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Podcast Episode Notes: My 2024 GymCon Keynote on Getting More Clients | Ep 764
Podcast Overview Title: The Game with Alex Hormozi Host: Alex Hormozi Description: A podcast focused on business strategies for small business owners, particularly in the gym industry, aimed at increasing customer acquisition, profitability, and retention.
Episode Summary In this episode, Alex Hormozi delivers a keynote presentation focused on strategies for gym owners to attract more clients and improve business efficiency. The talk emphasizes actionable steps and changes needed to overcome common obstacles in growing a gym business.
Key Themes and Concepts
- The Importance of Advertising
- Advertising Frequency: Hormozi stresses the need for gym owners to dedicate significant time daily to advertising. He suggests that many aren’t advertising enough, which directly affects their growth.
- Recommended Commitment: Spending four hours a day on advertising activities is highlighted as essential for growth.
- Conversion Efficiency
- Conversion Process: Hormozi breaks down the conversion process into three key steps:
- Scheduling appointments
- Show rates (how many scheduled appointments actually show up)
- Closing sales
- Focus on Weak Points: Identify which part of the conversion process is lacking and dedicate time to improving that specific area.
- Customer Lifetime Value (LTV)
- Maximizing Value: The discussion includes methods to increase the value of customers:
- Raise prices
- Reduce churn (the rate of customer turnover)
- Encourage repeat purchases
- Overcoming Sales Challenges
- Sales Skills: For those struggling with sales, Hormozi recommends practicing sales techniques systematically, emphasizing the importance of role-playing and getting fast feedback to improve.
- Onboarding and Retention
- Initial Customer Experience: The 24-72 hours following a customer’s signup are crucial for their retention. Proper onboarding can lead to increased purchases and reduced churn.
- Continuous Engagement: Regular communication and support can significantly improve retention rates.
- Mindset Shift
- Accountability and Standards: Owners are encouraged to hold themselves accountable and raise the standard for their teams, ensuring everyone in the business is performing optimally.
- Elimination of Non-Value-Adding Tasks
- Outsourcing Human Tasks: Hormozi suggests that gym owners should outsource mundane tasks (like cooking and cleaning) to free up time for more valuable activities that directly contribute to business growth.
- Addressing Underperformance
- Difficult Conversations: The importance of firing underperforming staff (referred to as "Susan") is emphasized. Hormozi argues that tolerating poor performance hinders growth.
Key Takeaways
- Commit to Advertising: Allocate sufficient time to advertising to drive customer traffic.
- Work on Conversion: Identify bottlenecks in the customer acquisition process and focus on improving them.
- Enhance LTV: Strive to raise prices and reduce churn for better profitability.
- Onboarding is Key: Ensure new customers feel welcomed and informed to increase retention.
- Accountability Matters: Regularly evaluate employee performance and make necessary changes to maintain high standards.
- Value of Time: Invest in outsourcing routine tasks to focus on high-impact business activities.
Conclusion In this episode, Alex Hormozi provides practical advice for gym owners to enhance their business operations, emphasizing the importance of advertising, conversion efficiency, and maintaining high standards within the team. By implementing these strategies, gym owners can foster growth, improve customer retention, and increase profitability.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:00If you're a small business owner and you're trying to build a brand and generate leads. I just did a full keynote at GymCon talking about business in general and how to generate leads for your business. Enjoy. Okay. So last one's referral. And I'm going to say, when I say referral here, I mean a referral partner, meaning you have a chiropractor, you have a doctor that you helped out and they have a huge practice and they start sending you and you create some sort of relationship. that you still do these things to attract this person. And if you're like, man, if I only, I've got this one guy and he sends me like half my customers.
0:35Well, how amazing would it be if you had 10 of those guys or 20 of those guys? Well, you know how you do that? You ask them, you reach out to them, you give them gifts, you bribe them. Really, that's how it works. And you know how you bribe another business owner? You send them business. If you want someone to send you business, send them business First. Little rule of life. It works a lot better that way. Okay. So we have our inputs and our outputs in the system. Right? So it starts with advertising. And for the vast majority of you guys, you are not advertising Enough. That's it. Who here spends four hours a day, Six days a week advertising doing one of those four things?
1:23does your gym make money yeah
1:30it's like I don't have a gym but yes I make money it's like what are you doing here it's called gym con alright I promise you if you spend like four hours a day is not much like four hours a day I don't know
1:47like what are you doing
1:54Why your business isn't growing. You're not trying to grow it.
