# Alex Hormozi: Take Your Gym From “Barely Surviving to Thriving”

Channel: GSD Gyms
Video: https://www.youtube.com/watch?v=dSSUXUQfO-c
Duration: 44 min
Language: English
Words: 10612
Transcript page: https://viewrankai.com/tools/youtube-transcript/dSSUXUQfO-c

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[0:00] okay um so my goal is to honor your time and help you speed up the process of getting more clients uh by getting by making more from them while serving them at a higher level so ultimately you'll get more clients by serving them more right and so i have a ton that i want to share his team was like how are you going to make it through 434 37 slides and i was like quickly um so quick bullets about us i don't want to spend any more time than we have to on this so we own gym launch and prestige labs layla is just as much an

[0:29] owner as i am i'm just the one doing the presentation but we are co-ceos of both those companies um we do a 50 million dollars a year in revenue uh which is cool uh we have 1500 plus gyms that we serve we have 120 us-based employees i had six gyms on my own before i sold

[0:45] those in 2016. um but as much as you're like great alex um that's cool for me but it wasn't always like that um i slept on the gym floor that's my first gym in huntington beach i lived out of my car i shot her at le fitness at that time i had no employees coached all the sessions anyone been there anyone still there it's cool if you are we've all been there so yeah i was doing the the hashtag 4am the 10pm lifestyle would wake up from stress sleep get like the nice cold sweats of like how am i going to pay payroll but um what i want to show you is the

[1:17] process that took us from sleeping on the floor to opening six locations and always being able to acquire more customers so this is kind of the secret revenue stream that's in plain sight that i use to outspend all my competition and double my eft without spending a dollar out of pocket you guys want to hear about it okay so to start i want to explain the only ground rule that we operate as a business like gym launch every single internal uh presentation that we hold has the next statement on it this will probably be on my tombstone but this is like what we live by so a business owner

[1:47] wins by making the same prospect more valuable to his business than to that of his competition and it's his or her if you know for the female owners but like that concept so that's a different way of saying what dan kennedy is famous saying who can spend the most to a car customer will win but i think this just makes it more tangible so by extension the gyms that satisfy and monetize the most customer needs will dominate their respective marketplace because the more ways you can monetize your customer relationships the more you can turn around and spend on marketing to attract more customers thereby helping more people and the more

[2:19] you can spend on serving those same customers because you're making more from them the more invested they will be because they're spending more with you the better results they get the more your clients will talk about your business the more money you make and then all of this is enabled by the fact that you have more ways to monetize your customer relationships and satisfy more needs all right and so i want to show you is how some of our gym learners have taken this business truth and used it to dominate their markets and i just really wanted to somehow put in this little finger monkey into the

[2:45] presentation so i figured our way in so that's you know future you and your competition isn't that cute though um so let me tell you how this all started so this is me when i saw my 5 000 a month lease i had no idea i moved from baltimore to huntington beach california i knew no one in the area i was like super excited i had no idea what i was getting into very much out of my league um and i heard about this thing called facebook marketing early on so i was i was very fortunate that i got in it like six seven years ago um and things started to

[3:13] actually go well i remember taking this picture and sending it to my dad cause i was so proud that i got that thank you and so things started to grow and i'll go over to nine employees and i was like i got this like i'm a businessman i'm an entrepreneur like i know you know hashtag blessed you know um and then the facebook slap happened and this is the one that just happened this is one that happened a few years because it's happened multiple times and so overnight um my cost per lead 5x and i was like crap and so my money rain turned into this right

[3:46] and so all i could think about was letting my dad down and so the question i kept coming back to was like how can i afford to get more leads because like i can't spend enough to do this by the way this is back in the good old days of facebook when like you could put like like michelle lewin on like within a bikini and be like click here for like bikini abs it was great uh things have changed but um but i was like how can i how can i afford to get more leads like i can barely pay what i'm getting right now right and so i was like i need to have

[4:12] something that's immediate that's cash up front that has no payment plans that didn't require any fulfillment and didn't add any overhead right so i wanted to be able to monetize more things but i didn't want to increase any complexity to the business because i was already like swamped and so i was like okay if i could just make another 100 off each person like immediately that would cover all my ad costs and i'd be able to forward lead flow again right so that's all i needed and i was like so what service could i possibly sell that everyone would buy cash upfront paid in full and then it

