Chris Cooper's Blog, page 105

Squeaky Wheels: When Should You Ignore Clients?

The client isn’t always right.

In the first post in this series, I told you which clients are likely to give you good advice.

Today, I’m going to tell you whose advice to avoid.

The Loud Minority

Even when things are amazing, it’s very easy to focus on the “problem areas.”

Our brains are wired to detect flaws. But we often get “false positives”: feedback cues that seem to knock all the good stuff off the table. We fixate on negative feedback even when it doesn’t represent the average client. And when someone says they don’t like a class time on our client surveys, we want to smash the whole puzzle and start from scratch! Right?

Even worse, sometimes your staff will report that “some of the members” had problems with “some of the services” or “some of the class times.” This feedback is always hard to pin down: Which members? What exactly did they say? These “problems” are aggravating and unsolvable.

This is what I tell my team: A small minority of people will always complain about everything.

For example, they’ll complain because you don’t include a weightlifting class in “unlimited” memberships, you charge for nutrition advice, you “‘don’t have enough classes” or you’re just “too expensive.”

While we listen to everyone, we act according to our vision for the gym and don’t let the “loud minority” sway us because we understand that they don’t see the big picture. We do.

When I hear “everyone is complaining” or “everyone thinks X,” I know that “everyone” is not everyone. It’s just the loud minority. The members of the loud minority, while welcome at Catalyst, aren’t our perfect clients. If we wavered on our position for every little complaint, we would have no direction. We’d have 100 different programs at 100 different prices and 100 concessions for each one.

We don’t do that. We deliver an amazing service and experience. Those who appreciate that will stay, and members of the loud minority will leave eventually. It’s a simple filter.

Our mission at Catalyst is to meaningfully extend the lives of 7,000 people in Sault Ste. Marie. That means over 60,000 people in our city will not be a perfect fit, and that very few people will be a perfect fit forever. We will be polite, caring and tactful, but we will not sacrifice the standard to satisfy the very few.

Focus on Your Best Clients

What I have learned is that following the minority is a disservice to the majority. Just as it’s important to train your strengths in the gym, it’s important to focus on your happy clients most of the time.

Perfect is the enemy of good. It’s impossible to please everyone, and some won’t like like everything you do. That’s fine. Your best clients will thank you for your consistency—and for giving them what they love—if you work hard to serve them.

As the gym owner, you must always be tactful. You must always be polite. You must be open to suggestion and criticism.

But you don’t always have to take action.

The post Squeaky Wheels: When Should You Ignore Clients? appeared first on Two-Brain Business.

3 Minutes for Retention, Reacquisition and Re-Engagement

Mike (00:02):

Got three minutes to make money and improve retention? Of course you do. Get out your smartphone and prepare to take action as Chris Cooper gives you 12 simple texts to send out right now. Get your thumbs ready. Here’s Coop.

Chris (00:16):

It’s Chris Cooper here. Your gym’s programming won’t attract new clients, but it can help you keep your clients longer. Good programming includes benchmarks, novelty, skills, progressions, leaderboards, you know all that stuff. But great programming contains something more: a link between each client’s fitness goals and the workout of the day. Your coaches need to tell your clients more than what they’re doing every day. They need to explain why they’re doing it. Gym’s whose coaches could explain the why connection had a 25% better retention rate during lockdowns. Imagine how that translates into better retention when things are back to normal. Now, I want to solve this problem for gym owners. Programming is the service you deliver to your clients. So I partnered with Brooks DiFiore, who had one of the highest adherence rates in the world for his group classes at his gym to build twobrainprogramming.com. We built this for Two-Brain gyms and we give them free access in our mentorship program. But I’m now making this available to the public. Programming proven to improve retention and cashflow in your gym. Visit Two-Brain programming.com to get it.

Chris (01:24):

Hey everybody, it’s Chris Cooper here. And today I’m gonna give you a three minute drill for marketing and retention. Now, before I give you this drill, ’cause it’s gonna be really, really fast. You’re gonna wanna hit pause and I’m giving you a second here to find a pen. This drill is a great illustration of the difference between acquiring knowledge and knowing the answer. Think back to seventh grade geography class and the teacher’s up at the board and they’re talking, talking, talking, and you’re writing, writing, writing, and they’re giving you this textbook and it’s got 300 pages in it. And invariably, somebody puts up their hand and says, teacher, will this be on the test? If the teacher says no, then you hear smack every pen, go down.

Chris (02:08):

If the teacher says yes, then you see people taking a quick note. We pay attention to what’s going to be on the test because we know that that’s the relevant information that we’re going to need. The problem is when you’re an adult and especially if you’re an entrepreneur, you start reading all these books, right? Like I read about a hundred business books a year and more fiction books. And it’s really hard to know like what is going to be on the test? What little tidbit outta that book or what tactic can you put into immediate action that’s going to help your gym. And so, as I’ve been talking to more and more gym owners, who’ve been following my content now for well over a decade, a lot of them are saying, Chris, your content just keeps getting better. It’s so much better. Thank you.

Chris (02:52):

And I get more emails back every day from people reading the content, taking action and saying, Hey, I used this and it worked. And when we posted this piece that I’m about to share with you, within five minutes, people started sharing in public Facebook groups. I did this thing and it worked. So I’m excited to give it to you. But the reason it works is not because these are new tactics. Not because I’ve never written about them before. Not because you can’t find them in our back catalog. They work because I was very clear about what you have to do. And actually the credit for this exercise goes to Mike Warkentin, our editor. Two-Brain produces a ton of content. I produce most of it, but what makes that content good is not the production or the volume. It’s the editing. And that’s what makes everything better and better and better.

Chris (03:40):

I’m a born anarchist. I love ripping everything down and just starting from scratch. It drives my team crazy. But once in a while, and you know, more and more, every single week, if you go in the Gym Owners United free Facebook group, you’re gonna find free guides from us. Sometimes these are brand new material. Sometimes these are brand new ideas that we’ve just finished data testing on. But a lot of times these are edited versions of content that we have published before. Why is this important for you? Well, when you’re delivering your message to your clients, it’s more important to be clear and actionable than it is to be unique, more important than it is to be loud, more important than it is to be novel or to even have like the new thing. It is more important to be clear in your coaching than it is to have the newest equipment.

Chris (04:31):

It’s more important to be clear and say, do exactly this than it is to have the best programming. It is more important to be clear than it is to have the biggest gym, the best location, the best website. Clarity is what it’s all about. And as noise increases in our world, clarity becomes ever more valuable. If you think about the high ticket practices that people are offering, it’s not that they’re dumping a bunch more, you know, extra services on people. Instead, what they’re providing is daily accountability step by step. Here’s a text. Do exactly this. Eat exactly that. That’s where the value comes is the clarity. So I don’t wanna add any more noise to this conversation. I’ve already spoken for almost four minutes and this is a three minute drill.

