Building $86,000 Monthly Revenue Through Retention (and Sales)

John Heringer

Mike (00:02):

$86,000 in monthly revenue? This gym owner did it. And he’ll tell you how on today’s edition of Two-Brain Radio.

Chris (00:09):

Chris Cooper here to talk about Level Method. When it comes to owning a gym, it can be really tough to show your members their progress and keep them engaged long term. Level Method provides experienced gym owners with a visual step-by-step fitness progression system that’s fun, engaging and easy to use. With Level Method, your clients can reach their fitness goals faster and safer than ever before and become raving fans of your gym. Go to levelmethod.com to find out more. I use this product in my gym, it helped with my conversion from my on-ramp program into ongoing group coaching, and it’s also boosted my retention over time.

Mike (00:43):

It’s Two-Brain Radio. And I’m Mike Warkentin. Two-Brain tracks data relentlessly, and it was amazing to see the August revenue numbers from our top 15 gyms. They went from $43,000 to almost 88k. I’ve got the No. 2 gym owner with me today. John Heringer owns Method3 Fitness in San Jose, California. John, welcome to the show. Thank you so much for being here today.

John (01:05):

Thanks for having me. I appreciate it.

Mike (01:07):

I know from a pre-interview that you did that you expect your revenue number to stay high. So this is not just a flash in the pan number, but before we rip into exactly how you did it, can you bring us up to speed on your business? Like I’d love to know, like how long have you been around, how big is your gym, lots of members. Who’s your avatar, any details you can give us to help us understand what Method3 Fitness is all about?

John (01:28):

Sure. Yeah. So Method3 Fitness has been in existence for just over 11 years. San Jose. We celebrated our 10-year through a pandemic. Not quite the celebration I was looking forward to.

Mike (01:44):

Congratulations nonetheless.

John (01:46):

Hey, thank you so much. I’ve never been more grateful to be here. So, let’s see. Yeah, just over 11 years in business, we’ve got right around close to 400 clients. We call them partners. Call our members partners and our memberships partnerships, because we think it’s a two-way street to get them where they want to go. And total square footage, we kind of have a couple of different units kind of in the same general, like small retail center that are just very close to one another. So total combined square footage is probably 37, 3800 square feet. And the primary people that we serve I’d say are men and women ages 35-plus. We have probably more like 70% of our partners are women. Maybe 70% are women. The rest are men. And, we do a combination of group training, personal training and nutrition coaching. Got a fantastic team, a lot of full-time coaches and a few part-time coaches and just an amazing team that really helps run the operation, a GM and a lead coach to kind of oversee everything. And yeah, it’s been an amazing, amazing journey and ride. Here we are.

Mike (03:08):

Yeah. So I, there’s a couple of things I want to know, kind of ask you a little bit more detail right off the bat. So you’re saying 37, 3800 square feet. Is that usable space or does that, or is what’s your usable space?

John (03:19):

Yeah, pretty darn close to that. And we have two small offices, two restrooms, but a majority of that space is usable. Maybe it’s closer to, I’m trying to think of the raw footage in each studio. Maybe closer to 3000, I guess, overall.

Mike (03:41):

  1. So this is incredible. So I know, first of all, I know Silicon valley rent is not the cheapest thing you’re ever going to find in the world, so that’s probably part of it. But the other thing I want to know is you’ve got 400 members in what a lot of people would say. Like for example, I had 6,000 square feet and I never even came close to 400 members. You’re doing 400 in 3,700. Tell me a little bit about that. Like, are you packed from morning till dawn til dusk? Or how do you space it out and make good use of that space?

John (04:08):

You know, we’re getting pretty at capacity right now in some of our sessions, but I wouldn’t say all, we just do a really good job with space utilization. So we actually, the company was actually called fast action training way back when, but the, you know, funny, I always talk about the acronym maybe didn’t serve me, like get fit with FAT. Our partners at the time were super awesome. Like, oh no, I just tell my friends I’m going to my fat class. I’m like, well, that’s not what I was going for. But so we did a rebrand in 2017 to become Method3 Fitness. And we did a huge remodel at that time as well. And what was really important to me was space utilization. So, we kind of have basically I’ll call them three mini studios. One is probably, I dunno, let’s call it 10 to 1500 square feet.

John (05:03):

One is around the thousand ish and then one’s around 600, we’ll say, give or take. And we try to do different things in different ones. So the bigger one is kind of our group training specific and the other two are for more like personal training and semi-private and so really, it’s just been a matter of being mindful of what we host when we host it, you know, and for how many bodies we can actually put in there. So there was a lot of thought that went into, you know, the design of it to be able to accommodate that number of people in different situations. If I have this many coaches kind of, where is each of their stations, so to speak with each of their clients, their partners, so that we can still maximize the number of people that are in there without making it feel overwhelming.

