Today on Two-Brain Radio, Chris Cooper is in to tell you why unlimited offers erode value and don’t help you retain members. Chris explains it all right after this message.
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Hey everybody. It’s Chris Cooper here. And I just got a great question through email and it’s such a good question that I thought I’d share the answer here with everyone. And this is a question that’s really, really common.
So I’m just going to read it to you. The question was “You recommend gym owners to not include all types of services in their membership like CrossFit, yoga, Olympic lifting. A client should only pay for the services they use and if they want more, they pay extra. But Two-Brain offers way more than any Two-Brain client uses or will ever use. The roadmap itself is really extensive.” Now the value of the growth membership, and they’re talking about like our second-tier program at Two-Brain, the value of the growth membership is way higher than the price because of everything that we get. We may never use some of the resources, but having access to them are enough to keep us engaged in growth. It’s almost like an insurance and the premium is so low that we’ll just stay forever. So a goal of mine at my gym is to create so much value for our members that they will never leave.
So the services like group and PT nutrition have to offer higher value than the price. If we also offer daily home workouts, yoga sessions tailored for today’s workout like ROMWOD or daily recipes, daily meditations, you name it, the value would or could be perceived as higher. So why is this a bad idea? All right. That’s the end of the question. And this is my response. The problem when you’re adding value is not in the value you’re delivering, it’s in the perception of that value. Your clients don’t actually see or use everything that’s available to them. And even if they do see everything that’s available to them, like the meditations and the ROMWOD and stuff, they don’t measure that value. They don’t do the math in their head, right? They don’t go like, OK, CrossFit is 150 a month. And I’m also getting yoga, which is worth about 50 bucks a month.
And I’m also getting nutrition tips and meditations, which is worth another 150 a month. Wow, I’m getting $350 in value. And I’m only paying $200. You do that because you’re the gym owner. And you know what these things are worth, but your client doesn’t do that. Nobody does. Instead, the inverse is true. The client actually undervalues the individual services because they’re all rolled into one. It is kind of murky. So for example, if you’ve been giving away one-on-one personal training for free to anyone who wants to stick around after class, then you’re never going to be able to sell one-on-one personal training. And this was a huge problem for a lot of gyms a few years ago. It’s the same with nutrition coaching. Maybe the gym is running seminars on nutrition coaching, or they’re like talking about the plate method in class and clients aren’t getting results because they aren’t paying for the coaching.
It’s just something for them to do in between doing thrusters. The rare alternative is when a gym bundles everything together into an unlimited package and actually charges what the package is worth if all of the things were priced out separately. But the problem here is that not everyone needs everything. So most people are actually overpaying. If I don’t want yoga, then I don’t go to yoga, but you’re still going to charge me for it. So you’re better to charge people separately for what they want to buy instead of rolling everything into one. It won’t help your retention to provide more value that they don’t understand or break down. And sometimes it makes things easier for the gym owner to have like only one unlimited option, but it doesn’t make things better for the client. And so it doesn’t add any value. Here’s a non-gym example.
The number one reason people switch payment platforms is for a new feature. So you go from platform A to platform B because platform B accepts Stripe or whatever. But a lot of the time platform A actually accepts Stripe too. I was talking to the CEO of the largest platform in the CrossFit space. And he told me that 30 to 40% of the time when their clients quit, they cite a new feature in another platform that they’re already getting for free on his platform. This is so common that it even has a name, recency bias. We overvalue something new and we undervalue what we already have. This is why so many Two-Brain gyms can sell out a six-week weightlifting specialty program for more than twice the price of their normal membership. But if they ran a weightlifting class every Tuesday at 8:00 PM and included that in their normal CrossFit membership or whatever, it would flop. Well, you’d have 10 people show up the first week and then you’d have eight people show up the second.
And by week five, you have like two people. And those two people will complain if you took the class off the schedule, even though it’s taking the place of a class that you could fill. Man, I remember doing this. We really wanted our clients to have yoga. And so, one of our members was like, Kelley Starrett’s got this great idea. You do this wine and yoga thing and you do it on Friday nights. And people bring wine and we do yoga. And so I said, OK, well that sounds like a lot of fun. Let’s run it. Week one, 10 people show up. Fantastic. That’s a great turnout for a yoga class on a Friday night. Week it’s six people. Oh, I wish I could make it. But I had this other plan. And by the time you reach week four, it’s like these same two ladies.
And at least one of them is just there for the wine.
