Using “Hybrid” Packages to Increase Average Revenue Per Member

20210208-brian-blog

Mike (00:01):

Average revenue per member is bananas at CrossFit Jungle Gym. King of the jungle Brian Zimmerman shares his secrets on Two-Brain Radio next.

Chris (00:11):

Hi guys, Chris Cooper here. Two-Brain Radio is brought to you by Forever Fierce. Reach out to them to sell more apparel or retail items. Matt Albrizio and his team will save you time with templates. They’ll provide ideas and tell you what’s selling best. And they’ll supply marketing material and preorder sheets. If you want to get serious about apparel and retail, visit foreverfierce.com.

Mike (00:31):

This is Two-Brain Radio. I’m Mike Warkentin and I’m full of jungle jokes today. But Brian Zimmerman’s average revenue per member is no laughing matter. In December 2020, it was way over $300. He hit 335 and this is in a New Jersey gym that was locked down for three months and stuck outside for five. They’ve been operating inside with limited capacity only for the last three months. And Brian’s still crushing average revenue per member. We call that ARM or ARM for short. Brian has talked to us before about the prescriptive model and his onboarding program. And we’ll touch on those aspects a little bit today, but he’s got a few other secrets to share about specialty programs, marketing managers, and hybrid training packages. Brian, you’re back on Two-Brain Radio for the third time. And your commemorative bathrobe is in the mail. Thank you, sir.

Brian (01:16):

I’m super pumped to be here, so, you know, thank you for having me.

Mike (01:20):

Of course, my pleasure. Well, let’s talk some details here. Back in summer, we talked and you weren’t even really open, right? Like your gym, I think you said you were working out outside, and you told me your ARM was 285 or 300 in that range. How did you beat that in December? That was a great number already.

Brian (01:37):

Well, twofold it’s like, you know, we just keep onboarding, anybody that we’re onboarding we’re onboarding at a high value package is number one. And then number two is we ran a nutrition challenge that was really high value. And we basically sold it out again at 20 participants and between just bringing people on and high quality service and adding a specialty program, that was the winning ticket.

Mike (02:04):

Okay. Do you plan those specialty programs out? Do you know where they are already for the next year or even beyond that?

Brian (02:11):

Yeah, so our nutrition challenge, we run three times a year, so we do it in January. We do it May/June and then in September. So those are planned, some of our other specialty programs that create a large buffer in the, in the ARM. They’re a little bit more loose, but we know we’re going to be running at least one every month.

Mike (02:34):

Do you plan them for slow months or months that you are traditionally not as good as other ones?

Brian (02:38):

We plan to have them all year round and we do strategize based on what the, you know, what the season is like, you know, we usually do like a run program, like a couch to 5k, you know, depending on what our target is for that quarter. But we’ll run that one, usually like March and April, getting ready for like the season’s first 5ks.

Mike (03:05):

Yeah. Now you hinted at this already, without going into detail, listeners can getting your previous appearances on Two-Brain Radio. We’re gonna talk a little bit about your onboarding program and we’ve talked about this in great detail, but the thing that I want to know about specifically is what you hinted at is a hybrid PT as a default recommendation with onboarding.

Brian (03:24):

Yeah. So we’ve got the three tiers, one that sort of leads directly into two group. We have the one that’s all PT and then our default recommendation is the one that leads to hybrid membership. And, you know, part of this is based on client value. Part of it is making it easy for my salespeople to not have to be as skilled or and also like client experience. So on the coaching end is like, what we found like, this goes back years is like, when we did seed client interviews, all of our seed clients wanted more one-on-one attention. So it was really simple. Like, okay, well, let’s give you one time a week one-on-one attention, and you can still go to your groups and hang out with your buddies. And the first people that started doing that, just like accelerated in their results, like body composition, skills, like, and it was, I mean, it was insane. And so we were like, wait a minute, like this just needs to be a membership option that we recommend because it works so well. So that’s kinda how it, that was the early beginnings. And that was over three and a half years ago now. But then we built it into the standard recommendation, because with that one session, you build accountability, you build higher value, you get faster results for clients and who doesn’t want that.