Mike (05:58):

And I really wanted to ask this question, because again, so many people think that, you know, bigger is better and you need these 20,000 square foot facilities. And what we’ve often seen and heard is that they become empty caverns where they’re full at five o’clock and then they’re dead all the other times. And that really cuts into profit margin. And it’s, you know, Chris Cooper’s written about this, where he’s talked about, if he were to do it all over again, he would go very small. And then he would only scale up when he was bursting at the seams. And it sounds like you’ve kind of figured that out where you’ve got three smaller spaces, but you’re maximizing the usage of those things. I have to ask. What style of training are you doing there? Like, is it like barbell facility, functional stuff, or is it a different style of training? How do you get people in those spaces?

John (06:37):

Yeah, so more functional training, our version of, you know, high intensity interval training. Some equipment. So no, you know, no big treadmills and all those other things taking up a lot of space. Mainly TRX, dumbbells, kettlebells, med balls, resistance bands. We have Kaiser machines. They’re like a nomadic compression. Yeah. So we actually have those mounted to the wall with a wall mount. It’s just, I wish I could show you more pictures of the space. It’s beautiful. And again, so it’s a wall mount, but we actually hid the compressor up in the ceiling. So just everything looks really, really clean. Everything has a spot and a place so that, you know, when you go in there, it makes it seem even more open and bigger than it probably really is. Which is really helpful as we kind of get people into certain groups and situations.

John (07:31):

I will say that kind of what I’m saying about layout using the studio is in normal times right now, in fact, we actually built, we call it our outdoor arena, just a huge canopy out outside, kind of in the back area of our parking lot that was able to accommodate kind of a lot of space, these huge eight foot fences with some privacy screens, almost like tennis courts, right. The screen that is around the fence. So it kind of creates some privacy and doesn’t allow a lot of stuff to blow into the area, but we have this huge area that we have fenced off and inside of that, all these different like mats and flooring laid down. And actually that’s where we’re hosting our group training right now. And it’s honestly been fantastic. All of our group training just per our county in Santa Clara and, where we’re at in San Jose, group training, we’re still conducting outdoors because if we went inside, everyone would have to wear a mask.

John (08:31):

And I know a lot of our partners don’t really want to do that. Thankfully, our personal training partners are OK with that. We do all of our personal training for the most part indoors with a mask, but all of our group trainings done outside. So I’ll tell you what though. I’m just so grateful because it’s, I think people have kind of gotten used to this, normalization, so to speak of what’s possible that they can do with their fitness and they’re more and more open to doing what we offer right now. So it’s kind of interesting that, like I’m not getting any hesitation whatsoever with personal training inside with a mask or group training outdoors. People are still connecting with us, still plenty of leads coming in. So very grateful for that, but it’s sometimes very surreal when I step back and take a look at it. So, you know, hopeful for when we can get back indoors with some of that and utilize this beautiful studio that I just described. But, right now we just brought a bunch of equipment outdoors into our little, outdoor arena.

Mike (09:31):

Yeah. Listeners, if you Google Method3 Fitness, you’re going to see you guys have done a really nice job with, building out your Google My Business. There are some great pictures here, so I can see exactly what you’re saying with Kaiser machines. I can see the outdoor kind of, it almost looks like you said, like a tennis court with like individual stations and so forth. And then you’ve got some great pictures of your equipment space. So listeners, if you want to kind of take a look at what’s going on and how Method3 is managing to generate this revenue, what space does it, take a look at these pictures and you’ll get a really good idea. John, you’ve done a nice job of making this thing look super pro. So I’m going to go ahead and let’s dig into revenue now. So tell me about, you’ve been around for 11 years now. Do you remember some revenue holes from your very early days and how fast did this number grow over the years to what it is now?

John (10:15):

It started gosh, super low, right? Under a hundred thousand and then it kind of grew relatively quickly. You know, we kind of doubled a certain amount of time. I think we hit just over seven figures, I think after about five years. And then honestly from here it’s been this really slow, incremental growth. 2019 ironically was one of our best years ever. Yeah, almost a 10% jump from the year previous, we had hit 1.2 in 2019, 1.1 the year previous, and then pandemic hit. So 2020 was, gosh, probably a 30 to 40% decrease and then 2021 is going to be shaping up honestly, to be not our best year ever, but put us on track to make 2022, I think it’s going to give 2019 and run for its money.

John (11:16):

So I’m very excited about that. And to be honest, it’s one of those things where, you know, I can look back on it now and find all these silver linings, but extremely challenging obviously for so many gyms owners and studio owners, during the pandemic, but there was some great things that came out of it. One of which for us was this, we had a large kind of a big discrepancy between the percentage of group training clients and percentage of personal training. We always had both, but I think we didn’t do a good job at really trying to get people involved in personal training in the beginning, even though for most people, that’s just such a hugely useful tool from a support, accountability results, making sure that they’re kind of entering in a good way. I know it’s where a lot of Two-Brain Businesses will have them do personal training only when they start, sometimes we’ll do that, but sometimes we’ll let them do kind of a hybrid where it’s some group and some personal training combined, depending on where they’re at.

