Your Inflow Is Your Bottleneck (ALEX HORMOZI)

Summary

• Selling all day is expected when aiming for high gym membership numbers; it aligns with the business goals you set.
• Analyzing inflow is critical; gyms that paused services with GLX couldn't handle the lead volume.
• Acceptable churn metrics in service-based businesses, like gyms, are around 1-2%. High growth requires diverse acquisition strategies (organic, outbound, paid ads).
• The inflow of new clients is often the bottleneck for growth; manage your lead volume to scale effectively.
• Operations must prepare for high lead volume, using inflow to your advantage in a service business.
• To reach 300 gym members with a 10% churn, one must sign up 30 new clients monthly just to break even.
• Sell continuously; if you can't onboard new clients while servicing existing ones, you'll struggle to grow.
• Time management and staff scheduling are crucial. Block schedule for sales, onboarding, and customer retention.
• Calculate the actual numbers needed for growth: signups, conversions, appointments, and factor in churn.
• Understand the volume game and confront the reality of sales targets and marketing spend to achieve goals.
• To scale, properly allocate time for sales, onboarding, and customer service tasks.
• Accept that you'll face rejections; emotionally resilient salespeople understand it's a numbers game.
• Prioritize effectively; conflicting priorities mean one is more important than another, allocate time accordingly.
• Work harder to afford staff to relieve bottlenecks if necessary. Your inflow strategy dictates your growth potential.

Video

How To Take Action

I would suggest analyzing your current inflow and lead volume. Here is a step-by-step plan:

1. Set a clear goal, like reaching 300 gym members. This will give you a target to aim for.
2. Prepare for high lead volume. Make sure your operations can handle more clients coming in. If you're flooded with leads, that's a good problem; you just need to manage it well.
3. Keep selling. If you stop bringing in new clients, your business won't grow. Aim to sign up a certain number of new clients each month to counteract churn.
4. Manage your time wisely. Create a block schedule for the team that includes sales, onboarding, and customer retention activities.
5. Do the math to understand what it takes to grow. How many signups, conversions, and appointments do you need each month? Remember to include churn in your calculations.
6. Know that rejection is part of the game. You will hear "no" a lot, so work on becoming emotionally resilient.
7. Prioritize your tasks. If something cannot be done, it's because something else is more important. Make sure your priorities align with your growth goals.
8. Be ready to work harder, especially at first. You might need to put in extra hours to afford staff that will help with bottlenecks.
9. Utilize your advantage in a service business, which is the ability to scale quickly by bringing in a lot of clients in a short time.

Remember, growth is often about handling more volume, both in sales and service delivery. Plan your team's schedule to reflect these priorities and start taking action towards your growth target.

Quotes by Alex Hormozi

"Most people want a full gym until they actually have a full gym or see what's required to get a full gym"

– Alex Hormozi

"Champions have short memories"

– Alex Hormozi

"If you want to scale, your inflow never stops"

– Alex Hormozi

"The first two hours of the day it's blocked on their time is going for outbound"

– Alex Hormozi

"Priorities are just priorities, there's never really conflicting priorities"