2:02All right. Cool. Well, I mean, we could just stop there. None of you are even doing it. All right. Well, let's talk about efficiency while we're at. It doesn't matter because you're not putting anything in the system anyways, but let's talk about so fundamentally i'm being dead serious it's just like it doesn't if i were to spend a full day with each of you i'd be like oh okay well what are we gonna do with the rest of our eight you know seven hours and 40 minutes that we have for this day because that's the problem but okay let's talk about efficiency so fundamentally you got to let people know fantastic now they know you got to get them to give you money, which is going to be the conversion process.
2:44All right? Cool. Conversion is going to be the next step in this efficiency. I'll give you a little spoiler of the next ones. Then you've got your price, and then you've got your churn. And I'm saying this specific to Jim because it's a recurring business. Okay. So if we think about what a business is, you get more customers or you make them worth more. It is the only way that you will make more money. Fundamentally, that is it. There's no other way. Get more customers, make them worth more. If we double click into each of these, getting more customers means you need more traffic and better conversion.
3:21And so if right now you're not getting enough customers, it means you need more traffic or better conversion. If you need to make your customers worth more, the only thing you can do to make them worth more is you raise your prices, you decrease churn.
3:38That's what you have control over. And so if you're like, okay, how do I make my customers worth more? Raise your prices. Get them to buy more times. That's what decreasing churn is. Get them to buy for 10 months rather than five months or three months. And so the idea here is that once we feed the machine, this is the raw input. This is eyeballs. This is the activities that you do that get people to find out. Then it's about how many of these things can we turn into money and how much money can we turn it into? And so the most efficient gyms are ones that convert a very high percentage at a very high price and get people to buy lots of times And so This is from a constraints perspective of figuring out what's wrong with your gym And for everybody who didn't raise their hand, which is literally everyone here.
4:23It's this But we'll talk about the other three Is that you have steps within this conversion process You have to get them to schedule you have to get them to show And you've got to close So who here sucks at sales? Can I get a hand? Some of you suck at sales, that's fine It's helpful to actually, it's like the first step Is being like, hi, my name's Sarah And I can't close a door So It's okay And so If you want to get better at sales, if that's the problem You're getting leads in the door but you can't close Then you practice closing And you do that for four hours a day And so there's probably a meta takeaway here which is that whatever the big problem in my business is, that's what my first four hours every day are spent doing until I solve that problem.
5:14And then I change what that four hours is spent on. But that four hours that I spend in the morning before everyone gets there, or if you're a late night person, the last hours of the day when everyone's asleep, that is what moves the business forward. The vast majority of people skip those four hours and go straight to firefighting all day. But the thing is, is that if you look back on last month or two months or three months back, the only thing that you really will have to show for progress is what you did in those four hours. It's something that it took me a little bit of time to realize. And I was like, oh, if I don't do it in that four hours, nothing big moves forward.
5:48But what I can promise is that I don't remember any of the fires that I put out last month. The fires are going to happen, and they will get put out. You'll also find that if you ignore them, they tend to also go away. Real talk. and so if you're having a conversion issue from sales you practice sales the way you practice sales is you role play you do it with somebody else play with a friend that's how it works and you want fast feedback loops you need to be able to breathe the script and the secret to making sure that you don't sound dumb in the sale is you make them sound dumb in the sale and you do that by asking questions so no one can oppose you this is a Make no statements.
6:33So whoever answers questions in the sale is the one who's losing. And so you can even address this with every single obstacle that you ever come in contact with. Well, what certifications do you guys have here? Which ones are you looking for? They don't know. This is a question their friend told them to ask. They have no idea. And then they're like, you know, what are the workouts like? Well, what's your dream workout? They tell you. And you're like, well, it's not that.
7:04If I really want to be like, well, how's that working for you? Well, I don't do them. OK. That's why you're here? Cool. Well, then why don't you do our workouts? So the thing is, there's always a way to sidestep objections by just asking what they're trying to get out of the question that they're asking you. And most of the time, they have no idea. Because you should know the answer to their question better than they do because you've had this conversation before. Imagine having the same conversation over and over again and sucking at that one conversation. Mind-blowing. It's also like not advertising your fucking business.
7:38Anyways. So you've got show rates. You've got schedule rates. And you've got close rates. So that's our conversion efficiency. And so whichever one of these is below benchmark is the one that you spend your hours on. I'll also promise you that schedule rate and show rate, If you actually spend four hours a day on it, will not be a problem at all. But everyone just wants this to just go away magically and wants everyone to just, like, show up ready to close. Like, my leads suck. All leads suck. Until they become customers, and they're amazing. But then, like, the process of taking a lead and making it to a customer is work.