[4:42] hit me is that it wasn't service it was supplements now before you're like oh my god supplements i'm gonna explain like how i went through this journey um of like being the guy who's like never take supplements like you don't need them just like just you know eat your eat your vegetables and train hard to being like do you want fries with your coke all right so once i figured this process out it changed my model forever and it unlocked the missing link to my growth and the growth of my facilities and so then we started to grow again after we started implementing this and we kept growing and growing and growing

[5:15] and not only that i actually started getting pretty good at selling them and so um this was a video anyone ever see this video we ran this like two years ago it was like a really popular ad we ran has like a million views on it um but anyways this was uh this was one of the first gym launch themes that we did we did like 191 signups and it was like in the hood but what isn't included in the video is that right after that launch we did 21 000 in supplement sales in five days um which is pretty cool and so that was like kind of my own four

[5:40] minute mile of like that was a record for me in a five-day span and so that was me but it was like huh can i get other people to do this and so i got pretty good at teaching other people how to sell them this is when my lovely wife leila came to the picture and she we met on bumble by the way so like swipe right like that's how we met um she her parents like we got married in secret her dad forgave me eventually um no not now now we're good uh but at the time she was like is this legal because she picked me up from the airport and

[6:09] all i had was this big backpack full of contracts and i was like listen i promise i'll take you on the date that i promised that we were going to go on two months ago um but like you have to do one thing for me she's like what i was like you got to help me process all these contracts and so i think we processed something like 28 000 in like an hour and she was like what do you do again and then she ended up quitting her job and joining me with gym lunch and so she was like well let me try and of course in classic lately style

[6:34] she went up me and did better um and did 28 000 in sales um her first try doing it and i was like huh that's neat i know girl power um and this is actually the hardest secret that i've had to keep from the greater gym community for two years because this was a major part of my model and i didn't share that with anyone until very very recently and so just consider this presentation my way of making up to an industry that has treated me very well so you might be thinking like sure you and laylee could do this but could other gym owners achieve those types of

[7:02] numbers um this is actually totally impromptu because casey atkinson came up to me he's one of our dremelers i didn't know he's here casey you're here where you at so um first time you ran this little process that i'm going to go through what did you what did you what have you made since like december uh 64 000. i didn't know he was here like so there's so like other people can do this um and so you can decide for yourself so here's a few of our gyms who added 5 dollars a month in um additional revenue ten thousand dollars a month in additional revenue fifteen thousand

[7:35] dollars a month additional revenue twenty thousand dollars a month additional revenue thirty thousand dollars a month in additional revenue of all recurring without spending a single dollar on ads that's the key point here all right and they didn't have to add a single class by doing this or spend any dollars on payroll in their first 30 days neat and so this is the same system that rob and trama used they did 30 000 in their first 20 days in supplement sales i'm going to show you how it works this is cool right this is cool okay you guys are like okay this is good all right so

[8:06] supplements have been the missing piece to your gym and the key to future proofing it because without them lead costs are only going to go up period if you're like man why isn't facebook giving me five dollar leads again it's never coming back get over it it's gone right you'll get the next wave when the next thing opens up until then you can either die or adapt all right that's just the truth so if you're not future proofing your business with this the people who do will beat you just is what it is all right so i don't care how skilled you are or what type of business

[8:34] you have i'm confident that every person here who has a gym or a fitness studio okay perfect so you guys can add 45 708 per year using the system that i'm going to show you and the reason it's that random weird number is that is the average average that the gyms that we work with add average including like the dude who sells one thing it says 16 and drags down my average right average no one talks about averages because no one has good ones average all right and so i'm gonna prove to you the next 60 minutes and i'm talk really fast so um would you guys pay eight grand if

[9:08] you knew you would make an extra 45 000 like you knew without a shout out of a doubt would you do that good investment okay so here's why selling supplements hasn't worked for most and why it didn't work for me when i started out and so this is kind of the old way of doing it right you buy a lot of a product up front type a lot of cash and inventory you run out of you run out of popular flavors i always ended up with like 16 banana creams i don't know why and i could never guess the right amounts um i never had any margin left

[9:31] over with amazon there was tons of price competition i would always lose the second sale and what i mean by that is like you you know you sell a product to somebody they buy it they're excited about it and then you never see it again and they just continue to buy it on amazon without you so it's like you just make that first pop and then the company gets everything after that right um the dusty shells problem because i had a really poor retail selection i didn't know how to present it i had a pretty crappy product because he was only thing i could sell that had a