Chris (05:13):

Back to the show in just a minute. The people at Incite Tax know you’re working long hours to improve health for the world, but it can still be hard to turn a profit. You just can’t focus on your mission without money in your account. So Incite founder John Briggs wrote “Profit First for Microgyms” and created a system that increases your cashflow so you can be home for dinner with a thriving fitness business. Bookkeeping, profit first, cash flow consulting, taxes, whatever your financial needs, Incite can help. Join their free five-day challenge at profitfirstformicrogyms/five days to get a snapshot of the financial health of your gym. That’s profitfirstformicrogyms/five days.

Chris (05:53):

So here we go, got your pen ready? Today, you’re gonna pick up your phone and make money. So first you’re going to listen to this whole thing before you take action. But if you’re feeling like, ah, Chris, this has already gone on too long and you don’t want the rationale or the reasons behind these instructions, then just take this shortcut.

Chris (06:11):

OK? Here’s the short version. Number one, send this text to three members that you haven’t seen all week. Here’s the text: Coming to the gym today? Just send them that text. OK. Number two, send this text to three members that you’ve seen recently. Hey, first name. I’ve noticed how hard you’re working in the gym. Way to go. What’s your next goal? OK. That’s the second text. Third text. Send this text to three departed members. Do you still want to improve your fitness this year? Send that. Now. Four, here’s the fourth text. Send this text to three people on your lead list who haven’t signed up yet. Hey, first name, it’s Chris from Catalyst. I haven’t forgotten about you. Do you want to talk about personal training or new nutrition? OK. Just send those texts out. If you aren’t gonna send those messages right now, then listen and find out why you should.

Chris (07:05):

And again, this is Mike Warkentin’s weekly column on twobrainbusiness.com. Every single week, Mike has something of super high value like this. We’ve been hanging out together for years and years, I think since 2012. And so Mike is amazing at pulling like these tiny, actionable, but incredibly valuable tidbits out of our content. So Mike writes: https://twobrainbusiness.com/three-mi.... And when I hear the same things from a bunch of them, I take note. When a large number of very intelligent, very successful people are doing the exact same thing, you might want to consider doing it too. Two-Brain Business takes a scientific data based approach with stuff like this. We analyze the actions of successful gym owners. We test them and then we recommend those actions if they’re proven to work.

Chris (07:53):

So in the limited space of this column, I’ll jump over the research and just tell you that the best owners in the world are doing the things I’m recommending here. And if you’re not doing them, then you’re probably missing out. So first, retention, the where have you been text. John Heringer of Method3 Fitness is just one of many successful entrepreneurs who prioritizes retention of current clients. Every week, he runs a report to find absentees and then he calls, emails or text them. Simple, right? But John’s revenue in August, 2021 was $86,000. And you can listen to him talk about it on Two-Brain Radio, I’ll put links in the show notes. You don’t even have to run the report, just do a mental review, pick three members you haven’t seen this week and fire off those texts. The next is podiums, right? Make them a star.

Chris (08:40):

And Mike writes, for years, Chris Cooper has been telling gyms owners to make their clients famous and put them on podiums. Your gym might be the only place in the world where they feel special. So take a minute and high five three people. You’ll give three members a warm fuzzy that will last all day and strengthen your bond, and you can high five them through a text. The next one is the 10 word message. So just send this message to departed clients. Do you still wanna improve your fitness this year? It’s a kind of magical marketing message because it starts a conversation with them and Mike Writes, Chris Cooper talks about it in one of our podcasts, but if you only have time for one action, skip the podcast and spend your time just sending this message. Next, follow up with your leads.

Chris (09:23):

When it comes to marketing, I’ve heard a relentless drumbeat for years now, contact your leads quickly and keep trying until you get in touch with them. Without fail, the gyms that sell more, get touch with leads in minutes, not weeks. And they attempt to contact leads many, many times before writing them off. I bet some of your leads could use another quick text. So pick three and start thumb typing. And you we’ve got a link to Mateo Lopez on Two-Brain Radio where he talks about lead nurture texts, too. Now you need to take action here. I bet that it would take you less than three minutes to send these 12 messages. And some of you will literally make money in those three minutes. Maybe a disheartened member will perk up and give you a chance to reengage and prevent their cancellation. Maybe a valued member will feel noticed and appreciated and less likely to cancel a membership or miss their next workout.

Chris (10:13):

Maybe a departed member might jump at the chance to reconnect with you and get back into training. Or maybe a lead will see your message and respond, giving you a chance to book a consultation. At some point today, you’re going to spend three minutes doing something useless, probably checking Facebook or Instagram or TikTok. Instead, take those three minutes to improve your retention, reacquire departed members and nurture future members. And when you hit a home run with these tactics, remember Two-Brain has hundreds of others that will help you solve every single problem in your business. To hear more about these tactics book, a free call. Mentorship is really the difference between acquiring knowledge and knowing the answer. Because as an entrepreneur, yyou can bet that at some point, this will all be on the test. Every day is the test. And if you know the answers in advance, you’re far more likely to ace it. Have a good one.

Mike (11:09):

Two-Brain Radio comes out twice a week and features all the info you need to run a successful fitness business. Subscribe so you don’t miss a show. Now here’s Coop one more time.

Chris (11:18):

Thanks for listening to Two-Brain Radio. If you aren’t in the Gym Owners United group on Facebook, this is my personal invitation to join. It’s the only public Facebook group that I participate in. And I’m there all the time with tips, tactics, and free resources. I’d love to network with you and help you grow your business. Join Gym Owners United on Facebook.

 

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Squeaky Wheels: When Should You Listen to Clients?

Is the customer always right?

No.

Is the customer always wrong?

No.

Your clients want you to be successful. They feel very close to you, your staff and your brand. Sometimes, they’ll give you advice—and sometimes they’ll try to fix the problems they see in your business. This can sound like complaining at times—but usually you’ll consider a client’s ideas.

Should you?

Likewise, your staff members want to help. They want you to think they’re important. So sometimes they’ll approach you with ideas and hope you’ll listen. When that doesn’t work, they’ll bring you some “concerns.” And if they still don’t feel important, they might even amplify their fears by saying “a lot of customers are complaining about X” or “I think a bunch of clients are talking about quitting!”

As a leader, you must appear open to feedback. And the best ideas sometimes come from your clients or your team. But how do you tell the difference?

Here, I’m going to help you identify whose advice you should take. In Part 2 of this series, I’m going to tell you whose advice you should never take. And in Part 3, I’m going to tell you how to use precise questions to grow your business instead of using horrible “client surveys.”

Do This Quick Exercise

Today you’ll need:

A blank sheet of paper.Your gym management software.20 minutes without distractions.

Divide the sheet into two halves.

Draw a vertical line down the middle.

At the top of the page, draw a smiley face on one side of the line. Draw a dollar sign on the other side.

