No one will pay 300 bucks for a gym membership. No one! If you’ve ever said that you need to hear from Karen Hazleton, she’s up right after this on Two-Brain Radio
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It’s Two-Brain Radio. I’m your host, Mike Warkentin. And today I’ve got another gym owner who hit a huge average revenue per member number in December, 2020. We call it ARM for short or ARM and Karen Hazelton of Telos Strength and Conditioning in Tucson, Arizona, scored in the top 10 of all Two-Brain gyms. She and husband, Shaun reached just over $300. Karen, thanks for jumping on Two-Brain Radio with me today.
Thanks Mike. I’m happy to be here.
I’m excited to ask you some questions about ARM, I’m going to ask you the first important one that shows where you came from. Do you recall what your ARM score was the very first time you ran the numbers?
Well, so the very first time we hardly knew what we were doing. We’re just starting with you guys at Two-Brain a couple of years ago, so I don’t even remember where we were, but I know it was, you know, low hundreds. But it was not good.
You know, it’s funny. I talked to a guy, a Storm Strout, you may know him from the Two-Brain group. He was telling me in a previous episode that his original average revenue per member, he charged $70 for all you can CrossFit group classes and he gave everyone a discount. So his average was probably like 50 or something like that. And now he’s up in that high range as well. He actually scored near you guys in this top 20 that we ran. So isn’t that incredible? What can happen over time?
It’s so true. It’s so true. I mean, we had a whole lot of discounts going, so I know how that goes.
I’m going to put you on the spot here just for a second. If I would ask you, like, I know so many factors go into this, but if I asked you for one factor, that’s caused your ARM to rise from the low hundreds up to where it is now, what would you say? The top thing?
Yeah, I would say definitely the shift to more personal training. We have always done a lot of personal training, but more recently we’ve realized just the level of care and coaching and customization we can give to people when they’re in either like a one-on-one setting or, you know, two on one, three on one is just, it doesn’t even compare to what you can get in a group. And so shifting to personal training was just kind of a natural progression because it allowed us to help people quicker, which that’s the business we’re in.
Isn’t it funny though. I’ve talked about this before on the show, but I was super ignorant. I didn’t realize that you could teach CrossFit in a one-on-one setting. And I thought that my group classes, that we were charging like $150 for, whatever, I thought that was my premium option. Whereas that was actually my discount option. Did you have the same issue?
Yeah, I thought, I mean, when I first started, I was thinking, Oh, how could people afford this? Because I can’t afford this. But I think that was the first thing we had to realize is that we have a great service and we can really help people. And the best way to do that is to have them one-on-one and have kind of a premium product. And we’re providing them a great service and, you know, we tell our people, we want the money you’ve spent here to be the best money you spend all month. And I think that’s really what we’ve been able to do. And I think so that mindset shift was I think really important.
It is an evolution. And I talked about this with so many gym owners, like you, I lived this myself where it does take a bit of a mind shift and sometimes it takes experience and time to convince yourself that you’re worth it, and you know, and Chris has written about this so many times, Chris Cooper, Two-Brain founder, and the best way to, you know, to convince your clients that what you’re offering is valuable is to be valuable. Over-deliver, give them the greatest amount of stuff, but sometimes you don’t realize that right off the bat, because for me, I was brand new. I’ve got my first one, you know, one-page weekend certification. And like, am I really worth this money? And then after 10 years I knew I was. Other people like you, you’ve done that evolution even faster. Like you said, about three years, this has happened. Right?
Yeah. And I think that’s—we’ve been with Two-Brain for, I think over two years now. And it really has been just the past few months that I’m like, Oh, this is what you guys have been saying for the past two years. It’s like, so I think it’s like I had to really internalize it so it came across as authentic.