[9:57] good enough margin to be worth it um i was seen as the blood cycling middle man which always sucked cause consumer wanted to cut me out manufacturers want to come out so i was like wtf right and i didn't have any way of selling high ticket front-end packages i didn't know how like do that bundle i'm talking like two grand five grand packages like up front right and i had no way to track commissions well for trainers right and i had no idea how to sell them without teaming salesy and so after six years of figuring out the hard way of selling supplements do you guys want to know the easy way

[10:24] all right so um this is the same way that caleb and eric used to do 47 000 in their first 20 days and recurring same way that josh uh matched his entire gym eft in the first three weeks he did it um just in supplements in the same way justin lesh had his entire team take this over and they did i can't even see it i think they did 11 000 in sales but he was on vacation because you don't have to do it it's a very easy sale it's significantly easier sale than fitness sales i'm gonna get to why in a second and so this is the way

[10:51] that our gym lords are using like this is how we are able to liquidate ad spend and why we spend so much more than everyone else is because we can that's it right and so they're able to liquidate their ad spends and they they're able to recover the cost that they're spending on advertising before they even count their fund in sales right which means their entire advertising campaigns are pure profit is that cool all right so the goal is to show you i can add this untapped revenue stream and use this to outspend your competition without having all the issues that i struggled with the old way right and so

[11:22] here's why this changes everything so if you have gym number one right typical gym they convert 20 of their leads and they don't sell supplements because of whatever you know head trash limiting beliefs they have right let's say they make 500 from any front-end program they have whether it's doesn't matter 28 days 6 weeks 12 weeks whatever right and they make 20 margins at their gym that means they're making 100 per sale net all right now if you're converting 20 of your leads that means you're making 20 per lead that's your break even point right now gym number two converts on average 315 per head in

[11:54] product sales those are real numbers all right and they have 3.4 on lifetime value which i'm not even going to include in this because we're only talking upfront money all right and you're running a 42 margin on your product sales versus your service sales which means you can spend an extra 120 per acquisition not including lifetime value and so that means that you add an additional 24 per lead that you can make from immediate cash an extra 24. and so if you're looking at which gym you want to be one gym can't buy leads anymore after 20 or it has to come out of their pocket

[12:25] where you get the other gym that can make can continue to price up until 44 lead right same gym just a tweak in the process who wins right gym too so i'm going to show you how we model this process and how you can use it at your facilities and how you can double your eft without ad spend and buy as much traffic as you want as a result so that traffic is no longer an issue for you cool all right so here's the four secrets of turning any supplement into a money faucet first people will pay you twice as much money for supplements as they do for fitness

[12:56] twice as much like it's insane two why not selling supplements is doing a massive disservice to your members three how to add the revenue stream without competition risk or dollars out of pocket and then four how to double your eft from the existing client tell base in 14 days all right so people are gonna pay you twice as much why would they do that because they value them more all right so this is a saying that we say all the time in our community is like sell the vacation on the plane flight all right people want maui not tsa right right they don't want tsa they don't

[13:32] want airport lines they don't want packing suitcases taking off their shoes layovers connecting flights person farting next to you uh turbulence baggage claim right or within the context of fitness they don't want your modules your meal plan your macros your workouts your mobility work your meal plan your programming you don't want it right you sell maui you sell the final destination you sell the bikini right and so we always sell the same thing the difference is the quality of the journey and the speed so do they want to swim to maui you know there's sharks and you could get drowned or robbed like this lovely lady

[14:03] you couldn't pay me to do that um do they want to take a boat to maui you know it'll take a while there's it's slow there's no wi-fi which would kill you you know that's that'll probably kill you more than the sun um do they want to take a normal flight to mali you know get there a little faster smells bad has security bad food but you know you'll get there or do you want to take a private jet to maui right it's direct non-stop champagne's on the plane right so everyone gets there the variables are the speed and the quality of the journey the likelihood of arrival is assumed so

[14:34] this goes for anything that you sell if you are selling it you should believe that the person is going to achieve the result no matter what so it's just the quality of the journey that we're talking about if you're like well you know there's this thing but uh like you shouldn't sell it if you actually don't think they're going to get there it's just the question of what kind of quality journey they want to go on and so let me show you how these variables work together this was a big epiphany that i had and this is how we teach pricing so this is the value equation you can

[14:57] take a picture of it it's really cool so there's four variables result belief divided by effort and delay all right and that equals the value so the result is is the end result meaningful to the person right two do they really believe that they can achieve it you probably have signed up someone at your facility and they're like like you know that they know that they're not really sure if they're actually gonna hit the goal but they're like i'm gonna give it a shot and so on some level there's a certain degree of doubt that always exists in the prospect's mind that they're going to achieve what you're promising them

