CoachBot Video Transcripts-10
Tracking Attendance
Let's talk about tracking attendance. Alright, so the first of the six horsemen is based on making sure your clients are actually consuming your service. And consumption is the name of the game. And when it slows down even for a couple days, it's important to take steps to improve it. Alright? Now, what you will do for this is very simple, but it does take work. So it's important that you do it. This is, by the way, in my opinion, this is the simplest, yet most effective way to cut churn. It's by far, if you're going to do any of them, this is the one to do it. You should do all of them and you're going to do all of them. You're a gym Lord. But if you're going to do, if you only had to pick one, this is the one.
What you'll do is you'll have every client pre-book and check in for every session that they attend. No matter what. You should be using your CRM and you should be using a client app for them to be able to pre-schedule, to schedule or pre-book their sessions in advance so you know who scheduled so that you know who didn't come in. Very important. So treating it just like a sales funnel. You have your scheduled appointments and you have your shows. You want to know whose schedule didn't show and then who just simply didn't show period, okay? And you want to have that no matter what. You want to train your clients to do that. And if you don't do it now, now is the perfect time. Just roll it out. Let 'em know you're doing some updates and moving forward, you need to schedule. I had to do this when I had, I didn't have a lot of members, but I let my members know.
I was like, Hey, we are in the process of growing and we want to continue to provide you an exceptional service. And the last thing I ever want is to have you show up to a session that's full and you can't be a part of it. So in order to make sure that you can always be there and have a spot in the session moving forward, we will require every member to schedule and book pre-book their session. Okay? Now, what'll happen is every Wednesday morning, you will run a report in your CRM to see who didn't schedule to come in yet that week and didn't come and who scheduled, but didn't show yet that week. So what you can do is you're going to take away anyone that's on vacation that you know that's on vacation, you're good. You don't have to reach out to them, but everybody else, you are going to immediately call or text every single one of them to get them rescheduled for that evening, Thursday or Friday because you want to act fast on this.
You do not want them to go a week without coming in. Now if you're like, I can't find this in my CRM, I can't do it, then you need to run a show report and then just cross-reference it against all active members, and that's the easiest way to do it. So who came to all the sessions for the Monday, Tuesday, and Wednesday morning, right? So you run this mid-morning after the morning sessions, and then who didn't come in and then you just cross-reference it against all your active paying members, and you hit up every single person that did not schedule and show and did not show it all. Okay? Really important to do this. The reason for this is churn doesn't happen overnight. People don't just wake up and be like, I'm out. It's a slow fade for your members. And what happens is if they're not consuming your service, AK your product,
Then they don't feel like they're getting value from it. And regardless of the reason why they don't come in, if they don't find value in it, they're going to quit. So what we need to do is make sure they're constantly consuming the service, okay? And what happens is typically is that, let's say a member will come in three sessions in week one. Then week two, they'll come in two sessions, then week three, one session, week four, one session, then it's zero, and then they request to exit. This happens all the time, and it's unfortunate. And the only reason this happens, and gym owners are shocked that people cancel and they don't understand is because they're not tracking this, but you're a gym Lord, so you're going to track this no matter what. Okay? Another reason is, is they go on vacation, they stumble in for a session or two when they get back, and then just simply stop showing up because they got out of rhythm.
Which is why it's really important that when you have someone on vacation, you should be hitting them up when they get back. She should be like, when they're gone on vacation, you're like, oh, if you didn't know they were on vacation, you hit 'em up and they're like, oh yeah, we're on vacation. We get back X. Awesome. I can't wait to see you. Let's say they were like, we get back on Saturday, great. Can't wait to see you on Monday. Okay? You're trying to get them back in and if they don't show up, you're hitting 'em back up to get 'em in. Okay? But either way, you should treat not consuming your service as a massive, massive red alert. Red alert, red alert. Red alert, okay? You're not plan of fitness. You actually want people to come in and get healthier. So make this a priority as soon as possible. So start doing this right now with all of your members, okay? In the next video we'll talk about weekly reach outs. Okay?
Weekly Reach Outs
Okay, let's talk about weekly reach outs. What are they? What is it? Okay. This is the second of the six horsemen, and it's based on checking in with your clients every single week, and it's very, very simple. What you'll do is you'll shoot a text or a call to everyone that isn't on your red alert list. Remember, we just talked about this in the tracking attendance. Basically, anyone on your red alert list would be someone who hasn't come in or scheduled a session by Wednesday, but what you're going to do is everyone that's not on that list, the people that actually show up and that aren't on your red alert, you're still going to check in with them via a text or if you want to call them every single week. It's that simple, okay? The point of these is to check in with them and simply see how they're doing.
You can just see, Hey, how's the workout today? You feeling all right? Right? Hey, how's the nutrition going? Or you can congratulate them on a PR or on a promotion that they got at their work or their kid's game winning hit. It doesn't matter. What you're going to do here is just really try to develop a deeper relationship with them, and it's important to understand that the more personalized that these reach outs are, the more impact they will have. I'm not telling you that you have to spend countless hours doing this. I'm just letting you know that if you do, you'll see much lower turn across the board, and this takes work, it takes focus, and most gym owners don't do this, but you're a gym, Lord, right? You do what needs to be done because you care about your clients and you care about your business. So weekly reach outs, every single week, you're going to shoot a text or give a call to every single member at your facility. Every single one, okay?