And I’ve talked to salespeople as well, Mateo Lopez and Jeff Burlingame, two of our experts, they say that asking for high-value sales does require confidence and belief. And you kind of have to build that up in yourself. And like, we can obviously short circuit that process with education and training and mentorship, but you still have to come to it in your own pace and eventually realize, yes, I’m worth this. Let me ask you this question. I understand your revenue now is about 70% PT and about 30% group classes. Maybe that’s shifted a little bit, but it’s in that range. Has it always been that way or if not, why did you shift focus in this direction?
So we’ve always had a good amount of personal training just from day one. My husband’s been a personal trainer in town for 11 years now, so he’s gotten a pretty good following of clients. And so we’ve had a lot of personal training, but I really think through the COVID crisis that, you know, there was kind of almost a natural shift where people didn’t want to be in big groups. And we had this service and our members started telling their friends that this is where this is where they go for personal training. It’s so safe, you know, we’re doing such a good job of keeping things clean and they feel really safe. And so they told their friends and then their friends started coming. And so it’s almost this affinity marketing without even realizing that was happening. It was just, we did such a good job with the pivot to when everything kind of happened last March. And so it kind of happened naturally.
And that’s interesting cause COVID has been such a disaster in so many cases for the fitness industry, but there are some gyms and some businesses that have managed to pivot and found the bright spots in there. And maybe they’re not, you know, it would all be great if we could all go back to normal, but it’s really neat to see how you and others have figured out that yes, we can offer new services. And for my business and my wife’s business, it was offering 100% online coaching, which we didn’t really do much of at all. And it’s mostly nutrition with some fitness, but for you guys, this helped you really jack up your PT to the point where now these really satisfied clients are bringing in more clients like them.
Yes, exactly. And I think that’s kind of our been our mindset all along is that the best way to grow is to do just an amazing job with who’s in front of us. And then they will tell their friends and family and that’s, I mean, we have so many family members coming now and friends and it’s really great because we just have such a good energy and such a good environment in there right now
This is a little bit off track, but I’m gonna ask it anyways, because it is important to ARM. You mentioned affinity marketing, which is for people who don’t know, it’s basically working with the people who are closest to your business rather than cold leads through ads and things like that. It’s working with your clients to get more people like them. And we have a guide that you can download by clicking in the show notes. You said a lot of this happened organically. Have you done to like, make it happen and make sure that it keeps happening because we all know that your clients will refer people to you, but they don’t always do it unless you kind of help them along a little bit. Have you done anything like that?
Yeah. Where we kind of ask people if they have—
Chris has a strategy, for example, where he asked people to come in and meet with him, review their goals. Who else can I help in your circle? Things like that. Do you guys do stuff like that? Like through goal reviews or anything?
So this is the other kind of thing that’s clicked for me is I’ve been hearing, you know, since we’ve started Two-Brain, goal reviews, get these done. And we’ve tried it and it’s been unsuccessful in the past, but really these past, I would say even just these past few months that finally, it clicked for me how to do them correctly. And so that’s been the best way to kind of talk to people and have just a natural conversation. I think I was forcing it too much in the past because I didn’t really know what I was doing. But now it’s like, when I sit down and talk to these people, it’s just so natural to say, who else can I help? Or who else is, you know, who else could I help get results that you have? You know? And so I think it just, I mean, that has a lot to do with it. I’ve also, you know, if we’re low on clients, I say, Hey, do you have anyone else that we could, even just bring them in, I’ll even do a free session with them. And that’s been a way to get kind of people in the door that way and get signed up.
That’s interesting because when had our physical space, I struggled to get people to goal reviews. And I think the reason, we’d been around for like 10 years and a lot of our like six, seven, eight year members were like, we’ve never done this before. I don’t need a goal review. You know? But when we shifted online in the COVID thing and basically start a new business, my wife started doing these goal reviews and it worked because people wanted more connection. They wanted more touch points. And we basically had a new business that this was part of. So it wasn’t that the goal reviews didn’t work for me. It was just that we hadn’t put in enough time to make them part of our business. When we hit that bump and reset, it started to work. And then exactly like you said, it is natural saying, Oh, your husband needs some help. We can offer that. Or your wife.
