Friday, January 12, 2024
people, ads, gym, run, cost, business, money, discount, acquire, bargaining chip, referral, pay, work, spend, membership, marketing, bucks, client
All right. Ladies and gentlemen, welcome to this week's episode of the gym owners podcast. I'm your host Tyler Stone over there's John Fairbanks. How's it going, John?
John Fairbanks 00:07
I dodged a bullet this week Tyler with the flu running rampant throughout my house.
Now that bullet circling back around JFK style buddy hits. No magic
John Fairbanks 00:16
bullet for me. Yeah, yeah. No, it's gonna happen. No, I listened to Joe, which means I've done all the things that are gonna COVID or the flu. Neither of those are happening right now.
Guys this week, for you gym owners out there want to talk about something that we kind of have been fleshing out for quite a bit as we talked about ads, running advertising as the cost of acquiring new new leads, new members, new clients, whoever you want to call it, there is a thought exercise, we want to walk you down here because fundamentally, there's some things that are happening that you cannot avoid, okay. And that thing is that there is normally a cost associated with acquiring new members, there just is, what that is, what should be what is fair and why that cost is getting inflated, or why that cost really exists at all. That's what we're going to dive into today, we're gonna cover some essentially lead generation strategies, and what to do with the how to work, work around and do the best thing you can with the costs that are associated with acquiring new members. So let's get right to it. Follow the show at the gym owners podcast on Instagram, follow me at Tyler effing stone John is Jay banks, NFL, you want to get into the gear Academy, which is our business coaching product where we go through and we coach you, your business, your staff and make you and your team awesome, excellent and your gym kick ass. That's what we do here. So if you want in on that, you better be listening to the show for a while before you understand what we try to do, because this isn't something where we're just going to start barking at you, we will give you 40 members in 40 days and it's who's gonna be the best and we don't run bait and switch bullshit. It's really your systems, your products, your people and that's what we're trying to do. We're trying to help you do your thing better so if you want in on that go to gym owners revolution.com Also we have the Facebook group in there. So let's get started. So we were going through this going through some data that will probably actually not get too deep into the rest of that data set that we are planning on getting into today. But the fundamental thing here for this now is John, this data that we're looking at for acquiring a new lead, the cost for acquiring new leads primarily for CrossFit gyms, right.
John Fairbanks 02:30
It was it ultimately the the it's positioned, it comes from like its push presses, releases, right there stages
80% affiliates across, but
John Fairbanks 02:43
they do claim, right, like whatever it is, get enough
other data when they're just showing the breakdown of types of gyms that they have. I feel like they were just trying to make a list of gyms that exist because they were like martial arts studios, and the number was zero. It was zero. So I don't understand why it's uh, it makes me sad. I don't like the data that you're giving out when your graph is fucking stupid. And at that point, I'm like, Jesus, save us the space. But the reason they do that is so they can make a list and hope that that grows. So see, we can serve martial arts to like your fucking don't.
John Fairbanks 03:17
And it's like statistical 02. It's like, like plus or minus for like your average mistake or whatever. Like there is one guy in like Des Moines, who actually, well, whatever like,
or does martial arts out of the CrossFit gym and some fucking shit, whatever. Anyways, aside from all that bullshit, the piece of data that was interesting is that the average cost of acquiring a new lead is around $45 to $50. Yeah, that is important to think of, and this is a thing that I think when people start to I'm gonna go at this both sides, I'm gonna go at this and that, like, you shouldn't be such a policy about running fucking ads, and that it just does cost money to acquire new people, and it's on your system to be profitable, and to retain people in your sales system to get people into products that are worth it for your business. And that's just the fucking name of the game. In every goddamn industry, for the most part, if you're gonna grow, there's some cost to acquiring new leads and new clients. It just is what it is. On the other side of that, what are you going to do with that cost? And when Who is it going to I think that's really what we want to cover today. But the idea that it costs 50 bucks to acquire a client Well, the amount of times I've seen gym owners have just boosted post one time for like 50 bucks 80 bucks and they don't get anything out of it. Or get maybe one lead by the way this is this new lead or is this to close a new client? I don't remember that piece of data. Let's call it a new client I think is acquired if not lead Correct. Okay, we have our notes wrong. It's okay to know what the father is. Anyway, but to acquire a new client by the way, when we were doing this in the mathematical equation matter Because this starts to allow you to do dollars in dollars out as long as your marketing strategy is solid and you're dealing with some commodities that are consistent and that you can trust right? So if you're just throwing shit into the fucking void, throwing more money into the void isn't just going to return stuff back and forth some bad strategies will cost 100 bucks some really good ones will cost 20 So not all of your stuff that you're running out here is going to be consistent and of course you should also be trying to do things organically via referrals and stuff like that that that cost you nothing
John Fairbanks 05:33
and in just a state like the brutal right like the the fundamental basics of this it doesn't mean that if you spend 50 bucks you're going to acquire a new customer right like It's like please understand that like it's because this is where this is what we're really gonna dive into this and go out this hard because this is it is a dangerous slippery slope when we start venturing into this world because you will find yourself shelling out 1000s and 10s of 1000s of dollars over a period of time if you're not careful because of how this industry has become
Yeah, I think so , right? It costs money to acquire lead now I can tell you this for sure. Of the gyms that I work with directly like directly not not within this network here that we work with like our coaches from the gym owners revolution but gyms that I have been in as a coach as a helper or whatever this is right I don't think any of them paid to acquire any leads which by the way, did not running ads not running any paid anything right? Now the problem is, those gyms Don't fucking grow. Like every I can tell you and the amount of and I've been in a lot of sales, specifically CrossFit affiliates and functional fitness gyms especially. And a lot of 24 hour facilities that I'm seeing at the larger scale franchise level 24 our facilities often are running ads, just because that's a part of their overall marketing strategy. But there are some that don't. The one here that I operate out of fucking never runs goddamn ads for anything ever. And it's like if you're trying to grow, that's like, how are you acquiring leads, it's just they just happen, which some gym owners I think like to hang their hat on that?
