Gym Launch CEO Alex Hormozi: Financial Freedom for Life

I deal with people who don't have a million dollars of net worth who are not you know necessarily super operators they're actually struggling they don't have capital that they can immediately inject into marketing they don't have the you know the the desire to do the guerrilla marketing i have to work with a hotdog stand to make them into a mcdonald's without the capital [Music] how to bring more clients into your business keep them longer whilst improving your profitability is a subject we have discussed in many of our interviews but my guest today has turned this

art into a science in this episode we discuss a number of tried and tested methods to grow your business including how to make money from team Training and why most gym owners get their pricing wrong why workout based group training concepts are affecting your retention and what is the secret formula to make virtual training work and it's not streaming classes with a client base of over 2000 thriving businesses i'm very impressed with this guy's results so please check out this week's podcast with the founder and ceo of gym launch Mr alex hormozy so alex thank

you so much for inviting me into your house today and what a beautiful house it is thank you for inviting me on your podcast beautiful podcast as well well one of the things i was going to ask you is i i actually first came across you on on your ads your facebook ads and i i think there's two things that stuck into my mind and kevin's is that Is the tash and the biceps and i had to ask you i i you know i've not got big guns but where do you buy your shirts from

to fit those arms in well i go so the key is to get youth extra large right because if you get youth xl then everything looks bigger you know because it's really just a shirt for a child um no i'm kidding i just i get our stuff But lululemon that's where i get the majority of my my gear very good yeah very good so what so what what's your like you you're obviously in great shape are you your background bodybuilding or anything like that he's a power lifter right yeah so i was a power lifter

i competed for five years and then um one day i realized that no one cared how strong i was and so and my i remember i was pulling My my leg out of the car because my hips were in so much pain from the volume i was doing that i was like wait i don't i'm like at the time i think i was 25 or 26 and i was like what am i doing and so um i was like you know what i'm gonna just switch how i train so i started training with more volume

um kind of switching more to just more bodybuilding style i've never competed in bodybuilding i don't have the desire to get Stage lane but i just have done that for probably six more years now and that works for me and so you just saw the saw the home home set up i just kind of like to do my thing and train every day and train hard and do more for those of you that are on audio and we'll see if we can get some video this but like i've never seen a home gym like this

It's got so much equipment it's very impressive are you a bit of a collector of equipment um yeah i think everybody's got like i'm i'm actually not like a car guy or anything like that like i the only thing i think i really splurge on or will find myself like late at night scrolling is like new equipment and so like whatever our next home is it'll probably be twice that size i just i just love having all the pieces Uh just because for you know when you're training it's just nice to have the variety and

so i like having the variety yeah so what what got you into the gym business because i guess there are i guess there's the the sort of one percenters that do extremely well and then the rest of the people in the business sort of you know kind of uh struggle to To get going i know you've you've had your own gyms you know why why did you sort of set this up as a career um i was a management consultant for two years after um i graduated college and uh i did pretty well now that

was space cyber intelligence we focused on strategic initiatives for the military for cyber and space and um that was a totally different life and i knew that i didn't enjoy that and So um i just made the total 180 decision that i was like you know what life's short i'm gonna do something that i love even if i don't make any money i'll just at least be doing something that i love every day and then um i think i told you the short story but i moved across the country i talked to some gym owners

they were willing to help me out in the very beginning to just kind of learn the Ropes i knew nothing but i think that ended up being an advantage because i didn't have any preconceived notions about how i was supposed to do it and so with that i think we did things a little bit differently and by doing that we're able to have some success and continue to grow from there i use the consultative message that i learned as a management consultant to kind of acquire and iterate on information so The whole council date methods

typically you find experts you ask them what they're doing what their opinions on how things should work are then you ask those experts for five people that they think are smart and you talk to those five people you ask for them then overall over time you end up getting basically the same people and once you have that you kind of have the the mind map of all the information that exists from the people who've Already sifted through the vast majority of it so they're giving you kind of the top one percent of the information and

then from there we would categorize the information um into buckets and then basically consolidate what we think the the crystallized actions or strategies should be and so that was kind of the consultative method that we use for like military strategy but it was it was pretty much the same Thing that we applied we i applied to running the gym and so every weekend i didn't know anybody in california which is where i moved to which was an advantage to a certain because i had no friends i had no girlfriend i know nothing and so every

weekend i would drive up and or i'd have long phone calls with gym owners and i would just take pages and pages and pages of notes and i would try and implement some of the things and Some of them worked some of them didn't but piece by piece things ended up working and so fundamentally i think most gyms struggle from one they don't know how to require customers profitably two um if they uh finally do end up filling their gym the gym isn't profitable so their model's broken and then three if they do have a

customer that finally does come they don't know how to keep them and so Kind of those are the three big problems that most fitness you know most fitness facilities especially independent operators struggle from and so it's kind of solving each of those three pieces and once you do then you have a way to acquire customers profitably to put them in a model that is profitable and then a way to extend the lifetime value with multiple services and revenue streams and whatnot so that overall the Facility can continue to grow and did you find that those

problems were the same across whether it's an independent gym owner with one location up to people who they've got you know sort of big franchises that we were talking about off camera is are they sort of universal problems that you found yeah i think they are i mean it's yeah it's acquisition um the model Itself and then the retention right that's that's it and then you know what you sprinkle on top of that is just what what training and culture needs to needs to be in place because it's a service-based business at least the business

the gyms that i worked with or work with currently are all service based businesses so they're not uh facility licensed type businesses so um the 10 a month massive facility um that's a different model than what we Talk about so like if i were to work with a crunch for example i would be working specifically about how they're going to do their group training and you know their boutique services side because that's the side where i think that's where i work um not to say there's anything wrong with outside it's just that's what that's what

we kind of specialize in and why do you think that is such a Common issue like i'm you know we go to a lot of the seminars and you hear the webinars and it just seems for years i've been in the business for about 20 years and it seems for years we always talk about the same things you know why do you think that nobody's really been able to successfully figure that out and scale that i think It's because it requires skill and so that's the hardest thing is to is to in the fitness business

most people who are coming in as employees are typically really low skilled employees and so you have to take someone who's not being paid very well because you know if i were in a yogurt shop i'm sure i could have like you have to figure out a job that somebody who's going to be paid at that level Which is what is required by the business model what can someone who's paid at that level do well and the difference between a yogurt shop and a gym is that at the yogurt chop i'm getting my value from

the yogurt and the machine whereas at the fitness studio you're getting the value from this 15 hour employee and so ultimately we're selling people at a at a discount and that's where making our margin is on Selling selling the services that we've provided and so the level of culture and management that it takes to run a good facility to be very candid with you the people who are really phenomenal operators if you can operate 10 facilities at once as a as an owner operator or operator overall usually if you were to take that same level

of skill set and apply it to a different opportunity vehicle you'll Probably make more money and so it's kind of one of those things where i feel like fitness is just like the breeding ground for acquiring the skills of business but typically once you achieve a certain level of mastery there are superior vehicles for making money if you have the same level of skill set right and when you say superior vehicles do you mean like other industries Outside of totally yeah i mean we're going into like the equipment side or going to it's just service