Handwritten Cards
Okay, let's talk about handwritten cards. The third of the six horsemen is based on doing the unscalable and going the extra mile. At minimum, you and your team will send a handwritten card to each of your clients every eight weeks, right? So every other month we will go over how to manage this and options on how to send cards in this video, whether it's digital or written. Okay? So the reason behind this is that everyone loves a handwritten card, and these are also powerful for two primary reasons. Number one is they make your client feel very special. Very special. Who does not love a handwritten card? Seriously, when you get one, you just feel loved, you feel appreciated, you feel thought of. Now, the second reason is writing handwritten cards gives you a chance and your team a chance to personally invite your clients to upcoming events or internal plays that you're going to be launching.
This is big. We'll get into why you're going to have these in just a second, but this is really big here. Alright? Now, the simplest way to organize the production of this is to split your clients into groups based on the number of people who will write them handwritten cards. For example, if you and three other staff members will write cards, you will organize your members into four groups, A, B, C, and D. So if you have 200 members, you're going to have 50 in each group because you have four people that will write cards. Now, once you have those groups, each staff member will have a group to start with. They will write cards to half the members in their group. The next month, they will do the other half every eight weeks. You will rotate the groups amongst the staff so that each client receives cards from different staff members throughout the year.
What this would look like is month one and two. You have owner will take group A, staff one will take B staff two C staff, 3D, and in month one they'll write letters to the first half handwritten cards, and then month two, they'll write 'em to the next half in their own group. They're not going to switch groups. They're staying in the same group, but months three and four owner will take group D. Staff one will take a staff, two will B, and staff three C. This allows you to rotate through them. Now, depending on how many clients you have, you and your staff can write cards every day, or you can schedule a block each week to go through the list. You don't have to write every card in the first week of the month. By the way. You can if you want to, but you don't have to.
You can break them up into weekly goals, right? An example of this, if you have 200 clients and four total people to write cards each month because they have 50 in their group, but they're splitting it in half, each staff member will need to write 25 cards. That's roughly six to seven cards per week, so you could have a block of 30 minutes and they write cards to everybody, or you could do one or two a day and you're set. Attached in this lesson is a Canva template that includes different types of cards that you can print for your gym if you want to. We included them in there. You can edit them and add your logo and stuff. Some of the card options are based on milestones, like number of sessions they've come in, others are birthdays, and there's also one basic template that you can put your logo on for any occasion. You get those printed and have those set, you're going to want to buy a bunch of them and you can have them printed with a local printer. You can just go online like Vistaprint or something like that. You can print 'em
Directly through Canva, whatever, but if you want to write them out each time, you can print them and have them on hand and ready to go. Now, if you prefer not to write them, you can also use digital services thanks to or handwritten.com. These will automate your card writing, meaning you'll just type in what you want to send it, what it is. You'll put the address for each person and it'll write them and send them for you. You can choose the font style, like the handwriting style, all that stuff, okay? However, it's important to understand this. It will cost per card, so you got to be aware of this and you got to budget for this. I think handwritten all in for basic, I think it's like $4 and 14 cents or $4 and 40 cents, something like that per card that stacks up if you have hundreds and hundreds of members. So you can balance that verse, the cost of printing, the cards and the cost of stamps and things like that. You can run your own analysis on that to see based on time and effort and everything else, which one is best, okay? But this is how you do it. In the next one, next video, we'll talk about events.
Events
All right, let's talk about events, right? This is the fourth of the Six horsemen, and it is all about building community and relationships outside of the gym. In the next video, we'll talk about internal plays, which is all about inside the gym, but this one is outside the gym. Now, every two months, at minimum, you should have an event for your clients. This doesn't mean that you're paying for the event, by the way, I just want to be very clear. You're organizing it, okay? You're the promoter and you're organizing it. Here are examples of events and what they could be, right? Taco Tuesday, go to a local taco shop and get tacos after the last class. Just invite them. Say, Hey guys, I'm going to go get tacos if you guys want to come. We'd love to have you guys. It could be as simple as that.
You could do a sporting event. What's great about sporting events, if you have professional teams or even minor league teams there is that you can negotiate group discounts on tickets by getting with your clients and just putting a poll up and asking, Hey guys, I'm looking at potentially getting group discounts for a game I live in near Jacksonville, so it'd be like the Jags, the Jaguars, right? The NFL team, and seeing what we can do about group discounts. Okay? Another one could be a bar hop. Our clients love this. We lived in St. Augustine, Florida, and this was a tourist town with tons of bars, great bars, great restaurants on one strip, and it was really easy to take it, and our clients loved it. You don't have to do this, it's up to you. But our clients loved it, and so what we would do is we'd be like, Hey guys, all right.
We're doing a bar hop this night. We'd give 'em a month in advance, have it scheduled, and then, Hey guys, we're meeting at this pub or this bar, and then we're just going to go from there, and then we'll see where the night takes us. Right now for us, sometimes the way that you can do this, if you want to, you could say, Hey, first drink is on us. That will get more people to come, and you can do that. It's up to you. Or you could just be like, Hey guys, we're just going out and having fun, and then you can stay as long as you want, or you can leave after a little bit, because what'll happen is the groups will just begin to monitor themselves. You can also do fitness events, right? You can do five Ks, CrossFit competitions, obstacle course races, you name it.
Another one would be laser tag. Go-kart racing. You do the virtual reality stuff. It's a whole bunch of different things. You can go to concerts, you can do potlucks or a Christmas party, which I highly suggest, by the way, Christmas party, they slap, so if you're going to do them, definitely do those. Okay? This is just a few of the countless different options that you could do, right? You want to listen to and understand what's big in your community, what do people like to do? And it's really up to you and your gym on what you want to do for events. If you are not into bar hopping and you don't want drinking to be a part of it, don't do it. It's totally up to you. But the point of these is to do things outside of the gym and to get together and to have community outside of the gym.