John (12:20):

But that was a big realization during the pandemic. Especially when I looked at our attrition, was that even if 75% or, you know, 75 to 80% of our partners were group, 95% of our cancellations were group, and so it was like, wow, OK. I have these people that are paying me double what a group client is, and they’re staying with us during a pandemic. So that says something, whether it’s from a results or relationship or disposable income for some of the people that we’re targeting. So it was a really great realization to say, wow, we’ve got to do a much better job at enrolling people in personal training or at the very least a combination of personal training and group. So it’s been really neat to go through that process. And then with Two-Brain start tracking our length of engagement much better, our average revenue per partner, and to see all those things, you know, continue to go up, which has really allowed us to, I think, create a much more stable, business for over the long haul and ultimately generate a little bit more revenue per person than we were previous to the pandemic.

John (13:32):

So a lot of good things that came out of it, would never want to go through it again, but a lot of good things that came out of that.

Mike (13:39):

I can’t wait to ask you a couple of retention questions, but before I do, I’m going to ask you, do you happen to know off the top of your head and even within, you know, a margin of error, what your breakdown or percentage of revenue would be between personal training and group? Like, do you know what that number, that figure ratio might be?

John (13:55):

I should know that right at the top of my head. It’s a little challenging now that we have so many people on these hybrid partnerships, bu I can tell you that, I believe I want to say about, so it’s probably, I can just give you a percentage, at least, I don’t know of the revenue, but like, in terms of like partner wise, instead of being closer to, you know, 75 ish percent, 75 to 80, somewhere in there, of group group clients to then 25% personal training. Now I can tell you that it’s probably closer to 60 to 65% are group only, the other let’s call it 35% are personal training or combination. Which has just been fantastic. Cause I think from, it also gives us more leverage from if and when people need to discuss pausing or cancellations, we’ve just got more tiers to offer them. Now, if they’re starting at a higher tier, we have lots more tiers to be able to connect with them on, to find a win. Hopefully.

Mike (14:59):

Yeah. And the reason I ask is that, we’re currently working our state of the industry report. And now I’ll give away one little tidbit here. And the average percentage of revenue from our survey respondents in that report was 19% for personal training. And this is a huge area of opportunity. And I’m going to guess, based on the numbers you just gave me the true revenue percentage is well above 19 when it comes to personal training, especially if you’ve got a sizable number of PT clients and they’re all high value clients as opposed to group, would I be correct in that assumption?

John (15:25):

You’d be correct.

Mike (15:27):

Yeah. So right there guys, listeners, PT is a huge area of opportunity across the board for gyms. So I won’t go further. You can get that state of the industry report, I will in future shows tell you where you can get it, but that is going to be a great one for you guys to look at. Now, John, retention.

Mike (15:44):

So this is a huge one. So I know that you’ve talked about when we did a pre-interview, holding onto people. And so many people think that revenue is all about sales. I need to sell more to make more. And that’s true in some cases, but in a lot of cases, retaining members is going to do more because you don’t have to work to acquire them and they’re gonna stay longer and they’re gonna buy more services. So talk to me a little bit. Do you happen to know your length of engagement or don’t mind sharing it and what have you done to retain members and drive that number up?

John (16:12):

So currently our LEG is holding strong around 39 months. Yes. And, we do a lot for retention, hard to probably pinpoint all the things, but so variety of things.

Mike (16:30):

That you can’t even pinpoint them all because there’s so many, that’s a huge reason why you have that length of engagement.

John (16:36):

I appreciate that. Yeah. And I think the big thing is we’ve tried to create systems around those methods of retention. It’s one thing to have a lot of retention ideas, but unless there’s a system built around it, it’s not going to be a duplicatable process that can be done by others. One thing we do every single week, we call them we miss yous. We’ll pull a report. People that haven’t been in for the last week, two weeks, three weeks and call email, or text them, just check in, how are you doing? What’s going on? Haven’t seen you, how can we help? How can we serve you? And we do that consistently. That was a big piece for me. It’s pretty labor-intensive. So we’re trying to find some different things now that will help us automate it a little bit. So that we can then hopefully just how the automation to create the conversation. And then we can take, you know, have a human take over from there.

Mike (17:29):

You know what, it’s funny. I always say this to gym owners and I always apologize after I say it. It’s like, that is so simple. Right? And I’m not saying your idea is simple, but it’s like, it’s incredible that it’s just something doing something like that. Running a report saying who hasn’t been here in a little while and then reaching out to them is going to generate so much revenue. It’s going to generate good will. It’s going to generate length of engagement, everything stems from doing the small thing. But so many people don’t do it. And you said you do it consistently and have a system for it. So many people don’t do it. So listeners, I’ll tell you right now, if you want, end show, run that report right now and message the members that you haven’t seen in a little bit. If you do, you will make money and you will have better retention. I guarantee it. So I won’t even be offended if you just hit stop on me and John and go do that. John, tell us a few more things for those that who are staying around for the rest of the show.