Yeah. COVID gave a nice reset for a lot. I mean, it just gave a reason to, OK, this is going to be important. We need this, we need you to do this.
It’s tough, but it really gave us a chance to like, if there was ever a time to change something in your business, that was the, you know, that was the excuse or the reason or the opportunity, however you want to look at it.
Totally, totally. I mean, we overnight fixed, I don’t know, 10 issues in our business, just literally an overnight, because we had to, we had no choice and it was just, yeah. So a lot of issues we had last March we don’t have anymore.
Oh, that’s so good. That’s so refreshing because the doom and gloom in the fitness industry right now is real. There are a lot of people that are struggling. So it’s so nice to hear that, you know, you guys have made some positive steps and I know in the notes that I got that you said that your retention and your headaches have actually, you know, things have changed since you just went to this shift from more personal training and a little bit less group, or maybe just more personal training is more accurate to say, but talk to me about what’s happened to ARM retention, headaches now that you have this different focus.
Yeah. I think it’s definitely a shift. I mean, we have fewer people, we’re definitely down on members, but the people who are there love us, they love the brand. They’re so happy. They’re getting results. And it just, the environment just is so much better. I mean, we always, I feel like we always had a great community and a great following, but I feel like the people that kind of faded away over this were people who weren’t bought into us and who we are. And so now it’s like we’re left with this core group of people who believe in us. And I just feel like it’s set us up for the future to just go so much further because of it, because we’ve cleaned up so much in our systems and our, you know, what we do and who we’re helping. So I think it’s, I mean, it’s exciting going forward. Cause I think just we’re set up for success now.
We’re all still under various stages of pandemic stuff. Have you found right now where you are in Arizona, are you acquiring more new PT clients or more group clients or does it reflect your 70, 30 ratio or what is the intake?
So right now we’re probably getting, we’re definitely getting more personal training. The reason being is because I feel like the market where we are in Tucson is so saturated with group classes right now. So we have the Orangetheory, F45, you know, all these group fitness studios that are popping up. But so what we’re getting is really truly people that want a customized one-on-one scenario. So we definitely are seeing more personal training coming in, but we, I mean, I had five people sign up last week, so we’re definitely getting people in our door.
Tell me about how your PT rates relate to your group class rates. And it could be just your, you know, whatever your group class average is, because I’m sure you have some different ones.
Yeah. So we have several, I mean, we don’t do discounts anymore, which is huge. So we got rid of those, but we have several different, depending on how many times a month people want to come. So last time I checked, our average group membership was $141 a month. And for a one hour personal training session, it’s $70 for the hour.
- That’s really interesting. Reason why I asked is I asked Storm Strout, one of our other ARM leaders and he said, almost identical to you that his general group class rate was about 140. His nutrition coaching rate was about 140 and his overall ARM is about 280. So you can kind of see where his comes from. Right. And his PT rates are also in that $70 range. He told me, and I’m going to ask you the same question, but he told me that he had almost all of his PT clients are training a minimum of twice a week in summer training, more at $70, which means that he’s selling PT packages in the range of a thousand to 1500. Is that kind of what you guys are doing too?
Yeah, exactly. And so we have, I haven’t even talked about nutrition coaching too, which is big. But we definitely, we have people coming three, four times a week for personal training and then coupling that actually with group classes in addition. So we actually have a handful of people that are doing both personal training and group training. But I would say, I mean, I would say the average person’s coming three times a week for personal training.
Yeah. So that’s such a key thing because what you’re seeing there is that you’ve got these new high package items that are really helping clients out with high touch services, the stuff that they want right now. And if you look at it from say a quote unquote COVID safety thing, one-on-one training is probably easier for a lot of people to stomach right now. So you’ve got these high ticket items. And then you’ve also got these really cool hybrid systems. And I never even thought that this was possible, but you’ve got people who want this tailored, direct approach, but maybe every once in a while, they want to throw down and do Fran with the group, they have that option. Like how cool is that. They get the best of both worlds.