Mike (04:49):

So it’s interesting that you bring that up because seed clients, for those who are listening, if they don’t know what they are, seed clients are your very best clients. They’re the intersection of the people that bring you the most joy and pay you the most. And we recommend that our affinity marketing guide, which you can get in free tools, the free tools section of Two-Brain Business, that you build services around the desires of your seed clients, not try to sell your services to people, right? Ask your seed clients what they want, provide services for them. Then find more people like your seed clients. It sounds like that’s exactly what you did here.

Brian (05:19):

Yeah. I mean, for the most part, and like, you know, we refined it over time to make it something that we could easily sell. But yeah, it started exactly from seed client saying we want more one-on-one attention, then making it into a package that they could buy. And all they need to do is say, I want more one-on-one attention. And we say, done. And that’s what the hybrid ended up being for us.

Mike (05:45):

Do you mind telling me what kind of rate that thing ends up at? If you have a person with a group membership and, you know, a PT session a week or a month, or however you set it up.

Brian (05:54):

We have a couple of options, but we have one that’s 570 a month, and that’s the most popular of the hybrid options. And then we have another one that I believe is just shy of $400 a month. The cheaper one is one half an hour session, a PT session a week in addition to group classes. And then the standard hybrid is one hour a week PT in addition to group classes.

Mike (06:25):

So that’s really interesting. So this is a high value service, and it’s a high touch service, and it allows people to kind of get the best of both worlds, where they can, you know, party with their friends in the group atmosphere, but also get that dedicated one-on-one attention. That’s so important both to retention and success.

Brian (06:42):

Yeah, absolutely. And I think one of the big piece that’s so helpful is like, you know, you have your clients who like, they need some level of accountability that’s above what you’re going to give to a group client. And it’s not because you don’t love them and you don’t want help, but like, you know, it’s hard to±this is staff thing. It’s like, how am I paying somebody to hold our clients accountable? And the best thing we could come up with is let’s give somebody a personal training session, like try and try and skip out of a PT session that you paid for. And like, now I’m going to ask you what three classes you come into this week. And like, they’re going to show up and you’re going to check their attendance from the week before, like that session is paid for, they get extra accountability from it. Plus they get all the extra attention and, you know, goal specific training. It’s, I mean, it’s dynamite.

Mike (07:36):

I have data on this, but I’m going to go out on a limb and say that because you’re building in that hour or half hour, you’re directly interacting with this client. You’re obviously building a greater relationship. I’m going to have to suggest that this is going to improve your retention, just because you’re building a stronger relationship. That’s a one-on-one connection that you just can’t quite do in a group class. You can certainly build a version of it, but not if you and I sat down for, you know, 30 or 60 minutes and had a beer, we’re going to be a lot closer than if we just like slap hands at the end of Fran, right?

Brian (08:04):

Yeah, absolutely. Yeah. And I don’t have the LEG, you know, the length of engagement difference between the two, but I can tell you just like looking at, you know, what happened when we got shut down in March through, you know, us getting back to inside in November during the eight months where we were doing something different, we didn’t have people that were on hybrid or PT memberships change their membership or quit. Like it was only group-only clients. And like, I think that means that the service was equally as valuable as it ever was. And those people weren’t about to go anywhere.

Mike (08:47):

It’s incredible. I’ve spoken to two or three different gym owners who scored as you did in the top 24 ARM in December, 2020. And all of them are talking about these hybrid packages as not just a great thing for the gym, but a huge benefit for the client. So really everyone’s winning. And if you take one step further, the trainers are winning too, because the trainers are involved in this high value service that they can now take a larger, not a larger percentage of, but the pie is bigger. So to speak, right. If you’re paying them four ninths and you’re selling a $500 service, that’s better tha, you know, $140 membership and taking four ninths of that. So are your trainers and employees working or contracts if you have them, are they winning in this situation too?

Brian (09:26):

Oh, absolutely. And like, I can tell you, right? Like there’s a couple of my coaches are like, only give me the ones that are enhanced. Like, like only the ones that are going to be converting to hybrid, like some of my staff, they just want more personal training hours and, you know, there’s, you know, athlete check-ins and goal reviews that they can, you know, talk to clients and upsell them in a sense where, you know, decide and plan with the athlete, that there’s going to be more value in one-on-one training. But it’s a lot easier when somebody has already purchased a package that has hybrid membership, you know, written on it from the beginning. And then all they have to say is, Hey, we’ve had success, let’s continue doing that. And those clients that do the hybrid onboarding package, just roll right into a hybrid membership without a second thought.