Start with the left-brain exercise: Under the dollar sign, record the 10 clients who pay you the most money every month.

Now move to the right-brain exercise: Under the smile, record the 10 clients who make you the happiest. These are the people who light you up and give you energy, not just the 10 who are easiest to tolerate.

The names on each side of the line might be mostly different. But you should notice a few names that appear in both columns.

These are your Seed Clients—your best clients. They’re the people who bring in the most and bring out your best.

Most of your clients follow your lead. But you should follow these people. Book a coffee date with them. Then ask these three questions:

What led you to my gym in the first place?What did you try in the past that you didn’t like?What’s your greatest challenge outside my gym?

The answers will tell you:

What you should be saying or doing more to attract clients just like your Seed Clients. You’ll also know what you can say less (or just skip altogether).What turns potential Seed Clients away.How you can serve your Seed Clients more and create more value for them.Learn From Your Best Clients

You have a client-centric business. Over time, your service will gradually shift as your client’s needs change. The key is to follow the lead of your best clients, adjust your service to give them what they need and allow the rest of your audience to change over time.

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Why a Yoga Studio Owner Needs a Mentor

Shannon Brasovan, Two-Brain Yoga Business Mentor

“Why does a yoga studio owner need a mentor?”

I think an even better question is this: “Why don’t you have one yet?”

A mentor is not dissimilar to a teacher, something very common in yoga culture. However, a mentor is not there to drown you in dogma but rather to guide you to your own highest truth and potential with time-tested methods and a clear, simplified path.

In the past, the guru model has become quite abusive because it centers on one person’s ideal of how everyone else should be (see Bikram for examples). A mentor flips this on its head and takes your data and your story and helps you channel it to create the most success. 

So why does a yoga entrepreneur need a mentor? Because a yoga studio owner is like a therapist, priest, masseuse, personal trainer, confidant, retail manager, HR director, business analyst and nurse all rolled up into one.

There are so many thoughts rolling around in our heads at any one moment it’s a marvel that most of us don’t wind our butts and wipe our clocks. We need a mentor to help us carve out a clear roadmap and put the first things first before we move on to anything else.

A mentor will help you discern how to approach the path before you without trying to tackle everything all at once (yogic principle: viveka!).

It is the mentor’s job to help you quell the noise of your clients and staff, avoid the flashing lights of Facebook and all the marketing being thrown at you, and clearly determine your next step. And then the next one and then the next until you build incredible momentum.

Think of a business mentor as a guided meditation expert. We are going to bring you back to the present and have you focus on this moment so you can maximize it and bliss out!

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Government Failures and Huge Opportunities for Gym Owners

Gym owners: You’re needed more than ever.

After a very tough two-year stretch in which gyms struggled to navigate pandemic restrictions, the fitness industry remains an essential part of the world’s health-care system.

But most people don’t know that.

So your goal in 2022 is to tell them.

On Nov. 30, the Canadian nonprofit group ParticipACTION released its 2021 Report Card on “Physical Activity for Adults.” You can get it here.

Executive summary: Our fitness sucks.

The report grades almost 20 aspects of fitness over four categories, from “Daily Behaviours” to “Spaces, Places and Cultural Norms.” You will not find an A in the report, and I’d suggest some of the B’s are rather generous.

I can’t resist the urge to lay out the Daily Behaviours section for you:

C — Total daily steps (2019 grade: C).C+ — Light physical activity.C — Moderate-to-vigorous physical activity (2019 grade: F).D- — Muscle-strengthening activities.D- — Balance activities.F — Active transportation.D — Sport participation.B — Sleep.F — Sedentary behaviours.

The only win I can see: Canadians seem to be OK at sleeping, which seems to be the free space on this bingo card.

It should be noted that “light physical activity” is a new category perhaps introduced to create a chance to give out a decent grade. According to the report, light physical activity includes “activities that are part of daily life.” Stuff that qualifies: “standing work or light housework such as washing dishes.” And we still don’t do enough of that.

The report’s definition of “moderate-to-vigorous physical activity” will not match up with yours, either. The category includes stuff like dancing, jogging and “brisk walking.”

Overall, the ParticipACTION report says we are a nation of weak, inactive people who spend most of our time on the couch.

It’s disastrous.

One Good Thing

As a positive, the report does a good job of listing the benefits of activity. For example:

“Benefits of strength training include reduced risk of all-cause mortality, chronic disease and premature death. Strength training increases muscle and bone density and metabolism and is accompanied by significant decreases in fat, reduced low-back pain, decreased arthritic discomfort, increased functional independence, enhanced movement control, increased walking speed, improved glucose control and reduced risk of Type 2 diabetes.”

The percentage of Canadian adults who lift but twice a week to get all these amazing benefits? Just 25. One in four people.

Just under half of Canadians get at least 150 minutes of moderate or vigorous physical activity per week, passing on another lengthy list of health benefits.

The good news for gym owners: You don’t need to fight each other for prospective clients.

The Plan for Gym Owners

The report’s “policy” recommendations—corrective measures—are what you would expect:

“Policy-makers should develop more focused campaigns for promoting strength training as an important part of overall (physical activity) for all adults.”

I’ll interpret for you: Some vague group of people should take undetermined action to try to get adults to lift stuff once in a while.

That plan will no doubt be as effective as the government’s scheme to increase the use of active transportation in a country characterized by urban sprawl and winters with temperatures below -30C/-22F. (Grade: F. “7% of adults living in Canada use active travel, walking/bicycling to travel to work.)

I’ll brush aside millions in wasted government spending and offer a concise, concrete plan that will actually work:

Go here and get our “Affinity Marketing Guide.”Follow the clear steps in the guide to connect with the friends, family and coworkers of your current clients.

That’s exactly how gym owners will be able to get more people moving and make real change.

Yes, you can run ads and target the huge population of people on the couch. But you’re going to war with the World Junior Hockey Championships, “Halo: Infinite” and Season 2 of “The Witcher.” That’s going to be a long fight.

I’m not a scientist or statistician, but I’m pretty sure the people most likely to get moving are those who know people who already move regularly.

A Two-Brain Tactic for 2022

Here’s what I’d do:

Our Affinity Marketing guide suggests you should “go for the group” once every quarter. That means a large event like a Wine and WOD, a nutrition talk and so on.

So host an event early in January in which you present key aspects of the ParticipACTION report and explain exactly how your coaching will help people take action and improve their health. Most of the work is already done for you: State the grade from the report, list a stat or two, tell people about the benefits of improving their score and talk about your coaching.

Promote this event widely to the public, but spend more time asking your members to bring in their family members and acquaintances. Your members already see the benefits of fitness, and they no doubt want the people they love to live longer, healthier lives.

If you follow this plan, you’re almost certain to get some new clients. At the very least, you’ll get contact info from attendees, and you can continue to warm them over the next months.