Alright? Now, if you don't do these regularly, you will find that attendance will be low when you first start this. If you've not done this, it's going to be low, but just don't worry. I think it's unreasonable to believe that a high percentage of your clients will show up ever, really, because everyone has their own lives, they have kids, they have family, they have work, they have all these things that are going on, so don't ever feel like you're wasting it by doing it, and maybe five people show up. That's okay. What matters is that get pictures, get social
Proof, do this, and get those members to also talk about how awesome it was to the other members. And what'll happen is that it will grow organically from this, and that's the best way to do it. Okay? And remember, it's your time, which is very important, but it is your time that you're putting into the business and long-term, as you grow, this could become something that your manager does, your retention manager does. Your GM or staff members can help him go and do these instead of you having to be there all the time. Okay? Now, what you should be doing is every new challenger and member should be invited to come to an event if it falls within their challenge or within them being a member. So you should always make sure, and what's crazy is that as these people come, if you make it be like, yeah, this is normal, everybody comes to these, and what will happen is as you bring more members in, they'll just be used to these, and so it'll just be what everyone does no matter what.
Just keep doing them. Couple important things on events, only have one event each year that you pay for. The best one, in my opinion and our coach's opinion and everyone else is a Christmas party. If you go crazy on a Christmas party, I highly suggest that it's fantastic. It is by far an exceptional place to get testimonials, video testimonials, so hire a videographer to come in, follow you around, get video testimonials from your clients at the event. Do a dress up. You can do an award ceremony there. You can cater the event if you have it, but again, if you don't have the money for it, don't do it. You can do a potluck and still do the same thing. Encourage your members to invite their spouses and friends. Super important so that you can get referrals or just build a bigger community. Also, it lets people know that you're not just about getting shredded and being super fit because people have this idea of fitness where it's like it's all about elimination and they can't do things.
What you want to do is showcase what they're doing inside the gym, transfers to life in general, and that there's more to just being in the gym when it comes to life. Now, if you're not the event planning type, have one of your staff, someone who loves it, or have one of your clients take over the role. Just ensure that you sign off on all events. Make sure, make sure liability is all set. If there's anything going on, make sure you sign off on everything. And big thing with this is try to plan them out six months in advance at minimum, because what you want to do is have a calendar of events to prepare your clients for. Okay? Just know that. Don't expect them to remember an event six months in advance. They're going to forget about it because life happens. So you're still going to need to make sure that you're hitting people up two weeks before the event to let them know that it's actually happening. On the next video, we'll cover internal plays and challenges.
Internal Plays/Challenges
All right, internal plays and challenges. These are a blast. These are super fun. This is the fifth of the sixth Horsemen, and it's all about building community and relationships inside of the gym. We talked about events or outside of the gym. This one is inside the gym every quarter, so four times a year you should have an internal player challenge for your clients. These are fitness focused plays and community focused plays that last four to six weeks and give your clients something different to look forward to inside of the gym. Alright, now we have a full arsenal of internal plays that you can use that come with full breakdowns, marketing assets and fulfillment protocols. What you're going to do is when it gets to this point, your coaches will talk with you and you can talk with your coaches to see which ones you should do.
Very important though, and this is super important, your very first internal challenge with us will be a 42 day play that helps you release Prestige Labs to your clients. It can be 42 or 28 day, we prefer 42, but it's going to be this and it will give you a chance and it'll be free for your clients, but it will give you the opportunity to sell supplements to them so that you can monetize that. And that's the two ways that you monetize off internal plays. And it's important to understand that this should be done within 90 days of becoming a gym. Lord, very important on this one. Each year we also have gym Lord, community challenges that everyone does at the same time inside the community. So it starts on the same day. Everyone does it together. We have competitions around it inside the Jim Lord community.
So these are important. So January, we do a little black dress or red carpet challenge in January to kick it off. So this is usually at the end of January. It starts like kicks off and there's a pre-sale event that happens before, but this usually kicks off at the end of January. Then we have the September Lean by Halloween or a September challenge. Sometimes it's back to school, sometimes it's whatever. But lean by Halloween or Lean for Halloween. There's different ways to name it. We do that. That's typically a four to six week event as well. The red carpet challenge is typically four to six weeks. And then we do a Black Friday VIP Black card event. This is not a challenge or a long-term thing. It literally is just a lead up to selling a hundred dollars gift cards for $10 to your members that they can't use for themselves, but they give to their friends and family as referrals that those referrals will now come in and use that towards a challenge or a membership moving forward.
But that's just a one day, it's a lead up to a one day thing on Black Friday. You can also couple this with a pip play on Black Friday and make a ton of money, a ton of money. I think we just had a gym owner that made over $180,000 on this, which is crazy. And knowing this, knowing that we have these two, four to six week challenges during the year, that leaves you with two other internal plays you can do throughout the year. A couple important things when it comes to internal plays and challenges. Internal plays can be free with subs or they can be paid, but they should never be fully free, meaning you should never have, some people will do it for free if you do it free with subs. What happens is, is if they don't buy the subs, they can still do the challenge, but you should never just have a free internal challenge.
There should always be a cost associated with the reason why is sometimes there's swag with it. Sometimes there's a party at the end of it. Sometimes there's a charity component involved. Just understand that it should never just be free. People who pay pay attention and they'll be more bought in. Okay, now expect 20 to 30% of your clients to do them when you first start. As you do more, more will join. So don't expect everyone to do them if you've never done them before, if it's not like it's always going to happen, not everyone will be used to it. It's new, it's different. It's changed for them. But over time, as people do them, they'll also be way more excited. And as you create it and make it a big deal, more people will see it as a big deal. Another thing with this, and I know that we have a lot of strength and conditioning facilities, semi-private CrossFits, power lifting, all this stuff, specific training courses work great as internal plays and challenges as well.
