What I Would Do If I Had My Gyms (Do This in 2020) [ALEX HORMOZI]

Summary

• I believe in providing solutions that cater to the majority, aiming for an 80% win for 90% of the marketplace over a 100% win for a smaller 5%.
• Being adaptable and tailoring advice to the audience is crucial, as I would run a gym somewhat differently than what I generally recommend, due to personal differences.
• In a situation like the COVID-19 crisis, I'd take the opportunity to flip my gym business model to remote, capitalizing on the government's support and the society's encouragement for remote services.
• My strategy would involve exiting gym leases and negotiating rent reductions, transitioning members to remote services, and reducing overhead by focusing on core, profitable activities.
• I'd estimate a 25% drop in membership due to the shift and potential issues with staff engagement but maintain a significant recurring revenue by focusing on nutrition, accountability, and virtual workouts.
• I would retain the best and most engaged trainers to handle member relationships and workouts, aiming to increase the value provided to my clients.
• To keep costs in check, I'd pay a stipend to trainers who would now work remotely, provide accountability to members, and be responsible for running one live workout per day.
• I'd leverage Gym Launch resources like 16 daily remote workouts to reduce gyms' overhead and continue member engagement.
• My trainers' daily responsibilities would be divided between reaching out for new clients, maintaining relationships with existing clients, and providing one workout session.
• I'd focus on marketing and sales, taking on the responsibility of making it rain by capitalizing on lower ad costs and filling up the sales pipeline with appointments set up by my trainers.
• I'd paint a vision for my team and clients of a more sustainable, remote-based future that could potentially be more profitable and enjoyable.
• It's vital to remember that workouts aren't the main sell; it's the accountability and personal attention that matter most.
• In times of crisis, it is my job to provide hope and optimism, both to my team and my customers, and to approach every interaction with the aim of making them feel good.
• Remember that while selling a service like weight loss, what truly attracts clients is the hope and positive feelings they experience during interactions.
• My outlined approach isn't a recommendation for others but a direct insight into how I would handle the situation, focusing on transforming my business into a high-margin, remote service model.

Video

How To Take Action

I would suggest flipping a gym business model to remote services during a crisis like COVID-19. Here's how to capitalize on remote work while maintaining significant revenue:

1. Negotiate out of current gym leases or aim for rent reductions to cut costs.
2. Transition existing gym members to remote services, offering nutrition guidance, accountability, and virtual workouts.
3. Be prepared for a possible 25% drop in membership but focus on providing value through different services.
4. Keep only the engaged trainers who can manage online relationships and workouts effectively.
5. Pay trainers a stipend for working remotely and have them run one live workout per day.
6. Use resources like ready-made remote workouts to keep members engaged without incurring extra costs.
7. Trainers should divide their time between seeking new clients, maintaining current relationships, and leading workouts.
8. Handle marketing and sales personally, utilizing lower ad costs to attract customers.
9. Paint a vision of a sustainable and profitable remote future for your team and clients.

Remember, it's not just about exercise; accountability and personal attention are key. In times of crisis, it's essential to provide hope and optimism. Make every interaction about making clients feel good because ultimately, they're buying into the positive feelings they get from your service. Implement these steps to transform your gym into a high-margin, remote service model.

Quotes by Alex Hormozi

"I would rather have a solution that I can get ninety percent of the marketplace to get an 80 win rather than have five percent of the marketplace get a hundred percent win"

– Alex Hormozi

"They pay for you to pay attention"

– Alex Hormozi

"If you're the best salesman at your gym, then you should sell"

– Alex Hormozi

"Just because this has changed does not mean it's bad"

– Alex Hormozi

"What they want from you… is one word: hope"

