym.

Mike (24:56):

Wow. OK. So that’s a small number of people. What kind of, how big is your space?

Jennifer (25:00):

So our space, our gym floor is about 1800 square square feet. It’s not, you know, it’s not super big, so we can have seven people at a time and we have room on our rig for six people. We do things like, we opened up the garage doors when it’s nice out and we will, we monitor every day, let me start with that. So we have a class cap that we monitor every day, and if it’s cold weather, we reduce the cap so we can only be inside. If it is something where we have to use the rig. And we know the other thing is we can’t share equipment. So we cap the class to be at a place where we can only have six people if we have to absolutely use the rig. In March, when all of this really hit the US pretty hard, we were closed down.

Jennifer (25:45):

I believe it was St. Patrick’s day. We were closed down from March 17th through the beginning of May, maybe May 8th or so. And we transitioned everybody online. Throughout that process, we gained a few members for online training. And I believe we didn’t keep that many of them because online training is a very specific service. And we will get better that better with that in time. But right now, our focus is on personal training, group training and nutrition. So now that we’re back in the gym with the limited number of members, we had a scare a few days ago, I would say the end of last week, I got contacted by three different people. So sidebar, I have very close relationships with the city, county and this department called Tri-County health.

Jennifer (26:43):

And they’re the ones in charge of what our restrictions are. So I received three contacts, Friday night telling us that on Wednesday, we were going to be closed. Gyms were going to be closed. So those relationships are good to have. I know there’s a lot of people that have a tumultuous relationship with the government and I get it, but it’s really not getting you anywhere. I would reach out and try to be positive and try to be supportive. Just think about it this way. If somebody, you know, if you have a coach there and somebody doesn’t like the price and they’re yelling at the coach, well, they’re not the ones setting the pricing. So these people with the city and the county and the state, they’re not the ones make, they are making the decisions, but the people you talk to odds are not the ones making the decisions.

Jennifer (27:27):

So I try to be very respectful and polite, and I just can’t imagine the stress they’re under. So because of that, they reach out to me and they kind of tell me what’s happening ahead of time. So we were prepared for a full shutdown and we were prepared to stay at a reduced capacity. What we were not prepared was is hybrid type option. We ended up in, which was gyms we’re going to be closed. Like no, if ands or buts about it. But personal training was going to be allowed in groups of three people, plus a coach or less, right. We couldn’t fit everybody in and make everybody happy. And, you know, everybody wants to be in the gym, right. So we were thinking about how are we going to make like an hybrid option work?

Jennifer (28:15):

So this is what we decided to do. And I will say 50% of our members opted in for this. So it was a good option. So the way we explained it, we did a Facebook live kind of explaining what we had found out. And we said, look, everybody’s got to go back to online. Gyms are closed. This is just the way that it is. And obviously we sugarcoated it, but those were the facts that I got out. And I said, for those of you that want to stay in the gym, there’s going to be a cost to it because we have to add additional coaching hours to handle—when we go online, we spend a lot of time with people. We do a lot of accountability. We’re checking in with them before the workout, after workout, we’re doing videos, we’re doing video check-ins, there’s a lot of time spent. All of the workout is customized for them. So think about a coach in front of a whiteboard, and you got six people in front of you, and you’re telling them what weights to do and how to scale. Well, that’s all gotta be done in writing on video for every single person. So we have a very high touch process online. So because of that, we can either focus in class, or we can focus on online. It’s kind of tough to do both for us right now. So what we told people is you can stay online. No upcharge, normally our online training costs more than our in-person training, right? So what we told people is you’re going to get this online training, no additional costs. You’ll get it at a discounted rate because of the situation where we’re put in, but anybody that wants to come into the gym, we’re going to have the same time slots we do now. We can only have up to three people, but there’s going to be a $99 upcharge for the month in order to reserve that spot. And then that spot is yours every day, you know, five days a week, to be able to come in and utilize the gym and the coaching services at the gym. And again, we had 50% of our members choose to stay in the gym and pay that additional $99 a month. And then we had 50% opt to go online.

Mike (30:16):

Wow. So this is really cool. So what you did here was you essentially adapted your service to offer something that would please, you know, and did please 50% of your members, add an additional charge, and you found a way to create a high value service that supported or drove your ARM during a pandemic when other gyms were just getting crushed, running under because they couldn’t adapt.