on its own is incredibly difficult especially in what most would consider what like a commoditized marketplace and so what we work with you know with facilities to try to decommoditize them from the from their competitors so that they can charge a premium because pricing is i mean i could go into all The issues but pricing especially for for services is typically way off um most people will price it pretty much at breakeven because they think oh well you know i'm going to take i'll open up this new class time because one person said that they

were going to be able to do it so it's at least another 100 a month so it'll make sense but it doesn't actually work that way and so um there's just i think there's a Fundamental misunderstanding especially on independent operators because they're usually more passion driven and so like just like i was when i started i just want to start a gym but i also had my own insecurities and ambitions so i wanted to do it well and i think a lot of people were really content still being on the floor and i didn't have

that desire i knew when i started my first gym i wanted to have Multiple and so i kind of always had that end in mind of like figuring out what the right model was going to be do you think that um that that the pricing is is part of the issue where you know you've you that this sort of the fitness product is being sold as a commodity which means that you're not able to pay for good quality people to work in there Whether it's in marketing or or in fitness and and that is is

part of the crux of the issue totally we call it the virtuous or vicious cycle of price and so you lower your price and then the thing is is the incremental decreases in price with a fixed cost um have massive impacts on the bottom line so the average independently operated gym runs on Twelve and a half percent margins and my source on that is i have a cpa firm that only does gems and so they know what people actually make um and so 12 and a half percent margin is what they're making so that means

if you're making 300 000 a year you know guys are making 35 40 000 that's not a lot right and so from there if you think about that if you reverse that to their membership Right um depending on where you look like zimplander uh wodify they came out with some some reports about what the average cost per member was and so it's about 90 a month for a group training member and so most of the bootcamps are running like 99 a month for the membership which means they're making 10 on that membership and so that's

where the pricing is really important Because if they go from even even 100 to 110 they double their profit right so there's incremental those small tweaks in pricing can make massive differences in the business model you know for example we get all of our independent operators to switch from you know monthly billing to every four weeks or every two week billing and the reason for that is we do you Know 28 day cycles you get 13 28 day cycles in a year compared to 12. now that doesn't seem like much but you know it's eight

percent more per year but if you're running on twelve and a half percent margins you just took it from twelve to twenty and so all of a sudden you almost double the profit simply by changing the way you bill and that's not going to that you're not going to get any pushback from a from a prospect on Saying hey we just built every 28 weeks instead of building monthly no one's gonna no one's gonna balk at that and so there's like there's a lot of small things that you can do to incrementally improve the the

profit profitability of the business that's just on the pricing side but there's the same thing can be done on how we're how you're picking the exercise selection so that you can maximize the Square footage to the facility so you can do instead of having you know 10 people uh in a crossfit i mean i remember there was this crossfit that we flew out to this is back when i was doing turnarounds in person um rather than kind of the cons consulting that we do now but we'd fly out and um this guy i remember was

like yesterday They maxed out at i think 13 people and this place was 3 000 square feet 13 people and it was it was a crossfit facility and i was like what do you mean you can only run 13 but like this doesn't like look at the math like you're you will at full capacity you're under profitability right like and he was he was living on his personal training so i was like you realize your entire business is a non-profit and then You're just making money on your personal training hours you might as well just

be a personal trainer and forget about this stuff and so finally after like digging literally this was a four-hour conversation it came down to the fact that they do double unders which is jump ropes right and so when they do double unders it takes up this enormous amount of space and so If for some reason the class does choose to do that then they had to limit it at 13 and because they didn't know what the workouts were going to be they always had to prepare for the you know the lowest common denominator of space

and so i remember i grabbed the jump rope and i was like this is strangling your business this 10 jump rope is the reason that you can't Go from 13 to 25 people in your sessions is because you're choosing to have jump ropes you say what do i do and i was like stop having them i was like because 90 of your clients are never going to compete nor do they care and it was this wasn't like a competitor facility so these were you know soccer moms just trying to not gain weight during thanksgiving and

so it's understanding the customer Avatar which most people just want to look okay they don't actually care about competing they don't care about their macros they don't even care about the programming they just want to work out and feel good about themselves and so there's a lot of ways you can you know accomplish that same degree with like the olympic lifts we get most of our facilities to not do the olympic list for their large group you can save those for summer private And small group but a you have injury risk but b there's just

a huge space demand and also the coach to client ratio has to massively decrease so your profitability for the session goes down but the objective of that which is how most people are using it is for conditioning but if the objective's conditioning then there's a million ways you can condition someone that doesn't require 10 by 10 square foot around them for the bounce radius on a bar and so it's like small things that's just like exercise selection so one was pricing what's exercise selection you know how you're structuring the sessions are you doing hour-long sessions

are you doing 45-minute sessions are you putting a 15-minute buffer in between like all these little things can massively increase the the efficiency of the facility um so That ideally we can you know operate for a few hours of the day so we can decrease the payroll on on the actual fulfillment side and then um you know again you can structure from a lot of places to unlimited and you know i have a somewhat controversial view about it i i think that it's better in my opinion to structure things as as sessions that are scheduled

right people take them more seriously i think They're more likely to attend and they're also they're also valued higher so it's not workout sessions right so you're against unlimited ni i would say it's i would say it limited if done properly is done by an advanced business owner who actually knows all the measures of the business which 99 of them do not and so um most of them if we can get them to three times a week then just by Doing that we double the capacity of the facility again right and so and people will

actually pay the same amount for three times a week as they will for unlimited sometimes more which actually doubles again how much you're making per you don't say like these little things when stacked together at the end of the year uh you know for us the the average gym that's worked with us for a year adds 239 000 to the top line revenue they take their take home from 29.40 a month to uh 89.50 take home and profit uh that's per month that they're able to take as a result of what we do they take

their average price from 129 a month that's what they're what our incoming surveys say that's the average that we get to 167 a month and again that like that 37 dollars Uh when you're looking like that's you know double sometimes triple the profit that they were making before and so it's all these tiny things that we you know we add in supplement sales so they have retail revenue that start coming in that doesn't take any operational drag it's just simply there and just provides one two three thousand dollars a month which for many of them

just covers the rent and so it's it's these small things that Add up um over time and a lot of them just don't do all of them um and so i think the difficulty in the fitness industry is that you you have a lot of people have a lot of passion who also have really poor views around money they sell from their own wallet they're like well no one would pay for that and that's because they already understand what they're trying to sell like if i go to a mechanic shop and two Mechanics are talking

like who would pay for that all you gotta do is turn this and turn that knob i'm like i don't know and so as long as you're not being unethical and you're just providing value a lot of times people will value things more than than you think what do you say because you've how many how many clients do you have currently so we've worked with uh over 3 500 facilities um at any given time we probably have Active probably 700 right now so i mean there's definitely a clear path that we have for our gyms

to get to you know seven figures um the average gym on the last survey we had is doing 594 000 in revenue um that we work with so that's what they're doing using our systems and some of them once they've implemented the systems graduate and that's fine you know i mean that's the way that the work you know i Love to keep everyone forever but like that's just the reality and that's okay our goal i mean it was a turnaround business so once the systems are implemented the only thing so if you think about a