So one of the things we used to do is I had an Olympic weightlifting team that I coached. My wife was a competitor and we had several competitors, a couple that went to the national level as well. And what we would do is we had a lot of members that showed interest in this. So what I did is we put together a six week, I think one time it was a six week one, and then other times we did a 12 week one, and then we did an internal weightlifting event, Olympic weightlifting event. So it wasn't, and actually no, we ended up getting it sanctioned for this. So it was actually sanctioned for USA weightlifting. But on this, when it comes to these things, you can do these, you can do a six week powerlifting course or an Olympic weightlifting course, or you can do a gymnastics camp, six week gymnastics camp or 10 week and charge for these, right?
And what happens is how many sessions you do per week depends, but most of the time it would be one to two extra sessions or specific sessions that they come to during that camp or course. Okay, another one that's really big that people love, and you'll laugh at this name, but Big Booty bootcamp. Women love this. Anytime we ran this, it's sold out in minutes. And all this is, and we have the play for this. All this is is just you have one extra class for 90 minutes on a Saturday and they're paying anywhere between, I think it's like 1 49 to 2 99 for six weeks. So they get six sessions and it's 90 minutes and it's basically just glute work. That's it. Now another thing is you should ensure that all new clients take part in the next internal challenge You run after they complete their first six weeks.
This gets them integrated into the gym, gets them part of it. Alright, now here's a list of the internal plays we've built for you and we have access to. It doesn't mean you're just going to run these out, you need to talk to your coach and figure this out. But red Carpet Challenge, we have a little black dress challenge. We have Lean by Halloween, big booty bootcamp, black Friday, black Card event, 28 day summer slim down, 28 day back to school holiday accountability challenge. And we have a lot more that we don't actually have built out, but ideas from coaches that they've run and things like that. So there's endless ones. You can have your own, right? So an example of ours is we had this thing called the Super Squad Challenge, not squad, but Super Squad Challenge, where we actually took, we elected captains from our clients and then we did anyone that signed up. So we had this whole thing where they'd sign up and then we'd split them into teams. But part of that to get them into teams was we would do a draft. So we'd do
A dinner with the captains, take them to dinner, we'd have a draft. Not everyone is there. So they draft their members and from there they're competing week over week to collect points by making sure everyone on their team has to show up three times in the week. We'd have specific fitness challenges that are a part of this. We would do a weight loss component to it. We would do another thing outside of the gym that they had to go and do. One year we did where they could get extra points. Each person was eligible to get up to a certain amount of points. If during any time during the challenge, they got a friend or a coworker to do some sort of fitness component. It could be holding a plank for a minute. It could be doing five burpees. It could be doing lunges, it could be doing jumping jacks, it could be whatever.
And they videotaped them doing it, and then they posted it publicly online and then they would get the points for it. So little cool stuff like that. And that, by the way, was by far everyone's favorite at my facility. But you can get creative on these. It's super fun. Now, what's great about all internal plays and challenges is their flexibility. Meaning you can use the same marketing cadence and assets. Just change the name, adjust the pricing, adjust some of the messaging, and next thing you know have four to five different internal plays available. That's it. You'll notice that a lot of our plays, when you run them, same marketing cadence, they start two weeks out. They have the same sales process or onboarding process. They have the same, very similar fulfillment across the board because you don't want to make it too crazy and too hard to do, but it makes it really easy for you to have lots of different plays and challenges for your clients. And they love these. They absolutely love these. And the next one, we'll talk about exit interviews.
Exit Interviews
Okay, exit interviews. This is the last of the six horsemen. It's all about reducing churn and gathering feedback. So exit interviews, when done can cut your potential churn in half just by doing this. Alright? Just by having a conversation with a member that wants to exit. Now, some clients you can't save because they're moving right? Though, later on down the road, as you get more solidified into this, you could potentially offer them a hybrid membership as an opportunity to save them, but we won't get into that right now. Others, though, you can absolutely save. Most people that can be saved are leaving because they have unmet expectations. So they have an expectation on something. It could be something simple as they didn't get the results or they didn't like their coach, whatever it might be, but that's it. Now what you need to do is figure out how do we meet those, right?
And most of the time it's because they aren't receiving the type of service and attention that they thought they would when they signed up. Maybe they're not seeing the results they wanted, like I mentioned before, maybe they just don't like the coach, it coaches their class, or maybe they want more personalized coaching and have no idea that you can do it, right? An example of this would be someone that, I know Alex talked about this in the past, but he had a client that came to him and wanted to exit. Come to find out she was exiting because she was just going to go sign up with a personal trainer. He's like, I can personal, I can train you. And she's like, oh, great, okay, awesome. Sign me up. And he made an extra thousand dollars a month off of her. So letting people know this is super important, but regardless, without an exit interview, you'll never know this.
So a couple of important things to remember on exit interviews. Number one, you'll need to add conducting an exit interview to your agreement. So your membership agreements, make sure you have that. So they need to do it prior to exit. So you want to put that in there in the exit, in the actual agreement. Exit interviews can be by phone, but in person is best. Hands down, they can be up to 30 minutes. A lot of times they're actually a lot shorter and you have two goals with these. Number one is save the client if possible. Number two is gather as much information about how you messed up as possible so you don't repeat it. Really great data gathering and feedback gathering session. Now, two ways to help encourage people to come in for an exit interview start at the point of sale. Number one is let them know that if they would ever like to cancel their membership, they can.
