https://www.youtube.com/watch?v=hnfh2jqNVEQ

1 00:00:00.000 --\> 00:01:00.000 we also learned that if you're not
full-time in your gym and you have a job outside and you're trying to do
a gym as a side hustle or something you don't do as well as people who
are fully committed to their gym \[Music\] what is going on everyone
hope you're having a wacky wednesday um i am fired up today i'm gonna
probably make a bunch of content because i've had like 10 straight days
of events and i have all these questions that people were asking me on
my mind and little anecdotes that i shared that people found value in so
hopefully you don't mind me just sharing those things with you now so um
the first uh two days were actually events that we attended and spoke at
uh which is at sas academy dan martell's event and i was fortunate
enough to be at the speakers table which was value in and of itself and
one of the people who was at the speakers table with me uh was a man
named marcus rivera he was vista's former head of pricing packaging and
products so pretty much when they would acquire a company

2 00:01:00.000 --\> 00:02:00.000 um he would be the guy that would go in
and retool the entire kind of fulfillment structure who they were
serving how they would break down you know the the levels of membership
etc and so for those who don't know what vista is vista is uh i think
the world's largest private equity firm for software um if you put their
whole portfolio together it's over 50 they do over 50 billion a year
they'll be ranked third i think um in the world behind like facebook and
amazon so like uh for like software companies so they're uh they're
really really big really really smart and uh i was fortunate enough to
sit next to this guy for uh two days which was awesome for me um and one
thing became really clear when we were having dinner um and so they have
something called vsops which is vista's um uh sop so they're they're
kind of their standard operating procedures and these things are so
closely guarded you need like retinol scans and like there's like you
only get access to certain numbers of them if you're at certain levels
and then they you your access gets removed it's like

3 00:02:00.000 --\> 00:03:00.000 super top secret stuff and this is
literally how they create value how they purchase companies put their
system on top and then increase the value of that company and so for
them their whole mantra is tripling their money in three years so it's
three and three and so um one of the things that he shared with me now
obviously he couldn't share like the the intricacies but the concept was
really really powerful for me and i'll tell you how we applied it at gym
launch and so um one of the things that uh most companies don't do is
they don't score their leads right they don't score their prospects they
don't score their customers based on uh the value of that customer right
and so scoring them can be based on a number of of characteristics
behaviors etc that that person shows uh to you know put them in a
certain bucket right and uh what vista does and what they count on is
the fact that when they go into a company when they're assessing a
company in the diligence process that they're going to learn more about
that company that the founder and the people in that company even know
about

4 00:03:00.000 --\> 00:04:00.000 it and so what they do is they parse
out the data and they start trying to find the veins or the buckets of
the most valuable customers once they find those buckets that vein of
customers that's more valuable what they then do is they basically
expand and focus on that vein of high ltv customers like it sounds
simple and one of the things that marcos actually hit on a lot was like
he's like we we stick to simple simple systems simple processes and so
when when we when i've like said things like the people who are the most
advanced never don't do the fundamentals i feel like i've seen this at
like so many levels and seeing this from probably you know the biggest
and probably biggest you know software turnaround increasing value
company out there um is pretty cool and so let me tell you what we did
to kind of go through this process and so marcos was explaining that
they don't even just do it for customers they do it for prospects
opportunities and uh and customers so three different segments they're
going to look and score at each each part of the pipeline all right
using the analytics that they have in the teams that they do now

5 00:04:00.000 --\> 00:05:00.000 you're like okay cool that's awesome
alex how does this make more money at my gym and so let me tell you how
we're applying it right now and so what we did um is we took the last 90
days i think it was july uh july august september or maybe it was
september i think yeah i think it was july august september so it took a
90-day um block of time and we looked at all of our exits all of our
escalations uh what the with the people who kind of kind of suck the
most are people who didn't get the most results whatever you want to put
it uh the people were the the hardest to serve uh and who got the least
results using our program and then we looked at the the conversation the
reverse of that what were the characteristics of the people who made the
most money who got the highest returns who were the easiest to work with
right and so we found here's some unsurprising facts um if you are not a
gym owner right uh you don't do as well as people who are gym owners
crazy crazy facts right um and we also learned that if you're not
full-time in