John Fairbanks 07:26
Well, yeah, it's
always word by word of mouth, word of mouth. And it's like, know what that is, is leaving this up to the fucking wind. And also, then you don't really get to choose the type of person you're getting, you may just be catering to the lowest common denominator, right? You may just be catering to the type of person that's already in your gym. And if you wonder why you have problems with some people already in your gym, or simply like, I wish I was getting some, you know, higher value clients that are buying higher value products or spending more money with us. And you just have no marketing strategy, you're not even involving yourself in the conversation about who these people are, and who they could possibly be. Okay, so I've the gym I ran to, we didn't run any paid ads, we just really tried to push referrals and did a lot of just organic marketing and shit like this. But in hindsight, it was fucking like, we frankly didn't have money for ads. didn't have it. But the fact is, and this isn't just Facebook ads, this could be radio, this could be any number of just marketing strategies you're going to use. I think that that is if you're not expecting to pay any money to acquire clients, then you do not get to fucking complain that your business isn't growing. I'm sorry. Like you're, you have to invest. If you don't pay your goddamn electric bill, you don't get to complain when they shut your power off. So when you are not paying the cost that it costs in order for you to acquire leads, then fuck off. If your business thinks I don't know what to tell you, now you can scramble, you can try to cover as I've heard we've worked with gyms in this situation. It's like we need to work referrals, we need to get some organic strategies going so that we can get some revenue coming in. And when we have that extra bit that needs to go right into trying to acquire new members that needs to go right into marketing strategies one way or another. We need to start to systemize the growth of your business. Because if your growth your business is not systemized, the growth of your business is just maybe going to happen or maybe it's going to not. But
John Fairbanks 09:23
I also think it's important to along this exact same line of like marketing strategies and different advertising strategies is that there is more than one way to kind of skin the cat in this scenario where it's especially we're coming up on January, right, which is where everyone is talking where you start to see the largest entities in our space will start to run really, really heavy, aggressive advertising to get people through the door. Right because they're, they're playing a different game. So then it becomes crazy aggressive, right? Of like, no money down. $1 down and We're going to ignore or we could talk about later, like, like all the hidden fees and bullshit. But with that is really important because if you think about if it costs me $50 To acquire a lead, or to acquire a new person, that's what it ends up averaging out to all the money that I've spent, is that ended up costing me 50 bucks and get that person through the door or whatever. It's because exit because Tyler I think that is what it comes down to getting someone when they say, when it when the metric is 45 to $50 are spent to get somebody to walk through the door, we've played this game before, to sign and this is it this this is no, it's gonna be Yeah, because if you think about because if I think about when we have worked with ads for we
have. So by the way, I can't reflect on what this data set is that they're talking about. But we have worked with ads, things that are essentially when someone's coming in for Australia with some franchise stuff, some lead delivery systems, what was it like 80 bucks,
John Fairbanks 11:04
Yeah, it's so much money. And so the purpose of this right is like to get somebody to actually walk through the door, because you will get you run ads, and let's you're going to spend a fuck ton of money to run ads all the time, you're gonna get a whole bunch of bots that are going to respond, that's bullshit, people that are dead, that don't even exist, that somehow they're filling out fucking things, and they don't even speak English, they live in a different country or whatever. And then, then you will get some people that are confused, that don't know why you're contacting them, even though you now have their info somehow. And then maybe you're gonna get people that are legitimate. But either way, there's so much back and forth and payment that goes through that they do eventually, it's like, well, I spent this much money by the time I got somebody to walk through the door, it ends up costing me about $50 a head now.