We just need to do a quick feedback session prior to exit. Okay? Number two is have them put down a CH, so a bank, basically an eCheck, their banking routing number and account number as a backup payment so that they can't just cancel their card and ghost you. That's one easy way. Okay, and now attached in this lesson is a simple guide that walks you through how to conduct an exit interview. The questions you need to ask and what you can do. The simplest way to save someone, the simplest way is that you just talk them through and be like, cool, no problem. Let's adjust these things. Let's make this happen. Great. Maybe they have problems in their own life, maybe they need to coach to walk them through and they just need to be talked off the ledge of exiting. That's the easiest one, right? They just need a life coaching session. Then you could go to the point where at most I would ever offer as just a full month free,
Like the next one. Especially if we messed up. If we messed up and didn't meet expectations, I'd be like, cool. Is it okay? Susie, would it be okay with you if we spent the next 30 days? You come and train on the house and I do everything I possibly can to make sure that this never happens again. Would that be okay? And then after 30 days, or after the next month or 28 days, we can then figure out if this is the right place and if you want to continue. And if not, we can part ways and I will help find you another place after this. Okay, and one last thing on exit interviews before we finish. And that is never push too crazy hard because you don't want the last thing, the last taste in their mouth to be you just making them feel bad or guilty for exiting. Always make sure that they exit with grace because they could come back.
Profit Levers Overview
All right. This might be one of the most important sections that you go through as a business owner because we are going to talk about very simple ways that you can increase your profit. Alright, so here's an overview of all these and profit levers. So in this section, if you implement the levers taught here, you will add more money to your gym than anything else that you learn throughout this entire thing in the easiest way possible. So what's taught in this section are the profits, as we call cheat codes, that make running a business so much more fun because it will make you so much more money. Alright? And none of the things taught in this section require you to get a new client, add a session, or add expenses. There's a saying called, that goes by small hinges swing big doors. And that's what these profit levers are.
They're little levers that you can pull inside of your business that will have huge ramifications on the long-term profitability of your business, which will create a bulletproof business. And if you want simple ways to increase your profit, this is the section for you. Now, if you decide like some unfortunate gym owners do to not implement these, your business and bank account will not grow like you wish it would and you will regret it. Trust me on this one, the amount of gym owners that have come to us saying, we wish we would've done this sooner because they wait too long and then they end up doing it and they realize that they could have been making all that money prior, is very sad, frankly. And I don't ever want anyone to regret this right now because not only will doing these things help you make more money, but will also help your clients have a better experience and help your trainers to have a better experience.
Okay? And to be clear with this, these profit levers must be implemented if you want to maximize your take home, create more freedom for you and your family and achieve your financial goals. The timing of when you implement these is up to your coach based on the day to day they have from you and your level of execution. The faster that you move, the more profit you make because the faster that you move inside of your business, the quicker we can pull all of these levers to the speedy go the spoils. So there are three macro profit levers, pricing, capacity, and overhead. Within those macro levers, there are 11 micro profit levers. Within pricing, there are two billing frequency and price. Within capacity, there are more than that. There's a number of sessions per week, duration of sessions, membership levels, attendance, physical space, and exercise selection. We're going to go over all of these. And then overhead is number of sessions fulfilled. Total work hours meaning how many sessions, which session should you cut to reduce total work hours and then trainer pay. Alright, in the following videos we'll cover each one in more detail. And on the next one we'll start with pricing profit levers. I.
Pricing Profit Levers
Okay, let's talk about pricing profit levers. There are two profit levers in pricing, billing, frequency, and price. Now, billing frequency is how often you bill your members. Most gym owners bill monthly, and this is a colossal mistake for three reasons, right? Reason number one is billing versus payroll inequality. And this one, it blew my mind the first time that I went through this, and I realized this. Hopefully it blows your mind as well and gets you to change quickly. Most gyms pay their employees every 14 days. Most businesses do, but they get paid by clients monthly. This means that at the end of the year, they paid for 13 outflows of payroll. So 26, which is every two weeks cycles divided by the two week cycles. That's 13 months of payments, but only get 12 inflows from EFTs. If you think about it, that means that one entire month of payroll comes out of your pocket.
You're paying for your team one month out of the year. Two on that for a minute, and realize that it's game changing when you realize this. The second reason is low margins. The average gym only makes 11.3% profit per year, which basically means they are barely surviving and drawing only enough to make it to the next month. So if your gym grows $250,000, but you made 11.3% margin, you only made $28,250 in take home. Now, you might say you have a salary in that 250,000, but at most it's not that much unless you're doing all of the work and doing all of the training. But then you can't grow, and for me, in my opinion, that's pretty underwhelming for the amount of money, time, and risk that you are exposed to as a business owner. Reason number three is devil is in the decimals. Most people assess pricing without realizing that there are four and one third weeks per month.
That one third is really important. It means that whatever people say yes to, emotionally, that boundary can always be pushed another 8% or so by simply changing the cycle. So to fix all of this and add 8% to your top line, which will flow to your bottom line, you simply switch your billing cycle to every 28 days instead of monthly. So here's an example. Non Jim Lord doing this. They have a hundred members charging $196 a month. They make $19,600 a month times 12 months. That's $235,200 a year. You as a Jim Lord, will switch to 28 days billing. So members don't change, pricing doesn't change. Everything stays the same. But now you're charging 19. Now you're getting 19,600 every 28 days, every four weeks, times 13 billing cycles because by doing this, you get an extra billing cycle. You now will make $254,800 a year, $19,600 more per year, which is an 8% increase.