Financial rewards aside, you’ll get to feel good about yourself for “helping first.” You’ll be offering assistance to people who badly need it and succeeding where governments around the world are failing miserably.

Don’t wait. Start planning your event now. Get Two-Brain’s “Affinity Marketing Guide” here for free.

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How to Buy a Gym (or Sell One)

Mike (00:02):

Looking to buy a gym? Chris Cooper will tell you exactly how to do it. And if you want to sell your gym, Coop’s got you covered, too. This is Two-Brain Radio. Hit subscribe and enjoy the show.

Chris (00:12):

Hey guys, it’s Chris Cooper. Your members are buying supplements somewhere, so they should buy them from the person who cares about them the most: You. And you should work with my friends at Driven Nutrition. Jason Rule and the Driven team put customers first, every time they’ve got a ton of products with high margins and they’ll even train you so your retail program adds revenue to your business. Kirk Hendrickson from Iron Jungle CrossFit says Driven Nutrition has some of the best support I have seen from any company we’ve partnered with. To make more money with supplements and retail sales, visit drivennutrition.net. Now back to the show.

Chris (00:45):

Hey everybody, it’s Chris Cooper. And today I’m going to tell you how to buy a gym. Over the last 18 months or so, government lockdowns have created a greater separation between the gyms who are doing really, really well and the gyms who really weren’t. Up until now,

Chris (01:01):

you could go along for three, even five years, just kind of breaking even, hanging on, you know, just kind of paying the rent, paying the government, not really paying yourself, but staying open. But when lockdowns happened, it kind of decimated that middle group of people who were just barely hanging in there, and the gyms who pivoted quickly and recovered quickly, they’re way ahead right now, they’re killing it. And a lot of those people are looking to buy gyms. On the other end of the spectrum are the gyms who were just barely hanging on. They didn’t pivot quickly, or they didn’t rebound fast enough. And now they’re looking to sell. At the surface level, this seems like a really sad state of affairs, but honestly it can work out for the best. The clients of the gym that’s failing. They can go to a more successful gym and that gym is probably successful for a reason.

Chris (01:50):

You know, they’re providing a better experience. They’re more professional. They have systems in place. They provide better value for the client’s money. The coaches at the failing gym also have an opportunity to make a better career if they can get a job at the new gym, and the owner of the failing gym doesn’t have to work for nothing anymore. They have a new opportunity. They can go get a job somewhere else, or they can maybe get a job for the new gym. You know, in many cases, it turns out that they just wanted to be a coach. They didn’t really want to or appreciate what they would have to do to be an owner. They didn’t understand it was a different job. So today I’m talking to the people who want to buy a gym, but I’m also talking to you if you are thinking about selling your gym or even if you’re just kind of sell curious, you’re wondering what your gym is worth if you were to sell it.

Chris (02:43):

So as you’re listening to this, if you’re buying, take notes and also go download our how to buy a gym guide from Two-Brain business.com, I’ll post the link below. It’ll walk you through this stuff step-by-step and it’ll also give you the tools that I mentioned, like a gym valuator, like our valuation calculator. If you’re thinking about selling, or you’re just kind of sell curious, you want to know what your gym is worth. Listening to these things will help you make your gym more profitable, because ultimately what determines the value of your gym is how profitable it really is. So we’re going to start with what’s the gym worth. And then we’re going to talk about things like what are you really buying, understanding that you’re buying the previous owner’s mistakes and liabilities, and also why that still might be worth it to buy the audience.

Chris (03:26):

So how to buy a gym? A gym is an amazing business opportunity, right? Everybody knows that. First, your service will directly change the lives of hundreds of people. Second, you have more flexibility in operations than almost any other business, right? Like nobody gets to tell their clients how to stir paint differently or carry the couch inside their house differently. Third, the barrier to entry for gym ownership is tiny. For 20,000 bucks in equipment and $5,000 in mentorship, you can have a brand new business that’s on par operationally with a franchise without paying $2 million to get a franchise. And this is true even if you’ve never owned a business before. And if you’re a CrossFit affiliate, you can leverage the most popular fitness brand in the world for three grand a year, which is peanuts. And you can use it any way that you want. You’ll have your brand on TV, around the world and in shoe stores around the corner.

Chris (04:21):

And there are more and more brands coming up like this. You don’t have to be a CrossFit affiliate for this to work. You can build your own brand, or you can leverage other brands through licensing. Now buying an existing gym can give you a great headstart into entrepreneurship. And I’ve actually got a new book about this called “Start a Gym.” But you have to be careful. Most gyms aren’t money machines. Most gyms require a lot of time to operate. Most gyms aren’t currently very profitable. And the former CEO of CrossFit himself, Jeff Cain, told me that a CrossFit gym, isn’t an investment grade asset. So if you’re buying an existing gym, you are also buying the previous owner’s mistakes. But entrepreneurs don’t own gyms for logical reasons. Usually. They own gyms for emotional reasons. And I’m one of these. We start gyms out of passion, but we sell gyms out of frustration.

Chris (05:09):

There are some great opportunities out there, but it’s also pretty cheap to start a gym from scratch. And many gym owners share a fantasy of starting over from a blank slate because our early mistakes are causing long-term profitability problems down the line. So maybe an outsider can overcome those mistakes, but change will still be painful for any new owner, especially if they’re buying quote unquote, the community that was built on cheap prices or the owner’s personality. So let’s start with what the gym is actually worth. If you’re thinking about buying, ask the current owner to provide some numbers and plug them into our valuation tool, and you can link to these, of course, if you go to the Two-Brain Business dropdown free tools on our website and download how to buy a gym or click on the direct link in the show notes here. What you’re really trying to determine from these is year over year profit and the likeliness that that profit will continue without the current owner.

Chris (06:03):

So to be clear, in this valuation, when you’re assessing what a gym is worth, the head count doesn’t really matter. It doesn’t matter how many clients a gym has really. Gross revenue doesn’t really matter as much as you would think. Location doesn’t really matter unless you’re also buying the building. The gym’s potential definitely doesn’t matter. And your friendships with other members that doesn’t matter if you buy it because you won’t be their friend anymore, your relationship will become transactional and friendly, but you’re not buying friends. So what does matter? Predictable revenues into the future. How well can you forecast what this gym is going to be worth? So retention rates really matter because if a gym has amazing revenue, but really poor retention, then you can’t bank on that revenue in the future. Qhat else matters is the client’s willingness to stay on without the current ownership, you know, do they have contracts?

Chris (06:55):

Are you buying guaranteed revenue in the future? What also matters is outstanding liabilities like loans and commitments like leases and a lot of new gym buyers don’t look at this. So when you’re buying a gym and I’ll get into this more in a minute, if you’re taking over the lease with that gym, and there’s still $80,000 left on that lease, like, you know, four years at 20,000 a year or whatever that is, you are buying that liability. And you have to take that into account. In many cases, actually these liabilities make the gym worth nothing or less than nothing. And so if you’re taking on a debt or even if you’re buying out your partner, you have to weigh these liabilities into the overall valuation of the gym. Don’t just look at the revenue. And then you also have to look at equipment and assets, you know, a year ago we would say calculate the value of their equipment at about 30 cents on the dollar.