8:19And everyone's afraid of doing that. And so now we get into LTV. So you advertise more. You work on these things for conversion. to increase the conversion rate you have in the business. And then you've got price and churn. Now, Kale, I'm sure, talked about pricing at some point. Yes? Okay. You're probably priced too low. And it's not because we want to destroy your gym. You're priced too low because at that price, you will not make a profit. The amount of times that I had gym owners who were like, my gym's full and I'm not making money. And I was like, do you see a problem? Like, you can't service any more customers, but you don't make Any money.
9:03Get where i'm going with this? Like, something has to change. And if you're already full, we Just need to increase the price. You're mispriced, and that's Okay. Like, that's how you learn. But for many of you, you just need to send an email and send A letter and let people know that from this point going Forward, this is the new price. Grab your big boy and big girl Pants and say, like, i'm going to take this risk because the Other way is guaranteed to never work. That's the thing. It's like we want to stay in the same boat and be like, you know what? Even though all the math makes sense with this higher price, I'm afraid, and I'm going to let that stop me forever from getting the business to be where it needs to be.
9:46That sucks. So don't think that. Make the bet, and then deliver like that actually is your price. and do a really good job on the back end. And the way that you do a good job, which Gym Launch has already given you, but you have exit interviews with people on the way out the door. You can save half of them by saying, oh, you're right. I didn't give you enough support. You should go into this hire thing. That's what actually gives you the support. You save half your customers. Awesome. You reach out to them every two weeks or so as though you actually cared about them. That was a joke. But no one laughed at that one.
10:22Anyways, so you reach out to them every couple weeks and you just make sure it's a touch base it's a pulse check you don't even need to talk about fitness it's just to make sure that they know that you know that they exist you track attendance when someone says that they're actually going to show up for a time you make sure they show up and if they don't show up you say hey marley where were you i missed you we actually track this and we could watch people go from three times a week three times a week two times a week one time a week cancel you can just watch it if you track attendance but if you You implement that, you go three times a week, three times a week, two times a week, Marley, get your ass in here, three times a week, three times a week, and she keeps going.
11:00They have to know that they're missed.
11:05The next one, and this is something that happened later in my life that I learned, is about onboarding. So when somebody comes in the door and you do sell them, the next 24 hours are absolutely crucial to setting all the expectations of what their experience is going to be. And so right now if your onboarding processes show up on monday tough very hard and so if there's Ever a time where you invest more resources into a customer it's in that first 24 48 72 hours So that they know exactly where they're going to go at what time who's going to talk to them Who reconfirms they're showing up because they're petrified because they haven't worked out in six Years and they feel terrible and they used to be a high school aide and they can't look at the It makes them feel terrible.
11:45Whatever. Right? and we have to deal with this by over Communicating in the window of time that makes the most sense. And so even if it feels like it takes a little bit more effort, I promise you, you will get two, three, five more purchases From this person in terms of months by just making sure that They know when they're supposed to be there, who's going to be There to welcome them, and who's going to show them around a Little bit in the beginning so they don't feel like they're Completely lost. Okay. That's churn. Fantastic. So, right now, if your business is not growing as much as you want, you're not advertising enough.
12:24If you're advertising enough and people are finding out about it, you're getting leads, they're either not scheduling, not showing, or not closing. If it's one of those three, then all of your effort in that first four hours of the day is to get them to schedule, get them to show, get them to close. If you're getting all of that stuff, You've got lots of people and you're closing them all, but you're not making any money. You're mispriced
12:48And if you're getting all of this and you have a high price, but everyone falls out the back door you have to make your stuff better And this is how you walk through it. This is how you figure out what the problem in the businesses And so who here has capacity in their gym right now? Okay
13:07Start there
13:11So that is part one of my talk. Everyone feel good about that? Okay. Thank you. So part two of the talk is reverse engineering your goal. And so the reason that I broke down the activities that you need to do into those four things is because we have to figure out how many activities equals one customer.
13:42So if you know that on average you post, let's say, 30 times a month, so you post 30 times a month, and from those 30 posts that you make, you get five customers. Which for most of you is not the case because you're local businesses and this doesn't work that way. But since that's what 20 % of you are doing, we'll talk as though that's what happens. So if you make 30 posts and you get five customers, you can say for every six posts, I get one customer. Okay. So I need to make more posts and I need better posts. And if you're like, okay, I want to get to 25 customers is my goal. This is the goal.