John (18:19):

Yeah, I think I just, I also do want to reiterate though that that is, I won’t be upset either if you go do that, because it’s one of those things where you might not realize, it’s a tough system to have, because whether it’s for the gym owner themselves doing it or their staff, it can be pretty labor intensive, depending on how many partners you have, right. People. It can get pretty time consuming, especially on a weekly basis. But it’s just worth its weight in gold because so many people have told us, even if they don’t respond, right, which many of them don’t, that they’ve got our email or text message or whatever. And then they showed up the next week or the week after and receiving it just shows that we care because a big thing for us. And we tell people when they join is we care more about, you know, you and your results that we’re trying to help you obtain, then what you’re investing in us. And we’re going to prove that to you through, you know, how we serve you.

Mike (19:18):

And of course you have to do a good job of that because in 400 members, you’re now above that 150 Dunbar’s number kind of thing, where at 400 members, you could lose people quickly. And even like a 10% drop in membership is like, that’s 40, that’s 40 people that you’ve got to figure out how to get back. Right. And replace. So everything that you do here is such a huge deal. And it’s doubly important because you have more cracks for people to slip through because you’ve got 400, right.

John (19:45):

Constantly looking at things like that. How do we not have them fall through the cracks and to your point, yeah, we actually pride ourselves on a really, you know, knock on wood here, a really low attrition of like, you know, maybe two and a half to 3%, but with 400 people, that’s still 12 people a month. And so that’s why our, you know, it’s a constant, you know, trying to dial up the dials of, we make sure our retention is good, so that doesn’t go about 12, but we’ve got to make sure our lead generation is good, so that we’re actually still netting positive and growing slowly but surely. And it can be hard cause then you’re investing a lot more in marketing and advertising, which can feel, uncomfortable, as they grow. But other retention tools we do.

John (20:29):

So, partner events, we do at least two per year kind of getting back to that now. We do like our anniversary party in the park. We invite, whomever wants to come, their families or kids. We get like a bounce house and tacos and we just celebrate them and their commitment. And also gives me a chance to celebrate my team. We do, typically a holiday one as well, whether it’s around Thanksgiving and Christmas, same thing, kind of invite them all in to hang out and have fun. And in years past myself or one of my staff would dress up as Santa, Santa will come for the kiddos. It’s just fun. It’s a fun time to get together outside of, you know, the normal workout times. At our team meetings. I think honestly, part of our retention tool for me is my staff.

John (21:15):

So we try to hire, honestly, just A players. It takes a long time to get people, to hire people. We have a really strong hiring process that takes a long time to kind of vet people and, you know, eventually allow someone into our, you know, it’s like a velvet rope is the way I was describing it to join the Method3 team. In doing so and trying to employ mainly full time career oriented people, which is a little bit different than I think sometimes how people do it. And thankfully, you know, it varies at different times, but we’ll have the resources and funds necessary to invest in someone on a full-time basis, even if I don’t have them necessarily at the efficiency level that I would like to have where it’s profitable for the company, we’re kind of investing in their future in the first 90 days and our ability to help fill them up.

John (22:09):

But it’s worth it because if they’re a full-time career oriented person, I can get them to really buy in to everything we do at Method3 and be helpful with all the retention efforts and everything else and creating relationships. They’re not someone that’s just kind of here five hours a week and could be gone two weeks from now. So that’s a big piece. In our team meetings we do, which we have on a weekly basis. We write kudos cards. So we have a big spreadsheet of all of our partners that we’ve sent a card to and a kudos card is these really cool little branded cards, with various sayings, like, you know, high five, you’re awesome, way to go. Thank you, whatever. And it’s just a postcard. So they grab a postcard. They’re already self-addressed, try to save time as much as we can.

John (22:54):

And they’re a little bit less on postage, right? And the coach will write a little note to whomever it is they’re thinking of that just had a big milestone, had a great workout. Maybe just got back on track, did something really cool outside of the studio, whatever it is, just kind of congratulate them and kind of show some, give them some kudos and we’ll do those on a weekly basis, but we track it so that, you know, if I send them one to Mike this week, my coach doesn’t send you one next week without knowing. So you got to know who you’re sending it to. So if you think of someone that you want to send it to, you look at the spreadsheet first and realize, OK, last time they got a kudos card was three months ago. OK, great. I’ll send them one right now. So it allows us to really touch a lot more people and people love getting them. I can’t say how many Facebook posts people have done with taking a picture of that.