business in terms of inputs and assets assets would be the actual business structure the the selling processes the bundles the packages the price points the meal plans all the things that are one-time assets right And then after that the only inputs are going to be demand generation and sales right like that's it like that's that's it and so the only things that have to be done on a continuous basis is whatever the whatever the acquisition method is so whether that's organic with outreach and cold messaging or cold emailing or it's uh demand gen with uh

you know facebook ads and instagram Ads and all that stuff like that's the input but the machine once the machine's built you don't need to rebuild it you just need to add more demand and that's it have you found that and i'm probably going to have to reference pre-covered because you know it's a bit of a crazy time but prior to that did you find that there was a certain type of gym model that just you know worked Better than others and when i say that i mean probably like a pure group x sort of

boutique studio or a traditional gym with group x or group xpt was any of those that you found were nicer better to work with from a profit perspective yes the ones with the best operators just being really real that that 100 is what it is um i mean we have our model so obviously we espouse that model Um and we specifically work with you know group training facilities um you know group training semi private independently operating facility like that is our bread and butter who specialize in transformation weight loss before and after picture that kind

of style i don't work as much with the what i would consider workout-based facilities so like with a unique mechanism like spin bar Yoga like not that the model doesn't work for them it's just that we tend to not i tend to rub those owners the wrong way um why is that uh because i think that i want to sell around the result because weight loss will never go out of fashion but bar might no offense to anybody any bar owners or les mills or whatever you know whatever the thing is Um usually and not

to again not to knock franchise orders but a lot of times people will have their you know ten years ago they were the brand new thing and they exploded in growth they used those metrics as their their base metrics to sell their concept they were probably also really good promoters and good operators and then they sell the the mousetrap that was based on something that was new And then the thing is is that the novelty declines over time and then all of a sudden it's not that new and the people who are taking over are

not that good operators they're not promotional oriented and so this kind of stacks all the chips against those people whereas in my opinion weight loss and transformation will never go out of style and so i think it's a more timeless Model to focus on what people value the most like a woman will pay five thousand dollars to get plastic surgery to look a certain way because beauty and weight loss will never go out of style but they are not paying five thousand dollars for yoga they're not paying 5000 per bar but we can sell a

five thousand dollar you know 28 week program uh for one on four semi-private all day long and that's incredibly profitable and so That's that's kind of why why i prefer the transformation based studios because i think that there's way more ability to get a higher ticket there is ability to put retail products in that like yoga you don't see a lot of them selling like big supplement bundles you know what i mean but those are those are huge profit centers for a business and so i just try i lean more towards that type of business

simply because There's more opportunities to make money a lot of the workout only facilities are struggling a lot because they're commoditized price-wise from every other one that does the exact same workout whereas at least with transformation you have a little bit more wiggle of your unique method and all that kind of stuff but if it's like this is what we do then it's very difficult to To differentiate yeah exactly to de-commoditize yourself and so there's all these chips that are stacked against and so usually if i say that uh it you know someone who's let's

say a yoga person would be like that can't be true i was like i mean i don't really have an opi it's i don't want to say it's not opinion i guess it is an opinion but i think it's it's a pretty data-backed opinion You talk about good operators that are key to success what what makes a good operator then uh good interpersonal understanding good emotional intelligence being able to stay organized and run a team um a lot of people a lot of business owners have massive emotional issues a lot of them are not organized

at all a lot of them don't even hold weekly meetings they don't hold one-on-ones to Their team they don't give them improvement plans they don't give them they have no goals set week to week the employees have no transparency in how the business is doing they don't even know what key metrics they're looking for they're really just operating blind and so a good operator should know what the key metrics of the business what are the things that they're going to drive what are each of the you know what are Each of the roles doing on

a regular basis what the utilization level of the employees are and so if they have all those things then they can have a really good grasp on the cost of the business and what are the you know handful of key drivers for growth that they need to be focused on and then direct the team towards but most operators don't don't do any of that So yeah is there a thing that you you know out of order thousands of people businesses you've dealt with is there one thing out of all of them that that trips people

up more often than anything else the two biggest things that i'll say too um biggest mistakes that i see are around pricing and around and i don't know if the other one's just it's sales ability right so if someone Is priced properly and can sell they'll probably make money in the fitness industry like if they can just do those two things they'll do it one of the hardest things is if you have an owner operator who's not very sales oriented it becomes really challenging because they're also usually aren't very good at recruiting sales people because

they're not like them right and so they can't find the right People and then if they do they can't train them and if someone's not doing a good job they don't know how to correct them because they can't sell either and so it's kind of like it's this base thing especially in fitness where you don't all that in my opinion a lot of the chips are stacked against you in a fitness sale because you're telling someone they have to change everything about their lives They can't eat the food they love they have to wake up

super early they have to be sore and they may in 12 months look better than they do now but they still probably won't be at their goal right so like you have everything stacked against you and then the only thing you have is just the conviction that they want to work with you to achieve that goal right and so it Takes sales ability it takes interpersonal ability and typically when you have someone who's an absolute savage closer in that space if they apply that skill set to selling real estate or cd i mean like once

they develop that skill set usually that skill set can be taken into a different opportunity um but that's why i think it's a great breeding ground for entrepreneurs Because a lot of entrepreneurs themselves wanted to take control of the first thing they could which is themselves and so they get to control their food and their body and then they want to do what all entrepreneurs do and share that with the world and so a lot of newer entrepreneurs start in fitness because that's why mlms for for supplements is a great huge breeding ground for people

who are starting their Kind of careers in entrepreneurship because they it's it start it starts with fitness for many people it's the first discipline that they're able to learn is how to control their own body what do you think about a lot a lot of the models where they don't have any sales whatsoever i know some of the studios uh you know it's very much like you come in or it's it's done online are you of the opinion That you you need some sort of like real human being in that sales process or can you

automate it i think you can automate it but i think the guys who have been able to monitor automated are world-class marketers they're phenomenal marketers you look at you know like rumble boxing or you know barry's boot camp they've built just amazing brands that they've built allure around the brands they get celebrities to come like They've done so much good pr work like that's the type of thing that most independent operators wouldn't even dream of or think about and so they're able to generate so much uh buzz that this is just my two cents is

that they develop so much demand and so much word of mouth and so much awareness that they have this huge of a funnel of impressions That they can have a less efficient conversion process which would be like online sales or whatever but even with a less efficient conversion process they're still able to make a very profitable facility because of the level of awareness that exists for their brand you know soul cycle is another example but they also have a phenomenal product um and many you know many brands have tried to copy you know what they

did but Again they were first to market and so but they're they're i would say those guys are far more the exception if you look at the total number of facilities that exist out there you look at the you know the 100 or so soul cycles and it might be 200 now i don't know but uh and then you look at the barriers boot camp which they don't have a ton you look at that compared to the total number of fitness facilities you're Talking about a fraction of a fraction and how many others have tried

to mimic them and then just fail miserably after spending millions in pr and then nothing happens so i think i always try and i typically will try and go towards the optimal conversion mechanism which i do think for many is going to be a phone sale and in-person sale um with a you know a fitness Professional that can sell to goal which is what i usually prefer to do with our gyms is we try and get them to just because when you sell to a goal then people understand what they're trying to buy right whereas