And I think the one that we had worked with directly, it was more like 80. And that matter of fact, the marketing firm that worked with him said we will, we will handle everything up to this point. But every time someone schedules a meeting and shows up to just meet with you, that doesn't even guarantee that you're close to them . That opportunity was around 80 bucks apiece, because we were coming and going. I was like, Look, I can just have it. I was like I could do this for way less than this. But I wanted to. But I don't like the nature of that game, because the incentives are bad. You know, there's a yeah, there's always a thing, that matter of fact, they were just talking about this on Rogen on the AI thing, which is, show me the incentives. And I'll show you the outcomes. And this is why we talk about building your system on client results and getting the right people in. Because when your incentives are, everything is modularly incentivized, because some ads guy who's the only thing he gives a fuck about is getting someone to schedule a meeting then at that point, not your closing, right? Not your closing rate at all. And if he can just get meetings scheduled that work now, even worse is when they're just doing it for leads just to get you leads, that's the lowest term not just a person to take a meeting, but like to fill out a form and you contact them. Yeah, that's even worse, because you're just going to get a bunch of your fucking time wasted. But it's going to look like this marketing guy did his job, right. And so but as we go through this process, now, you need to be spending if not money. Just you need to know that this is the cost of the game. And when people are doing these, these specially paid marketing strategies that are on say Facebook, things like this also coincide, such as ad spend. And I don't believe that any discounts associated with the offer are factored into this cost at all. When we're reading this data, and we're, we are going to extrapolate on that a little bit here. But like most of these discounts now, because an offer is not just running ads to say, Hey, join my gym, it's a gym, we do gym stuff, here's the gym. No, there is some sort of thing that compels you to go. And there is something and very often it's a discount. In some of the worst cases, especially businesses that have been around for a lot of years. It's a fake sum of fake money, fees or whatever that we've decided is real. And then they just use it as a bargaining chip. It's like a quilt when your parents would get mad at you and they start counting down from 10. And you're like, Well, what the fuck is what does this fucking timeline have to do with anything? Okay, and this thing is very similar. They're like, Oh, we're gonna. It's $1. It's joined today for $1. What great apply for or will you still have to pay for your today's membership, your monthly membership today? You still have to sign in on a two year contract. And instead of the $60 activation fee or $80 activation fee, that's the dollar and it's like, yeah, but that's your constant bargaining chip. When you run your next offer it's zero activation fee or your first two months free but then I pay See the activation fee. And so all of this stuff becomes disingenuous and becomes bullshit. Because by the way, we were spending the money on the marketing to get the people to come in, we couldn't really afford to give away the money that was between us and the client. So what happens instead, we give that money to some fucking ad person who's just gonna run ads and whatever this is, but they're getting that money, then you're probably still if you're not running one of these imaginary fake money Bait and Switch games, which is, if you are now you got to think to change that. Now. Just know if you're running activation fees and stuff like this, that just flat rate your shit, you need to simplify it the best the easiest, nobody knows anything costing McDonald's anymore, John, right. But I know what it used to cost, because there was the dollar menu. And then they did the 135 or whatever, right. But things made sense back then. Because I knew that a McChicken was $1 just was $1. And if I go in to do business with you, and it's like, what's the cost was $45. Now it's nice. And it's like, it's $60 to get started today. And then the $20 card, dig and then you know, and then in the middle of the year, we run another fee that just comes out by the way we don't ever talk to you about. And he's just like, well wait a minute. And this isn't just one place. There's many places that do this. But it sucks. It's if it just sucks in the worst way. And the problem is it's only costing you your reputation as a gym owner, all these arbitrary fees and all this stuff, and everybody is so transparent. Now, just like the amount of apparel sites and like lifestyle branded things that you see on the internet right now. There are plenty of websites that are very successful that if you ever bought anything at full price, you're an absolute fucking mark, absolute mark, there's always a 20 or 30% sitewide discount or a coupon to be had. And not only that, like, everything is so expensive. Because the base price of everything that they're expecting to sell everything at is 20% cheaper. Which means if we can just treat us all like adults, and don't dangle in front of me a fake 20% Discount that's on a product that you've inflated by 20% That's fucking bullshit. It's bullshit when they do it on these fucking websites, it's bullshit when they do it on Amazon is bullshit on all these things. And now you're doing this in a person to person business where you got to look these people in the fucking eye, go fuck yourself. It's fucking crazy. There's no place for that in this industry.
John Fairbanks 17:38
Now let's do this only for now if you are a place that can afford to try and bring volume, like you can handle high volume like that, that's the one strategy and the reason why you have to do it's bait and switch with no fees and all that stuff that we've been talking about. But let's say you can't handle that volume, so you don't get you can't play that game. And in fact, we're going to say that we're better than those books because what they're doing over there is they only have stuff that we don't charge, we're way more fancy. And our coaches are so much better. It doesn't cost $50 A month to come to us we're $200 a month so we're a higher quality entity over here but I need to still run ads and the issue is is then if I can't run ads we're all I have to do is be able to somehow make that money back because I have to be able to have all that bait and switch fees the other alternative that we then see if I still have run ads it's fucking expensive. So because I have to add the ads guy and then I also have to pay for the ad spent on top of the ads guy so then what the top tier recommendation is for these gyms that can't handle insane volume is oh we'll just have the thing that you're offering be $600 Yeah, he's really really fucking expensive. And when we start to zoom back from that, it's why Hold on What I get the high ticket and I get the tear and I get love
high ticket stuff. We sell high ticket stuff. We say we want people to make a choice but I love the incentive of a big investment too. Because you're getting more motivated people there's a lot of reasons to do this except how are all of these things executed? dog shit, that's just dog shit bait and switch bullshit. It still is all the worst ever. By the way every one of these goes How can I get I do this I don't remember the process. I go to Facebook because you can go to any gyms out there. And I look for the ads library and you just look for challenges and fitness or whatever. And you'll get all these ads that just look like stuff gym launch gyms were running a year or two ago.