Chris (10:20):

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Mike (11:28):

So what’s the response in a sales meeting or a consultation like a no sweat intro, any term that listeners are familiar with, what is it like in there when you’re talking about a hybrid group personal training package, which a lot of us didn’t didn’t even come up with for a long time, like I’ve said before on the show, I didn’t even know you could do CrossFit in a one-on-one setting for a long time, so ignorant. Right. But now we know, but clients, we’re still educating them. How that sales pitch or, you know, offer of help in the form of group classes plus personal training. How’s that go over with clients?

Brian (12:00):

So the first thing that people say is, wow, that sounds great. And we don’t sell the hybrid as like, Oh, you’re going to get personal training necessarily. We talk about it mostly as accountability and specific work on your goals. So everybody’s going to do the first successions exactly the same, right. We’re going to teach them what they would need to know to have success at our facility period. At that point, when they go into doing one time a week personal training, and three group classes, we’re talking about like, Hey, you’ve done a program before and you’ve fallen off. And maybe the program itself was great. You know, maybe you enjoyed it. And you’re just like, eh, I don’t feel like going. So I sleep in today instead of going. And we sell that extra PT as like, yeah, I’ll call you five minutes after you’re supposed to be there.

Brian (13:01):

If you don’t show and guess what they’re going to do at that appointment, they’re going to look at your attendance from last week and say, Hey, you didn’t come the days you said you were going to come and people instantly go, yeah, that’s exactly what I need. And in our no-sweat intros, we don’t talk about the price until they’ve said, yeah, that sounds awesome. You know? And like, it’s like you tell them exactly all the problems that they’ve been fighting for the last five years. And then you say, how does that sound? And they say, you have a solution for every problem that I’ve had. It’s like you’re reading my mind. And it’s because we listened to all the clients that had problems before and just stuck it in the package and said, this is why it’s that way.

Mike (13:47):

I can think of so many clients over the last 10 years at my gym, who would probably have stayed longer or enjoyed their time more if we had given them a hybrid package with personal sessions. And I’m thinking specifically of people who like despise double unders or just like, can’t stand the snatch or like muscle ups would make them leave the gym in fury, you know? And I’m sure, like, do you remember those kinds of people? And just like, I feel like I failed them, you know?

Brian (14:15):

Yeah. Yeah. And there’s no doubt that the extra attention goes a long way. And yeah, I think one of the things too is like, you just it’s like with any PT session, you get to work on whatever the client wants to work on or work towards their goals. And like that extra time is just, especially in the first five months is so vital. And, you know, in sales appointments now I’m a veteran salesman. Like I would tell people if I didn’t think they could have success on our basic package, I would not let them drop down. And I’m like, because I know the package through and through like, I would feel comfortable saying, no, you need the enhanced package. Otherwise I’m not letting you sign up. And, you know, I don’t have my staff sell that way, but like the value of that extra attention and being able to get somebody beyond or to give them the accountability or to reassure them that it’s okay that they’re sore or that, you know, they’re feeling frustrated about something, it keeps them around for much longer, like anybody that’s marginal, you’re going to keep around because you can build the relationship.

Mike (15:32):

So I love what you said there about the retention aspect of it. And even with the best systems it’s going to take you, you know, two, three weeks maybe to find someone who’s missing in a class because you just can’t track them all that well. And like someone will miss a week or something, that could be a work trip, something like that. But if you have that personal relationship, you’re going to notice as soon as they cancel one session. And by the second session, you know there’s an issue and you can fix these things. So it really gives you an opportunity to solve problems before they get out of hand with your members.

Brian (16:03):

Yeah, absolutely. And you know, the other piece, like, you know, like, you’re going to notice if they skip an appointment 100%. So it’s like, you’re guaranteeing that you’re going to have an attendance check built in because you have an appointment. We’re also gonna use some of that time in the PT session to check their group attendance, because some people need you to crack the whip and like, they want to get fit. That’s why they sign up and spent 500 plus dollars a month to sign up with you. And like, you owe them that, like, check their attendance and say, when are you coming and get in here? Like, we want you to have success. Like, that’s what you’re paying us for.