trying to explain the unique mechanisms of how our workout is special and different i think also brings a lot of workout hoppers who will say i'm going to try this for a few months and then The lifetime value massively plummets we try not to sell the workout and actually just sell the goal and say don't worry about how we're going to get there like you're going to sweat you're going to probably be sore and it's going to be okay it's interesting yeah so we should have a different approach so do you think then that those

those sort of workout based concepts of Which there's probably a lot springing up at the moment it's difficult to to sell or to keep people coming back in the long term then yeah yeah totally right i mean the thing that's going to keep people in the very long so there's there's five five things that that you have to do to retain members right um one is if someone is supposed to show up and hasn't showed up they need to call the next day Multiple times to get them back in the facility you can actually track

user metrics and watch someone go you know three times a week three times a week two times a week two times a week one time a week cancel you can just watch it right but if you have the right you know retention systems in place it can be three three two three three three three so you actually can save them and what's nice about that is it's good For the business but it's also good for the person because most people i've never really encountered anyone who cancels the gym membership that they're using don't get me

wrong people do it but like most people if they actually used the entirety of their gym membership would happily pay it and so that's where so the goal of all retention systems is consumption it's how can get them to consume the service Right and so you know checking in on them to make sure that they attend if they don't attend uh checking in twice a month just as a human being to develop the relationship making sure that you have exit interviews so that you can save someone or potentially spot issues that you didn't know maybe

one of your trainers was drunk or who you know god knows i've heard everything Right trainer's sleeping with one of the you know whatever right we've all dealt with that kind of stuff um and uh so there's three you know just three of the of the five you know retention tactics we do handwritten cards you have events uh those are two of the other ones that you can use that typically what they'll do is they'll it's much easier to quit uh a gym than it is to quit a relationship or a Community and so the

goal is to have a a choreographed process of getting the the client to go from a prospect or new client to part of the community and so you know we look at four milestones throughout that process in the beginning we need activation which is you know i know orange theory presented i think at i can't remember what conference it was but you know if someone worked Out five times in the first 30 days they were typically gonna stay much longer um you know we have activation metrics for gym launch most businesses do a lot of

gyms don't look for activation they just look at their churn which is a lagging metric which can be difficult because even if you start implementing some of these retention systems you won't see it for typically 12 weeks especially if you start reaching out to All your customers on a regular basis because most gyms are like don't talk to them let's just hope they don't cancel but usually when you start getting proactive with it you'll see a big spike in churn which will usually mean you'll get that month and the next month churn all at once

but then i mean i've seen this happen so many times uh gym will be at let's say eight percent month over month churn they'll start the communication cycles That we have them do for retention they'll go from eight to twelve percent turn and then like oh my god what's happening but then it'll go from 12 to six and then six to three but that takes you know it takes 12 weeks 16 weeks for that to happen um and and so the the the activation points that we try and catch earlier on is making sure that

they attend those first sessions that's what the Making sure that if they attend you call them the next day that's it pushes activation right checking every two weeks pushes activation because at least in the first month they've already had three personalized reach outs one in the beginning and then two more plus anything that they missed so you're really covering those people in the beginning but that's like part of it the other Half is how we're selling them up front um i haven't been the biggest proponent of trials in general there are some contexts where it

works but um i i prefer to sell defined front end program so like six weeks 12 weeks 28 day that type of program at a much higher price point and we do that one because it liquidates the cost of acquisition that's the whole like getting your customers profitably But second because if you have a more invested customer they're more invested and so uh the conversion rate on a you know a higher ticket front end like you know 300 to a thousand dollar front end ticket uh will typically be you know 50 to 75 percent depending

on the skill of the operator and this and the the goodness of the facility for like better term Compared to a trial which the industry averages 35 percent and so you're converting twice as many of them on the back end which consumes less resources on the front and you're also getting paid you know compared to a low barrier offer front end of like 21 for 21 days or you know free month or whatever uh you're able to make significantly more on those clients i mean a lot of times 20 30 times more and so you

can actually be profitable in the acquisition so you're making money getting new customers rather than spending money and then hoping to recruit the cost over time have you seen any of the sort of studios for example doing this well like you mentioned orange theory have you you know is that a system that you think they've got right or i think they're i think i mean i think They're a they're one of the few really really well-run franchises i think that they're you know this is just me speaking candidly um i think churn around work out

these facilities is always you know is always going to be an issue um from what i understand their churn is continuing to go up right now um this is right before kovet and i know Kova that hit them relatively hard from my understanding but i think they do a really good job of i think if i'm being really honest i think they're just so good at business that they're they have such a good way of of signing up customers they they hit so they get the right franchisees in they make sure that the the requirements

of your franchisee Are higher for them than virtually any other brand they have high liquidity they spend more on the openings than anyone else does and because of that the gyms that they open are already profitable um and are already really well-run businesses they won't even allow you to open if you're not at a certain level and so the launch is such an important part of the business set like 95 of the time is the most Overlooked part but starting out strong is huge um and they've really perfected that model and then beyond that they

have such a strong culture of execution just within the entire brand that they they make sure that every single person is kind of mayor of the town so all the small businesses know you're there they've got flyers they do all the guerrilla marketing stuff on top of All of the you know digital marketing and social media stuff so brand i guess which they bring now right and they and they're also really good at the branding so i mean they've they've really put together a really good machine um and i i don't want to say it's

just i think the workout they have is very good but they do a lot of variety and they and if you'll notice Around how they how they sell it is how the workouts are not the same and so it's really not about the work they're not saying we're just going to use bar or we're just going to use rowers or we're just going to you know xyz and so as much they have a workout based facility but it is based on the variety so it makes it a little bit different whereas if you just have

one modality it can get stale um but still i think They do have some some turned things that but they're so good at bringing him in um that if you were to take in my opinion that level of execution that level of operator and then apply it to like say like our model with transformation you would probably see equal success or higher i deal with people who don't have a million dollars of net worth Who are not you know necessarily super operators they're actually struggling they don't have capital that they can immediately inject into marketing

they don't have the you know the the desire to do the guerrilla marketing and so i have to work with i have to work with a hot dog stand and make them into a mcdonald's without the capital and so that's kind of why like our solutions are based on who we're Dealing with does that make sense so if i if i just start from scratch i probably do things differently than what i typically will have to do to kind of turn a facility around so i know you're quite big into metrics and i i guess

you know a lot of the people i speak to is when particularly when it comes to marketing a lot of it's unmeasured and it flies and print And a bunch of other stuff you it seems as though you've got a very sort of measurable predictable system if someone's not got a huge amount of money and i guess there's probably a lot of people in that position now because they've been closed down what are some of the effective marketing strategies that you would always put in first and just just talk a little bit around that so

if i were if i were a struggling gym Owner right now first thing i would do is i would get a cash flow injection and so what i would do is probably pre-sell five to ten people for a year forward because then i could get probably you know five to ten thousand dollars of cash up front all right with that money um i would probably go straight to paid ads but if i didn't do that then i would start with organic outreach and so what you can do there is you can Join your local groups

of you know local be cave moms and you know fitness fit moms or whatever right um and you can friend request those people message them bring them to a phone call and then see if you can get them into the facility that's 100 free it just takes effort um and so in terms of like knowing the measures behind that typically you know if on social media if you let's say a friend request 1500 people that's 50 people a day which is usually the limit for most of the platforms otherwise they'll think you're spamming if you