– Alex Hormozi

Full Transcript

i would rather have a solution that i can get uh ninety percent of the marketplace to get an 80 win rather than have five percent of the marketplace get a hundred percent win i uh slept like uh a cherub which is a small angel baby uh last night my gosh i feel like a human being um and so i wanted to bring you a question that layla asked me yesterday and i thought that would be a good podcast topic she was like what would you actually do like right now you're like well like if you had if you were you know roll back the time clock and this had happened when we had our six uh gems like what what would your actual what would you do to uh approach this and what would your play be and so i wanna i wanna first uh just at least say with my big disclaimer here is that uh something that i don't discuss a lot but i think is worth mentioning is that the advice that i give in general um i try to cater to the audience that i'm speaking to um if i ran a gym i would probably run it somewhat differently than what we espouse and that is because i am not you and you are not me and so i would rather have a solution that i can get uh ninety percent of the marketplace to get an 80 win rather than have five percent of the marketplace get 100 win um and i've run my business that way and i think that is why we've been uh really successful is because it's the same thing with like a weight loss program like if i can get if i could get you know 90 of people to have a great result uh rather than you know 10 of people to have a crazy crazy result then i would rather serve the 90. um elon musk even talks about this he's like i'd rather do a good amount for a ton of people rather than a lot for a very small amount um and so we've taken the same approach in terms of how we uh you know like when we make offers all my focus is like how can i make the best offer that anyone can sell right um how can i make a sales process it's so easy anyone can do it not necessarily like like for me i'd be selling high ticket over the phone all day long right but a very small small segment could actually do that successfully at scale so that's my first disclaimer now that being said this is exactly what i would do um if my gyms you know were were in the midst of this uh you know coveted stuff so first off uh i would get out of the leases that i have now independent of of because there's some people were like well we're going to get out of this sooner we're going to have this later i have no idea but what i know is just opportunity if i have the opportunity to to to flip my facilities in an environment where i'm being encouraged by both government and my uh clients to make the flip and remain open uh then i'm going to take that opportunity and flip to a more profitable model right like we're giving we're being given permission in this instance to do that with zero repercussions it's even being encouraged and so the first thing is i would take all six i have my recurring base of members and i would flip them to remote now then i would try and cut um all of the rent uh for each of those locations maybe even get out of the lease i would likely just try and negotiate three to six months of free rent see how it shakes out but likely um this is what i'm saying i would do you don't need to do this all right i'm saying like this is how i would this is how i would play my cards all right and so what would happen is let's say each of those gyms is at 30 000 a month right uh in recurrent just efts not running cash flow nothing else not supplement just like they're doing 30 000 a month cool so now i've got 180 000 a month that i have in recurring now let's be realistic let's say 25 of those people drop off because it's not an owner operated facility i've got staff they don't care as much they're not rubbing bellies and kissing babies the way i would if i were at a single location um and so let's say i lose 25 so that means i lose roughly you know 45 000 off that um i think no 40 yeah right 40-ish right so there's 40 thousand on that so now i'm down to like 140-ish or 135. uh per month that's my recurring nun okay there's a lot of cash there all right then i would take my best trainer at each facility the guy the guy or gal who cared the most who was the most engaged with members who was the most upbeat the most positive um and truly cared about uh keeping them and i might have to take two at each facility if there's too many for one person to handle that's fine uh the rest of my personnel would be considered non-essential because in this new model they would not be able to provide value right that's what i would do all right so i've got let's see we got six that means i've got 12 staff that i'm keeping on to maintain a hundred and thirty five thousand dollars in recurring revenue per month now let's say conservatively i pay each of these people three thousand dollars a month right just stay at home now that's a great for some of these guys that might actually be a big pay jump from what they were doing in person cool so now they're making 3 000 a month staying home to just provide accountability all right that is it so big big thing here now like at gym launch what we're doing is we have um we just so i'm kicking this off today uh starting on monday we're running 16 remote workouts per day basically every hour during the normal work day uh there's gonna be a class that's being held and that way all of our gyms can cut their overhead and just have all of those workouts as fulfillment for their online clients right and so now they don't even have to staff that stuff it's already been taken care of centrally by all of us all of our gyms can participate that cut their over even further right now rewind back to the six gyms so step one i'm gonna get out of the leases that i can because because right now uh you have a pretty good opportunity to be able to break leases uh and or at the very least get three six months of free rent uh right now so that's one two i would flip um