6 00:05:00.000 --\> 00:06:00.000 your gym and you have a job outside and
you're trying to do a gym as a side hustle or something you don't do as
well as people who are fully committed to their gym if you don't have a
signed lease or an or a building of your own you don't do as well as
someone who has a building of their own right and if you uh don't have
any employees it's harder for you uh to do this mostly because there's a
huge time constraint right like it takes effort to implement new systems
because not only do you have to keep your existing business going you
have to start working on top of that in order to dig yourself out of the
hole right and so when we found those characteristics what we started
doing is we started uh filtering and qualifying our front end and so we
started doing this uh for the month of october all right so we we took
the 90 days we found we took the findings and then we implemented for
the month of october right now we're in november and what's crazy is
this from the the previous four weeks so in september the last four
weeks compared to after we started doing this qualification there's two
crazy two crazy numbers i'm going to share with you one is once we
qualify prospects that

7 00:06:00.000 --\> 00:07:00.000 they had to have at least 25 clients
they had to have assigned lease they had to be a full-time gym owner
right and ideally this was optional but ideally have one employee or
more who worked with them so that they could share the load and so that
they could actually focus more on selling and you know working leads etc
when we looked at the after effect of that our sales decreased from uh
over 100 a month uh in terms of gyms to about 40 to 50. right now here's
where it gets interesting all right so that cut our inflow in half by
qualifying our customers right by by really making sure that the people
were coming in were the best fit who could serve the best right here's
what's cool on our side now that we've done this in the first four weeks
in the four week period since then the people who started after those
qualifications we've had zero escalations from those people prior to
that we have we had 22 escalations as in people who

8 00:07:00.000 --\> 00:08:00.000 were having issues uh you know whatever
it is you know i mean just red flags right um the the prior four weeks
so from 22 to zero now think how crazy this is in terms of scaling a
business and operational uh complexity as you go up right so we we had
this huge vein of people who were taking up the vast majority of my
team's time and were actually worth less right they made less they were
worthless to us and so when you're thinking about scaling and
maintaining operational efficiency and profit if you're looking at the
customers that that are the highest lifetime value the best customers
right and here's what's crazy the people so after that october date um
we switched back to the defined end program which is what we did for you
know three years so we did a a brief stint where we uh where we
basically signed people up for a year up front because we wanted to give
them everything it was it was a trial we did a 90-day sprint and uh it
turned out that that didn't work nearly as well as having defined it

9 00:08:00.000 --\> 00:09:00.000 and it's kind of the same way you run
the gyms it's like having a defined end program tends to be a little bit
more it's a little bit easier for people to wrap their heads around a
little more defined in terms of the skills that they need to acquire etc
but what's interesting is that the people who uh came back in were
actually paying more than the the people who uh were paying more than
the people who who we were letting before so this this new vein of
customer who's higher qualified is paying more is making more requires
less work now that sounds like a recipe for a higher profit business
right it also sounds like a recipe for better happier customers and so
also what happens if you think about it from a reputation standpoint
it's like if you lower the bar too much then what happens is you bring
in people who are not qualified right they take up more of your team's
time they cost you tons of effort and they're not making as much which
means that then they say like your thing is not as good right when in
reality it might just not be as good for them right which makes sense i
mean

10 00:09:00.000 --\> 00:10:00.000 like it makes intuitive sense and so i
just like sharing these these mistakes learns with you so that maybe i
can look back on this 10 years from now and be like hey i remember when
we started doing that um but now what our focus is is cool we know who
the best customers for us are and it's like dear god why did this take
us three years to do this you know like you know learn from my stupidity
like hopefully you can start doing this with your own stuff um and now
we're just gonna focus and double down on that vein of customers and try
and expand that by really focusing on on them in multiple platforms
right and so um i say this to say if vista has has repeatedly you know
been able to go from i mean they're not a super old firm you know from
basically nothing all the way to 50 billion in a very short period of
time it's because they know how to extract and amplify value and the
biggest thing is not change i mean they do shirt they tweak the pricing
they find the right buckets etc but they do that by analyzing the
customers better than the business that they're purchasing