Yeah, totally. Oh my gosh, Fran.
I mean, I don’t want to do it, but if someone really does.
Yeah, I know. I know what you mean. And I think that’s, I think that’s another thing that’s shifted and this is, the hard part about this is I would hear people in our group, in our Facebook group, I would hear them talking about, Oh, I sold this, I sold this huge package. And I always thought, how would you do that? But now I’m to the point where it’s like, I have seen, if you do what we tell you to do, we can almost guarantee you’re going to get results. And so it’s so natural to, and I keep saying that, but it is just, it’s so authentic. And it’s so natural to say, look, you want to lose 50 pounds. I can help you do that. I’ve helped people do that before. This is how we did it. And so I think part of it is it just came from me not thinking anymore about, Oh, I need to sell this. I need to sell this, to shift into how can I really help this person? What does this person need to do? And just knowing, having that confidence that we are the place that can help them do whatever it is they want to do. If they just trust us and trust the process.
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Yeah. That’s such an interesting point because when you need quote unquote to sell something, you’re inclined to just get, you know, get any money, right. And that means that you might be recommending your low value offerings and so forth instead of telling people what they actually need to do to get fit. And we know that people can get fit in general nutrition and group fitness programs, however, you’re absolutely right in that it’s going to happen faster with a dedicated coach. Like there aren’t too many, you know, Hollywood actors who are training for a specific role who just go to random group classes, right. There’s other factors, but they probably have a personal trainer who’s saying exactly what they need to do for that role. And so it’s really cool that you kind of, that belief in the fact that you can get them fit faster, really creates that value in yourself. And you can say that with confidence. That’s really cool observation.
Let’s talk a little bit now about, we’ve mentioned nutrition stuff. Let’s talk a little bit about specialty programs. So I’ve asked a number of gym owners about high ARM scores. A lot of them talk about specialty programs. How do those things factor into your number? And I guess we can call nutrition coaching an add on in this case, even that might be a primary service for you.
So that’s something I would say that we definitely like in the future would like to improve on actually, but nutrition, coaching is becoming more and more a part of what we do. It’s actually part of our intake process now where we have everyone do an in-body scan and it just opens up that conversation when people see the numbers and they realize, Oh my gosh, this is so much worse than I thought I was.
You know? And it’s interesting, you know, I think it’s—I am someone, so I’m actually our nutrition coach as well. And I’m someone that’s, you know, the scale is important. It’s so much more than non-scale victories for nutrition coaching, but there is something to seeing that body fat percentage on a piece of paper that you’re like, OK, this is something I need to take seriously. And so that’s been a big shift to make nutrition coaching, you know, from day one, everyone hears our philosophy, what we believe in when it comes to nutrition coaching. So that’s definitely increased there, and then we try to do two nutrition challenges a year. And so that’s another way to kind of get people started down the down the right road.
So really it’s a big deal is that you’re talking to people at the outset and then you’re telling them exactly what they need to accomplish their goals. And in most cases that’s probably going to be fitness and nutrition and maybe even PT on top of it.
Exactly. And it’s just, and we try to use, you know, what Chris Cooper will say is like the good, better, best approach. And I try to say, you know, if I meet with someone and I think, OK, maybe if we just did a few tweaks, maybe you don’t need the nutrition coaching, but we’ll circle back in three months and see how it’s going. So I finally have that process all, I mean, I think you’re only as good as your procedures, right? So I finally got that part figured out, but you know, some people I say, look, you have this wedding you’re going to in March, here’s what we need to do. You know, I can help you lose these 15 pounds, but we have to get focused. We have to get you dialed in.
- So what I’m seeing here is you’ve got an intake process where you can prescribe the exact best plan. You have some high touch, high value, high ticket items, which know personal training packages. Some of them have hybrid options where you can do PT and group. You’ve got a group rate that doesn’t have discounts and that group rate can be increased with, you know, add on nutrition stuff. Maybe you do a challenge from here and there. And you’ve obviously, you mentioned you have about twice a year, so you obviously have some sort of schedule in place, right. For these various challenges.