[15:27] third is the effort how much time stress sacrifice do you need to give up in order to achieve it and then the fourth is how long is the delay how long do they need to endure the cost or pain before seeing the result and so here's here's a fun example that i like giving so if you have like meditation right what's the result of meditation happiness calm chill well-being right that's a good thing big positive belief that someone can achieve that like i was like hey start meditating how many people have started meditating and not stuck with it anyone i've probably started 100 times i just like can't do

[16:00] it so the belief that i'm going to actually achieve this nirvana is really really low all right the effort that it's going to take me to get there there's two types of effort one is that i'm gonna have to probably do this for like 60 days straight to get better at it because the first time you do it you know you suck at it like and then the second time you do it you realize why you suck at it more and there's also the fact that like it takes time in the moment before you get chill right before you get the result so there's the long-term one and then

[16:24] there's also the short-term one and the same thing here is that the delay period is is extended right so the value here is like one out of four which is why meditation isn't really a big industry now let's contrast that with something that has the same exact result same exact result chill well-being feel good same result now if you take a xanax do you believe that you're gonna feel chill afterwards yeah how much effort does it take very little you got to swallow a pill what's the delay 15 minutes and if you grind it and snort it it takes even less just kidding no one does that so um

[17:05] so the value is four out of four right now you can see the thing here is that the same exact result the value is so much higher because of the cost associated with it right and so let's take a fitness example and walk through the same thing what's the result this is the biggest thing that we have in our favor the result is we're going to change someone's life they're going to be a new person they're going to have a new identity they're going to feel good they're going to look good they're going to want to have more sex they're going to be a better spouse

[17:29] they're going to be better example to their kids all that stuff right now the belief that susie q is going to get there ah she's tried 20 other things in the past maybe this will work kind of low effort we have to have her sacrifice everything that she loves she can't sleep in anymore she's got to wake up at 4 am she's going to be sore as she she actually has to go to the gym for three hours a week minimum right she can't eat the food she loves like wow we have a lot of things stacked against us right and then delay and if she does all

[17:55] that stuff for a week nothing happens she has to wait six months a year two years before she's actually gonna achieve what she actually wants in her life right and that's why the value score of selling fitness services is so low and this is our problem fitness as a service is a hard sale that's why we need to sit down with someone for an hour to close them on a 2000 package when people go on amazon and buy all day long without a sales person right so this is also why i believe the best sales people in the world start with fitness because we have the hardest sale

[18:27] in the world to do and so let's look at supplements to the same value equation lens result it's actually the exact same result as fitness they're going to achieve a transformation they're going to feel good they're going to look good et cetera the belief that they're going to get there pretty high because what is associated with it very low effort take a pill take a pre-workout whatever it is and the delay this one's mixed because they still aren't going to achieve the same result like with fitness but at least with supplements you can feel something immediately like you take a pre-workout you have beta-alanine and your skin starts you're like this

[18:57] stuff's working right and so the value here is three and a half out of four it's not the same as xanax but it's pretty good it's not the same as that which means yes people perceive value supplements is more valuable all right it's also why supplement industry is twice as big as the fitness industry from a membership standpoint if you look at health club memberships it's twice as big which means that people spend literally twice as much on supplements as they do on service crazy so let me give you a real world example so consider what other products and services people buy within the larger context of weight loss all right and the

[19:31] results they have like that they that they get and their cost and think about the cost within those four variables so um maybe some of you guys have seen this this is a weight loss clinic example this is a result of coolsculpting if you guys have heard of this this is probably one of the most used images like this exact image is like on national campaigns is massive and they actually kind of sneak you with it because it goes before 12 weeks after 12 weeks after because it's actually 24 weeks not 12. but who here thinks that they could achieve better results with someone in 24 weeks than these images

[19:58] at your facility okay three people that's good all right so so the thing is though we struggle to sell memberships and suzy q here is going to drop between 2 grand and 3 500 on this transformation why because there's low cost it doesn't cost her anything she goes in for an hour and she's done that's it she doesn't have to change her eating skills she doesn't have to work out she doesn't have to ship to do anything she just has to go in for an hour that's how much people value the result and how much the cost that attributes it stacks into how much people are willing to pay for it

[20:29] and so prices like that may shock you but they shouldn't because you have to look at it within the context of everything as a whole like these aren't ultra rich people who are doing this right these are regular people paying premium prices for things that they value and so the the this is an example i got from chris cauley who owns uh who owned think they had 220 weight loss clinics which i love studying adjacent industries which is like i highly recommend you should do people would come in for a 5 a week or 30 30 day promo so this is like a low barrier offer right and then immediately in that