Another really easy way to think about it right now is whatever you're making monthly, just add that to another billing cycle at the end of the year. So if you're charging monthly and you're making $50,000 a month in EFT, guess what? You can add that. Add an extra $50,000 a year at the end of the year just by switching to this. Okay? Best part about doing this is that you can still tell people that their membership is $49 a week. You just bill every four weeks. That's it. It's like, cool. Yeah, it's $49 a week. We just bill every four weeks. Cool. Great. That's it. Okay. The second pricing lever is price itself. We've already gone over this previously, and you should have increased your price for all incoming members to $49 a week for large group and one 19 to 1 49 a week for semi-private.
So that should already have been done. You also want to ensure that you have your billing frequency set to where you're charging every 28 days for all new people. Okay? The question now is, when do you raise your prices on your old members? Well, here's when you do it. When your churn is below 10% a month for at least three months, okay? 50% or more members are paying the new monthly rate, which means you have a steady acquisition system in place, because otherwise you wouldn't have that. So you want to make sure you have 50% of your members paying the new monthly rate, and you want solid culture that knows, likes and trusts you. So you should be growing. You should have acquisition in place. You should be around the point where 50% of your members are paying the new monthly rate, and then you can pull the lever on the new people.
And when you do it, we have a price increase letter that you can send to all your members. It's in this lesson, and the next lesson after this, you simply go through it, edit it as needed, and make sure that you include any other changes you're making at the same time. And my suggestion is when you work with your coach is add all of the changes that you're going to. One time, we suggest that you rip the bandaid off when you do this and make as many changes as possible at once. Otherwise, you just keep making small changes over time and your members just get really frustrated with it. They don't know what's coming next. They're like, it's always changing. All these little things are happening and it's not worth it. Okay? So in this lesson, we also have a profit lever calculator worksheet that you can use to see how the changes you make will impact your business for pricing.
Use the price adjustment calculator on the first tab to see your new price, how your new price will impact your business. Let's walk through this and let's use an example. So in the green sell C four, you're going to put your current average monthly revenue in the next one in C six. So don't do anything with the reds, just in the greens in sell C six, put your number of active paying members, and then from the dropdown in sell C eight, there's a dropdown there. Choose your new weekly rate, scroll down a little, and you'll find your new projected monthly revenue. If no one left, that's in C 10. Next, you'll find your new projected yearly revenue. If no one left in C 11 and last, and I think this is really important, you'll find how many clients you could lose with your price increase and still maintain your current revenue, which is in sell C 12, using those same in the examples that we use in the money.
If the gym lost no one with the price increase, they would increase their monthly revenue by almost $12,000. Their yearly revenue by $142,000, both 93% increases, and they could lose if they had to. They could lose up to 48% of their clients and still make the same amount of money they are now. Okay, so imagine making the same amount of money you are now with way less people, way less cost to fulfill. You can even cut more sessions. You can do all these different things. So it's a massive lever that you can pull inside of your facility, and this is why it's so powerful. So quick recap on this. You should already have increased your pricing and change your billing
Frequency to 28 days for all new members. You and your coach will figure out the best time to raise prices on your old numbers based on churn is below 10% a month, 50% or more of your members are paying the new monthly rate and solid culture that knows, likes, and trusts you. Okay? In the next one, we'll talk more in detail on how to raise prices on old members.
How To Raise Prices On Older Members
Okay, how to raise prices on old members. In the last video, we talked about when to do it. Now let's talk about how to do it. So when it comes to raising your prices and making adjustments to their memberships for your members, here are a couple things to remember. Okay? Make as many changes at once as needed. Don't kill them by a thousand paper cuts. Don't do it. It's not worth it. It will destroy your culture and community. Give them a 30 day notice or whatever is required by law in your state or region or country or in your agreement. Do not raise prices on people you told would have their rate for life. Some people say you should. I disagree because if you can't keep your word, sorry, I can't trust you. Your clients can't trust you and word will spread. You just have to eat it.
So that's why you should never tell your clients that this is their rate for life unless you're at the top of the market and you never plan to change it. Okay? Just don't do it Again. When you actually roll this out, you're going to use multiple mediums to communicate these changes. You're going to use direct mail. We have a letter in this lesson in the previous lesson, same one, email, social media posts with video and private members group. If you have one. Make sure though, that you do this, you turn off the comments when you post them in Facebook. You can turn off comments. Then you want to make a video. That's a YouTube unlisted video. Just walking through the same thing, and you can literally use the script. You can use a letter as the script. Okay? Then you're going to do text blasts, pushing to private group posts and the YouTube unlisted video for the letter.
Adjust it as you need to for your business. Include any and all changes that you're making and be prepared to deal with loud customers. It's going to happen regardless. Okay? Here's some quick tips that will help you when you release this, especially with dealing with them when you make the video in your Facebook group. Like I said, make sure you turn off comments on the post. You can reuse the letter content as the text for the video. Alright? Number two, send a blast out to push people to the Facebook group and be ready to deal with loud customers for the next few weeks, but recognize it for what it is. It's just noise. Remember, it's in their best interest to convince you not to change. They don't want to pay more. It just is what it is. It's in their best interest, but it's not for the business and it will be scary for you. You will wonder if everyone is going to leave, but they won't. The cost of leaving a community to find a new home, new friends and a new routine is very high for them, and it's much higher than the typical 10, $15 a week increase. If you do have people threatening to leave, remind them that the risk of falling off their fitness regimen, if they leave, we'll put them at risk for losing the momentum they've created while using your facility. But if they do leave, let them leave cordially.