John Fairbanks 19:54
I need 10 men or 45 and
then a whole lot and then a whole Another a whole nother thing that is the same fucking thing, the same deals, you know, we're looking for women between the ages of 20 to 30. And it's like, as though that program is very specific to women in that age group, even though it's the same program, same bullshit. And you see though, these gyms that are running these challenge programs and shit like this, it's all built by somebody else, the fulfillment is fucking questionable as hell. And it's all like, what did I see one spot here that was promising 20 pounds, you'll lose 20 pounds in four weeks or five weeks, 20 pounds in four weeks, or 7% of your body fat, or your money back or whatever. And it's like, you don't really get your money back. That's not a real guarantee. It's like a fake ass guarantee, you know. And there's really no expectation that anyone's going to fulfill their side of the bargain when they do that when they're getting involved with a thing like this. But the problem is, John, this costs of setting it up running all those ads, and doing this just really drives the overall cost of that service up anyways. So a service that sucks, that's not good, that also whatever. But at this point, it's like selling the fucking MC rib and your business. I don't know, what the fuck is is doing in here?
John Fairbanks 21:10
But can we talk about why it has to be $600? Like, why? Cuz you're paying
all this money to somebody else to bring you leads. And that's one of the things that drives the cost. And I like let's, let's go on. I want to approach this in the inverse now. Okay, all right. Okay, so the reason a lot of these things now end up becoming $600 is in response to, well, that's the only way we can move the needle to get people to do is we have to do all this ad spend, I gotta pay some firm, there's some outsider coming in marketing our shit. We're running ads, we're building landing pages, and there's some whole other system getting run, that's not me. And God knows what's happening on the fulfillment side. Okay, but that's just done in reflection of a cost that we're already choosing to just Shunk off to somebody else who's not associated with your business. Yeah, it's fine if it has value, but now that you're letting that service, dictate the cost, value and products of your fucking business, which is a problem. On the other side of this job, what if whatever you're offering, or whatever your service is, you have a good solid offer stack where people can make choices. And that just in return, because of the overall initial commitment that people are allowed to make, or maybe you do have a nice, nice deal that you're going to make for somebody, right? Or semi private coaching and some stuff that maybe doesn't cost you one to one and ours are labor costs on the fulfillment side. If your average sale price is two or three times, right, what what your base membership is, which would be ideal, if it was about double should be at least double what your base membership, ideally, because some of your people will spend 10x, some of them will spend 2x, some will spend one to one, right? Right. So if your average sale price is double what it was now, guess what, you could actually just without having to do this in the inverse, you could do what you do and do it well. And you could spend two to three times as much money acquiring leads, right? You could really go, I'm going to spend more, I'm going to spend more to do this, because I'm bringing them into this product, it's already a sale system that's already that I know can do my thing. Well, that feeds my my members, it's focused on the client experience spoken focus on client results, it's focused on letting them commit early, letting them decide letting them know all my fucking services, then want to move up later, they want to recommit in 12 weeks, whatever that is. But that whole thing seems to make a lot more sense. Now, when that's the case, instead of just saying, now I have a $5,000 product, and it's because I have to pay this asshole $10,000. to, for me to even start to have these conversations with people for a product that people will be unsatisfied with. Because it's not about their success. It's frankly, the incentive, right? Show me the incentive, I'll show you the outcome, the incentive for that is for the marketer. All of this is too fat in the pockets of the marketer, the ads person or whatever. And at this point, this is where I lose my fucking mind. Okay? The problem is, if we assume that the cost of acquiring a new customer is 50 bucks, most likely those are coming tethered with an offer to where you're discounting something, because you do need to move the needle, right? You need to compel someone to click, it should be like, Oh, this is whether it's a percentage, a free session or something. There's some other costs in there that's not baked into that $50 On most in most of those cases. But if we're assuming it's just 50 The biggest thing that I see is why then is that $50 just going to somebody else. Do you understand that? Like, if it's 50 bucks, what if you just gave that to your member? And we were everything on the up and up? What if what if it's just for every person that signed up, then now that doesn't mean you just hand out 15. But if you're a 20 If our gym and your membership is $40 Yeah, and I let's delete the fake money. First off, I fucking goes away. If we need the fake money in the fees to fucking make your business work, then your membership isn't $40 anymore, your membership is $45. And then we're all acting like fucking honest adults here, okay? So your memberships are 45 times low and low and behold, the cost of acquiring a new lead is $45. Okay, perfect. By one month, get your second month free two months for the price of one that might just organically compel a lot of people to come in to the point where it may be an issue where you need to not have all a ton of people coming in. Now you could go literally, your first month is free. Right? I like to do like a two for one kind of when they come in, frankly, because if especially in a 24 hour gym, if they fall off on the back end, you're not crowding yourself, you're not just getting a ton of people walking in spending a month and baling or whatever, at least you and at least you're guaranteeing yourself one month of money. The other one is I don't just want to give away the first month. But if that's the deal, you buy your first month or second month's free, and you go on your membership after that, all of a sudden, you're giving that back to your consumer. That's a discount that matters that that that the whole point of the marketing, John, what is the whole point of the marketing, get their attention, compel them to act, get in front of more eyeballs, that's it and you want and it has to be something that's going to compel them to move closer to your business, doing your service for you could afford to do your service for free for the cost of acquiring some of these things. And even better, John, is if you're doing this with a real sales process here, where people do have the opportunity to like to move up to personal training, nutrition, coaching, whatever. That $50 credit, however you want to apply it. Yep. Like it has a chance to really like to bring in some, like decent business if, if that $50 credit is going to attract what I would describe as discount seekers, which is fine. Listen, all your other marketing is for the most part. And so if that attracts too many discount seekers, at least you have a shot that two out of 10 of them may choose something higher up on your offer stack as long as they're all going through your actual offer set. It's my biggest complaint with the $600 bait and switch challenge bullshit that always gets run out there is nobody really gets a chance to fall into anything that's actually for them. It's they're all forced to conform into this single product, you don't really get the chance to run these people through a real good sales process that's about their results and aligning their desires and their needs with your products and their budget.