get 50 a day you'll get about 700 of those people to accept your request which is essentially just like them opting in right they've opted into communications with you so you don't go to their outbox it goes to their inbox um from there if you were to message all of them hey You know i'm a gym owner in xyz area right across the street from you you know do you or do you know anyone who might be interested in you know getting in shape or running some crazy promotions right now right so i'm not asking

you i'm asking if you know anybody so all of a sudden i'm not really spamming you i'm just asking for help which is a little bit different right so you ask them the first message after that you'll probably have 25 Percent of people who respond uh to that first message so if you're at 700 let's say you're at 140 those people so 20 uh respond to that first message i'm going conservative and then from that 140 who respond you say um okay uh we get 30 of those people on the phone so you get you

know 42 people on the phone from the 140. and of the 42 you say you close one out of three Right and so you close whatever that is 15 people right uh or 14. and so from there that that kind of funnel would take a full month right that's a full month of work probably about one to two hours a day of just responding to messages and whatnot um now if your price point's right and you're selling 2500 packages that's a lot of money right and so Then you can take that money again plus the

paid and full stuff and then do a real marketing campaign and do paid ads that being said doing the organic outbound method is something that you can always do um but it's a four-letter word which is work a lot of people don't want to do that and so the easy button is always paid ads and easy button i'm saying that like somewhat toning cheek because it is easy If you know what you're doing um but most people don't and so they're like well i ran a boost i tried the facebook and the facebook didn't work

it's like saying i tried marketing and marketing it doesn't work of course it does you're not good at it and so um you know we want to have some sort of promotion that we're going to run we want to be attractive we typically run almost exclusively free offers uh and we do that because we split test Free versus non-free so something that doesn't have a free in the headline or anywhere on the copy or the page versus something that is free we'll typically give about four times as many leads for a free offer compared to

an free offer and the close rate's the same we've run this test four times so with like 20 plus locations so i feel fairly confident in saying free versus non-free you get the same types of prospects Right did you mention earlier about trying not to do free trials when right so there's 11 different ways that you can make money off a free okay so you can do you can do free with commitment you can do free free and then you're monetizing through supplements you can do free uh and free could be like you're putting a

deposit down uh and if you had a goal you get your money back you can do free where you say hey the Free thing that you signed up for is you know one times a week but you really should do three times a week and this is also gonna come with a guarantee and we'll do this extra group and we'll meet up with you and we're stacking the value and then it's like okay well i'll do that option which is paid so there's a lot of different ways that you can kind of structure the offer

so that you can monetize the front end Um you can do free like pick your price which is like you can do free but if you do 99 we'll we'll do this extra if you do 2.99 we'll do this in this extra if you do 4.99 but it's still pick your price so from a compliance standpoint someone can pick frey but that's where salesmanship comes into it where you can add guarantees you can add additional services to get them to upsell into something else and so that's Also one of the things that we have to

typically break beliefs about with you know a a small business owner is understanding how to advertise right and so if we're saying you know if you go to if a lot of people have like a lot of limiting beliefs but like if you go to uh if you go to get dinner and they ask you if you want dessert it's not like i mean it's an upsell right if you If you go to you go to rent a car they're going to ask you if you want to fill the tank up they're going to ask

you if you want to upgrade your package they're going to ask you if you want the minimum insurance package which by the way you don't need it's called minimum because everyone just says yes um so they're all upsells uh so it's it's this process that a lot of them don't Have a choreographed sales process so that you can take a prospect and know through a three-step sale that we're gonna make x amount on the first transaction for service we're gonna sell them supplements on the second day they come in for for a nutritional orientation of

some sort and then usually at day 14 we'll try and pre-sell some sort of larger package and one out of five uh will pre-pay that Package which will usually be a 20 you know two to three thousand dollar sale and so if i can get you know one out of five people to buy three thousand dollars then i add six hundred dollars to every one of the values of each of the other for you know five sales and so that's where like the metrics of understanding like the entire acquisition process end and works but most

guys will just boost a post with something that says hey you should Sign up at a gym and then it goes to not even a landing page and says text us at this number so a lot of them don't have like okay well how do i how do i make ads how do i make headlines how do i make pages that are going to load quickly and just conversion optimization that kind of stuff um i won't get into that but but yeah so if i were it's at ground zero i would run a paid in

full play number one Number two i would do organic outreach and then sell high ticket packages selling to goal and then number three i would take that money and then i would run a big promotion where i would have a really sexy offer that people would want to sign up for that is what i would do for an unbranded undifferentiated independent operator who's in fitness and we lost and you obviously we talked about the Brands like soul cycle and orange theory that have got a brand and if you're an independent you don't have how do

you and then relating that to the price point that you said you know most people don't charge enough so i guess if you are an independent and you're pricing yourself correctly which is probably going to be more than everybody else in the area how do you Get that value where where because it's kind of like i guess it's a cold advert that comes in front of you with a high ticket is there things that you would do before that so the price wouldn't be on the page the prices only brought up on the sale so

they wouldn't know about that so most times you're selling in a vacuum most of the time right so people aren't shopping it's an Interruption-based ad and so they're clicking and they're not really comparing to anyone else they saw the offer and they thought it was interesting and they opted out and so you're not really going to be compared to anyone else that being said what we do to try and get our gyms to make more money is that we try and sell or bundle in high value or high profit margin services in addition to The

workouts right and so for us the biggest one is going to be accountability and so if you think about why people why people are willing to pay more to go to the gym is because they actually want to use the gym and so if you say hey you know what we'll do is for 49 a week we'll also we'll text you every morning of your workouts to make sure you show up we'll measure your weight we'll make sure you're making progress and then Once a month we'll check in on about your food or whatever and

so by doing that we start stacking the value of the membership and then no longer are we just a workout facility we're actually more of a transformation facility and by doing that you provide more value you have way more communication and relation and affinity with the client and so because of that they're Going to be stickier they're going to get more value and they'll be far more willing to pay the added premium but the thing is is that the extra effort that it takes to text someone can be automated um yeah all that stuff we

have software that automates all that so really all the all the trainers or the operator has to do is just respond when someone has a question Based on those responses so there's a lot of this 80 90 of this can be automated by selling that added degree of value going from 129 to 200 or 220 a month all of that almost all of that's margin and that's where you can really drive the profitability of the facility i was going to ask you that then so i was going to say you know is this something that

the trainers will do in terms of those follow-up calls and those Texts um or have you got like a system that that's got all that set up yeah so for the first three years um we had good old-fashioned excelsior systems and checking with this person at this day and that's how we did it but now we we've got software that we've already programmed all that stuff into and so all the clients come into that automatically they get set up with the programming that they need over The next however many weeks and it's going to have

all the reach outs all the all the milestones built into it so for your first workout your third workout your fifth workout how was it hey congratulations your third workouts you have milestones set in place all that stuff now is is automated and it just makes it you know we white label it so it's branded to the gym and it just keeps everything in one place and that way They can look at their trainers they can see how their coaches are doing you can assign it out so that each coach let's say has 40 clients

you got five coaches you have 200 clients and you can monitor how the coaches are responding you can see which of the coaches are retaining the best all that kind of stuff so i guess a lot of those systems work really well you know january february this year how is your business Changed and and is is you know what what are a lot of these clubs doing that are not able to open or open on a very compromised way is there a light at the end of the tunnel for those yeah so there's right now