Chris (07:47):

But honestly now it’s really tough to buy fitness equipment. And so the value of the equipment that you’re buying is quite a bit higher. All right. So if you want to get a rough estimation really fast, and somebody calls me up and they’re like, I want to buy a gym. How do I assign like a value to it? And we’re just talking over the phone. Here’s what I tell them. Take your total profit for last year. OK. The profit, not the revenue. So this is the wages paid to the owner and the dividends, period. How much money did the owner take from the gym last year? OK. Now, if the gym isn’t profitable, you’re starting from zero. It’s really not worth anything in a way that you can measure, right? So I don’t know if you really even want to think about buying this gym, but there are still some reasons why you might acquire it.

Chris (08:36):

Now take that profit and multiply it by three years. Assuming that last year was fairly typical or to be conservative, it was not as good as a typical year. You can multiply last year’s profit by three years. In most cases, though, what you would want to do to kind of get a handle on what a typical year looks like for the gym is take the profit from the last three years and add that up. And that’s basically like what the gym is worth. So if the gym is doing $400,000 a year and it’s profitable by a hundred grand a year, you would take the last three years kind of average them out and say, OK, this gym is worth $300,000. OK. And then you would multiply that again by your retention rate. So if the gym has 80% year over year retention, which is great, then you would multiply that three year profit projection by 0.8.

Chris (09:25):

So if you said, all right, the gym has profited $300,000 over the last three years. Then the actual valuation price is about 240,000 because without acquiring any new members, that’s about what you could expect maybe in total profit. Now, of course you’re gonna bring in new members. And of course, as total membership drops, the profitability decreases. But those two things at minimum should balance each other out. And so the gym valuation in my estimation would be about 240,000 plus the equipment. So next, you’ve got that 240. You add the value of the equipment. So if the equipment is more than three years old, it’s probably worth $0 in normal times. If it’s less than three years old, you would add up the purchase price and take about 30% of that. And that’s what it’s worth. That valuation comes from talking to equipment resellers who will buy equipment from gyms for about 10% of what it cost and then sell it for about 30%.

Chris (10:23):

OK? So that’s the value of your business. It’s your profit over three years multiplied by your retention rate and plus the value of your equipment. Then what you’ve got to do is you’ve got to subtract out the cost of your liabilities. So maybe you’ve got $20,000 left on an equipment loan. You got to subtract that. Maybe you’ve got 50 years left, five years left on your lease. I hope you haven’t signed a 50 year lease. You might want to subtract that out of the valuation too, because you’re buying that debt. OK. So here’s an example. Bill’s gym pays him 60,000 a year, and his P and L shows a profit of 5,000 last year, right? So the total that Bill received from his gym last year was 65,000 bucks. Now you could just multiply that by three years, if you think that’s going to continue.

Chris (11:08):

So you start with a value of $195,000 for the gym.

Chris (11:11):

We know that getting clients results isn’t enough to make a great business or a great career, but it is the foundation. If you’re not getting your clients results, none of the other stuff matters. Your marketing plan, your operations plan, your retention plan, your systems, how much you care about the clients. You need to get them results. What does it take to get a client results? Long-term behavior change, short-term habit change. It means learning skills like motivational interviewing, peer-to-peer programming. It means focusing on things like adherence and retention instead of novelty. And I built twobraincoaching.com with my partner, Josh Martin, to teach coaches how to do this. More than ever before it is critical to get results for your clients. You need to charge a premium fee. You need to provide high value to warrant that fee. And what is most valuable to the client? What do they care about the most? The results on the goal that they choose. Twobraincoaching.com has programs set up to help your clients achieve those goals. We will train you and your coaches to deliver personal training, group training, online training, nutrition coaching, and coming soon, mindset coaching, in a way that’s simple for you to adopt, it’s legal everywhere. And it’s super effective. These courses were built by experts with years of experience getting clients results. Twobraincoaching.com is a labor of love for me, and I know you’re going to love it too.

Chris (12:40):

Unfortunately, Bill’s retention rate is poor. So most of his clients are on these eight week challenges. And so he calculates that he only has 50% year over year retention rate. This brings the value down to 97,500, right? Half of 195.

Chris (12:58):

Now this is super important because if most of his revenue is coming from these eight week challenges, and he’s got a high churn rate, you can’t just keep doing that forever. So the value of the gym is actually decreasing over time as he just burns through his target audience in his town. So yeah, the value is down to 97 5. Now, if you’re Bill, I would hold off on selling my business, bring your retention rate up and increase the value of the company before you sell it. But that’s all right. So then he adds the value of his equipment, right? So we’re starting from 97, 5 based on the value of his revenues. And then the value of his equipment is maybe about seven grand. So if he spent, you know, 21,000 on his equipment three years ago, it’s worth about 30% of that.

Chris (13:42):

OK? So the total is, about 97, 5 plus 7,000 for equipment, 104,500, right? That’s not bad. And as a buyer, you can be reasonably sure that the business will operate at this while under your guidance. And you should be able to make at least 65,000 per year from the gym. So great. You budget for mentorship in the first year, you increase profit and you pay yourself back a lot further, right? But remember, it’s your responsibility to know these numbers. And if you buy the gym and you find out problems later, you will own those problems. You can assume that you don’t know everything about this gym, even if you’re a client there. All right. So here’s how it can go wrong. One of my favorite gyms in the Two-Brain family is owned by this young married couple. And they fell in love with CrossFit and a local gym asked them to buy, you know, they had over a hundred members, so they did some quick math.

Chris (14:35):

And they said, OK, a hundred members paying 150 bucks a month is $15,000, right? And that’s like way more money than we’ve ever made before in our lives. And the owner only wants 150,000 for it, man, in 10 months, we’re going to be paid off and just making this money. But what they didn’t actually calculate was that the business was actually losing money every month. And $150,000 loan would add even more stress to their bottom line. The only money that previous owner ever made was in the sale of the business. And without a profit margin, the young couple was dipping into their savings to run the business. So they got caught and of course that affected their marriage, right? So here’s another example that out of dozens. A business owner purchased a gym as a retirement project. He’d been an entrepreneur for decades. So he knew how to read a P and L statement.

Chris (15:24):

The gym he was purchasing was profitable on paper, but he didn’t realize that over 50% of the membership was on these recurring eight week challenges. And all the group revenue had been collected upfront. People had paid for like a year. So when that challenge ended, he lost half his membership and he was suddenly losing money. So, you know, he managed to right the ship, he was an experienced entrepreneur. He got a mentor, but a first time entrepreneur without cash reserves probably would have been bankrupted by that. Right? So you really have to be careful. The next step when you’re buying a gym is to interview the coaches. So you go through the process of buying the gym, you sign a non-disclosure with the owner, you’re in quiet talks. You don’t tell anybody about it, but as you get close to the sale, you should start taking the coaches out for coffee and say, Hey, what’s your perfect day.