Yep, yep, exactly. My annual plan. I’m living by the annual plan. It’s very important.
Well, it’s cool. The people that I talked to about this and you’re kind of echoing with some of the other owners have said, there are little wrinkles between everybody, but there’s a general theme and it’s all this stuff that adds up to high numbers. There’s no one that’s spoken to yet that says, Oh, you know what? I have 400 members and I sell all of them, you know, $140 and we have this gigantic revenue and profit. Those people are out there. But what I’m seeing here for ARM is kind of exactly what you’re saying. These tailored services and add on services, all this other stuff. And then like, you know, the average retail sale puts in $20 on top of that. It’s just cool to see how people are building this. And it is according to a system that works. I’m going to ask you this because I heard about this as well. I’ve heard that with your nutrition challenges, you’ve actually told some clients that they shouldn’t participate. What’s that about?
I know. I’ve been doing them for a few years now and I haven’t really been super happy with the results of it. I think part of it was because for some people it was just a month and you’re done, so you’re going to go on a diet for a month and then you’re done. So that was—this time, I really wanted to shift that mindset for people right from day one, so how I started this challenge was I sat down with all 20 people that were in the challenge for 20 minutes. And I did a goal setting session with them, right from the start and talked to them about what are you looking to get out of this out of this next month? What are your long-term goals? What are your short-term goals? And for three of the people that had signed up, I realized during that talk that actually this challenge, they were just going to get lost in it.
So I told them, I said, you know what? I think you need to do one-on-one nutrition coaching instead, and just get started right now. Don’t waste another month and then maybe, you know, have your motivation kind of fizzle before the month is done. And then you’re done. I can help you, but it’s going to be much better if you can do one-on-one coaching. So they actually switched to one-on-one coaching, which, you know, is more, it’s like the personal training of nutrition. And so I was actually able to get three more people to do the challenge then. So it all worked out in the end.
That’s really, really cool. Have you read Lindsey VanSchoyck’s recent article where she talks about kickstarts instead of challenge?
Yeah. So I love that idea. And unfortunately I saw it like, after I’d already started marketing for this challenge, but that’s how I’m going to, you know, when we did our kickoff seminar, that’s the language I used and yeah, it’s called a challenge, but I said this is not something you’re going to be done within four weeks. This is just the start. So I started using that language, but from now on, I will never call it a challenge again.
Yeah. And for listeners, we’re going to get that article in the show notes, you can click on it. And I’m actually getting Lindsay to come on the show shortly in a subsequent episode. And we’re going to have her explain exactly what happened because for her, she changed one word and it was changing challenge to kickstart and things got better because more clients saw it as the start of a program that would lead to ongoing nutrition coaching. And they continued and got results as opposed to a challenge, which is like, I made it through the 30 days and we’re back on the brownies. Right. That happens so often. And I’ve done this. I’m guilty of it.
Yeah. Yeah, totally. Yeah. So that’s, I love that idea.
We’ve noticed in the conversations that I’ve had, that the more time people spend with their clients and the more they talk to them, the more they sell, have you noticed that?
Yeah. Yeah. And that’s something—so my mentor is Tammy and that’s something she and I have really been working on this past year is our client journey and getting—again, I can’t say it enough, it’s all about your systems. So we got organized and have it so the first month I’m touching base with them once a week, you know, either in person, a phone call, text, I’m talking to once a week. This isn’t including like the automated emails we send out to them, but this is in addition to them so that they know that we care and that we want them to succeed. And so I think that’s been really important too, to kind of keep people around because that first month is always hard. You know, if people aren’t feeling like they’re getting enough for their money or they’re just, they’re not getting results yet, you know, they’re sore all the time. It’s kind of where we would see people drop off. But now we haven’t seen that since I started doing this.