Mike (23:46):

What you’ve got going on here right now is systems and consistent action. If I was just to sum everything up in three words, your retention plan it’s systems and consistent action. It’s it’s these small things that add up if you keep doing them, and it’s a lot like working out, right? You’re hammering your clients with love and touch points as often as you can. And you’re noticing them, making them feel special, doing all these things. And like every gym owner that I’ve talked about that has great length of engagement and retention does this kind of stuff, the ones who don’t, don’t and it’s just that simple, it’s a direct relationship. I want to ask you about one thing that I noted from a pre-interview. You have exit interviews with people when they try to leave, correct. What happens in there? And how often are you able to save them?

Chris (24:30):

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John (25:38):

Oh, goodness. Good question. I should probably track that. I don’t track that. How many saves or percentage of saves so to speak? I don’t know, actually the answer to that. So typically, you know, when someone tries to cancel, we don’t make it unbelievably difficult for them, but we don’t make it easy either. They have to put it in writing to us. And typically, our partner success manager will forward it to me. I’ll get them on the phone. I, even for my team, I constantly remind everyone like email is great for some things, but it’s not great for a lot of things. So, you know, get them on the phone to have a dialogue because then they can hear the sincerity in your voice. And honestly know that you’re there just to help them. So that’s honestly how these conversations go. I just say, look, you know, no matter the outcome of our conversation here, my goal is just to make sure that you’re supported and you know, if you have to stop with us, I get it. But when you came here, you had certain goals that you wanted to achieve and, you know, unless something’s changed, I just want to make sure that we’re able to support you in the best way possible. You know, tell me more about why you want to stop.

Mike (26:49):

And I’m guessing that some people, yeah, some people don’t cancel, I’m guessing at that point, if you don’t get everyone, do some people stay on board?

John (26:55):

Oh, a hundred percent. It’s like whether it’s, and you know, the funny thing is a lot of times they’re feeling overwhelmed and they just need a chance to talk it through. There’s one that comes directly to mind. She was just like overwhelmed with work and family and all this stuff. And she just, you know, boom, at the time, maybe she got a notification for like her upcoming workout or whatever it was, you know, decides to cancel. So I finally get in touch with her. We have a fantastic conversation and she’s like, I am so grateful that we just talked through that. Like, I feel so much better. I think I just on a whim and like full of emotion, I just sent off this email to you. And I feel really excited about this game plan and you’re right. Like I need, I came to you guys to create better boundaries between work and my health and I am going to do that. And it was like such a great end because part of what I think we’re here to do is really be a good coach, ask a lot of questions and help people see the value in themselves so that they know that they’re worth the investment that they’re making. And that’s what this led to. And in fact, I think she actually, yeah, I think she actually upgraded at that point to whatever.

Mike (28:14):

Oh, there you go. Then that’s what I was going to ask you. You anticipated it, is like you have these conversations, you can save people by upgrading them. Like, let’s say, oh, I can’t meet your class schedule. Well, can you make personal training? Right. There’s an upgrade and a save, or in other cases, maybe they need to be downgraded to a different service. But the point is, and I think you hinted at this earlier, you have those services and you have those conversations. So you have these different options that can either save members. And then even if a member doesn’t need saving and you just talk to them as a general thing, you can certainly have those conversations and make your service better and serve them to a better degree. So you’re doing all that. You’re giving yourself all these opportunities to save members, increase length of engagement, generate more average revenue per member.

Mike (28:54):

And like, that’s a huge part of your revenue. Like I can’t emphasize that enough for listeners out there. These are all different things that Two-Brain teaches you to do. And if you put these systems in place, numbers change. We track those numbers and they’re all tied together. I’m going to move off of retention because we, you know, this is a huge part, but everyone wants to know about, you know, the other part of it. So I’ll ask you this question and we’ll kind of go through this a little bit. It’s the other side of it. So talk about sales. You know, I know that you’ve talked about increasing number of opportunities to get more sales. Tell me a little bit about that because sales is kind of the part everybody, I put it second for a reason because retention is almost, I think it’s more important. I’ll go out and say it. Talk about sales now. How do you do that end of things.

John (29:37):

Sure. So I think getting more opportunities for us is what we’ve been focusing on with getting more leads ultimately and trying to make those obviously as qualified as possible, but experimenting with different advertising and marketing methods. In fact, someone in the Two-Brain group just posted about their success, more with Google ads over Facebook and we’re actually starting to experience the same thing. Yeah. So which kind of leads me to go, Hmm. Maybe I’m gonna, you know, start pushing different marketing dollars different places. And then it’s always about kind of experimenting. There’s something I’m not sure if it’s a national thing or not. I actually don’t know, but called next door. That’s like a neighborhood hosting place. So to speak. Almost like a Facebook for neighborhoods, I would assume, not really sure how to classify it. But a lot of people are on there talking about your neighborhood.