Chris (16:13):

You need to get a sense of what they want and where they’re headed. Now you can do the career roadmap exercise that we teach and Two-Brain with them, if you want to, because that will motivate them and show them that you have a plan to get them there. But what you’re really trying to do is avoid the possibility of the coaches scuttling the deal. So they can do this one of two ways. First, when they see the changes coming, they leave, they go, oh, I don’t like this. You’re going to have to raise rates on everybody? Nope. Can’t support that. So this leaves the owner shorthanded and forces them to deliver the classes instead of actually making the changes that will make the gym profitable. The other thing that can happen is that the coaches leave and they take clients with them, right?

Chris (16:53):

So the true value, the thing that you’re buying, just walked straight out the door. Now both problems can be avoided by talking to the coaches upfront. If you get the sense that this might happen, then you can either curtail that by showing the coaches here’s how you make a career with me, or by saying, you know what? I’m really buying a high risk here. The next thing that you can do is to interview the best clients in the gym. OK? So when the sale looks imminent, but before you sign the final transfer of shares, ask for a client list, identify the best clients of the business using the seed exercise that we teach at Two-Brain, take those people for coffee, ask them what brought you to this gym in the first place. And then say like, what’s the one thing that the current owner does that drive you nuts.

Chris (17:38):

Now you’re not sending out a survey because you don’t want everybody piling their dream list on you, which you can never deliver. And you’ll just wind up pissing people off. But if you do this with three to five of the best clients and say, what is the worst thing this gym owner is currently doing, then you can address those concerns first. And these seed clients will usually lead the rest. So if the seed clients say, oh, the bathroom never has toilet paper in it, that is a very easy win. They can see a great leadership from you by taking action on that. And it sets you up by framing future conversations, which might be a little bit harder. OK? You can also foreshadow the changes that you plan to make and highlight that your primary objective is to form a more stable gym where they can continue to improve their health.

Chris (18:25):

OK? If these people say, I’m not sure about staying, or if they, the first thing they say is, are you going to raise your rates? Like they’re price sensitive. Then you might want to think about just going somewhere else and starting a new gym from scratch. OK. Now let’s say that you’re buying out a partner and this is just like buying a gym. So you’re going into a gym and one partner wants out, OK. Or maybe you own a gym right now and you’re trying to buy your partner out. So I’ve been through this. You have to understand like, what you’re buying here is like, you’re replacing a spouse in marriage almost. OK. They’re leaving today. Their bags are packed. You’re coming in tomorrow. There’s going to be some headaches here, especially if you don’t own the majority of shares, what can happen here is you become basically just an investor in the gym.

Chris (19:14):

You put your money in and you spin the roulette wheel. And you’re basically counting on the gy, continuing the way it’s always been. Maybe the partner that’s remaining is the better business person. And maybe the partner that’s leaving was stopping them. But were they really? You know, if you’re buying a 30% share of the gym and the gym is not really doing well, will the other partner, who still owns 70%, suddenly miraculously change what they’re doing and make the gym profitable. You know, in these cases, what you might want to do is just offer to make a loan to the existing partner, to buy out the minority shareholder, you know, ask for 5% return on your loan and make your money back that way, support the owner of the gym, but don’t tie yourself into the ride for the long term. OK. So that’s another one.

Chris (20:01):

Another one is, let’s say that you do go ahead with the purchase and you say, OK, well, the value of this is so great. You want to have a non-competition, so I’ve seen this go wrong. One person buys out a gym from another person, right? And let’s say that Billy owns the gym. You buy the gym from Billy. Billy immediately rents a space down the block and opens up his new gym. What happens? You lose the thing that you’re buying, which is your audience. All the clients go down to Billy’s gym. Gym starts over from a blank slate down the street under Billy’s new, you know, rule. He doesn’t make the same mistakes. The clients have no ties to you. And suddenly you just created a mountain of debt and a massive competitor for yourself in one day.

Chris (20:47):

All right. So it might sound like I’m down on buying a gym. And this is kind of a unique situation because in other industries, it usually pays to buy out an existing business. I just bought out a storage facility and the storage facility was full. The owner was making money. It was profitable, but he was fed up with chasing people for payments. And I said, you know, I can come in. I can automate this whole thing. I know how to auto bill people. I know how to have conversations about raising rates. I know how to kick bad tenants out. I’m comfortable doing all of those things. This business makes sense for me and what I’m really buying there is the audience. If I wanted to start from scratch, I could probably put up a storage facility like this for about 500,000, which is less than I’m paying, but it would take me two to three years to figure out how to fill it up.

Chris (21:38):

And I’d make lots of mistakes. I’m paying more because I want to buy a full facility and make a few minor improvements, not start from scratch and learn how to run this. Now, the question that you need to ask yourself when you’re buying a gym, is, would it be easier to start from scratch the cost to start from scratch in a self storage facility is half a million to 3 million. The cost to start from scratch in a gym is like $20,000. So in many cases it is easier to start from scratch. The other reason is the other question you need to ask yourself is if I just started from scratch and I opened, would I get most of this gym’s clients anyway, like, do I have to buy anything? Can I provide a better service or better value to the same people? Now, fitness is not a zero sum game.

Chris (22:26):

You shouldn’t open a gym with the intent to just steal clients from the other gym, because that’s probably not going to happen. But if you’re providing a better service and better value, you will naturally attract people from other gyms. OK? Think of that as like 10% of your startup audience. And if you’re providing the best value and the best service, you’re going to get the best 10% from those other gyms. So you need to ask yourself, Hey, do I need to buy this gym out? Or am I likely to get some other clients anyway? And this is true, especially when gyms are absolutely failing. So, you know, you open a gym, it’s going well, three years in the guy down the road says, I’m going out of business. What will you pay me for my clientele? The first question I’d ask myself is, do I need to pay this person anything?

Chris (23:13):

Or am I still in business because I’m offering better value and they’re failing because they’re not. And those clients are mostly gonna just come to me anyway. OK. Buying a gym could give you a multi year headstart into business. I don’t want to sound pessimistic. I’m one of the largest promoters of entrepreneurship that I know. My mission is to help a million entrepreneurs become wealthy, but sometimes starting over from a blanks late is the best move. And sometimes it’s not. You could be buying a headstart, but you could also be buying somebody mistakes. So you can get lots of help on our website. You can download our free, how to buy a gym ebook. You can also download our how to sell a gym ebook. You should do evaluation. You should know what you’re actually buying before you get into it. And you should always ask:

Chris (23:59):

Would I be further ahead if I started from scratch?