Mike (16:47):

So, yeah. And it’s so fascinating that that’s what’s happening in fitness now, is that what we’re seeing, or maybe it’s not that it’s changed, but I think we’re just realizing now is that we’re accountability providers probably more than we’re like squat coaches. And I’m seeing this with relation to like personal training, group classes, nutrition, habits coaching, all these different things. Like my wife runs a nutrition business and she does fitness as well, but I’m constantly hearing her speak to her clients. And it’s accountability and support. Sometimes they’re not even talking about like macros and food, other things. It’s just about like support. And it’s so interesting that that’s becoming, you know, coaching is becoming more than just fitness and sarcomeres and squat mechanics and all that stuff. Have you found that in your practice?

Brian (17:32):

Mike, if I could tell you how disappointed I am that I gained all these amazing coaching skills and then to find out that like, it’s all about just getting people to show up. Like it sucks, but I’m so glad that I found it out because you know what, that is great news for a lot of our, like mor, rookie gym owners. Like you can be an excellent, excellent facility without being an amazing coach. Get good at getting people to show up and like, your programming has to be reasonably good. So we want your coaching to be excellent. And like, you don’t have to be an excellent coach to start though. Like, if you’re really good at holding people accountable and getting people to show up like that, stuff’s going to come along.

Mike (18:29):

It’s so true. And like, I remember when I was starting out as a personal trainer, I was like, worried about diagramming the Krebs cycle and all this nonsense that like, it’s sure it might be important from an exercise physiology standpoint, but all I really needed to do was know how to make people smile and send a video text message that says come to the gym. It’s just so fascinating. I want to also ask you about something that’s slightly related here. I know you have an internal marketing position and I’m really fascinated about this because we’re talking about sort of the evolution of like what coaches are. And there weren’t a lot of gyms when I opened mine 10 years ago that had, at least micro gyms, that an internal marketing position, what are the roles, responsibilities? How do you pay this person? What does he or she do? I need to know everything here.

Brian (19:12):

So this came from right, like part of our role as like gym owners is we want to provide as much opportunity for our staff as possible. Right. And you know, there’s a lot of your coaches, like they could go start their own gym and they don’t because they don’t want to do marketing or do sales or do all these other things that like are really hard work they’re not helping people on the floor and they signed up to help people on the floor. So when we’re trying to sell specialty programs, for example, like you go, Hey, you know what, James, I want you to run an awesome specialty program. Here’s what you should do. Right. And it’s like these Facebook posts and send these emails. And it was like, I had two coaches that went out and crushed it.

Brian (20:05):

And I had five other coaches that were like, I’d love to do a specialty program, but I don’t want to do any of that stuff. And you’re like, well, dang it. I want my members to get all the awesome stuff that’s in your head that you want to do. I want them to do it. Like they want to pay for it. All we got to do is like bridge the gap. And the obstacle that was in the way is they didn’t want to do the marketing piece. And so I had a staff member that was great at it. And he would do like two specialty programs or clinics or, you know, something else. And he would market them and sell them out. I was like, dude, you want to just do this for everybody else? You’re good at it.

Brian (20:47):

And, you know, I got a feeling that the coaches would be willing to take a little bit of a pay cut in order to have somebody else do this part. And he was like, yeah, I’d love to. And the coaches, like, so what we did is for like, those specialty programs is we were paying coaches four ninths to do it all and have at it. And we just took one ninth away and we give it to the internal marketer and pay the coaches three ninths. So like they can write their programming however they want. And they just show up on the day and like the internal marketer, like what his job is, is to go and ask the coach all the pertinent details on how long is the program, who’s it for, who’s it not for and getting it on our announcements board. This is our main whiteboard on the gym, writing on the side of that board so that people can see who signed up and get the fear of missing out going, send out, you know, for like, what’s essentially, you know, it’s in the modules, what Kaleda had for selling out a specialty program. And he does that piece and we sell out everything.

Mike (21:59):

And he makes not a commission, but he makes a percentage of that. So I guess it is a commission in a way, but everyone’s happy because the coaches don’t have to do the stuff they don’t want to do. He gets to do the stuff he’s good at. Does he do goal review sessions or anything like that? Any places where he can upgrade memberships?

Brian (22:16):

That person does. We consider any of our coaches who want to grow in our gym, like do goal review sessions. So not all of our coaches do them, but that particular person happens to do it, but it’s not part of the internal marketing position.