John (30:35):

So we’ve actually gotten clients from there because people will say, oh, I need to get in shape or do this. Like, who would you recommend? And apparently some of our own partners are on there. They go Method3, and so all of a sudden we have people coming from that. Well, now next door has an advertising arm where you can set up a business page. We’re going to be engaging in that, checking that out, vetting that, you know, if it ends up. So kind of making sure we have several marketing poles in the water and we’re constantly evaluating them. Like for example, marketing pole I think we forget about is, you know, bring a buddy, and on Two-Brain talks about that as well. It’s, you know, we make it bring a buddy month. We’ve tried to bring a buddy week or weeks or whatever, but it’s hard to, you know, pigeonhole people into saying, you have to come during this time.

John (31:19):

It’s like, look, come during the September. And, you know, your buddy’s workout is on us, but we also try to, you know, make it hopefully doubly effective if we can. By that, I mean, it’s not just bring a buddy, it’s bring a buddy, your workout’s on us. And when you bring them in and they complete it, we’re going to donate $10 to California wildfire relief on their behalf. And oh, by the way, if they join, we’re going to donate another 20. So we always try to make it around some type of like charitable event. We try to get creative with the lead generation or even like lower barrier offers. So, coming up in November, we do one called fitness feeding families where it’s a really low cost partnership kind of like a little 21 day or 30 day type of kickstart.

John (32:10):

And, 50% of the proceeds goes towards buying groceries for families in need. And then we give them kind of a, since it’s the holidays. We know that not everyone’s going to be able to start that ASAP. So we give them hey, you purchase it. You got three months to start it. You can start at any time between now and the end of January of next year. So it’s great because for us, it doesn’t overwhelm us from a capacity standpoint. It allows us to hopefully get a trickle in of leads as we go through it. And it’s such a fantastic give back because people know they need to do something for their health and fitness, but now it’s like they have this other thing saying, and if I do this thing for my own health, I get to serve this family over here as well.

John (32:52):

You’re going to go buy these groceries and we highlight it. And like I went down and grabbed all these groceries and took a video of me putting them in the truck and took pictures with the second harvest food bank. And, it was just fantastic. So just making sure that we’re doing things that create more opportunities, right? More people knowing about us, hearing about us and then asking for referrals. So things that will lead to that. And then we’ve really been trying to focus on making sure that once people do reach out, we get in touch as quickly as humanly possible. And so it’s been kind of putting that urgency in, not just on myself, but on our partner success manager, who I’ve really tasked with calling all these leads as soon as they come in. And our general process Mike is we have a very specific process, kind of a pre-qualification script that we have where we vet people a little bit, make sure that it’s the right general fit if even just in a five or 10 minute conversation.

John (33:53):

And then typically we like to actually invite them in for a trial workout. From there at the same time, they’re booking that though. We also book what we call is our version of an NSI called a results roadmap meeting. And right now it’s typically done via zoom. And it’s during that time that we have another specific script of questions that I ask them, and this is post-trial workout. So they kind of have this little pre qualification vetting call, book them for a trial workout. We believe kind of a give to get. And if we have a good conversation with them, then they’ll probably going to show up that workout. And if we’ve done our job and they had a good experience, it makes it much easier to have this results roadmap meeting and people can’t say they don’t know what it’s going to be like, or can I have a tour of your facility or there’s no questions on that.

John (34:42):

They already know what it is. And so it makes the sales process even easier. So it’s not this big, like, let me give you a week or four workouts or this and this. It’s just, I’m going to give you one workout. We’re going to have this result roadmap meeting, and then it’s just framing it up correctly. So, you know, when I jump on the results roadmap meeting, the first thing I say is great. Great to see you today, super excited to chat and dive deeper into your goals. I’m going to ask you a lot more questions about what you want to do, why you want to do it, you know, which is great for us because we’ll understand, you know, your expectations, but it’s also going to be great for you because you’re going to bring a lot of clarity to not just what you want to do truly, but why it’s important to you. And then if we still feel like it’s a good fit at the end, I’ll show you some different partnership options I think will be best for you. And we’ll hopefully get you started on one. Sound good?

Mike (35:29):

Oh, this is some good stuff. Yeah, listeners, this is like, you’ve got some, you know, upper level marketing stuff going on here. And a lot of systems, I’m going to point out one thing. If anyone’s feeling like whoa, I can’t handle all this stuff. The one thing that everyone who sells stuff does they call leads back as fast as possible. I have heard that relentlessly on Two-Brain Radio over and over and over again. If you take one thing from that, what John said, do that, but there’s a whole lot more good stuff in there. I want to ask you this, John. So the free trial class has often been like back in the day, that was all we did. And I ran a CrossFit gym and we were like try a free trial. And, you know, we make people sweat and sometimes puke and so forth and they stopped working. They just stopped working. And Chris Cooper’s talked about this and said that the free trial is kind of dead now, but in certain ways it will work. And I think maybe you’ve hit on this. And do you think it’s that link between the free trial and then that conversation that, that does it? Or how, why do you think free trials work so well for you?