John Fairbanks 27:39
And I think the reason why we're so , like, it hits us so hard, we hate it so much, is because it's the literal antithesis of what we believe is how business should be done. And more specifically, how we're working with clients in the fitness industry. Like the idea is this is supposed to be about helping the client it's supposed to be about putting that client success first and then everything else will fall in line. And this quite literally is putting them like just dead last where all of these things in the cyclical nature are just one after another will we're going to take care of like I got to take care of the marketer first and then that that dictates what my what my deal that I'm going to put out there what what can I afford to put out? Well, I can now we're
dealing with fake fees that have been manufactured because this whole thing is over inflated because I got to pay my marketer and because you're taking all this money you're fucking making it become your it's borderline predatory on the consumer for one and you are absolutely being fucking ripped through the wringer by your marketer. Therefore, then you're passing more costs on to the consumer, but who is really really getting the most benefit out of this is the marketer whose fulfillment is the easiest who doesn't have to do fuck all and it's just bought up here's your thing. They're the ones that are getting the sweetest deal so this is predatory on almost all the gyms and the consumer, the gyms consumers and at some point, again, it's the opposite of a snake eating its own tail. Okay, You're shitting into your own mouth you're like this is more expensive because I need to get more clients and now I have to charge these new members more which makes this new deal even less enticing so now that drives the cost up and I have to spend more money to the marketer so the only people really getting paid and not having the most fucking headaches and stress about this is whatever platform you're running ads on Facebook most likely and your fucking marketing guy so you're you're giving the sweetest deals to them don't and I by the way, there's a place that we have marketing guy Travis who does really great work we really enjoy working with him. But it's important for you guys out there that if you don't have the money to start to operate on a you know significant amount if you're unless you're running them yourself, it's gonna cost you over $1,000 A month most likely To be running ads just in general, not in ad spend just the cost of having somebody manage it and doing it all for you that just it does cost it is what it is. But it's a, it's, it's not going to be as useful. If you don't have that now you don't have that money, John said don't have the money to be running. I've heard that from lots of fun, but just know that it's that in general, that the cost to acquire new leads is around 50 bucks, and that that makes you a sideways move. So instead of you having to invest the money upfront to get that back, just make that the organic offer hard push on referral stuff hard push on this, and know that you can afford to sacrifice that 50 bucks or so for each person that comes in, frankly, if they came in and signed up and registered a full price or whatever, you handed that person a $50 bill, the day they signed up, you'd be making the same, it's the same game. So if you didn't have to start with the money, and now they're in your business doing this shit, find a way other than just that. To do that, though, give this is the best advice I can give you pass that money to the people that fucking matter to your business. There's nothing more frustrating than seeing a business getting leached and trying to run ads or by the way, a lot of these things when they get into these running their $600 challenges. These are last ditch home run efforts. It's just somebody's gonna fucking hope everything works out and they're all getting pimped by a consultant. And not a good one. Either of these, that's the problem. These would by the way, when you look at a thing when you gym owners out there, when you see all these ads that are like, targeted at you, that are gonna get you 30 members a month 30 new members every month, 50 new members a month forever per month 50 new members, that's what these are, you need to know that that's that's all of them are a stamped out cookie cutter $600 Challenge bait and switch guarantee, blah, blah, blah, blah, blah. And we advocate for guarantees I advocate that my clients who choose want to commit for 12 weeks upfront with the top my top packages, because there's accountability to every action, they have to track their food, they gotta log it in a thing if they don't follow those actions, they go fuck off and get nothing. But if they do everything I'll guarantee those results because that's how that process works. If I had to say you do all 25 of these things this way that consistency of this will be the outcome. It's the fucking nature of this line of work. Okay, yeah, so I believe that a gym owner, fitness coach and personal trainer should be able to give a guarantee and that it not be disingenuous. The problem is it's just shady as hell. It's all the same thing. All of them so just so you know if you don't understand if you've never bought the bullet on any of those deals don't start now. But that's what they are, anybody who's promising you 30 to 40 leads, 50 leads a month, that's what they're talking about. Well
John Fairbanks 32:52
Let's talk about it then in an escalating process right if I'm a gym owner and I know because I listen to the gym owners podcast I now know right the bless your hearts means something different in the south. So from $45 to $50 for a lead right to be able to get somebody to walk through my door and be interested in being a new client. If I know that that's what my cost is and I'm just getting started I want to be able to do this what are the ways that I can take that information and then start to kind of scale this up keeping that first and foremost, which I like the referral right if you're like no I'm not I'm not I'm not doing anything yet. I just know in the back of my mind the cost to get this as this then I can run a referral that that gives you a lot of leniency Yeah, as far as what you would present to people that are in your gym, you could