11 00:10:00.000 --\> 00:11:00.000 purchasing even knows their own
customers and so i challenge you now this may sound like super
analytical it's not all you have to do is look over the last three
months okay look at the people who left your business all right this is
where you get the the best data is from all the people who leave right
so look at the data from people who left your business try and get as
like to think about as many character traits as you possibly can what's
their age what's their you know what's their job uh what are their goals
what do they sign up for how much money down did they start with um what
did they sign up for in terms of their continuity etc and if you can if
you can piece those things together then you're going to get a really
good idea of of uh of who the good customers are who the bad customers
are and it's okay to have a stern line because we're doing this now now
the thing is is like in the in the short term you can be like oh my gosh
my inflow cut in half but so did all my operational overhead and and the
issues that like all that work that the team had to put together um

12 00:11:00.000 --\> 00:12:00.000 to try and service these people who
were not necessarily the best fit right and so um i share that with you
and i'll give you one more tidbit that i learned from him and so uh we
learned this from the from the whole event which we took is a huge
takeaway for us that you can totally apply to your gym is that customers
in a recurring base business or really any business decide whether
they're going to stay at two points in the beginning of your life cycle
all right between the sale and when they start getting the thing right
the service the product the whatever and once they start using the
product the implementation or onboarding period so in that period so if
you're doing an orientation with your clients right they buy something
all right the time between the purchase and when they start getting the
thing which would be your orientation and the actual orientation itself
is typically when people are already making the decision of when they
want whether they're going to stay with you in the long run all right
which means if right now

13 00:12:00.000 --\> 00:13:00.000 you just think your your orientation
is an aftermath it's like oh yeah now we have to fulfill that thing we
sold you're screwed right you're getting by just on the fact that like
you're you have enough volume in the door but you're losing massive
amounts of money by not making that a completely choreographed
experience that you're really focusing on over delivering a value and
the way to do that is to demonstrate the skills that they're going to
need to be able to use to use your services right and so whether that
like not just not just saying hey yeah you should download this app yeah
you'll figure it out but actually doing it with them holding their hand
and then having them duplicate the process so that you can see that
you've transferred the skill to them so that they now know and they are
self-sufficient in being able to consume your services right and so if
your onboarding is rushed right your orientation is rushed then expand
the time period because it's going to massively multiply the lifetime

14 00:13:00.000 --\> 00:14:00.000 value of that customer and the
likelihood that they're going to stay with you so this is one of those
few times where you don't want to be lazy um and not and not deliberate
and intentional in how you're onboarding the customer after you complete
the sale so the communication that you have with them immediately after
the sale which is like sending them a personalized video you know giving
them swag maybe a letter whatever it is definitely texting them between
the time that they make the sale or you make the sale and when they
start the onboarding and the second piece i'm already going back to the
big beginning is the sale itself and so what we're learning internally
for us at gym watch and this may seem obvious but maybe i'm sharing it
with you because we're learning it too is that expectations are
everything right expectations are everything and if you set proper
expectations for what is going to happen next and then you fulfill that
beautifully your trust with the prospect goes up now here's where it can
get uh tricky right and this is what we call selling hot it's where you
where you set expectations so high it's

15 00:14:00.000 --\> 00:15:00.000 impossible for you to ever fulfill or
for you to hit that with the majority of customers right and so this is
where selling towards behavior and selling towards sustainability and
long-term change comes really into play so that you can shift and break
the beliefs of your prospect to shifting their time frame to what is
really going to be beneficial for them rather than um simply trying to
sell them to say yes right and so um an example of this is you know for
us if if someone has only consumed testimonial and we've we've changed
this in our marketing we've changed this in our testimonials we've
changed it in the in the post that we tag people in is that we're really
no longer focused on on saying like hey look at these 10 people who made
a hundred grand in their first you know six weeks with us right we have
those right we totally do but the thing is is like but what are the
averages right and so now we just share what the average gym does all
right and it's significantly less you know appealing i