A lot of times when they leave and you run an exceptional facility, they'll just come back. Number three, remind people who worry about added costs, that there are ways to change their budget and spending habits in order to be able to afford the new rate, and that it's an investment in their good health. Tell them stories about people and harder situations who've been able to scrape up the money because their health is a priority. Now, I say all this and let you know there will be customers that come to you and do this, but it won't be all of them, and you can sit down and have a one-on-one conversation with
Every single one of them if they want to. It's definitely worth it long-term. And number four, remember above all else, if you do not make this change, your business will never get to the profitability level that you want it to be, which is bad for you, your employees, and your customers. You're going to have to do it sooner or later no matter what. So you might as well do it sooner and start enjoying the benefits now. Now you have two choices, the guaranteed path to burnout, which is you're not making enough profit in your business or potential to transform your entire business. Both have risk, but only one can get you what you want. And that is taking the uncomfortable step and raising prices on your OGs, right? I've already told you how to, when you should do it from a metric standpoint, and then how to do it. Your coaches will walk you through as well and give you extra steps on how to do this efficiently inside of your business. In the next video, we'll start talking about the capacity profit levers. I.
Capacity Profit Levers
Alright, let's go through capacity profit levers. Okay, there's five micro levers that maximize capacity. Number one is membership levels, A K, how many sessions someone can attend. Number two is attendance. The percentage of scheduled sessions that are actually attended. Number three is duration of sessions, which is the length of sessions themselves and the breaks in between. Four is physical space, the amount of usable fitness space, and five is exercise selection. So these are the ones that we're going to go through. Membership levels mean how many sessions a member can come to each week. So this is number one. If you offer unlimited sessions, it's time to stop. Unlimited has zero value because there is no scarcity. Unlimited personal training. Have you heard of this? I've seen some gyms do it and it blows my mind because I just don't get it. I don't understand why they would do this because human behavior is very simple when it comes to this.
People value scarce products and services, and when they value them, they will consume them, which is what we want. We want people to consume our service. When you just give them unlimited, they can come in one time a week, they'll come in five times a week. It also hurts you from a capacity standpoint. You can never plan If you offer unlimited, you can't plan to grow your gym because your capacity, you have to plan off of your normal attendance, which is typically 85% to 90%. So you have to think of that. It's like if I offer them unlimited, they can come in six days a week. That means the average person's coming in five days per week, four at best, but five days per week. So then that cuts down my ability to grow. So instead of offering unlimited move to three times per week, we've already talked about this, but it needs to happen.
This will automatically double your capacity if you're currently offering unlimited sessions. The primary on attendance. Now we're moving to attendance here. Okay. The primary problem most gyms have is that they offer too many sessions and the attendance for each session, unless it's at peak time, isn't enough to have the margins needed to solve that. Simply require your members to reserve their sessions ahead of time each week and if needed, as you grow, you can charge a no-show fee of $10 to $20 if they reserve, but don't show for the no-show fee though. Be careful on having this if you're not nearing capacity for sessions because it just wouldn't make sense with your members. They're like, listen, there's five people per session. Your session cap is 20. Why in the world am I even paying a no-show fee when you're never full? But if you are overflowing and have a wait list, that's a great time to start having a no-show fee.
Or you can have no-show fees for your really busy sessions that are always packed and have a wait list and not for the other ones. This may even push people to start doing the go to the lower attendance sessions. Number three is duration. This property lever is not mandatory. I want to be very clear on this, but it is an easy way to increase capacity without increasing payroll as long as you pay by the hour, not the session. Instead of doing 60 minute sessions, you can switch to 45 or 30 minute sessions. This way you can service more people and still get them exceptional results. Here's an example of how that can impact overhead and capacity. So when you're looking at this right here, we've got gym A with their capacity, their total capacity, and total hours. Then you've got gym B, then you've got gym C at 30 minutes. Okay, so we've got hour, 45 minutes and 30
Minutes. If you look at the A, you've got six sessions in the day, six hours that you have to pay for. They can have with a 20 person cap per session, you can have 120 people come in to the session every single day. If you switch to 45 minutes, you have the same amount of hours. You can add more session times, you can see more people. Now you can see 160 people and still pay the same amount to your trainers. Then with the gym, that's 30 minutes. You can see this, you almost double your capacity from gym A and lower the number of hours that you actually have to pay. And in my belief, I think the sweet spot in my opinion is 45 minutes, especially if you're a strength and conditioning facility. I think 30 minutes is great
Overhead Profit Levers
Okay, overhead profit levers. Let's talk about 'em. There are three micro levers that reduce overhead. Number of sessions, cutting sessions, and trainer pay. Alright, so number one is the number of sessions. This first lever will require some math, so I need you to hold tight here with me. Okay? The problem is most gyms don't make enough margin per session to be profitable. With that comes three big questions. Number one is, what should my margins be per session? Two, how do I figure out my margins? And then what do I do if I have sessions that aren't making me enough margins, which leads into cutting sessions. The first question is simple. What should my margins be? Well, you need your gross margins, which is revenue minus your cost of fulfill to be at least 80% per session. Okay? If it's less than that, you're going to cut deeply into your bottom line, so you want be having 80% margins per session on average.
Okay? Now, how do we calculate margin? Well, before we get into the calculation, there are two levels of margin we can look at. Number one is macro level gross margin per session, meaning we just take your averages across. But then number two is micro level gross margin procession, which is figuring out exactly like for the 7:00 AM Monday through Friday. What is my gross margin for that? That's the one that we're going to use to cut sessions, okay? Now each follows the same formula. However, the second will help you pinpoint exactly which sessions aren't hitting their margin. So let's start at the macro level first. The formula is very simple. Service revenue per session, minus cost to fulfill equals gross margin. To find the percentage, the formula is gross margin divided by revenue. That will give you a gross margin percentage. But how do we solve for these?