14:27then i need to 25x this so i need to make 150 which means i need to do five a day okay this is something i can control is this making sense this is literally what i do with the businesses that we buy i just say i just boil everything down to like what do we do that makes us money not all the stuff after that what do we do that makes us money they're like okay we have an Outbound team. I'm like, okay, so what are the outbound activities? It's like, well, we haven't tracked it well yet. Well, start. So let's say you do 100 reach Outs. And that creates one customer. Okay. And currently you're getting 10 customers.
15:12Currently. Fantastic. And so that means you're doing 1 ,000 per month, Which means you're doing 30 per day. Okay. Well, if I want to get to 50 customers a month, then I need to 5x this to get to 150 per day. And then that gets me my 50 customers. And what's interesting is that when you do actually increase the volume that much, you also get better. So you actually get leverage on the time because your skill improves. If you do 100 shots a day for a while, you get pretty good at it. but when you start in the beginning and you do 10 a day you just tend to keep sucking because you never do enough to turn the corner to get enough reps in so let me ask you a different question maybe drive this home has anyone had a day where you had like or like maybe a week where you had a lot of sales you had two three four appointments a day for like a week straight can I get a hand okay did you feel like you were way hotter like when you were selling you're like okay because you get these fast feedback people you're like all right I got another one and another one an hour and then you like practice again oh and so like you're sharpening the sword on the flip side you have a dead week and you have like two sales consults it's like you got to like you like like brush the rust off right like the amount that you work the amount of volume you do will directly feed into how good you are at it and that's why the rich keep getting richer is that they do more and by doing more they get more from their more they get better too and so that's how skills start compounding and that's how you can just blow everyone away like the idea that any single person here gives a shit what the guy down the street is doing baffles me it just doesn't matter at all because that guy is like everyone else here and not even advertising and he's mispriced and he's breaking even even though his classes are there people running and outside looking crazy, he still doesn't take any money home.
17:07You know, I know because I've looked at so many gym owner P &Ls. No one makes money except for the guys who track their stuff, know their imports, actually advertise, work their leads, price appropriately, and remind customers to actually use the gym.
17:27It's just that the bar for winning is not that high. And so I was going to wait to make this The last part of the presentation, but i'm going to end up going here, so whatever.
17:50I don't understand why you don't do this. Because, like, everything you want is on the other side of you getting The business that works, that generates a profit, that keeps your customers happy, That provides for your team, like everything that you want is on the other side of that. And you're like on Facebook. And I just, I don't get it. Like, I just, I don't get it. It's beyond me. And so, and this is the part that I said was Similar between companies of this size. So I'm going to give you hopefully the highest ROI hack That you will only be able to do at this level, under$150 ,000 a month.
18:35You'll never be able to get this again. It will only happen at this stage. And so when I think about conferences and workshops and things that I've attended, you all have a lot of notes. You have a lot of stuff written down that you're like, I need to do all seven pages of these notes. But we'll be real. You'll fly back. You'll put the note somewhere or that google doc will start moving down in the recency thing and then you'll be like oh wait What was I gonna do and so? Realistically you have like a sticky note that has like three things on it. They are actually gonna do everything else really great ideas Might not be what you need right now because every business only has one constraint And so you can deconstrain it.
19:20It will stay stuck and then when you do that it will grow until its next constraint And that's how business works. And so I want to make sure that the three things on that sticky note are the right three things that will make you the most money.
19:36So what if I told you that there were a way that you could get... So right now, imagine your best employee. Who has employees, just to make sure? I've got... Okay, thank God. Okay. So imagine the best employee you have. if you could have twice that, would you make more money? Would you be willing to pay$1 ,500 a month? This isn't going where you think it is. $1 ,500 a month to get that employee a double, a clone, if you will, of that employee. Would you do it? All right. So, the average American spends 24 hours per month on food. Food. As in going to the grocery store, prepping, cooking, cleaning up after yourself, consuming the food, and cleaning up after the dishes that you made.
20:40All of that, 24 hours a month. The average American also, so this is food, for cleaning, cleaning their homes,
20:52spends, you know what? It might be per week, I can't remember. I'll just say the three, and I don't remember the stats. But for cleaning, it's like 20 hours per month that people spend. and then laundry is like 19 or something all of these on a monthly basis add up to 96 hours which is what i actually remember between all the time you spend on food all the time you spend cleaning all the time you spend doing laundry all the time you spend doing human stuff like things for your human this body bag you got to walk around in. Right? Really annoying. No one can do, like, no one go to the, I mean, if I could, if I could delegate, like, going to the bathroom and showering, like, dear God, it'd be awesome.