[20:56] first thing they would sell them 500 or 600 for the supplements and then one year free service they sold supplements and give the service away for free and then five days later they would sell them between fifteen hundred and ten thousand dollars worth of supplements and then they would service them for free interesting right and these are people who came in for a five dollar a week or 30 day promo so everyone who's like the leads are weak okay we might not be selling what they want and so i just always think this one's funny they're mandatory supplements of fat burner that they sell for 150 a

[21:28] bottle cost them less than 20. and note for them they had doctors and nurses that gave away their service for free doctors and nurses service for free why would they do that because they understand the average consumer values tangible goods more than intangible goods and services it's worth noting though everyone in this room that the wealthiest people reverse this because they value their time and they invest more in coaching and information anyone in your family think you're weird for attending these things cool just mine awesome i actually can't see anything because the lights um but backslide average consumers prefer tangible goods people have this weird belief that you

[22:04] shouldn't get paid a lot for services because they don't get paid much for their time so why should you right you're no better than they are etc they're like well if i you know i buy 10 sessions for 600 it means he's making 60 an hour i don't make 6 an hour he's not more educated than i am right and they have this head trash around it and so they'll spend their money on products because they have something to show for and there's more perceived value for general population and so we need to take advantage of this fact like the doctors did and realize that we can make more money selling what

[22:31] they want to buy all right so this is an example i always use like rosie so you all have had a rosie i've had hundreds of rosies rosie comes in says she can't afford you know the program we arm wrestle over it you know gator wrestler to death and she finally decides to sign up on a payment plan right so she only puts 100 down to start with us two days later she comes in for nutrition orientation drops 700 on supplements all the time all the time i'll take all the supplements is there anything else i need like that's the quest there's anything else i need

[23:05] interesting so supplements will make you more money because customers perceive them as more valuable and on top of being perceived as more valuable they stack on top of existing services so supplements actually represent entirely different category purchasing decisions and so it's a lot like so this is an example i have with my grandmother so my grandmother used to live in the same building as my grandmother terrible decision um on my part uh i literally could never see her enough or call her enough like just she was like i'm upstairs where are you right and she said that in farsi and i didn't really understand what she's

[23:31] saying but i'm assuming that's what she meant and so i would go there every once in a while and um when i knew i was going to go to dinner at her house i'd have like i'd like have to like pace myself i wouldn't i wouldn't eat lunch i wouldn't snack and i'd go there and she'd have like eight full bowls of food like we're talking like middle eastern grandmother and i was the only one who would show up and like she would just like she would just keep giving me food and i'd like start sweating like you know i have to unbox like i mean like it was like a

[23:54] serious it was like a gauntlet right and so i was sitting there and this is this is something that happened all the time then she would always offer dessert and i'd be like no and then she'd bring dessert and then i'd have some and then like and then and like this was a cycle repeat itself and then one day my dad came with me so i don't she and i didn't speak the same same language and so my dad came with me one day and um we just finished the first half of this gauntlet and uh you know she's like do you want dessert and i was like no and then she

[24:17] says something in farsi and my dad cracks up and i was like what did she say what did she say and uh he was like she said that your your your dinner summer stomach is full but your dessert stomach is empty and um i always that like that always stuck with me because um consumer buying patterns work a lot like that and so when we're selling training services a lot of times we've filled up their training service wallet or compartment we've we've ripped everything out of there but their supplement compartment is completely full and untapped it's not the same it's not the same whole it's actually

[24:47] separate budgets there's also a grocery budget on top of that too there's a whole bunch of pockets you can get into and so what it means is it's not fitness services or product it's fitness services and product it's both and so to recap you'll make more money from selling supplements because they'll spend twice as much of them they're easier to sell consumers pay more for them than for fitness and they stack on top of what you're already selling so now that we covered that the next natural brush is like cool i got it i get that supplements will make me more money but how does this actually help my

[25:14] customers right and so that's why the next secret is why not selling supplements is doing a massive disservice to your members so um this is a story that i had a mentor who told me and um it's called the ham the garlic and so as a little boy and his dad gave him a dog right and so he was supposed to like this is your responsibility you're a big boy now you get you get to take care of your own dog and so all of a sudden he sees the dog has ticks right dad's out for work grandmother's here i got a lot of grandmother stories and um and so the