Yeah. And you made an important point where, you know I’m saying, you’re talking to clients more, you’re selling more, that’s not the point of the conversation. The point is exactly what you said, where you’re just seeing if they’re happy and getting the results that they need. And if they’re not, then you alter their prescription and give them the stuff that, you know, it’s like, Oh, I’m not losing weight fast enough. Oh, have you done our nutrition program that could help you? They add it on. So it’s not really selling it’s Chris’s concept of help first, which he’s written about. It makes it so much easier to quote unquote sell because you’re not really selling, you’re just solving problems for people. Whereas for me, I was always like, Oh, I’m pushing this service on these people, but the reality is that they actually need it if they want to get stronger and they can do it one-on-one with me with a focus on powerlifting. Why wouldn’t you do that? Right. Like, did that change? Like, were you good at sales before?
New Speaker (27:57):
So did this change your whole approach and make it easier?
Yeah. And I totally feel like I’m not selling. It does not feel like I’m selling at all because—and it’s funny because as an nutrition coach, I’m always like, you’ve got to take the weight on the scale, you’ve got to take that out of your mind. And as soon as you do that and as soon as you just focus on getting really nutrient-dense, great foods that are going to fuel your body, then you’re going to see the changes you want to see. And so I think when I made that shift with what I was doing at the gym, where I thought, I don’t care what money this person spends at my gym, I want to help them. And I want to make sure that when they walk in or from the moment they walk into our doors, to the moment they leave, they are having a five-star experience. And when I started doing that, everything changed.
I’m going to ask you for a piece of advice here and, you know, put yourself back three years if you need to to give it, if someone is out there because you’ve given us a great picture of all these things that go into your ARM. What if someone out there is listening right now and say their ARM is like a hundred dollars or something like that. And they’re just like overwhelmed with this idea of $300 and $1,500 packages. How would you get that person to take one step in the right direction? Like what’s something they could do today to start getting closer to a high ARM?
I think it’s really just thinking, as hard as it is, you have to stop thinking about the money, which seems crazy. But if you, like, we just think about how can we make the most authentic, great, customer experience, have the top of the line coaching, how can we help these people? And you know, it’s not by letting them get lost in the hustle of everything. You know, it’s about touching base with them and, you know, talking to them regularly and just communicating. I think that’s been the biggest thing for us.
And I’ll confirm what you’re saying. I think just from my experience with other owners, the more our owners speak to their clients, whether it’s on intake or in goal reviews, the better things get for everyone because the client, and I’m saying everyone in the sense that the clients get what they want. They get the results. The business gets the money and the person in the middle, the trainers, and this is a whole different story, but trainers actually get careers that pay them properly because the clients are getting additional high value services. So the whole thing really works. If you’re struggling right now, do some goal review sessions, change your intake process. And if you can’t get goal review sessions going, keep doing it, but bolt into your intake sessions because then those new members will expect it. And then exactly like Karen said, set up your client journey so however you’re moving through this, you know that you’re contacting new members at X dates here, here, here, here, here are the procedures. At three months, we have a goal review and so on and so forth. If you do that, I would almost guarantee that the ARM’s going to start going up simply because you’re speaking with them, would you agree?
Totally, totally. And that’s the thing is, you know, they see that you really care and really want them to succeed. That you’re not just money hungry. You know, they see you as someone who’s really trying to help them and guide them through this.
Thank you so much for sharing all that. That’s super insightful, Karen. I really, really appreciate it. I wish you all the best of in the next coming year, hopefully COVID goes away and you guys can even crank up that number.
Mike, thank you so much. This was fun.
My pleasure. That was Karen Hazelton on Two-Brain Radio. I’m your host, Mike Warkentin. If you prefer video, Two-Brain Business is cranking out clips on YouTube. Be sure to head over to our channel to check out Chris Cooper and our team of mentors. Thanks for listening and we’ll see you next time on Two-Brain Radio.