21:45There's a point to this. You can get 96 hours a month back by paying 1500 bucks a month to get someone to make all your food for you, clean your house, and do your laundry. and hold on hold on and you would do this for the most valuable person in your business who's not your employee it's you you're happy to do it for them but you don't do it for you because you don't want to waste money but you would literally do it for a teammate who's not as good as you and i'm making a bet here because they don't own the business and they're probably not as skilled as you are because You probably taught them half the stuff they know.
22:32And you're not doing it. And so I want to break this. If I can get every single person here 96 hours a month, it's more than two full work weeks. And the difference is I don't get into stop watching Netflix and television and all that stuff because that's another 100 hours. But you guys like that stuff, and you're not going to stop. So who cares? I'm not even going to get into it. You are. Whatever. But no one likes this. now if you like cooking fine that's leisure but like prepping your food prepping other people's food going grocery shopping no one's like man i just love grocery shopping well some of you do you're fucking weird but but it's not worth it and so right now i'm laddering up to this the four hours a day that no one here is spending to actually grow their company I just found it.
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23:26And for$1 ,500 a month, and I said, you can only do this once. I can only outsource my food one time in my career. After that, I don't get the gain again. You're at a point where you have to start valuing your time and being willing to trade dollars for time. Like if you had to hire somebody for two grand a month, you're like, oh wow, what a steal. But I'm asking you to hire yourself for another 96 hours a month by getting rid of all this stuff on your plate that's not making you money. And so when I go back to this idea of the stuff that grows your business is really straightforward. And so I was racking my brain.
24:04I was like, why don't people do this? And maybe you're tired. Maybe you're distracted. Well, when I had these meetings where I talked to these smaller, you know, with the business owners that are between$10 ,000 and$150 ,000 a month, this is what they're telling me they're spending their time on. And don't. Stop. And I promise you, if you spend 96 hours a month on the constraint of your business, it will grow a lot. And then you'll be here, and everyone's like, what was your secret? You're like, I told me I should stop cooking my own food. And then I started working my leads. And we made more money.
24:47If you can make more than$15 an hour actively working, because that's what$1 ,500 divided by 96 is roughly, then it's worth it. Now, if you do that, and then you do nothing with the extra 96 hours, then shame on you. You deserve to be poor.
25:07So, please do that. It's on the sticky note for the day. Is that maybe sticky point number one? spend four hours a day on the constraint of my business, sticky note number two, make sure that I actually get those four hours a day in by paying for all the things that are not that. And so once you're really clear on the things that you actually have to do from an activity perspective, the rest becomes elimination. And so right now, a lot of you guys have a lot of things on your to-do list, right? I'm sure, especially leaving here, like, oh my God, I have all this stuff I have to do. But I would encourage you to focus on your to-don't list.
25:45Like, really, really. I get a lot of credit for the speed that we moved in business. And I would put a disproportionate amount of effort or weight on the fact that we just try not to spend time doing stuff that doesn't matter. and trying to not spend time wasting mental energy on things that i can buy to replace and so like when i was a single guy i get made fun of on tiktok now for it but like i just went to chipotle for all my meals i never bought groceries because it didn't make any sense because i was like well if i close a sale that's five hundred dollars and that's all my chipotle for like two weeks and then i can not worry about food at all and then the next hour i can close another 500 and be like well that's that's my cleaning for the month and then the next hour right you see what i'm saying here but if if you if you think small you stay small like you got to be willing to take the bet and if there's ever been somebody to reinvest your time into getting more skills why on earth would you not do it for you so
27:08Okay, so I'm going to do two more. Okay, I'm good. So I'm going to do two more quick topics. So one of the things that I prided myself on was buying education, buying experiences, buying help to move faster. And anyone here have a client that you're like, they're just an amazing client i could have just said like run that way and just eat less and they would have just succeeded you know like hands if you had that client i love that client they leave the best testimonials they're the great before and after pictures on the other hand who here's had susan you already know susan we all know susan right susan has a slow metabolism all right she has very bad genetics and uh big boned is you know everyone in her family is and uh you know she's been to a couple doctors.
27:58They gave her some medications and nothing's worked. And you know, when you start, she's already blamed nine people for the fact that she cannot control this. Being real, how do you think you get fat? This, just this, this one activity, that's it. And she's blamed every other person on earth for the fact that she can't stop doing it. Some of you guys are Susan with your business. You're not this person who can go watch a YouTube video and immediately execute everything and be an amazing client. You're Susan. You're saying, my market sucks. My leads are bad. Like this, the price change didn't work for me.