give your referring person 50 bucks to refer they sign a friend up by the way you and you may find that in the end if these if these work better than this that you got more money to fucking play with because you're hitting more home runs now. Exactly. So there's a lot of ways you can just think of that in your mind. Just think of that is that is the real bargaining chip that I'm using and getting people in it's real money it's money I should be spending on marketing not imaginary activation fees that we waive not fuck anyway. But that is your that is a real piece that you can move around and by the way you can fuck and if you're dealing with a real adult you can tell them that say normally listen, I we don't run a bunch of paid ads and scammy bullshit out there right now we are mostly on referral if you want to be about word of mouth actually be about word of mouth. Most of you who say you're on word of mouth, it's you don't mean referrals. What you mean is people accidentally sign up for my gym sometimes and they don't really know why and neither do
John Fairbanks 34:46
i Neither do I. Yep. So that makes
it very difficult for you to turn the fucking water turn the flow of that up a little louder. So you can get a little more fluid. It doesn't work that way. So if you're going to take this, understand that the cost for acquisition is x, perfectly baked that into whatever offers you're going to make. And now all of a sudden, you don't know what you got to do. Like, like, that's the thing. And you can see, you can run this, you can give your referrer this, you can split it with them, you could give it all to the new person, you can. And that's just on the referral side. If you want to have a special program where you come in and say, like, Hey, you do X. Now know that if you commit to whatever, say, you're just doing monthly memberships, I'm gonna make this either you're gonna commit to a CrossFit gym $150 membership, you could discount that, right? You could discount that to 100 bucks to get in third, save 30%. When you sign up in the next and you set urgency on these things, right. Now, their bargaining chip you can do is if your stuff's full price, what you can do, what does it cost for you to fulfill your nutrition coaching for a month. It ain't, if you charge 150-200 bucks for it, it ain't costing you a buck 50 right to do it. So know that like you can, you can then use your own products at the cost that it really costs you to fulfill that out as another bargaining chip, like get nutrition coaching for free, when you sign up this month, get your 12 week nutrition plan, when you sign up this month, for free, blah, blah, blah. And you can test these different things and find out what works, instead of just staying in this thing where we toss our fees around left and right and everybody knows what's going on and everybody's getting paid except for you. And your clients are paying the most money they're paying the most getting the least when you suck them into some $600 challenge that blows my clients who choose to spend 600 800 1000 $2,000 when they choose that they're the best way better than ones that would come in and want to spend 100 and be reluctant to close it that
John Fairbanks 36:40
because yes, it allows somebody to still psychologically make the choices where you always talk about where it's like if I already have to start a business relationship with you. And I have a bunch of weird things hidden in the fine print of all that kind of stuff. It doesn't matter whether I'm a top tier buyer, or a bottom tier buyer at I have already lost faith of interacting with you a little bit because of all that sleazy like, I don't want to do
and the business will persevere if the skills persevere if the scale is large enough through that and that's the problem is that hasn't been such the norm in all the things so many gyms with these fees that they start to imagine and move around use fake business and fake bargaining bargaining chips. It's like dealing with fucking Direct TV ever tried to have anything fixed with them or cancel or whatever it's like, it's the way to stop. Your fucking thing with Direct TV is to like cancel the credit card that's getting ran, and fuck it because it's nearly impossible to get out from under it. And it's still technically a contract, you go to some of these 24 hour gym spots and it's like you get into a two year contract. And if you want to cancel Same deal with a shit LA Fitness got busted with. If you want to cancel that, you know that after three months, and you're signed up for a 12 month contract, you have to pay half of what the rest of the contract value is. So you're still paying for an additional three months or four and a half months before you can get out of that contract. You just have to pay that to break the contract. Well that's all fake business and bullshit. Okay, and most people are going to double burn you out the door and say send me to collections. It is how you want your business to operate. Okay, so we cannot operate your fitness business because we are a brick and mortar. Like some shady online business or like Sirius Satellite Radio where it's like haha, guys, if you pay fuckin what is journalist serious actually costs, like 25 bucks a month. It's like $25 to $30 a month. It's absolute bullshit. Nobody is paying that everybody is paying three to $5 a month, but they have to threaten to cancel every fucking time. And if you want to know the trend for how well listenership and profitability is going for Sirius, I'd implore you to look into it. Okay, if you think the satellite radio will be more profitable 10 years from now than it is now you're out of your fucking mind. As you're playing fake ass business games, there are so much less now than they were before. And they've had to modify their whole business model into this thing that doesn't even make bucking sense. It just doesn't know what series is going to have to do mark my words on this there might have to be a fundamental shift. I would be willing to bet that they have to go because right now they run ads kind of still. You notice that right? There used to not be advertisements of course now