– Alex Hormozi

Full Transcript

they're like man these guys just expect me to sell all day and the answer is yes i wanted to make this because i woke up with this on my mind and i think it was relevant so i was looking through our um our weekly reports and uh i was looking at the sales team stuff and i was looking at uh the glx stuff which is our fulfillment side and uh i thought this was really fascinating i would share this with you so one of the things that happens is we get a lot of people uh who come on and they say you know we're like hey what's your goal right now what are you trying to accomplish right and a lot of gyms are like man if i could get 300 members that would be amazing like 200 members i'd be amazing i'd get 500 members that would be amazing right and so they have these goals right and yet they don't follow the simple math of getting there and so most times the inflow is the cap right now there's obviously like you've probably heard if you've if you've ever followed my stuff for long enough you'd know that i talk a lot about retention about lifetime value etc right but at a basic level there there is at some point what i would consider acceptable metrics right and what that means is let's say that you're uh you know if you're in the service based business you're never going to get your churn below one percent too i mean it's just it's very unlikely right and that's and if you aren't that it's typically because you're growing purely off organic referrals which is awesome but if you want to be massive you need to grow off everything you need to grow off organic you need to grow off outbound you need to grow off a paid acquisition right running ads and um the issue that i just continue to see is and so then so this last week i think we had like 10 gyms um pause on glx since the glx is our kind of done for you side and all 10 of them paused because there was too much inflow they could not handle the lead flow and the appointments uh that were being set for them and i'm gonna pause that right right there and layla was on a podcast this last week as well with uh i think it was push press i think it's push press and uh the ceo push press was like you know um we've we've heard that the number one complaint that that we hear from people you know from our customers who have worked with you is that they're like man these guys just expect me to sell all day and the answer is yes because that's what you said you wanted right and so what's interesting for me is most people want a full gym until they actually have a full gym or see what's required to get a full gym right and so when we used to fly out and force gyms to grow because we didn't have limiting beliefs around growing a gym someone would have 80 clients at their crossfit and then in 21 days they'd have 280 clients at their crossfit and they'd be like holy what do i do i did not sign up for this it's like actually you did sign up for this and so it reminds me oh i'm gonna pull this up for you my favorite my favorite magic cards of all time all right was called burning wish so dr cashy sent me a card versus really cute of him and uh underneath it says she wished for a weapon but for not the skill sorry she wished for a weapon but not for the skill to wield it and i feel like a lot of times that's what happens is uh at least for the the people who are coming in to glx underprepared is they're like i really want to grow i want to get new customers right our top client right now in the last 30 days sign up 100 new 130 new clients all right 130 and we actually that's in the last 30 days but she signed up 130 in the last two and a half weeks so if we give it another like one and a half weeks she'll probably top 200 new clients all right if you want a 200 300 400 500 person facility and you are not able to sign up 20 new clients a week you will not get there right because this is where the acceptable metrics parts comes in i would like to give you permission that if you have a service based business all right services of any kind anything that is easy in is easy out and you're like well i mean we have to onboard them and which you should be right but easy in service is easy in switching from your crm to another crm not easy right big pain in the ass and so the likely that you switch is very very low which is why software and things like that are much stickier than services are and so you have to kind of accept that that comes with the territory so if you're selling service and you want to be big then you have to know that there's going to be a back end churn that's going to occur and that's just because easy and easy out that's how it works right but if you have easy in and you're not maximizing the fact that that's your advantage and services that you can scale quickly right your inflow then you're not using one of the primary advantages of being a service provider right and so if it's like i want to get to to 200 or let's say let's say let's say 300 members right i want to get to 300 members okay cool you want to get to 300 members now your turn's 10 industry average and you can only sign up 10 trials a week and that's you maxed out right 10 new prospects per week that give you a credit card for some front-end program or a trial of some sort right you can only sign up 10 of those a week now even somebody who comes in and signs up straight into eft what we have noticed is we still have to resell them on a longer term because really there's the i'm going to try it phase and then there's the i'm going to commit phase and even if like i said you sign someone up for recurring it doesn't actually mean they'll stick until they really make the second sale and we've seen that across the board for us and our gyms at least okay so if you can only take on 10 new new potential prospects right per week and that's your cap and you want to get to 300 members then that would mean that you have to convert 75 percent of them week in week out and a lot of people are not doing that and 10 mind you means that you're closing 50 of four calls a day right that are showing and let's say you're