28:52My churn's high because people don't value my product. Duh. And so it's just this loser, victim, wanting to buy things only to prove that it won't work for you so that you can be self-affirmed in the fact that it's not your fault. It's ridiculous. It's Susan. You're a Susan. Susan sucks. And the thing is, even one of you is like, you know what, I do kind of do that. My goal of every time I get into anything that's education-based has always been to not be a success story, but to be the number one person they have ever had. And to be real, I was like, because it's about me, not you. I will win.
29:45I don't care if they're a mediocre teacher. I'll still learn it. and I'll still out-execute them and I'll get better than they are at their own thing so that people start asking me to teach them. And that's more or less happened in my life. But the idea that you can have, like there's no savior. Gym launch is not your savior. We're not gonna save anybody. We'll tell you the stuff that you need to do and if you actually do it, you'll win. But if you actually do it, here's the part that most people suck at. And so I'm trying to give you these hours things of like, okay, buy 96 hours back. I'm trying to give you this stuff of don't go into anything with the idea that you want, like, if you ever buy something with the intention of proving that it doesn't work, shame on you.
30:36It sucks. What a terrible way to live. Like, go into it trying to be the person who gets so good that the business asks you for advice. And I don't know when something snaps in you, but I've seen it happen. I remember there was a gym owner years ago who was a Susan, just moaned, just moaned. It's all moaning. Just moaning all day about his life. And I remember hopping on a call or being a little bit rougher than I normally am. And he snapped out of it. And then he became one of the top gyms, and then we hired him on. Same guy. Same information. Completely different perspective on how he chose to execute it.
31:30And so, like, if you, like, so many here, who here got into fitness because you like fitness? There's a passion of yours. Right. You need to start learning how to love business. Because if you treated your business the way you treated your body, you'd make a shitload more money. And so one of the interesting things about the fitness space is that I see the posts, I actually see a lot more of your stuff than you guys think, where you make these posts about being disciplined, right? About doing the hard work when no one's looking, right? That's right, day 72, you know, still cranking, still out here 4 a.m., getting it in.
32:10but it doesn't make you tough because you like it what makes you tough is doing shit you don't like and right now you don't work your leads you don't follow up with customers you don't send handwritten cards you don't have member events you don't spend money on ads you don't learn editing software so you can make better ads you don't research what you're going to say in the ad so they're actually good you don't practice your sales script you don't set up your lobby You don't put reviews online. You don't ask people for reviews. You don't ask people for referrals. You don't try and make affiliate partners.
32:43But you're tough because you can drink egg whites.
32:53The only person you fool is you.
33:00And so I just, I want everyone here to make a lot of money. And I want you guys to have the gyms you want. And believe it or not, the gym business has not changed. You still have to promote it. You still have to convert those leads. And then when they come in, you have to price appropriately so that when you're at capacity, you're making a lot of money. And you have to do whatever you can to keep people. That's not going to change. It's just your dedication to the execution of it that will. And so I'll bring up my second to last point, Depending on when they kick me off.
33:38Your team sucks.
33:56We thought earlier about your favorite employee, right? Now picture your least favorite employee. Also Susan. Susan sucks. So Susan, everybody got Susan in their mind? That one person that you're like, you know, it's our second quarter in a row. I think she's going to turn the corner. Yeah, I mean, she can be tough sometimes. Yeah. Fire Susan. Please, fire Susan. She's not going to turn around. She's not going to make her business better. what you see is her best behavior her best behavior and the moment you fire her you're going to hear horror stories from all the customers they're going to come up to be like oh my god thank god you fired susan she was sleeping here once oh my gosh the other day you wouldn't believe what she said to me all of this stuff fire susan because the other thing that Susan does is she sets the bar for your standards.
34:55And I can tell you that the, one of the biggest things that like, if I can identify something in an entrepreneur to know that they're going to win, I just look at their team. I don't even have to look at them. I just, because they're the ones doing it. And I'll tell you a story. At least if I can tell a PG version of this.
35:13I'm just going to be real with you So
35:21When I started talking to Private equity groups To consider selling a portion of Gym Launch So we could reinvest in some of the stuff that You guys will see soon, it's dope
35:33I had all these calls with Investment bankers and private equity groups And I remember so starkly the contrast between the quality of the questions that they were asking and how intelligent every single person on their team was compared to my team that I had built. And we built, you know,$50,$100 million business. Not bad. But they were going to go make an extra$3 billion. And it was this moment where I was like, oh, there's just more levels. It just keeps going. Steve Jobs spent the vast majority of his time bringing in talent. Because fundamentally, someone else can run your facility better than you.