Mike (24:02):

Two-Brain Radio comes out twice a week and features all the info you need to run a successful fitness business. Subscribe ao you don’t miss a show. Now here’s Coop one more time.

Chris (24:13):

Thanks for listening to Two-Brain Radio. If you aren’t in the Gym Owners United group on Facebook, this is my personal invitation to join. It’s the only public Facebook group that I participate in. And I’m there all the time with tips, tactics, and free resources. I’d love to network with you and help you grow your business. Join Gym Owners United on Facebook.

 

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Building a Referral Web (That Might Be all the Marketing You Ever Need)

In the Tinker Phase, your job as entrepreneur is to be the CEO of your business.

That means your job is to match new services to your audience and to forge new partnerships. In short, your job is connector.

In this week’s blog series, I wrote about several ways to set up a referral culture in and around your business. Today, I’m going to tell you how to set up a referral web for your whole town.

This strategy works best when your business has been around for a while, has a good reputation and shows obvious signs of success. Because I’ve been around awhile, I’m often the first fitness pro contacted by media when they need a quote. I’m often in the news because we’ve made a donation through the gym. And I’ve met dozens of other business owners through my gym.

So when my gym needs five new clients, I don’t turn to Instagram: I turn to my mental contact list. I think about other entrepreneurs in town, and I send them a text or invite them for coffee. Slowly, I turn the conversation to exercise. Then I invite them to join me at the gym or offer to introduce them to a trainer.

My niche is entrepreneurs. Yours might be the same: You probably have entrepreneurs in your gym. But you can use a “Help First” strategy with nurses, teachers or any other profession with a tight bond.

Here are several ways to do that:

1. Set up a referral board at your gym. Pin up the business cards of any professional who works out with you.

Example: I have a referral board at Catalyst. It’s just a cork board with client business cards pinned to it.

2. Invite entrepreneurs and CEOs from your gym to a local roundtable or coffee chat. You can propose a topic if you want, but this isn’t a lecture. Your job is connector.

Example: Last time we did this, I actually chose a topic. I said, “We’re having great luck with Facebook advertising right now. I’m happy to show you exactly how to do it. Want to get together next Friday and I’ll walk you through it? You can bring another business owner if you want.” We had 13 people show up. Unfortunately, some were absolute beginners (“How do I get a website?”) and some were really advanced (“What should our CPL be for lead ads with a video?”). But it was a really fun hour with some of my favorite clients.

3. If you have several entrepreneurs, you can make the meetup a regular occurrence and introduce topics if you want. (Two-Brain clients: I’m happy to send you copies of “Founder, Farmer, Tinker, Thief” if that will help you.)

Example: Recurring “lunch and learn” meetups are working in several mentors’ gyms now.

4. Invite trusted connections into your gym to speak with your clients. Have them email to invite their clients, too, or offer to speak to their clients at their businesses.

Example: Among others, we had a physio come in to talk with our clients about aging and fitness, and a financial planner came in to talk about saving money on taxes. Both were great.

The Long—and Rewarding—Game

While it takes time to set up and bear fruit, this strategy offers returns that compound over time—like any good long-term investment. I recommend it for those in Tinker Phase because you need time to nurture this strategy. (You can find instructions in our Tinker Toolkit if you’re a Two-Brain client.)

But when you use this strategy consistently, the rewards are big enough that it can replace almost all of the rest of your marketing.

Other Media in This Series

“Building a Referral Culture”
“Building a Referral Culture: The First Year”
“Building a Referral Network in Your Town”

The post Building a Referral Web (That Might Be all the Marketing You Ever Need) appeared first on Two-Brain Business.

Building a Referral Network in Your Town

Nobody refers to competitors.

Everybody refers to friends.

If people in your town know you, like you and trust you, they’ll refer to you even if they don’t use your service themselves.

Catalyst is a very successful gym in its 17th year. While we run Facebook ads once a quarter (max), we always have a constant stream of new clients from referrals. This is because we actively ask for referrals: We practice “help first” and tactfully ask clients how we can help their friends.

We don’t:

Offer discounts for referring friends.Offer bribes for referring friends.Run contests to see who can refer the most people.Trade free membership for new contracts.

I just don’t feel good about any of those tactics. I don’t need them, and neither do you.

Here’s how we do it:

1. Earn the trust of health-care professionals.

When new clients sign up, ask them, “Are you seeing a physiotherapist or chiropractor outside the gym?”

If they say yes, ask for permission to send their workouts to the health-care provider “just to be safe.” Most health-care providers know less about fitness than you do; you don’t need their permission—yada-yada-yada. Yeah, I know. But set your ego aside for five minutes: that’s all it takes to build an amazing bridge.

Email the health-care professional and say:

“Hey, Dr. Roberts! It’s Chris here from Catalyst Fitness. Your patient, Mary Green, has just started at my gym. I’m really excited to help her improve her fitness. My plan for the first 90 days looks like this: [give a brief overview]. I’m happy to send you the specifics if you’d like. As always, if you have any fears or known contraindications, please just reply to this email. Have a great day!”

I’ve been sending those emails for 16 years. The referrals they’ve earned me have been worth hundreds of thousands of dollars. I’ve had doctors and therapists sign up for my gym (and some have stayed for over 10 years). But not once has a single pro responded with “that’s a bad plan” or even “I’d do something different.”

Most are absolutely thrilled that you included them in the conversation.

Note 1: If physical therapists see you doing “therapy” at your gym—or any health-care pros see you trying to act outside your domain of expertise—they will never, ever refer to you. As I wrote a few weeks ago, get therapy out of your gym.

Note 2 : Avoid forming a formal referral agreement with any one provider. I’ve been tempted to do this many times, but you’re better to keep lines open with everyone. You’ll probably be the only coach in town following this strategy. You’ll earn the trust of nearly everyone. It’s better to keep that trust than to try and “go deep” with one chiropractor or doctor.

2. Publish a lot.

Nothing builds trust like media. Use that superpower for good by sharing free information with your community. (You don’t sell information—you sell coaching.)

This isn’t just a marketing strategy. It’s a nurture strategy, it’s a retention strategy, and it’s a recapture strategy. Overall, it’s a trust-building strategy. I often tell my coaches, “Teach our clients to know more about fitness than any other coach in town.”

For clients, we have a huge bank of blog content on the Two-Brain Roadmap. Two-Brain gyms use it to build trust.

3. Show up everywhere.

Bring a banner or a tent. Be bright (the Catalyst colors are black, silver and chartreuse because that shade of green is visible from a greater distance than any other color). Forget the artistic ads and T-shirts: Get your plain logo out to the public. A catchy phrase—even your logo—won’t attract any new clients. But we all have “recency bias”: We think that the thing we see most must be the best.