the industry is really fragmented um i think we were talking before this about at least from us about 80 of our gyms are open to a degree uh 20 Actually shifted 100 online and are staying online and so uh that's because they so a year ago i blasted the internet with something called hybrid which was going to be a hybrid gym model where you have in-person clients and remote clients and the reason behind that was because i thought that i believed that there was going to be a recession event that was going to come so

i feel kind of good about that i Guess i thought there was going to be some sort of event that was coming um and i thought that we would need to have some sort of remote services so they could extend beyond the radius and also because remote services are higher margin right if you're just paying a coach let's say you know 10 a week to sustain a client that's 200 a month your your total cost is 40 bucks you're making you Know 80 gross margins on the service which is better than most group training facilities

do which by the way is a benchmark for anyone who's listening is you want to be at 80 gross margin for your services um i can tell them how to calculate that in a second if you want but uh anyways so since the industry's really fragmented uh the guys who already had implemented The hybrid system already had 30 40 50 you know clients online at this point plus their in-person clients and they already had all the systems built out to do that and they just very seamlessly transition them to their existing protocols right the people

who are reopened right now uh if you were in a state that you can only see x amount of clients then you really have to switch to semi-private because you can't do Group training prices with semi-private fulfillment right you can't you can't have five people in a class and charge them five dollars a session because that's pretty much what it is and so you can't do that a lot of people are doing stuff for free as well i guess oh yeah good luck um and so so if they're if they're going to reopen and they

have a cap then our recommendation is Do somewhere privates and have have an online or remote component for the people who want to come back if you are able to open up 100 then run the run the gym launch model and so we have a two-tier model which is large group uh and then you can either this is an either or either have accountability nutrition as your second layer which you add on from their 200 A month or you can have semi-private on top which is one on four training right and so you can have

either of those things the price point's almost the same it's easier to do accountability and nutrition as your second layer because you don't have to deal with square footage uh scheduling issues and all that and people will pay pretty much the same for it And the way that we position it is that this is one-on-one coaching for an extra 200 a month and so even though you're training in a group you're getting the one-on-one attention and so that you have the same accountability as a personal trainer would give you just you're not trading time for

time for dollars and so with that that was the key to the entire gym launch model Of why we're able to get more profitable because we can get 30 40 of people at 400 a month and the only added cost is 40 bucks to the coach and so that's where it gets really that's where the juice is really there but uh back to what you were saying uh if someone's 100 closed and they have to learn how to to sell online now the program that we that we the software that we use to do the

Retention for in person also works online so uh we it doesn't really matter whether a facility is 100 online 100 in person or 50 50 the outreach and communication is the same so it actually simplifies a lot of stuff and you would still assign clients or members to coaches the same way you would assign them to coaches if you had a Purely online business so it actually works the same way so with with this online model then are you how is that being delivered have you got a trainer with a with like zoom and he's

doing the same thing but in a camera or what no we don't um we don't do any zoom stuff we had we started zoom stuff right off the back because i wanted to just like put out fires Um but all the guys that use you know our software now it's there's you know 1500 different exercises that are built into it that are not them but they just program out what exercise they need to do okay and so they can do that on their own schedule which for many people is good because it's about the convenience

and the value that they're paying for is the accountability they're paying for someone to pay attention right because At the end of the day like you can go if you want amazing live workouts then you can beachbody online is going to beat you for nine dollars a month right you're not gonna they've been doing it for 20 years they have the bandwidth they have the models and they have more types of sessions and times of day than you ever have and so you're not going to beat them Right and you're really not going to be

peloton right like they're already they're already way ahead of you right yesterday you're not going you're not gonna you're not gonna beat them right and so you have to beat them in a different way and so the way that you can beat them is having the one accountability and service and so that's why i always believe that there will always be room in any market for an exceptional Operator or people who actually care about their customers and so what we're trying to do is put the systems in place to at least make it look like

the owners that we have care so so just to spend a moment on that experience in so if i if i've signed up to you i've got a virtual this virtual sort of um work you know transformation so what will i get something on my phone my ipad and will i Will i just sort of stick it in front of me and i'll work out with some kettlebells or what does that look like the experience it'd be more similar to it's not it's not like a follow along it's not like tybo okay uh it's more

like all right we're doing five sets of lunges okay right and then after in each set you put your things in and then it marks it as complete and then you move the next exercise So most of the stuff is i mean you can build rounds you can build supersets there's a million things you can do but they're built in there so that they can do the thing mark it do the thing market so so the trainer then from their side they'll just kind of almost like have a library of exercises and they'll create the

workouts and they'll say to the hundred people that are signed up right you'll get the same workout and then tomorrow i'm going to create you a New one well the way we do it is we actually have you know 24 different programs based on someone's goal and so we're going to have guys who want to get jacked girls who want to lose weight whatever uh that they'll actually have different workouts which is one of the added benefits because then it's personal at the workout's personalized and so is the accountability Right um if you have the

one-to-many that's where the tybo and follow along that's what like you might as well do that for way cheaper so this is going to be more personalized and i mean big picture we're talking again susie susie suzy soccer mom is just trying to feel good about herself and so it's more important that there's variety in the exercises than Then really anything else that she just doesn't get bored you don't need to worry about like am i doing daily undulating periodization am i doing density training are we doing back to you know like she doesn't care

she just wants it to be fun and feel like she feels good about herself so so and there's there's literally hundreds of apps i guess that are doing similar stuff so Are you saying then the bit that differentiates or makes this successful is the fact that the coach is going to be connecting with you have you done it how are you getting on that sort of stuff it's the accountability really it's everything right okay it's the relationship and how is that you've obviously had a while to do this then from a revenue perspective which is

a Big number you know are people making money from doing that yeah totally i mean what was interesting is that we had a lot of our seven-figure gyms abandoned their in-person models all together to go online because they were able to get leads for cheaper from a larger radius and sell them at the same price as soon as they realize that they're like why do i have my gym i don't need to do workouts i don't need to pay this Rent they just flipped 100 yep online um i would say this is that when you're

going online there's a wider disparity between the halves and the have-nots what do you mean by that so when you're selling in person especially the two the two traits that it takes to be successful or pricing if if i had to just choose two there's a million but if i just had to choose two You'd be having the right pricing model and then having sales ability in person so there's three fundamental things you have to convince someone when they that someone's gonna have to be convinced of in order to buy right they have to trust

you the salesman they have to trust the company and they have to trust that the product is going to solve their their problem right when you're selling in person They already inherently on some level trust you because you're literally in front of them right they already to a certain degree trust that the company is legit because they're inside of your building right and so you really just need to convince them that the service is going to provide the goal and this personality drove their asses there so they have a certain degree of like buy-in and

you just have to not mess it Up a lot of you know gym owners don't even realize how much the chips are stacked in their favor until they actually start selling in an anonymous environment online now online you have to convince them all three of those in the same period of time and so it just takes more skill uh and so that's that's the that's where the difference between the have nots the guys who can sell As soon as they figured out that they could sell online we'll never go back because the profit is i