36:18The problem is that you can't get that person to work for you because of who you are and because of the people that you allow to be in your vicinity. They would walk in, they would see the other people and be like, oh, I don't want to associate with them. And they'd just walk out the other side. And so
36:38You need to raise your standards And right now I'll bet that the vast majority of the people That work in your business are mediocre And that's why your gym's mediocre Because if we're being real They're the ones that are doing everything They're the ones that are teaching the classes They're the ones not working the leads when you tell them to They're the ones not following the sales script When the person walks in the door they're the one forgetting to write the handwritten cards they're the ones that show up late to the event that they're supposed to be the champions of and invite their people to but they didn't they're the ones that don't wear the uniform the way you ask them to because they want to be special
37:16has anyone dealt with any of this stuff yes but you tolerate it and so it's your fault and so the better the higher my standards have become the better my teams have become the easier business has gotten because solving the business problems aren't complicated it's the everything else it's the fact that susan still takes up your time the fact that you like when you're in bed at night And you're talking to your spouse and you're like, God, Susan, I just, I want to believe her, but this is the third time she was late and I'm just, third time, third. What happened after the first one? Right? And we're spending all this time, all this bandwidth that you could be spending actually improving the business?
38:12Not. And so Susan's cost isn't just the fact that she sucks at her job. She also repels anyone who's good. She also is bad with customers, and she drains the single most important resource from the most valuable employee in the business, which is you. And so you just have to raise the standards. Like, if I was going to spend a day with each of you, I can promise you, half the conversation, I'd be like, okay, so when you leave here today, you're going to stop spending 96 hours a month on stuff that you can outsource for$1 ,500. dollars. You're going to spend the four hours you just gained back actually doing whatever the constraint of the business is so you actually make more money.
38:56And you're going to get rid of all the people who suck. Now, part of you, I can already hear it, like, but what am I going to do with the bad work that she's going to stop doing? Right? What am I going to do about the work she's not doing that she pretends to do that I pay her for anyways? And this is the real talk.
39:22I'm burning through these pages.
39:27I would say you can say it with me, but we're going to miss time it. It'll be really messy. So you can just think it with me. Double time. So this is a concept that I have spent almost my entire life living by, which is that I spend half my day working tomorrow's job and the other half of the day working my day job. And by thinking about my time this way, I can move on double time. I can move it twice the speed. But that does compound over time. And so if you have to take Susan's work over, I'll bet you that what took Susan 20 hours that you pay or 44, you can do in five. And because you haven't done it in a while, you'll probably realize there's a bunch of systems you'll probably clean up.
40:23And then you'll get closer to the customers. Not a bad thing. And when you bring that next person in, you'll have been fresh on it, and you can actually train them how to do it the right way and put a good feedback loop in for when they do it right. So one of the big problems with management overall is that it's basically, if I don't say anything, you're doing great. and when you mess up, I hammer you. What you want to be able to do is give people a cookie when a plane lands on time, rather than only when plane crashes happen. Because it's kind of like, if you do something for your spouse, let's say you wash the dishes because they like that you wash the dishes.
40:59If you do that three, four, five times, and they never say thanks, you're just like, either this isn't important, or I just don't, I don't need to do this. And they think the same way about their role. So if you just say, hey, do this thing, and you never say it again, and you ever tell them a good job when they do it, they will do it one time. And then stop doing it because you didn't talk about it. And then you find out months later that this thing you thought was happening isn't happening, and you've been paying them for it the whole time. And so I promise you, if you think Susan sucks, she probably sucks more than you think she does.
41:27And she's not doing nearly as much work as you think she is either. And the work she is doing, also probably not that good. So we have our big sticky note. Number one, four hours per day on the constraint. Which for what it sounds like, everybody here, is you're not advertising enough. Number two, you're going to replace all of the time that you spent doing human stuff. You're going to pay someone else to do it for you.