my my recurring revenue into uh remote which would be nutrition and accountability primarily i'd have the the workouts that are being done if i have 12 trainers i can say each of you guys are responsible for one workout a day that's it that's one every hour and that allows all of my people to participate in a session at any given time but it's not that hard because each of them can do it from home right and the whole point is that like i'd love to say it's going to be from the gym but reality if you're getting quarantined you might not be able to even go to the gym so and most of the clients are even consuming this from their homes and so it makes sense to have a trainer that's from home not a big deal so that's that's what i have on the workout part big big caveat here no one cares about the workouts if you're selling over the phone you can get workout apps online you know like uh you know beachbody and kayleitzin's got a sweat app like there's all these other apps that are like 10 to 20 a month that have probably better already pre-existing stuff so you're not going to win on the work out front right you're going to win on the accountability and the service that's how we've always won and that's how we need to keep like remember the rules haven't changed your workouts never mattered they don't matter now right what matters is the relationship that you have these people that they feel like someone is checking in on them right they pay for you to pay attention that's how it works all right so i have my 12 trainers let's say i'm paying them 3 000 a month so i'm paying 36 000 a month in overhead for those trainers right and the only thing they have to do every day is one workout and then reach out to the customers so make sure that they are uh being taken care of making sure that their head space is good making sure that they're not going to the pantry and rating it and getting cookies every day make sure making sure that they attend one of the workouts that is what they do all day now that's it that's all they have to do all right now overnight by doing this i have a hundred thousand a month that's left over in all profit holy smokes that's a pretty good deal but wait now what do i do with my time right so my time would be focused um the other thing that i would ask them to do is uh i would dedicate their first two hours of the day every day to doing 100 cold reach outs all right they want to pay for themselves cool 100 cold reach outs what you do is if you have someone who who's who's interested you book them on my calendar i'll close them all right so i'm going to fill my day up with uh appointments that my team my 12 people doing reach outs are gonna set for me all right and then i'm gonna close beyond that um i'm gonna start turning on cold traffic and i'm gonna run because right now in this hypothetical environment which is the real environment currently uh lead costs are like 50 to 75 off it's nuts right i've never seen anything like this it's crazy um and so we would be scheduling uh phone calls to sell and so my trainer's day looks like this first two hours of the day all they're doing is doing cold reach outs they get their daily 100 in you give me a hundred reach out that's what you owe me all right get me one schedule today i don't care just give me one schedule today all right what are they gonna say they're gonna say hey name do you know anybody who's trying to stay in shape during the quarantine who doesn't want to get make turn their sweatpants into yoga pants by the end of this ha right whatever now when you say that all of a sudden the people who are responding are like oh this person's not fishing they're asking genuinely if i know anybody right and now more than ever people have a lot of good will that they want to help out other small business owners like that is definitely the zeitgeist of this moment zach has a german word for the general vibe of an era um anyway so people are trying to help out small business owners so if you're asking like that you're not even soliciting them you're just saying hey do you know anybody and a lot of times i'm like you know i i'm trying not to lose weight perfect or gain weight perfect let's get you booked for a call we have a totally remote thing to make sure that you stay healthy etc right so their first two hours they're doing the daily reach outs then they're doing all the recess to their existing customers that they're maintaining right and then one hour of the day they're uh required to do their workout now most of the time you'd want to have your your trainers are working out anyways at home so it's like just record it like have fun with it right and then that way all of my people can actually have more sessions than they ever had in person so i'm adding value then from what i used to have they have more availability than we've ever had they have more variety because they probably have access to trainers that they couldn't have had access to before all right and it's also my best coaches so it's like you know we all know we've got a couple coaches who run stuff and if somebody use news coming in you probably want to put them with jessica and not eric right you're like no jessica's awesome don't put in eric's as her first session right maybe maybe save that for some of the later people who already like us right so those are the trainers who are going to be getting those at-home workouts big picture again big reminder no one cares right no one cares about the workouts they only care about the accountability all right so if i flip my gyms right i renegotiate my leases i push them out or i break them i take my recurring i would get into 100 remote i would let go of not essential personnel or not who are not generating revenue or keeping revenue through fulfillment right they're generating revenue in their first two hours a day by getting new calls the rest of their day they're focused on doing the fulfillment for the for the clients that they already have in maintaining that eft and