mean the margin is phenomenally higher the legion cost is phenomenally lower it's just all the metrics are in their favor but you have to be good at sales and so that's where we focus so much time and attention on making really creative offers making really compelling things trying to reverse risk to the you know Highest degree possible um but again it's you know trying to have free offers that have multiple upsells immediately so we can we can we can liquidate the cost of acquisition you know selling supplements selling add-ons all that kind of stuff in

the beginning so that even somebody who's not as good at sales can still succeed um but there are definitely many people who do suck at sales and they suck at sales even in Person and even horrible online and so that's why i mean as an industry at least based on our rough estimates about 35 percent of independent operators permanently closed during this during this time period which is huge and that's i think that that's a shrinking of both demand and supply so i think that there will be you know less demand for in person because

some people will never want to come back and They found beachbody online for 10 a month and said you know what this is great i can do it from home and i love it um and there's a certain amount of gym owners that went out of business because those people left right and so i think that it'll be interesting to see what happens afterwards but i think that there is a both sides of the equation just the entire market will shrink um it may i Mean i think it will grow but i don't know if

it'll ever go back to what it was pre-coveted to be really candid with you do you think though like i suppose with everything that's going on you know i certainly hear about it um a lot in in different markets but there seems to be a general greater awareness of the importance of health and fitness for people who Probably wouldn't go to a gym do you think that those people who probably wouldn't go to a gym but may be happy to do it in their apartment do you think that's a new market that's probably likely to

grow and provides more opportunity for this model for online only yeah yeah not for in person right no i don't yeah if not for in person i don't think so i also don't Think it's going to be a huge piece because i think i think in person it's going to have a lot of i think there there's going to be a lot of the gym industry is going to have an uphill battle for the next you know year or two years and then we'll see where it stabilizes but i think uh online definitely we'll have

a lot of opportunities that exist But there still will be plenty to take because on the on the flip side the people who do want to go to the gym really want to go to the gym and so this is actually one of those opportunities where having an even higher price at this point where you have lower lower capacity actually makes sense because you have a higher that you might have lower total number of demand but the extent of the demand is higher So make sense so like i might only have 20 people who really

want to come to the gym but the elasticity of their price of what they're willing to pay is now significantly higher because they'll do anything to get out of their house and so i think that there's that'll be an interesting like seeing how that shakes out but yeah i think that online's only Going to grow online to the future i think vr is going to really change a lot of stuff when virtual reality comes out and you can feel like you can get a group experience in the comfort of your home i think that'll change

a lot of things so you know the industry is new and exciting but i think there's still at least in the five-year horizon there will be room for Gyms to to come back but i think the bottom 35 percent of operators got knocked out and the people that when they come back will probably be able to go back to where they were before but it'll just take some time and with with people working at home what are your clients doing in terms of equipment are they are they doing keeping them sort of equipment free you

know body weight It depends on what the client has so if the client is comfortable going to the gym then we have workouts that have built in with you know barbells and dumbbells and machines if they have access to like you know 24-hour gym uh if they don't have access one of those then we have programs that already built out that have body weight and stuff they can just do at home so it really depends on the client yeah and i guess i guess You could if you've got a facility people could be working out

at another facility then and you could still be offering that service could you yeah if they went into like a say a low cost totally yeah i mean i mean yes absolutely because i mean the the i call it like facility leasing or facility usage like that's that's now you ha it's like kind of getting a ticket to being able to get in Shape like most people have no idea they have no accountability they have no idea about nutrition they don't even know what they're doing while they're there and so the fact that they're paying

29 a month is really irrelevant to what their results are so you absolutely can have i mean most i mean most online trainers tell their clients to go to a gym so it's It's not combative at all or you know cannibalizing and do you think that opportunity now exists outside of what's going on with kovid do you think but do you think that opportunity exists for people to do this purely because a lot of the current businesses have just done a poor job at helping people to get the results and keep them accountable um can

you read the question so so Do you think so it sounds like there's this opportunity for this kind of hybrid model of personal coaching and workouts um outside of what kovid's you know prevented you from going for a gym but do you think that opportunity is really um there now because the majority of gyms have not done a good job at getting you results and holding you accountable i think the opportunity exists a lot because Kovid pushed everyone 10 years into the future and so you know my mom downloaded zoom and figured out how to

do a video call and there's all these i mean these are tiny simple things but you know if you look at the bell curve of technology adoption you know you've got the innovators uh i can't remember the next one then early adopters late uh late majority and then laggards right And so it really took almost everyone besides the laggards and just pushed them all the way through doing video calls and zoom calls like it was normal and the idea of online training wasn't even i don't believe that general population mass market even knew it existed

like that because we're in the industry but like i mean i remember five five years ago that people didn't still really didn't know If i went to talk to my mom like what's crossfit she'd have no idea and like it's been around for like 10 15 years you know but still like it takes a long time for information to go all the way down from the top of the market all the way down to the bottom and so yes i do think that there's going to be a huge opportunity i don't think it's because jim

did a bad job i just think it's because Now all of these clients are now aware of a solution set that they didn't know existed and it's now more convenient for them and for many of them it's lower cost so as a as a business owner you've been and we've not covered this but you've you have owned your own facilities you've helped businesses to to make money and now you're moving in into the online space you know What what's your thoughts if you were coming into this again and you know post covid and you had

you know you had sort of all your savings and and you're going to put it on the line you know where would you what what space would you what would you do tomorrow so it depends on who i am and what my skill set is just being so i would i mean the opportunity that i would be getting into Would depend widely on that um and this is assuming that i wanted to be in fitness correct yeah yeah so you know if i had what i would consider the average skill set um it's a hard

call because it's a really hard call i think there's yeah it's a very it's a really hard call uh how much money do i have okay good never know let's say let's say let's say you've got Let's say you've got 50 grand 50 grand um be really difficult to open a facility and market it with that kind of money so i probably would try and learn online if that's all i had running a facility can be extremely profitable if you're selling high ticket and so that's where semi privates is usually where the vast majority of

the profits Being made or adding in kind of that hybrid accountability like that's where the margin is and so in some ways group training can be considered like i don't want to say freemium but you're basically for many people they're almost breaking even on the service you know give or take right and so it's making sure that they have these additional value ladders in place so that they can Maximize profit if i were somebody who had the passion of wanting to work with people then i would have the brick and mortar facility that would be

focused on sending people up to semi-private and or like the one-on-one accountability and coaching it also the nice thing that opens up is it allows you to actually do more um interesting programming right because A lot of us don't just want to make group workouts like a lot of us train in different ways and would love to share that with people and giving having that one-on-one accountability and coaching allows you to kind of flex those muscles that don't normally get flexed which most of us enjoy um if i really didn't have a ton of capital

then starting online is probably the only place that would make sense Because you just don't like there's lower barrier to entry that being said there's more competition and so you have to be willing to either have a superior skill set which would be understanding the marketing side of paid acquisition which takes time and money to understand um or having the work ethic to do outbound for you know two to four hours a day every day to build up my Business those are i mean you either have to pay for you have to either pay in

time we have to pay in money but you have to pay to acquire customers and it's just one or the other and you just pick you know i always joke that you can um you can't be broken busy so it's either you have time and no money or you have money in no time but you can always trade one for the other and so it's just making sure that the Opportunity vehicle that they choose aligns with what they actually want to do in their life a lot of people a lot of our gym owners for