42:04so i'm gonna say replace hours with vendors for human stuff
42:16three get rid of susan but here's the thing i say this we laugh we have a good time get on the plane you go back and guess what you don't do you don't get rid of susan so let's let's let's explore this you don't get rid of susan because you're afraid of the conversation and not the way you think it is not you're afraid i'm not afraid susan yeah i know i know you're not afraid of susan to some degree you like susan susan was there in the beginning you know she she hasn't been always the best but she's been there for you you know and you care about her as a human being and you're like i don't know what susan's gonna be able to do i don't even know if she'll be able to get a job after this imagine no one wants to hire susan and that's what you're afraid of you're like so i'll do it and so you then decide you know i'm just gonna have a talking tour with her that's what i'm gonna do i'm not going to fight i know alex said this but i know better so i'm just going to tell her she's missing expectation and it's not her fault it's not your fault susan i like i haven't i haven't been a good communicator and i haven't been clear about it and and it's it's okay this is this is good this is communication this is how we get better right you have this whole talk and susan keeps sucking we laugh but this is what's going to happen for 90 of you in the room you're not going to do it And so the reason the vast majority of business owners stay mediocre stay small is because they can't make the hard call They can't say I Love you, susan I also love every other person who works in this business and all of the customers and so I have to let you go And I still love you as a human being
44:21and then you're like wow that felt great geez and then you look you're like oh my god you did this all wrong uh and then you have space to go bring someone else in who's right because the process of building the gym is that you learn all the roles you do them well you train someone else do them and then eventually if you get all those people right you don't have to do anything and you can own the asset and then you can do it again as a side note i haven't seen anybody scale brick and mortar chain service businesses without having an operator that has a profit share i'm just letting you guys know this is what i've seen it's usually 10 to 20 percent they usually make somewhere in the neighborhood of like 75 to 100 000 a year so if right now you're like i would really like this thing to just be an asset that makes me money until you can get to that point, it's not in the cards.
45:12Because somebody who really can run the business is going to make 75 grand to 100 grand today to do it. And so you need to get everything so dialed that they can make that and you make money. That's how it has to work. So I'm just telling you guys right now, because the amount of you, I've seen this one too, my gym's making money. I just signed a lease to my second location, Even though I was literally not profitable Four months before gym launch Santana's seen it You've seen it a lot of times A lot of times Don't be that gym owner Get it so that you are bored Out of your mind For months on end And you keep hitting KPI You keep growing You keep becoming more profitable If you can't leave the business for six months And it still grow You are not ready The business model isn't ready Now some of you are like, man, that's a really high bar.
46:09Welcome to growing a legitimate business. It's what it is. So we have five minutes left. I want to make sure that the sticky note that you actually Do when you get home has the right stuff on it. Okay. So who here after hearing this is like, i'm not advertising enough. Thank you.
46:44Who here is going to get rid of all the human stuff for$1 ,500 a month so they can do that? Thank you. And who here for the love of God, instead of wussing out and pretending like you're making progress and saying that you didn't communicate when you really know that susan's never going to make it and maybe you just have to say i'm not good enough of a manager you just say i'm not good enough a manager you're amazing i suck either way it's not working because i can't fire me i still got to be here
47:20sorry full credit that's a layla quote for the love of god get rid of susan and i'll give you a belief that i have about about talent which is that you absolutely can train anyone to do anything i believe that in my core the question is whether it's worth it like i think everybody here could be a neurosurgeon if given enough time it's just that who's going to pay for that and some of you would take a while like a while I've seen some of your hands, man. Some fucking sausage. Like, I don't know, brain. You could do it eventually. But the question is whether you want to be the one to incur the cost.
48:06Because fundamentally, all business is is reallocation of resources. You have time, you've got money, and you've got energy. And you put it in, and the people who get the best returns on it make the most money. And so when you're spending all this time on Susan, you could just take a seven and make them a ten. And it would take you less time. You literally get a better employee to be better even faster instead of riding this ride you keep having with Susan over and over again. Does everyone know who their Susan is in their mind right now? So, number three on the sticky note. Will you please, for the love of God, get rid of Susan?
48:46Actually, can I get hands? All right. Please remember if you raise your hand, and 30 days from now, Susan's still here. I just need you to write on your mirror
49:08And just accept the fact that you can't have hard conversations And you will never grow your business You're in a service business Service businesses are people It's culture and training All of those are interacting with others If you cannot have a hard conversation Which I define a hard conversation It's easy to have a hard conversation With someone you hate Because you're like I've been waiting for this I hate this guy Yeah Todd you know when you're taking all those pictures Of you shirtless in the bathroom Yeah customers didn't like it But I've been such a good Yeah I gotta go Totally believe you think you're amazing And you're like I hope that guy ever calls me again Easy If you hate the guy Hard if you like the person But like this is what being a grown up is It's like you got to be able to have these hard conversations You got to be able to say It's not working out And so many of you have personnel issues I know this because I've spent days and days And days and days with deep dives in the business And honestly you don't need a deep dive in the business What you're not doing is obvious And so I put all my effort on why you're not doing it Which is that your time is getting sucked up with human stuff and your attention is getting drained by girls like Susan and guys like Todd.
50:26Cool? All right. Thank you guys so much.
From the publisher
Welcome to The Game Podcast where we talk about how to get more customers, make more profit per customer, and keep them longer, and the many failures and lessons we have learned along the way to $100M in sales. We've got roll-up-your-sleeves kind of hustle with a little bit of cleverness and a lot of heart.
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