recurring um they're feeling back the bucket because i'm going to be doing the sales because in in a time of strife i'm going to do what i need to know how to do best and make it rain right and so the people who are not going to be able to succeed are the ones who don't want to roll up their sleeves and get dirty if you're the best salesman at your gym then you should sell that's what you should be doing right and then they do their one workout a day so that's what trainers have to do three things reach outs to to to get new customers reach out to existing customers make sure they know we're paying attention and then finally that they're doing one workout a day which they should be doing for themselves anyways they're just gonna record it awesome box is checked all right my day is gonna be making sure that we're marketing and filling the bucket back up all right that's it that's my day all right so i'm marketing and taking sales calls i'm taking sales costs from paid traffic and taking sales calls from from outbound i'm taking sales calls all day long that is what my job is to make it rain and feed the machine all right that is what i would have done um if i had been in that situation or in this situation i'm not necessarily saying you do that i'm telling you what i would have done and that would be the play that i would do because it would give me permission to overnight transform six facilities into one massive recurring revenue stream that's 100 remote that is higher higher profit margin for fulfillment and i will say what i said yesterday but i'll say it again so hopefully it sinks in is that just because this has changed does not mean it's bad right eight months ago i walked through all the math about why having a remote fulfillment is a better solution there's a reason people like going online right there are better margins right there are the thing is is that a lot of people felt like for some reason that that was bad that's okay but now people are being forced to do it doesn't mean it's bad it actually makes more money and now we're getting permission from the government and from society to do this for ourselves so i would take that opportunity and uh run with it so that's my rec not my recommendation excuse me that's what i would have done uh you can take that for which you will but that is exactly what i would have done step by step that's how it broken out my trainers that's what i would have done with my overhead that's what i would have redefined their responsibilities as and then beyond just lead them through the crisis um i would also try and paint a vision or for a better future it's like guys you liking this you're staying at home you can work out whatever you want um you're just actually getting people good results because we're making sure that they're just staying accountable and they need us the most right and um one small note that i want to add to this when you're selling or when you're talking to customers everyone right now is at the airport so if you've noticed everyone at the airport is always just like immediately a three out of ten three out of five stressed right they're already at six out of ten stress levels what people want is to feel good all right and so that's gonna and so when you get on the phone if you wanna sell right you gotta make them feel good like the fundamentals have not changed it's just you got a little bit more resistance when you're starting because they're already at a negative point they're not at neutral most people are now going to be a little bit negative because they're quarantined they got their kids around they feel like [ __ ] they're smelly they're you know they feel sloppy and bloated because they're eating cookies all day right and uh you know they're uncertain about the future what they want from you what your employees want from you what your clients want from you and what your prospects when you get on the phone with them want from you is one word hope all right so you have to be the hopefulest [ __ ] that exists all right and the way that you have hope is that you have optimism about what you are willing to do to endure and as long as you know that you're willing to endure just about anything to get through this then you have confidence and certainty in the fact that you will get through this and you can you can uh convey that conviction to your prospects to your team and to your to your customers because that's what they're going to want like right now therapy is blowing up life coaching is blowing up in terms of like growth tons of people want life coaches tons of people want therapists right now because they're stressed out of their minds and so if you're looking for more ways to provide value someone will buy after how you've made them feel from the first 15 minutes of the phone call the first 15 minutes is just like caring about them throwing them some love making them feel good about like hey we're going to get through this no worries right they want to be around more of that they want more of that feeling the fact that you're going to sell them weight loss and that's going to be the vehicle that you monetize is almost secondary to how you will make them feel in that moment because they're just going to want to feel more of that and so that goes for your trainers reminding them dude like we're just trying to make people feel good right now all right we're trying to get people through this like if we can get them to put down the cookies and move a little bit they're probably going to feel better and if that's what that's what our value is right now then that's what it's going to be all right so that is what i would do step by step um if i have my gym drink covered right now um i make no recommendations you are all grown as individuals and make your own decisions for yourself but that is what i would do so anyways hope you have an amazing wednesday keep rocking you can make it through this um you just gotta want it all right lots of love catch you guys soon [Music] you