Jennifer (30:40):

That that is correct. And I will say, the nice thing. And hopefully it’s because of other people having relationships like this with government officials that, you know, people with gyms in Colorado, we found out Tuesday, which was the day before all of these changes were going to go into place that the state decided to allow gyms to continue to run at the 25% capacity, even though the higher restrictions were put in place for restaurants, bars, and other areas. So we do believe the state of Colorado is really starting to see that gyms are an essential part of life.

Mike (31:18):

That’s really interesting. And like, from my personal experience, I’ll tell you how we increased our average revenue per member, and I’m still shooting for what, you know, the numbers that you guys are hitting. But when we had a similar situation where we were shut down, the government eventually said we would be able to open with a lot of restrictions. And we were in that hamstrung place where we didn’t have the staff at that point to offer our online service to the degree. Cause we were doing the same thing. You were high touch, online service, and in-person, we just couldn’t do both. And we didn’t have the partial personal training option either, but we could have opened as a group facility and online training, but some of our clients didn’t want to come back. So we made the decision to pivot online and create an online service.

Mike (31:56):

And we talked about high value online services. So we worked with our mentor to figure that out. And we actually shut down our physical location, managed to drive up our average revenue per member with online services. So we took a different approach and that’s two ways that, you know, gym owners, and we did this through mentorship, you and I use the same service and we figured out what we wanted to do. And it’s fascinating how we were able to do that as a small microgym, make a pivot that a large chain can’t make because they’re locked into their programs. So in the coming months now, what is, you know, what is your short plan? Because your ARM, you showed me the last three months and it’s going up, what is your short-term plan as the pandemic continues, to keep that number nice and high. Do you have anything specific planned or what does your mentor suggest you should do to keep that going.

Jennifer (32:37):

  1. There’s a couple things we’re really focusing on right now. And one of the things is getting more leads in the door. There’s a couple ways that you guys have taught us to do that. And the best way is through affinity marketing, right? So we’re talking to our members and we’re talking to them about, you know, activities they’re interested in outside of the gym, groups they belong to outside of the gym. And we’re doing different things to try to engage the people around our members. If some of our members are members of a running club, we have people that do marathons, you know, can we come in and do a running clinic?

Mike (33:19):

So what you’re saying here is, I mean, this is really cool where you’ve got as one of the leaders in Two-Brain, you’ve got a great ARM, right? You’re over $300. You have a solid system in place. You’re selling stuff that people want. Now the idea is to drive up your length of engagement. So you keep those people who are paying that monthly rate for as long as possible, and then to find more of them. And again, we’re not in that chase for like, I don’t need 500 members, right? You’re in that chase to find some more members at that rate and then keep them for a real long time. So you’re trying to find the right people. And the way we teach gyms to do that is, like you said, through affinity marketing, where you talk to your best clients and you want to find more people exactly like them.

Mike (33:56):

And so you ask them, where can I find more people like you? Do you have friends and family that we can help? Do you have some coworkers that we can help? If you do it this way, eventually, you know, six steps later, you’ll get to some paid marketing, but you might not even have to. Chris Cooper at his gym does not use paid marketing because he’s very good at finding his best clients, finding more people like that. So, because you’ve hit this ARM number, you’re now able to start targeting people to bring in at that number. And it must be a really exciting time for you because you’ve got a big piece of the puzzle figured out.

Jennifer (34:25):

Oh, definitely, definitely. It’s all about engagement with your members, those relationships with your members. And you’re exactly right when we get new leads coming in, the second piece of it in order to keep that length of engagement up, you want to find members like you have now, right? If I’m chasing people that want discounts, like we talked about earlier, that’s not going to help improve my metrics. That’s not going to help my members’ experience if they have a new person every other week taking up a coach’s time. Right? So the biggest thing that I would say to people and that we’re going to continue to focus on is that sales process, when somebody comes in and they’re telling you all the right things to make you realize they need personal training and you offer them group training, you’re doing an absolute disservice to everybody around you. So that’s the biggest thing for us is getting more leads in and really giving them exactly what they are asking for.

Mike (35:17):

I think we probably need to put that on an Instagram post. I think what your quote there about that, because you are, you’re exactly right about doing a disservice. If someone needs something, something different, and we made the mistake at my gym for a long time, we assumed everyone wanted group training. When we made the change to personal training and specialized stuff, clients got better results in our gym did better. As we close this out, I’m going to ask you to put you the spot here. A lot of gym owners haven’t one clue how to improve ARM. They just don’t know how to do it. And they’re kind of lost. So I’m going to take step one and I’ll tell them what that is. The second thing I’ll ask you for steps, two and three are just a couple of tips. If you were just starting out again, what you would do to improve ARM. So step one, guys, listeners, you have to calculate your current ARM and it might sting to do it. That’s fine. But just get that number in and figure it out. You can use software, you can use spreadsheets, but figure that number out so that you have a starting point from there. Jennifer, what would you recommend?