Mike (22:33):

Okay. That’s really interesting. So does he do other things as well? Like, does he do coaching and training as well?

Brian (22:39):

Yeah, he does. He does coaching. He does PT and yeah, so that position, you know, like our target for specialty programs is to run two specialty programs a month that sell out and he has an opportunity to make a couple hundred bucks a month doing that.

Mike (22:56):

And that’s the coolest part is that, you know, you often have in your gym, these coaches who are really, really good at coaching or certain things, and you’re asking them to do additional stuff. And our contention, I think, is to be really successful in the fitness industry, you kind of have to sell yourself and you have to do all these things. It’s maybe not enough anymore to be a tactician, but in the right business where you have roles and responsibilities and you can divide things up, you can certainly be that, you know, that tactician or that just straight up coach, because the business owner has created a place where you can thrive and be supported by other people. That’s really interesting that you’ve created this in your gym. How did this come about? Did you see this as a problem and struggle to solve it for years? Or was it something that you just like hit on right away and fixed, how that happen?

Brian (23:44):

Like when we were making our annual plan for, like 2019, it was all right, we’re putting specialty programs on the calendar. And it was like asking people, you know, do you want to be the coach for this thing and for this thing? And it was like, we had people that wanted to do it, and then they just didn’t want to do the marketing portion of it. And it was like, man, well, I don’t want to do all that myself. Like, I’m certainly if I’m going to put in all of the marketing effort and, you know, writing emails and doing this piece, then, well, I want to be a paid for a chunk of that. And it was like, well, that’s not really the point of the specialty program.

Brian (24:31):

Like it’s for somebody else on our team to have opportunity. I don’t want to steal all the opportunities, I want to focus on, you know, driving the whole business for not just this one small component of it. And so it was like, somebody can do this, so let’s figure out who’s going to be good at it. And let’s make it happen. So it kind of came out of necessity, but also like just being creative and saying like, somebody else can do this part. Like let’s figure out who it is. And I think we’ll have success with it and it’s turned out great.

Mike (25:07):

Yeah. And the reason I’m digging into this is because I haven’t spoken to a gym owner about this sort of thing before, and it’s interesting to see how it relates to ARM, because you said that you’re selling out all your specialty programs. So these are, I’m guessing these are current members who buy into the specialty program or, you know, add something on. And in these specialty programs, you always know that you have the opportunity to essentially sell ongoing coaching and personal training after the fact where it’s like, yes, the Olympic lifting program is over, but no, you don’t have to stop working on it because we have hybrid programs. We have individual sessions and all this other stuff. So this marketing position that fills specialty programs really contributes to your ARM. Do you get that sense?

Brian (25:45):

Yeah, absolutely. I mean, if we sell out to specialty programs, it adds probably 30, $30 to our ARM on a given month. And like, and that’s not even considering the upsell opportunity or the upgrade opportunities that come from running the specialty programs. I mean, that’s just the front end of the specialty program itself. So yeah, it’s absolutely vital.

Mike (26:14):

We just published an article by Brooks DiFiore, one of your colleagues on the mentorship team. And he’s talking about how to sell specialty coaching all year long. And basically what he does is he just uses specialty programs and he tells people, you know, how they can continue afterwards. And he really lets people know that especially programs aren’t the be-all and end-all, there is always an opportunity for you to work on the thing that you want to. And it seems so obvious when he laid it out in this article, but I didn’t think of it.

Brian (26:44):

Absolutely. His article is dynamite. And I can tell you, like, we haven’t been at what he described in that article, we have not implemented to a T and you can bet that by the end, by the end of this quarter, we’re going to have that implemented into our specialty program. We’re going to sell a whole lot more PT just from that.

Mike (27:05):

Right. It’s just, you know, it solves that problem. It solves this problem that you always have coaches and athletes that say, can we make this a permanent program? But that inevitably the specialty program becomes kind of a dud where it originally had 20 people and now it has four and then maybe two, and then it’s just not really, it’s just not the thrill. You know, the thrill is gone, but the way he set it up, it gives an opportunity to a passionate coach and a passionate athlete to continue working on something while still maintaining that specialty of the specialty program rather than beating it to death, you know, all day everyday 24 seven. It’s such a neat concept. We’ll get that article linked to the show notes for you. So you can take a look at it. So Brian, as we close this out, you’ve got a big ARM and let’s say a gym owner’s ARM is low. And I’m sure as a mentor, you’ve worked with a lot of people who have this issue. We know we can drive it up with a rate increase. We have a formula for that and so forth, but let’s leave that out for now. What is the first thing you would do if you wanted to make an ARM number move in a gym where it’s just too low?