Hey guys, it’s Chris Cooper. Your members are buying supplements somewhere, so they should buy them from the person who cares about them the most: You. And you should work with my friends at Driven Nutrition. Jason Rule and the Driven team put customers first, every time they’ve got a ton of products with high margins and they’ll even train you so your retail program adds revenue to your business. Kirk Hendrickson from Iron Jungle CrossFit says Driven Nutrition has some of the best support I have seen from any company we’ve partnered with. To make more money with supplements and retail sales, visit drivennutrition.net. Now back to the show.
So back to Two-Brain business and Two-Brain Business, not a gym. So the company is not run like you would run a gym. We have over 50 staff, including a team of 35 mentors.
We have a managerial layer. We have assets and tools and we invest like a million a year into software and other things that will help gym owners. But yeah, we also have a massive amount of resources. We have something like 400 courses just in our growth program that gym owners can use when they need them. You need Facebook marketing here. It is. You need to create a client journey to boost your retention. Here’s the course and the templates and the step-by-step plan. But even Two-Brain clients are still sometimes lured away by recency bias. So a gym owner will see an ad for a new $5,000, Instagram marketing course, and they’ll sign up, even though we have the same content for them already at the growth program rate included in the rate that they’re already paying, it’s built right in. And recency bias, this tendency for us to be attracted to the new thing, instead of appreciating what we already have, this is how most biz coaches make money.
They sell the new tactic, right? They publish the new Instagram reels course as fast as they can figure it out. Like as soon as Instagram reels has a course, you know that 50 biz coaches are going to have the new Instagram reels course guide within 24 hours. And people will buy that from them because it’s brand new. And then the biz coach finds the next new thing. And they sell that. The problem is that this cycle of novelty leaves no time for testing. They have to get the new Tik-Tok playbook out really fast. So they don’t have time to see if it actually works. And then onto the next. And I think we saw this a lot withCclubhouse back in January, dozens and dozens and hundreds of business coaches were saying, you got to get on Clubhouse. Here’s how you do it.
Here’s how you sell from Clubhouse. When really it didn’t really work for almost anybody except business coaches, selling business coaching to other business coaches, right? So we actually take the opposite approach. We test everything because there are so many ways for gym owners to be successful, that we don’t have time or space to teach unproven strategies. We cut a lot of B-plus ideas because we have so many A-plus strategies on the roadmap already that we don’t need to waste your time with maybes, right? We’ve made 391 updates to our roadmap just this year. When a client has success with a method, then we look at their data and then we test that strategy in three to five more gyms. And if it stands up, then we broaden the test and then we put it on the roadmap for everybody. But I doubt most clients know every single thing that’s on the roadmap.
It’s their mentor’s job to point them to the thing that’s going to help the most right now. And even so with all of these updates, I think I said 390 some this year, so far, and all that testing. And we pay for this testing. We still have a churn rate at Two-Brain, right? And it’s like 3% or less. But a lot of that is attributable to recency bias. People are just attracted to shiny objects. So how does this affect you? Well, in your gym, you have to have a balance between the program you deliver consistently with excellence and the novel specialties. So CrossFit and Level Method and bootcamp and yoga, these things. If they’re your core service, that’s great. They’re great at delivering a broad, inclusive fitness method, but some people will want more and they will need more to hold their attention and their interest in your gym.
So for them, you have specialty programs. Other people will be mostly content with your core offering, but maybe they need some help with nutrition. So you sell them a nutrition package, but you don’t roll it all into one. Or people will quickly acclimate, undervalue your service and chase the next shiny object. I hope this helps. For me, it’s always been a matter of knowing, like, what am I clients need right now? But also what do they not need? What can I filter out to help them get toward their goals faster? And this is true in my gym. It’s true in Two-Brain and every business that I own. You have to put things through a really big filter when you’re at this level. And that means sometimes you’re not getting things quite as fast as you would have, but you’re not wasting any time on unproven things either.
However, you have to balance that out with novelty. You have to upgrade your staff. You have to present new stuff. You have to bring new ideas in to keep people interested. And when you just include everything all in one package, you get some people paying for more than what they need. You get some people distracted by all the options, instead of doing just what they need. And you lose that recency bias effect that we all have. People just kind of get bored with having it all and they’ll go chase something different. Hope it helps.
That was Chris Cooper on Two-Brain Radio. Don’t forget to subscribe for more episodes. And now here’s a special message from Coop.
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 in 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.