they run them a bunch but therefore like serious and serious adjacent to other shows. Yeah. So still listen to commercials or just yours. As though that's gonna compel me to spend more money with them though. Which it's not okay, because you can't they're gonna have to go to running just regular ass fucking ads. I fucking guarantee they will either go belly up or they're just going to be your radio that has global coverage. But that's going to be the only way it's going to work and it's going to either need to be a membership thing or it's going to end up being a free T Are they just run ads but mark my fucking words, it's the inevitability is the inevitable progression, much like I've said before about radio, regular terrestrial radio, that's only going to exist because it can be subsidized because it is essentially a what's the word an infrastructure emergency service? Sure, it still really, really matters for that. So I promise there will always be an earmark on the federal budget to keep some of these things alive. But that's the only fucking way any of these things are going to exist, not thrive, but exist. So no, you cannot be playing these fake ass business games that are done on a scale so much larger than your business is. You just can't stick to the fucking things that you do, and make it make sense to you and make it make sense to your clients. If I have to close the deal, and I'm making up fees and stuff like this, like I, I can't look that person in the eye and make it make sense to them without them going, like, because I have to go as a human I gotta go get this fucking it's fucking stupid. I know. Got you in here for $1. But it's not really it. Like, there's no talking around that and saving face. So stop. It's not worth it, give them the money. Just cut it there, they're done. Problem solved.
John Fairbanks 41:13
You mentioned a thing, because this is one of the biggest differences. And don't forget, this is your superpower, right as a brick and mortar location is your fucking brick and mortar location. Yeah, the number one most important thing about what you're, how you get leads, how you get new members, hands down, way over the majority is where you're located. Don't underestimate where you're located. And for me, this kind of takes the next step where we said, if you're gonna get started in this game of, of earmarking money and wanting to put money aside for your advertising for your marketing, if we talked about the referral, and we just talked about right, all that rethinking of how you kind of go about building discounts and deals and referral and doing those types of things organically, the next step is to leverage where you're at. And if you leverage just your local location and understanding that people are not going to travel, right, much more than 1515 minutes, right to get to you, on average, most of your people are going to live within that radius, then you really can start to test. And you and I have started to play with this Tyler, which is, if you really want to start to play the game of being like, Let's spend 50 bucks a week. And let's create one ad. And this is a post, whatever your post is going to be. And now very purposefully, knowing whatever that's going to be whatever your offer is going to be, and then only hit that immediate radius of people, this is becoming more within reach to allow you to strategically do this, as opposed to kind of just pissing in the wind. Because the complexity that ads are supposed to be to make you feel how complicated and confusing all the fucking ads are, is because the majority of the fucking people making money or putting money into these advertising agencies that are running them, or on the platforms that are then facilitating those ads to be RAM is digital fucking business. Yeah, these aren't brick and mortar locations.
People think when they think Facebook ads are like, okay, so I'm gonna run Facebook ads like man, I don't know. It's it's not this in the ads people, the world that we've been that we've worked in digitally and otherwise is like, that's the space where it's the most lucrative, by the way, the only places John, where we are hearing like big ad spend for big results, right, where it's like these guys spent $400,000 this year or whatever, right? We've seen, we've seen these types of things come out, and they make $5 million this year running those ads. Right, it's like nearly 10x Your ad spend, well, you're still paying a big chunk for somebody to manage that as well, which is not normally factored into it. The issue is, if you don't need that level of coverage, right? You don't need a quarter million people to see your shit every day is your brick and mortar. It doesn't matter that your ad spend so much lower, but your cost of management is the fucking same. So sometimes it's just too big of a jump for some people to take. And you're just you're not playing that game, you're just not and so stop lining the pockets of the people who are just making this more complicated for you. And that doesn't mean don't run ads, but it's like, I need you to think about this. Practically like this is just this is another resource that's out there. This is another piece of data that I think matters. So fundamentally, it costs some money in general so if you're going to grow you need to be paying money and paying isn't even the term I want to use right. Sacrificing money. Okay, so look at it that way, you have to sacrifice some money to acquire some leads. That is either in giving discounts or ponying up the money upfront on ad spend and marketing plans, right? But no, there does have to be some sacrifice on the altar of lead generation, one way or another, that's got to be made. Okay. Now, wouldn't it be a lot nicer if instead of sacrificing that to the gods of Facebook and some ads generator is that like, what if, instead of sacrificing that money to get people in, I give that money to the people, when they sign up one way or another either through a pro through this, everything we've described on the show, that concept allows your referral plays to be much better your product launches, you want to you want to launch a new anything that you're doing, it's externally facing. Yep. That's you need to understand that I