getting half those calls which means you have to have eight scheduled appointments a day now most gyms that i talk to don't even have they're they're stressed out of their mind with that right but that's just for them to get 20 or 30 new customers a month you want to get to 500 you want to get to 400 you have to accept the fact that you're going to be selling all day because you're selling a service and you're trying to get to a high number and so most times most times people have goals and are disconnected from the actions that are required to get there right the numbers the basic math and most people just don't do the math like so i would highly encourage you if you know what your turn is look backwards and think okay if i'm going to lose 20 customers a month and i'm at 200 and i want to get to 400 a lot of times you don't just double your inflow like sometimes you have to do even more than that because you also lose some efficiency on the back it's part of the game right and so if you're at 10 you're losing 20 all right and so if you know you're converting half of your trials that means you have to make 40 sales a month all right the industry average by the way is 35 which would mean that if you wanted to replace those 20 you'd have to sell 60 trials a month okay of some sort 60 front-end programs of some sort per month if you can't do that you will never grow and you will always wonder why all right and so this message is basically for anyone who wants to be a big dog if you want to dominate the market which is the marketing that most people respond to like dominate your competition blah blah blah all that kind of stuff right you want to be a seven-figure gym okay cool then you have to do the math that seven-figure gyms do and i do not know a single one of them that do not know how to take on high numbers of traffic on a weekend week out basis right what i continue to see is i'm gonna turn my ads on for a couple weeks and i'll turn them off and then we gotta go service those people no no no no if you want to scale your inflow never stops you have to be able to sign up people this week and next week and the week after that and the week after that and fulfill you need to be doing both things concurrently and if you're incapable of doing that it means you're not able to manage your schedule of your team right they have to know that the first two hours of the day it's blocked on their time is going for outbound uh for for ongoing fulfillment like they're reaching out to your existing customers to make sure that they stay then you have two hours a day that's blocked for onboarding for new customers then you have orientations right all that stuff and then you have sales and you have to disperse the meetings that have to happen in order to make this entire model work right and that's with any service business like this works the same for us right we've got sales appointments we have kickoff calls we have builds that happen in the background and then we have ongoing check-ins to make sure the clients are doing well right beyond that we still have daily calls with me to make sure that they're uh being able to sell and convert and all that kind of stuff right and so the whole point of this is if you're not where you want to be a lot of time it's because your inflow is your bottleneck and you haven't operationally prepared yourself for what it actually looks like to sign up a hundred people in a month right 50 60 80 new people in a month the math is there if you want to do it you can do it but i'm just seeing this like more times than not and then and like when when dan said it for push press that the no more complaint that people got from jim launches like they're just they just flood you know they flooded me with lee they expected me to sell a date yeah because that's what you said you wanted so either switch your goal or switch your head right like because like if you want to get to here it's just math backwards right and so just most people have not done that math so here's how you do the math if you want to grow to let's say uh 300 members okay and let's say your churn is 10 that means you need to sign up 30 people per month to break even now let's just get those 30 done let's say you convert half because to get the 300 you have some skills right so you're converting half your front end people which means you're at 60 new signups per month that's 15 a week all right now if you're selling one out of two that you're that you're talking to now you're talking 120 a month uh of people who you're talking to ever so that's 30 a week roughly right that you're talking to and you're probably selling only five days or now here's another one i could go off on it's like we only sold two days a week it's like well good luck trying to sell 100 you know 30 people in two days it's not it's very unlikely that it's going to happen right so if you're not let's say you're selling six days and you're selling 30. so you gotta sell five people a day or so meet with five people per day which is not that unreasonable it's five 30-minute sessions it's two and a half hours three hours of sales a day like this is not crazy right um now you're still gonna have show ups right which is gonna be another inefficiency all right so to go 30 goes to 60 appointments a week oh interesting all right now we're at 60 appointments a week and we're just maintaining 300 we're not even growing to get there yet interesting right and so now we're seeing how this math starts to work out you're like okay so now if i wanted to grow an extra 30 on top of that then i need to have even more i've need to double what i just said okay and so we have 30 conversions from 60 front and sales which is half of 120 meetups 120 uh client conversations per month okay that and then you have half of those that show for their appointments and then you need to double that to grow right that's the math and so if you're not able to deal with that math then you will not get there and sometimes it's just like just giving the sheer reality of the situation is like it's a volume game it's a math game