16 00:15:00.000 --\> 00:16:00.000 think the average gym right now is
like they do 16 000 in their first six weeks with us right now that's a
lot but it's not a hundred grand in your first month and and showing
what the average gyms are getting in terms of leak costs and lead flow
gives people at least an average understanding and we can explain to the
person that means that half the people who sign up get less than this
right this is the average and so that way um if you if and when you do
go above that mark then their expectations are reasonable and you can
over deliver right um and in an ideal world you would probably try and
sell on the bottom 25 of results so that the expectations are so low
that everyone is excited about the fact that they're over achieving from
that um from that baseline that you have set for them and so what i've
like i'm continuing to learn this i like want to write like a whole
presentation on expectations but expectation management is everything
right it's amazing what happens if you

17 00:16:00.000 --\> 00:17:00.000 set uh really high expectations and
like this is where this is where someone makes 20 000 in their first
month and is disappointed with gym launch and we've had this happen
plenty of times right they're like well this sucks i thought i was gonna
do better right when in reality that's amazing right um in terms of the
big scheme now maybe this resonates with you because you've had someone
who loses five pounds in their first 14 days with you and they're
disappointed now why would they be disappointed only one reason because
the expectations that were set for them in the sale and in the
orientation were were too high for the average person and then most
people are disappointed with what would otherwise be considered an
amazing great start and so if you can reset the expectations that are
being uh put on the customer in the sale right and you sell around the
fact uh not around yourself through the fact and you break the belief
around what the expectation should be in a short and long-term vision so
that

18 00:17:00.000 --\> 00:18:00.000 you can shift their expectations
towards long-term change and a process and behavior change so that they
can ultimately achieve what they want which is being fit forever not fit
for the next six weeks or six months right and so um all that to say the
big takeaways that we have at gym launch is that we are now heavily
qualifying people on the front end so that we have longer lifetime value
we have superior client outcomes we have less operational complexity
because these people have the right characteristics of people who are
successful both externally in terms of like what they have their gym but
internally in terms of how they work um and how like what level of
effort they're willing to put in to be successful right we found out
that entrepreneurs are not a very good uh demographic for us and so it's
like cool we're not gonna service them right we're not going to service
them in this way maybe we'll create an info product that's um less for
them so that they can go through it at their own leisure their own time
frame rather than the intense time frame that we put onto people uh when
they start gym

19 00:18:00.000 --\> 00:19:00.000 launch because it's really like ready
fire go you know you have 72 hours and leads are starting to come in
right and that's how we do things in gym lunch because that's how i am
right um but we have now used this on the qualification side and then
also how our sales people are tagging and setting expectations and then
being extremely deliberate and we're still working on this um in making
the onboarding and implementation even more choreographed and we have a
pretty darn choreographed uh orientation process but even better even
even more reinforced even simpler uh so that the handoff is seamless so
that everyone knows exactly what is going to happen before it happens
and then they know exactly what is going to happen next uh in their
experience with us and so you can use this all these these lessons that
we're learning right now um in your business so that you can increase
the quality of the customer set the expectations properly and then over
deliver on the expectations that you've set so that they can make the
decision in the first two or three meetings with you that they're gonna
stick with you for the long haul so i hope this was valuable for you
like it uh drop a drop a comment

20 00:19:00.000 --\> 00:20:00.000 drop a review if you're listening this
on the podcast um and uh as usual if you uh want some free goodies you
can you know download them somewhere you can go to alex'sbook.com if you
want more stuff like this uh and get a free book anyways lots of love
keep being awesome and have an amazing wacky wednesday and i'll catch
you guys on the flip side all right \[Music\] you