Jennifer (36:08):

So the first thing I’d say is, this is going to sound kind of crazy because this is a really big thing, but I think the annual annual plan. So we’re in almost November now, right? And what am I talking about an annual plan for? It’s not just the annual plan for next year, but what’s your plan for this year. If you’re only working and looking at the week ahead, you’re kind of bandoning things together. If you sit and you put together a 12 month plan, what you’re going to do each quarter, what you’re going to do each month and each week you’ll have a plan for what your members need and what new people might be might be looking for.

Mike (36:48):

And that can fill dead spots, right? Cause you can feel dead spots. If you look at that annual plan, you can say, OK, you know what? Everyone goes to the lake in July. And I have a real issue here where my revenues are down. What could I offer that would fill that? And then you start asking seed clients and saying, guys, what would you need in July? And maybe it’s like, wow. Our kids have nothing to do. You know? And you can start putting kids programs in or specialty programs, or you can do all these different things that fill up dead spots. And you do that by asking current clients, you know, what they need. Listening to members. If 10 members at goal review sessions tell you that you have, you know, they want to get better for an upcoming marathon. You’ve got yourself a marathon training specialty group. So annual plan is a huge way that you can find things that people need. And I would suggest that you probably want to make the annual plan in conjunction with looking at your metrics, your revenue, and also looking, listening to your members in their goal review sessions. Do you agree on that?

Jennifer (37:42):

Oh, absolutely. That was the second piece of it besides the annual plan is really asking again, I’m going to beat a dead horse, right? Is whether you’re in the sales process with an NSI or with a goal review session with a current member, you really want to find out what they need and make sure you’re offering it to them. If you don’t currently offer that service, then add that service.

Mike (38:04):

And that really echoes what one of our mentors, Brian Zimmerman on a previous show, talked about. When he started doing goal review sessions, he ended up selling more services. I think he said to 75% of them or something like that. And these numbers are not inconsistent. Like we’ve found that when gyms start doing goal review sessions, what they do is they find out that their clients want more stuff. And a lot of times clients don’t even know what you offer, where it’s like you offer online options or you offer nutrition. I didn’t know that you can actually do PT. Like when we started doing this and talking to our clients, one of them literally said like, I didn’t even know you guys offered PT, right. And how bad a job were we doing serving that client? You know, we were doing a great job coaching and group classes, but we didn’t actually offer a thing that could have made his life better. You know? So those goal eviews, they just have to be part of your process. And, you know, they clearly work for you, Jennifer.

Jennifer (38:56):

In preparation for this, I started getting into the details of my numbers and just kind of looking to see, you know, what members are using multiple services, right? So I found out that our group training, 31% of our group training members also do PT or nutrition. Twenty-five percent of our online members also do personal training. 55% of our personal training members also do group nutrition or online. If you find the right people that are right for your gym, they’re going to find other services that you offer than just the one they might’ve initially joined. I mean, a lot of people join and they choose multiple services because that makes sense, like nutrition makes sense for almost everybody. And I’d say for us, that’s the toughest one for us to sell, because that is so personal. And nobody wants to mess with my cheeseburgers. You know what I mean? Like I want my cheeseburgers and everybody kind of thinks that that’s what’s going to happen. But I think finding the right group for your gym is absolutely imperative. Finding your people, your tribe.

Mike (40:18):

Really you’re a coaching facility, right? As a health and fitness facility, you’re not, you know, you’re not branded as a group training facility. Although you offer that. You offer multiple services, coaching services that relate to health and fitness. And when you do that, there are obvious synergies between these services. And when you listen to your clients, you tell them about them and the right clients sign up for these services and drive your ARM up over $300. Jennifer, thank you so much for sharing your knowledge with us and congratulations on being one of Two-Brain’s ARM leaders.

Jennifer (40:46):

Thank you, Mike. It’s really great to be here.

Mike (40:48):

That was Jennifer Dawson on Two-Brain Radio. I’m your host, Mike Warkentin. Want to improve AR?. You can start by getting your best clients to help them find people just like them. We’ll tell you how to do that in the free Two-Brain guide to affinity marketing. Click free tools in the show notes to get that resource today. Thanks for listening to Two-Brain Radio. We’re back with another episode Monday. Hit subscribe on the way out so you don’t miss it.

 

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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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