it's the same people who get bent out of shape over one person who says i gotta talk to my husband i don't have my card on me it's like cool move on champions have short memories right they bounce back fast they're unaffected by losses because they're just thinking i know i need to close half which means here's the news flash if you have to meet with 200 people a hundred people are gonna say no and you have to be emotionally okay with that because you just understand the numbers right you know like i don't know i mean you should try and get better at your craft always of course right but if you just can't accept emotionally and this is what i continue to see is that some guys just can't take the emotional beating of having people say no which is why they'll never grow right and like the most experienced sales people they don't get bothered they're like yeah they understand that people come with their own preconceived notions to the call it's not about you the salesman it's about them right and just remembering it's about them so don't get butt hurt if for some reason someone says no of course they have excuses that's why they're not in shape of course they have limiting beliefs that's why they're not in shape and so if we're going to expect that they're not going to come with emotional baggage to the call or to the meeting it's ridiculous right and so then if we're to take this back one step right and we said let's say 240 uh consoles we we're gonna have to be generating 15 leads a day right roughly huh well what does it take to get 15 leads a day in cost well right let's back into it 15 leads a day 10 bucks a lead or 150 a day it's 4 500 an ad spend per month just the math and i think that a lot of people don't confront them at they make these goals and don't think about what it takes to get there and then as soon as it even gets to a third of what it would actually take to get there to achieve what they want they're like oh my god this is just so much so well yeah if that's what you want then this is how this is how it works it's like well i want to be a champion bodybuilder okay well i can only work out three days a week for an hour okay good luck okay right and so it's like do you want to be a champion or do you just want to be another person who also ran and that's fine if that's what you want it's just i'm not hearing that that's what you want so either people need to get real clear on what they really want or re and and and then make the adjustments accordingly or realize that it's not actually their priority and that could go into a whole other thing about like priorities are just priorities there's never really conflicting priorities you just have one that is a bigger priority than another and if it conflicts then the other one is a secondary priority and sometimes priorities do conflict in terms of their nature but not their importance and so you just need to figure out which of these things is more important to me right and most times it's simply being able to delegate time and appropriate on a calendar when things need to get done if we know that we have to onboard 30 new customers per week then how do we fit let's say 30 30 minute consultations in okay that's 15 hours a week i've got one team member they're here five days a week there's three hours on their on their calendar great so now that one person has three hours a day on their calendar five days a week for taking on new customers okay that seems reasonable they still have another five hours right and if they have to do conversion meetings which is to convert them into a long-term membership from a trial or a front-end program now uh from from those people we know that we again have 30 people we got to meet with and so of those 30 people and it's to say it's going to take a 30 it's a 30 minute console to sell someone into membership boom now that person's at six hours a day all right this is just one employee and so this one employee is now managing the onboarding and the conversion sales right and then they have two hours a day to do continuous reach outs to the existing customers great that is a role right and then you have a sales person who's gonna what i mean that has to be a full-time sales person who's gonna hit those numbers right they're gonna meet with 60 people right 60 people six days a week it's 10 a day right 30 minutes it's only five hours right and so if you're looking at this this is the game is how long does it take how many of them do we have block the time and that is how you scale that's it that's all there is right and just and just confronting the math now you can try and tweak it and control it but you have to understand you're not going to have orders of magnitude improvements you're not going to sell 100 of people who show up you're not going to keep 100 of people a month over a month it just doesn't happen right it just it just doesn't and so you have to you deal with what is right you're always gonna try to improve and that's normal but if you wait for always your improvements you will never start and you will never get to where you're trying to go and so that is my message for the week is that um your inflow is probably your bottleneck and there has to be acceptable metrics that you can extrapolate off of and then work backwards into how much time that's required and how many people are required to help you get there and if that means for you as the proprietor or the owner of the business that you need to work double time in order to afford the person who's going to be able to release the bottleneck then that is part of the game all right so anyways i hope you guys have an amazing monday i hope you look at money math and i think you look at time math to figure out how you can break your bottlenecks so you can get to the gym that you want whether that's corona or not corona or remote or launching anything or you have a b2b business it doesn't matter the metrics are all the same all right so lots of love hope you guys are stoked uh for this week because i am we're super excited and i will catch you guys all soon all right [Music] you