John (36:26):

I think it’s also in how you present it. So we kind of use it as a differentiator. Maybe there’s a lot of people out there that give away free trials and free weeks right now at different studios like ours. I don’t know. But I don’t think the prospect knows either, there’s very few that are calling like seven different studios and asking for a free trial. So we use it as a differentiator. So when I’m talking to someone on the phone on this pre-qualification I say, OK, great, Mike, it sounds like we’ve got a great fit. Here’s what I’d love to do. I’d love to actually bring you in for a trial workout first, based on what I’ve heard a little bit about you, I’m going to recommend whatever may be.

Mike (37:09):

So it’s prescriptive.

John (37:14):

And it increases the value. And then it says, you know, we’d like to gift this to prospective partners like yourself. So you can kind of just get to know us and make sure it’s going to be you know, a good fit. And to be honest, it’s something we do, it’s a little bit different, because we like to really spend a lot of time upfront with people before they join. Like a lot of time that honestly, you’re not going to have to pay for it. We just want to make sure it’s going to be a great fit and then we can serve you. And that’s a process that hasn’t really done us wrong. So I’m going to invite you in for this trial workout.

John (37:56):

And then I am going to schedule this results roadmap meeting, which is going to be either right after, or maybe the very next day. And that’s where, you know, John or I will be able to dive in deeper with you and your goals and hopefully figure out what partnership’s going to be best for you. OK. So you want to come in for that trial workout Tuesday. And so we just go right into it. And again, you’re right. It’s a very specific process. We build the value of it. And then, when we’re trying to book it, you know, I’m pretty, it’s always gotta be, and this is sales, but it’s always gotta be alternate choice and we roll right into it. So that’s why we do it. Would Tuesday or Wednesday work better for you, right? And eight o’clock or nine o’clock and it’s always choices. So they have to ideally just pick one and we move them. We guide them through the process to ultimately do what we would like them to do, but, you know, it helps us set and book those appointments as best we can.

Mike (38:49):

  1. So it’s all falling into place here for me, because again, when I did a free trial class, it was just a thing that you registered for on our website and we didn’t confirm it and you just showed up and then we beat the crap out of you. And then you may or may not join depending on, you know, whether you enjoyed that or not. Right? So that didn’t work. What you’ve got here is you’ve got a free trial that’s embedded in a whole, you know, prescriptive process where you’re talking to these people, spending a ton of time with them, then telling them, I think you would be a good fit for this kind of workout, whether it’s one-on-one or group or whatever it is. And then it’s followed up by some other stuff. So at this point, it’s just like one tiny part of this lengthy intro process.

Mike (39:26):

And I’ve spoken to other gym ownrs, Brian Zimmerman, one of our mentors is big on this. The more time he spends on the front end with members, the longer they stay, that’s his, you know, his data backs that up. You’ve kind of got the same thing going on, where you’re investing in all of these members, a great deal of time and prescribing this thing, that’s just one part of the process come work out with us and then we’ll talk about it. And then you’ve got a sales system in place. So it’s just, you’ve got a whole lot of good stuff going on here. Let me ask you this. Cause I think a lot of people are going to wonder, how do you staff this? How many people does it take to run this? Cause you’ve got 400 people. So you’ve got to replace this many, you know, 12 per month or whatever, is this a really labor-intensive process for you?

John (40:05):

The entire sales process and just overall, like taking care of all these prospective people?

Mike (40:12):

Yeah. Like that, if you’re spending a ton of time upfront with people and you’ve got a large membership where you’ve got to replace you know, 12 per month or even more if you have to grow or whatever, how do you manage to get all that done? Cause that sounds like a ton of work.

John (40:27):

So, I mean, I think it’s just having the right people in the right seats to be able to serve those people. And I a hundred percent agree with Brian and in terms of taking that time up front with people. And I also think there’s a certain act of, there’s a certain level of reciprocity that’s playing there where we’re giving them all this stuff in the beginning and you know, there’s a certain level of like, wow, they’ve give me all these things, I feel like a good fit. I should join this place. So I think there’s, you know, I forget if that was Robert Cialdini or who talks about that with, you know, certain things of influence, reciprocity being one of them. So, I think that’s part of it. In terms of, you know, how we do it.