Well, here are the three numbers you'll need to do this calculation. Number one is we need total number of sessions per month, which is the number of sessions per week times 4.3, which is the amount of weeks inside of a month. We need revenue per session, which is service revenue divided by number of sessions per month, and then we need cost to fulfill each session, which is hourly rate or session rate that you pay times 1.22 for payroll costs associated with it. Alright? So let's solve for each with a fictional gym. Okay? So first one, total number of sessions per month. This gym has six sessions per day, plus two on Saturday. That's 32 sessions per week, 32 times 4.3, that's 138 sessions per month. Okay? Now let's solve for the next one, which is revenue per session. This gym has a hundred members paying an average of $135 per month, a hundred times 1 35. That's $13,500 divided by 138 sessions in the month. You're averaging 97.8 82 cents. So $97 and 82 cents per session. And last, let's grab the cost to fulfill each session, right? This one, let's say pay your trainers $20 per hour times 1.22 to cover payroll costs like all your taxes and all that stuff. That's $24 and 40 cents per session. Now that we have those numbers, let's figure out our margins. The equation for this is revenue per session minus cost of fulfill divided by revenue per session. Okay? So 97, 82 minus 24 40 divided by 97, 82. When
We subtract 24 40 from the revenue per session, we get $73 and 58 cents. Divide that into 97, 82, we got 75% margins, not enough. So this means that the gym owner has two options. They can add more service revenue, meaning they get more clients to join, or they can cut sessions to reduce overhead. Easiest way to fix this is actually cutting sessions. I know contrary to popular opinion, that's the easiest, but which sessions should we cut? Okay, that leads into the profit lever number two, and that's where we do the micro gross margin equation. Okay, so cutting sessions, let's use this same gym owner, right? This gym owner, we need to find their least attended sessions on average per month. Let's just say it's a 7:00 AM session. They start with this one, and that's 7:00 AM Monday through Friday, and it averages five people per session to figure this one out.
We go through the same equation, but with just this one session. Alright? So number of 7:00 AM sessions per month, five, that's how many sessions per week times 4.3, that's 22 sessions of 7:00 AM sessions. The revenue per session is five times 1 35 because that's how many are average that that's how many people are averaged per session. That's not how many in the week. That's how many are averaged. The average attendance is, and divide that by 22. That gives you $30 and 68 cents on average. That's the average revenue per session. Then the cost of fulfill 24 40, that gives you 20% margins on that session. This session needs to be cut as soon as possible. Just cut it, it's gone. Then on this one, before I go into the next one, it's important to understand that you should then just go through your next ones and then cut everything that's below.
Okay? It's not worth it. Then the last lever is cutting trainer pay. This is the last one for a reason, it's the worst and has the worst effect on the culture and the team. Only use this as the last resort, and if you absolutely must do it, okay? You already know what the average pay per session or hours should be. So if you need to, you can use those examples. Just remember that you may lose staff from this, but if you're at that point, just understand we're backing you on this one. It's much better to lose staff than your entire business. So if you have to make that call, you have to make that call and your coaches will help you to understand when and how to do that. Okay? On the next video, we'll go through a bonus profit enhancement strategy that you can use every 90 days to be able to examine your expenses, cut costs, and increase profitability.
BONUS Profit Enhancement
Okay, let's go through a bonus profit enhancement. Wanted to throw this together. This comes up a lot, and this is a really simple way, Maggie, my wife and I also happens to be the VP of operations here at Gaines, is the profit queen, and she's the one that does this actually for our business today, all three businesses. But this is something that she also did inside of our gym when we owned the gym and helped us save a ton of money, and it has helped countless gym owners since then. So a huge problem we see in every struggling business is their overall expenses are out of control and mismanaged, just simply just not being watched. And that's okay. We can change that though. A simple way to fix this is to do an audit of all expenses for the last 90 days. So included in this lesson as an SOP for how to do this, but we're going to walk through this document right now.
So you're going to start with number one, if you're reviewing for the first time, download the last 90 days of your bank statements. You want to go directly to the source. Okay? Next, what you're going to do is you're going to put the statements into a spreadsheet for easy review and notes. So you're going to take everything, just move it into an Excel, all every line item. Then what you're going to do is you're going to go through each line item. I'll mark them with an S or an n. S. S stands for strategic cost. Strategic costs are any costs that generate revenue for the business. You spend a dollar, you get money back, and then NS stands for non-strategic costs. So non-strategic costs are costs that cost the business money. You spend a dollar and you don't get any money back. An example of strategic costs would be costs associated with sales, marketing costs, lead gen, and effective business coaching that's actually making you money in your business.
An example of non-strategic costs are rent, utilities, office supplies, administrative costs, and equipment. Those are just examples. Now, once you mark as strategic or non strategic, summarize all your non-strategic costs. So put them all together. Once you've summarized the non-strategic costs, go through each of these costs again and mark either F or N. FF stands for fixed. Fixed means these costs are fixed and cannot be cut or changed or negotiated. NF stands for non-fixed. So non-fixed means these costs can be canceled or negotiated on. So an example of this would be examples of fixed cost would be rent, utilities, water power, wifi, and then your CRM. Examples of non-fixed costs would be software tools with reoccurring subscriptions, office supplies, can you bulk order and save money? And cleaning supplies can bulk order save money in payroll. And then what you're going to do last is the last thing is, go ahead and put this here, is eliminate ruthlessly any non-fixed costs that you can.
That's it, and you're just going to eliminate them and try to get rid of them. Okay? So you want to go through this, and the best way is you do this first. If you haven't done this, do this 90 days. Go back and look at the last 90 days. And then the next thing is just do this every month. Just review all your expenses every month. Make sure that you don't have any non-fixed costs that are creeping up, and make sure that you have this in place and check it. You will save thousands of dollars every single year just by doing this. And all that money is straight to the bottom line of the business and straight into your pocket.