example really love their gyms and so obviously we have a very tested gym model that's very profitable and so they want to run that i ran into a lot of you know difficulty and pushback when i was like guys we have to go online for this period of time Um and many of them did it basically just to get by and then as soon as they could open back up did and they did fine but uh it really depends on the personality individuals some guys are like i don't want anything to do with my gym

anymore i'm out i'm gonna travel the world and some guys really love it so it really depends on the person yeah and i guess there's a lot of trainers That probably work for facilities even like these and they're like okay well what do i do and i i suppose this sort of virtual model if they can as you say if i can get the marketing right um they could potentially you know deal with a lot of clients that maybe they couldn't do face to face and and start from there i suppose if you have the

skill set being online in general will make you More money the big if is if you have the skill set and is that from a marketing perspective when you say marketing and sales yeah yep marketing and sales um obviously you have to have a good strong back end um but a lot of that will even still be dictated on like the extent to which the person's convinced that you're gonna be able to help them and the investment that they make if you get Someone to pay five thousand dollars or three thousand dollars for a weight

loss program they're far more likely to actually adhere than someone who pays 19. right and so it's my belief that in order to be a truly good and transformational coach you have to develop the skill of helping people make decisions to help themselves and that's sales right and so i think the first step in coaching is being able to get people to Prioritize that thing so that you can actually help them if you can't get them to believe you or to believe that they are worth it then you're not going to be a good coach

and so i think it's the first step so a couple more questions before we wrap up first one you know fairly new news but apple coming into the fitness space offering streaming service for ten To about ten dollars a month what's your thoughts on that i didn't even hear about it so you said it just um i mean i'm sure they'll do amazingly well i mean fitness is a growing space they probably saw the opportunity that a lot of people are which is probably saw beachbody's growth during this period of time i've got friends of

mine who have um uh you know like online fitness apps and most of them doubled or tripled just During covit to know to know i don't see fault of their own no no extra work of their own it was just circumstantial because all of those cancellations went somewhere um and that's where they flowed and so apple probably saw the opportunity and went for it um i think that they have a really good tech you know stack so the wearables all syncing together and all that stuff for the whole what do you call it like Digitize

me or quantify itself i think that there's interest there but even if everyone in america gets on the 10 a month out for apple most of them won't use it anyways and i think there's always going to be room for somebody to actually provide high-level service and accountability yeah it sounds like from what yours i've picked up from the conversation it's that it's that service accountability and And you know just keeping people to achieve a goal and and i i guess you know when you think about fitness that's probably the one thing that all of

us struggle the most with it's not it's not the kettlebell program or whatever it's you know it's right it's sticking with it and it's if you think i don't know if you had this experience but most people that i know who are serious in fitness at one point Had someone who invested a lot of time in them and it's either a mentor a friend a brother or they paid for it but almost all of us had somebody who kind of showed us the ropes in the beginning i mean i certainly did for a year i

had a teacher stayed up with me after school and worked out with me for two hours a day for the first year of my high school career And so from that that's what sparked the you know my my own interest my own internal motivation to go learn and all that kind of stuff and so i don't i don't know a lot of people who are 100 self-taught most people have other people on some to some degree that help them and i think it's a necessary requisite for somebody who's going to make an actual true transformation

in the long term And so i think there's always going to be an opportunity for people who do care in our good operators which is kind of like the very first question you asked the beginning is like why is there a difference between different facilities and it really comes down to how good you are at operating the business and caring and you know we have a joke that you know the best Way to uh look like you give a shit about your customers is to actually just give a shit about your customers i never thought

about that but i i started when i was 15 and i used to like weight training and bodybuilding and probably for the first five years like in gyms you used to have personal trainers not where i lived but you always had a training partner yeah and you'd always meet three times Monday wednesday friday and that partner would be there and you kind of evolved to another but you'd always have someone with you and it wasn't until i got older that you know they started to drift away that i then struggled to make that leap from

doing it myself to having somebody there um and i you know i thought i was committed but when you said that it's like well actually i had a lot of Hand-holding for many many years you're the personal connection that got you to the gym because you wanted to hang out with your friends and work out you didn't want to work out and hang out with your friends so it's like it's it's the dual uh motivation that gets people there and a lot of people just don't have that in their community and or they're in their

in their mind so far not fit you know when you're 15 Years old as a guy you probably weren't like incredibly overweight or you didn't have you just wanted to look better right but if you're you know 60 pounds overweight and you're after your third kid you don't want anyone to see you and so sometimes you do have to kind of pay for that person to to be there and hold your hand during that process and i think it's if you Really want to help people it's the it's the single best way to do it

and if you do it in the context of a group training environment uh or online uh the one-on-one touch is what allows you to get more margin extend the lifetime value and also actually deliver the product that you're saying you're going to yeah so what do you see in next 24 months what were they what would their sort of traditional fitness space look Like do you think um i think the entire market will shrink from a brick-and-mortar standpoint i think that the operators who are left are probably by definition the top two-thirds marketers either they

had the capital the non-marketers of gym owners uh they had the capital to bear it or they had the skills to bear but either way that's how they got through it Um i think that it will slowly come back not to pre-covered numbers i don't know if it'll ever get back to what it was before covet it was also the best economic time of of all times um and we're going to get back to probably some sort of slower recession inflation all that kind of stuff that's going to happen as an after effect and so

you're going to have some economic pressures you also have all of these new businesses that are Going to be siphoning away demand from the marketplace so the overall marketplace for in-person i think will shrink i think that online will continue to grow i think the pace of the growth will not be as explosive it was during covid because it'll kind of even out a little bit but i think that what it did was it pushed the awareness of the entire population that there was an online Solution and i think that in the next maybe three

to five years uh that's where i think virtual reality will become really interesting uh where people will be able to like work out in classes except not even have it and that's we'll cross that bridge when we get there but for the gym owner i think that you they'll be able to come back uh after This and the people who do want to come back to the gym will be even more dedicated than they ever have so final question then escape your limits is about escaping what you've believed is impossible and gone on to make

it possible what would be an example of where you've escaped your own personal limits i think gym launch in it of itself the company Has you know escaped the limits that i thought was possible you know i had life goals when i was younger to make x amount or save x amount and you know we surpassed that and then i put a new goal and then we surpassed that and then put a new goal and we surpassed that and um you know when i had my first gym and i was sleeping on the floor i

i don't think i i don't think i would have imagined that You know what i was learning at that point was going to become something that was going to impact thousands and thousands of gyms and their employees and their families and the hundreds of thousands of people who've gone through the facilities that we've helped um so that's that's that's very cool for me so i think from from escaping the limit standpoint that's Probably the biggest one for me fantastic well thanks for your time i'm gonna we'll put all the details of your company if anybody's

looking to take their business or struggling at the moment it's uh you've got some great stuff out there there's a lot of free content as well which i'd recommend checking out your podcast um but we'll put the links in and you know if anyone else wants to get in Touch with you then uh we'll make sure they can find out where you are so alex thank you so much it's been a very interesting conversation and [Music] i hope you enjoyed this podcast if you did then please go over to itunes and subscribe to the escape

your limits podcast leave a review leave a comment it really would help us a lot to continue to keep these going [Music] you