have this as a bargaining chip to get people and not not bargaining chip, that's the wrong move. Because that's what I think the bait and switch is about. It's about bargaining chips, I think you have this as a tool that you can use now to entice people to get in. And it's not a complicated tool. Yeah, that's the biggest thing. It's like this, this is the discount, don't do this. They can but like, Don't raise your membership by $50 a month, and then offer a $50 a month discount to get people and this is a thing that we see a lot on products. If I'm going to do a specialty program, I'm going to launch a $500 product knowing that I really only want $400 for it and then I just offer $100 discounts. That's kind of the same type of deal, right? But maybe you're not operating at a scale enough to where the market is going to be swayed extremely by a $100 price ticket, right? If I'm only getting 10 people in that product being $100 More just may not fucking matter to those 10 people but if I had to do that on a scale of 1000 people now all of a sudden I'm going to lose a lot of people once I cross a certain price point. Gyms aren't normally operating at that scale. So that's a conversation for another day. But that's what we got guys. So spend some money, sacrifice some money, figure out what you have to do to get some people in but don't There's nothing I like less than a gym owner that brags that they don't spend any money on marketing. That's it's like it's like okay, are you full? Are you turning away people like we can't even handle anymore? Is it okay then? Are you marketing to get new staff? Like are you are you getting new staffing so you can grow gyms that brag about fucking nots, but how they I don't spend any money on marketing. We just do word of mouth. Our gyms wish they had 40 more members right now. And don't usually.
John Fairbanks 47:45
And please understand, too, that like marketing advertising, we've only talked about we're not going to go into it. But it's also as how much does it cost for you to get new employees? Yes, like how much? How much does that cost you to get new trainers? Because there is at some point where we are able to get it down exactly to what he said, which is, well, if I had one more personal trainer, how much more money would that mean for your business per month?
here that we don't spend any money on getting people that people just show up to our door. All I hear is you're not fucking trying. And the day that you have to try it, you will not know what the fuck to do. And and that's why a lot of you guys, you guys, listen, you guys do a great a lot of mother fuckers went tits up after COVID Oh, just survived COVID slowed things down, took a big chunk out. And all of a sudden, none of these people are resourceful enough in their thinking to fucking grow. Because growth happened just naturally. And now when growth requires effort. You nobody wants to try. Okay, so this is the game. It's what you got to do. So alright, thanks for listening. Everybody follow the show Jim Morris podcast and Instagram, go to gym owners revolution.com link to the Facebook groups in the thing get in there. We got John's blog posts running pretty regularly there. Go to gym owners revolution.com There's tons of really good information, pretty useful strategies for almost any subject. So you want to scroll through there. These aren't just these aren't just like podcast transcripts. These are like pretty thorough action plans. There's kind of deep dives into specific concepts you will find something for you to thumb through there. I just need the internet to bring back the written word, John, it's gone away a long time like blogs went away when social media took over. It's just I'm not gonna get people to read 1000 words with me saying a thing as it is by just rant with a video on my face and posted on all the platforms, right that's just gonna get the views it's gonna get the point across kind of, but it's pretty incomplete. And so we're here for some Jeopardy where you want to look up a subject and it's just I don't want to watch a video on the subject. I need to scroll through so I can ignore a paragraph or things I don't care about. You know what I mean? Like I feel like I'm more precise if I'm reading something that's like a less than five minute read than I am watching a four minute video.
John Fairbanks 49:57
So I'm even dumber I want I have somebody that's written something and then I want the computer to read it to me so I can so I will have like the extension that will read the screen for me interested so that I can because only like I don't want to read it but I will listen to written word and so I then I can skip or I can certainly flag and put on like double speed because I just don't have time there
was a huge issue that came out with eBooks right where buying an ebook was obviously cheap just a digital copy of a book but they used to then have a feature where you could go voice to text on it. Yep. And going voice to text meant like that's pretty fucking good. Like it's essentially going to castrate the audiobook market completely. Now this was a long time ago, very likely before audiobooks. I mean, I bet audiobooks were 1/50 of the market that they are now right back then. Yeah, but they had to do away with that software as far as like from inside your ereader because it just made mean that the same people who are making money off the ebook are never going to get the audiobook sales like so because they're in cahoots they go if you're gonna have if we're gonna license our ebooks to you you have to do with this feature so they Yeah flex Donovan got it gone but yeah
John Fairbanks 51:20
some people but all the accessibility things are out there, man so you can hide behind Oh, yeah. The handicap stuff where you're live ceiling
You'd be allowed to service blind people on tick tock, and they talk about how they use their phones and how they can drag their fingers. It tells them things, even what's on the screen. Very interesting. Look up how like blind people use their iPhones. It's fucking kind of crazy. I never thought that was a thing. No, I
John Fairbanks 51:47
I think it's awesome. Jim,
like people on the boat. Do you guys know the blind people have crazy I will see