Brian (28:07):

The first thing is having onboarding packages that start at—the lowest onboarding package that you have starts at a monthly rate higher at your ARM goal or higher.

Mike (28:23):

So you’re basically, you’re saying, let’s say my ARM needs to be 205. That means my basic or my lowest, my discounted package is going to be no lower than 205. Now someone out there is going to say my current ARM is 110. There’s no way I can offer 205. How do you get around that? How do you change their minds and help them figure out a way to provide value that equals 205 or whatever that number might be?

Brian (28:47):

Oh, Mike. The short answer is like, there’s a lot of gyms doing it and you know, three and a half years ago about charging more. And I got to tell you, it’s just the experience that a client gets. Like you ask somebody after they finish your onboarding, how they liked it. And they can’t stop talking about it after you’ve charged one person $300 a month for it. And they are just raving and they say it was worth every penny. And you’re like, let’s go higher. And, you know, I think you just got to give it a go, like give the higher price onboarding package a go, and you’re going to learn to love it yourself. Like it’s just getting somebody over the hump to charge it just one time and see how much their client enjoys it and loves it and says it’s worth it, then mentee is sold on it forever. I mean, it’s there. The value is there.

Mike (29:55):

That’s the thing. We’re not, we’re not talking about gouging or we’re not talking about jacking up and inflating prices. What we’re talking about is providing the value. So if you know, and Chris has said this in his blogs, you need to be worth it. Right. So if you’re going to say, and again, I’m using the 205 number. If I’m going to sell a minimum package of 205, I need to find a way to make sure that that is so packed with value that the client succeeds and says, wow, this should have been 305. You know? And the pressure is really on the affiliate owner or the gym owner to do that. But once that happens and you start selling them, the clients confirm over and over again that what you’re doing is worth the money. Is that your experience?

Brian (30:30):

Yeah, absolutely. And just to go along, like when I started out as a personal trainer, right. I was like, I moved halfway across the country with a suitcase and I got a $20 bike and rode to work 10 miles each way. Like this is true story. And so like when I was first selling personal training, like somebody’s paying $50 for a half an hour with me, like these guys are crazy. But I’m like, Oh my gosh, they just paid $50 for a half an hour with me. I gotta do way better. Like I was trying to pack $150 worth of effort and care into that half an hour. And what I ended up with was just a bunch of super happy clients. I’m always trying to over service. Like if, if I’m charging a hundred dollars, like I’m trying to provide $150 in value and what you want at the end of like, when you ask that client what they think of your service, you want them to say it’s worth every penny and I would recommend it to anybody.

Brian (31:32):

And if they’re saying that when you’re charging $10 for a session or $30 or a hundred dollars, you know that you could charge more or that you should be charging more. And like, at some point you, you keep on working your way up to the point where it’s like, until somebody even questions the price after doing the service, you’re on a roll. Like there’s no price that you can’t go to. Like your clients will tell you the value to them. And it’s like just finding a way to just figure out every possible way and feel the pressure of what you’re charging to go I’m going to provide $80 worth of service right now.

Mike (32:10):

And that’s where the excellence comes in. For a long time, a lot of us in the fitness industry focused on excellence without systems and marketing and all the other things, roles, responsibilities, operations, all the things we should have been doing in addition to that. But you bring it home there for us, that if you want to charge and earn a high ARM, you have to provide equivalent value. And that’s the excellence that we all need surrounded by systems and all the cool stuff that our mentors can teach listeners. Brian, thank you so much. I always love talking to CrossFit Jungle Gym. I love the name. Thanks for being here and sharing your ARM secrets.

Brian (32:40):

Thanks so much for having me, Mike. Good luck, everybody.

Mike (32:45):

That was Brian Zimmerman on Two-Brain Radio. I’m your host, Mike Warkentin. Thanks for listening. Don’t miss any episodes of Two-Brain Radio. Please hit subscribe on the way out.

 

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