In the previous post in this series, I said that my first three clients were teen athletes and my next 30 clients were their teammates or parents. That’s because I used to show up at track meets carrying a tent and a banner. My clients would show up at the tent to stretch with me before their races or games. Their friends would see them, and I’d often say, “It’s OK to bring your friends with you!”

Did I ask permission? Never. But I was never told to go away, either. Parents would point me out to other parents. I used to come home from these events with two or three new clients to call the following day.

4. Wake the neighbors.

You want your gym to be at the center of a sticky web of referrals. Walk around to all of your neighboring businesses with coffee. Make friends. When their clients ask about you (they will), your neighbor will say, “I know she’s great!” You’d be surprised how important that is in fitness.

5. Be a pro.

While it’s super important to maintain a positive reputation in your town, it’s more important to maintain a professional one. I’ve had bad local reviews, and I’ve had a parent write a letter to the editor because I wouldn’t refund her kid’s fees. It’s more important to be consistent than to please everyone: People want to know they’ll be treated with warmth and professionalism.

That means you have to be kind. You have to be tactful. You have to publish your rules and your agreements, and you have to stick with them 100 percent of the time. Potential clients are watching even when you think they’re not. Reputation is a pillar of longevity in any service business.

This Above All

The key to getting referrals? Don’t wait for them.

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The Number 1 Thing Yoga Studios Should Sell

Shannon Brasovan, Two-Brain Yoga Business Mentor

Yoga studio owners, you should be selling consistency.

Not stretchy pants.

Not yoga mats.

Not teacher trainings.

Consistency. 

In Yoga Sutra 1.14, Patanjali basically lays this out for us:

“Perfection in practice comes when one continues to practice with sincerity and respect for a long period of time without any interruption.”

For more on this sutra, check out this great article.

No yoga texts—from the “Hatha Yoga Pradipika” to the “Shiva Sutras”—tell you that the way to equanimity is through teacher trainings. Nowhere does any great teacher say the path to enlightenment involves dropping into practices or only practicing when goats are involved. And while new yoga pants can feel oh so good, they are not the gateway to your inner peace.

The way to the practice and path of yoga is consistency. 

As yoga studio owners, our goal should be to hold people accountable to a consistent practice. By building a business that upholds this value, we are helping our students reach their goals in their practice.

Drop-ins, teacher trainings, goat yoga and stretchy pants became the primary focus of yoga studios because they weren’t making ends meet. This has led to confused students who wonder why they should practice, and it hasn’t helped owners end the struggle to get students into their spaces. 

Solutions for Consistency

So how do we fix this?

First, move to a membership model. If you currently operate on a drop-in or punch-card system, shift to a membership model ASAP. This encourages consistency and eliminates confusion about when and why people should show up. 

Second, audit your space, website and social-media platforms. Ask yourself what it looks like you are selling.

Are you selling stretchy pants, handstands and teacher trainings? Or are you selling the life-changing benefits of a consistent yoga practice? If your answer is the former, start shifting your content to share the benefits of yoga practice and show what consistency looks like. 

Finally, incentivize your students to practice consistently. When a student hits 108 practices in a year, elevate them on your social media! Snap a picture and tell their story. Find ways to make your clients famous.

Bonus: Have your teachers share why they practice consistently and the benefits they get from it on your members-only Facebook page. Monkey see, monkey do!

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Building a Referral Culture: The First Year

Your newest clients are the most excited about your service. In his book, “Never Lose a Customer Again,” author Joey Coleman says evangelism is most likely to happen around the 90-day mark.

In the previous post in this series, I told you exactly what to say on Day 0 and what to say on Day 90. Two-Brain clients can pull out their client journey maps again because I’m going to share a referral strategy for the rest of the client’s first year.

To recap:

Day 0: Set the expectation of referrals.Day 90: Get the client’s most likely referral.

Now, the rest of the year.

After Day 90

Book Goal Review Sessions every 90 days.

Day 180: Begin Affinity Marketing.

Grab our Cheat Sheet on Page 7 in our Affinity Marketing Guide, available here.

A few minutes before you meet with the client for a Goal Review Session, walk through the Affinity Marketing Cheat Sheet. Who does this client live with? Work with? Hang around with? You should have three opportunities for referrals right away.

Fill in actual names on the sheet. If you don’t know any names, you should use the Goal Review Session to learn about your client instead of asking for a referral. Solidify your relationship first before trying to expand it.

Looking at the client’s relationships, decide which person would be the most likely to need your service. Then practice “help first”: How can your service help this new lead get to their goals?

When you meet with the client, make an offer to help the connection. I wrote an entire book about this, with dozens of specific examples for gym owners. Here’s one:

“Mary, I know your husband Bill likes to golf. What does he do to stay in shape in the offseason?”

Then invite Bill in for a session with Mary. It’s not a free PT session; it’s just an explicit invitation to join Mary for her workout.

Day 270: Meet with the client for another Goal Review Session.

Even if your last meeting didn’t result in a referral, you should ask again—but try someone else in the client’s life. Remember: Even if only 30 percent of your referral requests result in a new client, that’s a 30 percent return on every client you have—exponential growth!

If you invested $100 in the market and earned a 5 percent return for 30 years, you’d have $433. Imagine if you had a 30 percent return on your current client headcount!

Day 360: Invite the client’s friends, family or coworkers in for an event.

Bring a Friend Friday, Wine + WOD, a corporate challenge, a ninja warrior challenge for kids, a birthday party or even an invitation to watch the client perform a workout—all of these can result in amazing referrals.

Try these approaches:

“Mary, we’re doing our quarterly Bring a Friend Friday next week. Who would you like to invite to do a partner workout with you?”

“Mary, we’re hosting a women-only workout on Friday. I’m going to bring some wine. Who would you like to invite from your friends list?”

“Mary, I know this time of year is stressful at work. What if we invited your team in on Friday night for a fun workout challenge to blow off steam? I’ll bring snacks!”

“Mary, I know your daughter’s baseball team is nearing the end of the season. What if we brought them in for a team party on Saturday? I’ll set up a little ninja warrior challenge, you can bring a snack, and we’ll just let them have fun for an hour. How about it?”

“Hey, Bill, I’m sure Mary’s been talking about the CrossFit Open at home. She’s nervous, but she’s going to do amazing. I’d love to have you join us—lots of spouses and families come in to watch. Make it a surprise if you want to. The event is Thursday at 6 p.m. and I’ll save you a seat. Can you make it?”

Of course, getting a body in the gym isn’t the same as signing the person up. But it’s a great way to start the conversation. While you’re chatting to the new lead, your goal is to get the person to book an intro appointment.

The key? Look for ways to meet the people who surround your clients.

Spin Your Web!

My first three clients were teen athletes. My next 30 clients were their friends and parents because I showed up at their events (sometimes I even set up a big banner and a tent!).

In the next post in this series, I’ll tell you how to set up a referral network in your town.

The post Building a Referral Culture: The First Year appeared first on Two-Brain Business.