John (41:11):

Yeah. I think, and ultimately it’s never perfect. Right. So what I’m noticing now is we’re getting so many leads. We’ve gotten the opportunities. Now, the focus is going to shift to how do we follow up with those people more effectively than we are now? Cause we’re booking some appointments and we’re definitely, you know, growing and netting positive every month, it’s been fantastic. But we’re not booking as many as I would like. And we need to be better at that. So it’s kind of like, you know, you’re constantly shifting your focus. So the opportunity has been great. Our lead generation been fantastic. I’d be comfortable with even a teeny bit less on the lead. If we were booking more, that may come down to a responsibilities, roles and responsibilities for the person I’m employing to make those calls, could come down to maybe needing to hire another part-time success coordinator, maybe not manager, right? Since I have one doing full-time, they are going to be here, maybe eight hours a week, literally just helping make phone calls and follow up. And then ultimately we just try to have blocks of time available for these results of roadmap meetings or these NSIs, so to speak. And it’s very, you know, I think there’s strength in having your team know what that looks like. So they know, I’ve taken everyone through a results roadmap meeting, so they know what it is, but we kind of let our coaches shine at being coaches and take over the accountability of some of their partners. We don’t, make them do these results roadmap, meetings. Those are typically myself, my general manager or our partner success manager. Between the three of us

John (43:01):

we’re usually able to accommodate the time that we’re going to be seeing these people for. So, you know, right now it’s working out. OK. And then ultimately my coaches are the ones that are just, you know, doing the actual service and the fulfillment. So it is a constant what I’m noticing as we continue to kind of grow back to where we were and then some it’s a constant thing of where do we shift the focus, right. We had opportunities now it’s going to be on maximizing those opportunities, right. Instead of trying to get more, then it’s going to be OK, do we have the staffing that’s going to be required to do that? Whether it’s on the administrative side, making the calls or the product fulfillment side, coaches. So right now we’re in a good spot with our coaches.

John (43:44):

We just hired another full-time coach and we’re starting to grow him. It’s going to open up a little bit more time for my general manager, because she’s going to give some hours to him and then he’s going to be a little bit more efficient and then she’ll have more time for these result roadmap meetings. So it’s just a constant trying to take a step back, you know, take a step in to work on some of these systems and then take a step back to look at how they’re doing. And I hope it doesn’t seem some of this conversation, like you said, doesn’t seem overwhelming for people. I was, you know, wherever people are at listening to this, I was obviously once in a spot where it was just me and it was just about, OK, how do I even create a job description? And like duplicate myself. Like there’s always going to be these learning opportunities and bumps in the road where it challenges you to, you know, seek the knowledge that you need. That’s been a fun part of being part of Two-Brain is, you know, there’s a lot of other higher level studios like mine, right? Not just me. So it’s been great to learn from others as well.

Mike (44:46):

What you’ve got there in that whole process that you described is kind of a three-step thing that I’ll just summarize as like systemize it, staff it, and then streamline it. And that’s kind of been what I’ve heard from you in almost every case. You create these systems, you get the right people in place, and then you optimize as best you can, even with the, you know what you said about postcards, where you’re like pre addressing the, you know, the whole everything you can do to save time. Right. I love that. And I really appreciate what you’re talking about with, you know, this wasn’t always the thing that you did, right? You’ve built up to this over a period of 11 years. You’re an upper level gym owner now, based on what you just said, I’m going to, I’ll put you on the spot. If a gym owner out there is like, whoa, I don’t know, my mind’s blown. This sounds great. Where do I start? What’s the thing that you would start with. Let’s go with the retention end of it. If you were going to try and boost retention, and someone just came in and said, John, how do I do it? What is the thing that you would tell them to do first, today? Make it as simple as possible.

John (45:40):

Yeah. I mean, I think if they have the bandwidth and the time they should do the we miss yous, because whenever you’re creating a dialogue, even if it’s just a text message or whatever it is to the people that didn’t show up, if you’re able to create a dialogue and a conversation, that’s where people find value, right? Because it just shows that you care and that might not lead to a sale, right? But it will most likely lead to greater retention of people staying with you. Could lead to an upgrade, but if people stay longer, right, your profitability of that goes up because you’re engaging them for longer period of time. If they’re engaged in a longer period of time, they’re probably going to bring in at least one more referral. So there’s lots of other things that will help you monetize it. But the biggest piece is that they know that you care and that will completely differentiate you from, you know, the big box gym down the street. Make them want to stay. Even if they’re not coming in all the time.

Mike (46:34):

Listeners, if you are not doing that, do it today. If not today, do it this week. But do it. Make some time, even if it’s 30 minutes, run that report and make some calls, assign some staff members to it. If you do it, this episode of Two-Brain Radio will make you money. I guarantee it. John, thank you so much. That was a really fantastic conversation about all the different things that go into creating $86,000 in revenue, congrats for fighting through a pandemic and coming back on the other side of it and starting to grow again. And I can’t wait to see where you get to after we get back to normal.

John (47:06):

Thank you so much.

Mike (47:07):

That was revenue leader, John Heringer on Two-Brain Radio. I’m your host, Mike Warkentin. Subscribe for more episodes that can help you make more cash. Now here’s Two-Brain founder Chris Cooper with a final word.

Chris (47:20):

Thanks for listening to Two-Brain Radio. If you aren’t in the Gym Owners United group on Facebook, this is my personal invitation to join. It’s the only public Facebook group that I participate in. And I’m there all the time with tips, tactics, and free resources. I’d love to network with you and help you grow your business. Join Gym Owners United on Facebook.

 

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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