[25:39] the kid goes to his grandmother he's like you know grandma like what do i do like the the dog has ticks and she's like meal like give him some give him some garlic and so he's like okay goes to the dog tries to give him garlic you know the dog like moves his head anyone who has a dog you know that like they won't take it he's like grandmother like she he's not taking it like dad's gonna be so upset like i have to i have to take care of the dog and she's like did you just try and give it to him he was like yeah just

[26:00] like you said she was like mijo rapid and ham and then give it to the dog so he wraps it in ham gives it the dog dog eats it right up a couple hours later starts swimming out garlic takes crawl up the wall right and so the thing is the moral of the story is you have to give people what they want in order to give them what they need all right and so this was the big one of the biggest aha moments i had um that took me from like never selling supplements and being very against it to actually being like okay with it and

[26:24] including in all the services we had and so this is susie so susie came in she bought a 400 uh challenge from us and as soon as she finished that she was like what supplement should i buy my friend says supplements are awesome um and i was like susie you're good just like eat and train you'll be fine like you got everything you need and then she was like but what supplements do i buy and she just like she would not get out of my office because of course i had nothing else to do when she finished her 9am session and like what do i have to do right you know

[26:51] like she's in my office like against the door blocking my exit and so i was like all right in the name of good service like go get this stuff be gone all right and so what happens next she goes to summon shop right and she doesn't get what i prescribed because the guy pimps around the thing that he has more commissions on right um so he was upset on a bunch of bad products without any context of susie's goal it's like i know susie i know what her goals are and yet someone else was making the prescription right she spent 700 in 20 minutes and that supplement shop made more on

[27:20] the tr on that relationship than i would as the owner and i was going to counter reps i was going to be responding to all our messages like consoling her for some reason she didn't lose 25 pounds a week like all of that right over the next six weeks i had to deal with this and in 20 minutes they made more than i did and so this is also despite me paying the cost of acquisition working the lead making the hard sale and actually gator wrestling her into doing this thing right we're the ones who did all the work to get her to do fitness and then

[27:46] we just send the profit away and so um funny thing here is like who actually made the sale in this transaction me or jake he looks like a jake i'm calling him jake right who made who made the sale i did but he got paid for it because i told her what to get and she just went and got it and also total side note when was the last time you got like something sent from you from the supplement shop that you sent all the business to right so why do you keep feeding these guys so this is a second one this is juan juan was like dude i want to get jacked

[28:16] like what something so i need bro and um swan was like your perfect client he was the guy who came in like went all in worked out like did everything to the tea right and again i was like dude just eat and train you'll be fine and then of course he's like but bro like you use supplements and like mind you in my office the way it was set up like i had all my supplements behind me on the floor that like i would take and um i was like uh you know man like i'm at a point in my career where like you know i just really need to get the

[28:42] most out of your workout it's really just like five percent we're talking about here and he was like well i want the same five percent like why don't deserve the same advantage as you and i was like uh you're right uh this is what i take and of course gave him the list he went out drop 400 in supplements which was more than he was paying me um and talk again about the world's easiest sale for jake right and so i was making a decision for customers that i wasn't even making for myself and worse yet i'd rob them of the opportunity to choose for themselves

[29:11] right and of course the aftermath of this is that he started taking stuff and started working out like a madman because he thought that creatine was was was testosterone um and so he's like bro like my sex drive is crazy and i was like dude it's atp it doesn't work that way but like awesome man like sick which leads me kind of my next aha moment was um this till two clients so everyone here has had both of these clients jamie and jennifer jamie was a single mom she was a she was a nurse and she drove uber on the weekends in order to pay for a gym membership like she was

[29:40] all in right she did everything she got the products i told her to do she followed the meal plan she was the best jennifer on the other hand was was a client who like had her friend who was a trainer that she met once that was an article on something that she read who had to contest every single thing i ever said to her um just such a pain we've all had them right and the thing is she didn't invest in anything and what i realized is that the more people pay the more they pay attention period it's the way it is who has who has you guys have your most expensive

[30:09] clients right are they your best clients right they pay you the most the most committed and honestly they're the easiest to work with right and so it's the same thing here the people who pay the most pay the most attention and this by the way is actually jamie in real life jealous 55 pounds in her first 12 weeks still had four kids it's awesome and so the last one i had was like okay i was like you know what i think i think we might go in this direction but i was like i'm like i gotta get my trainers on board and so i had to figure out a way to get them on

[30:38] board and what happened is as soon as they saw the clients like juan and jamie getting all these better results and getting like more excited just more bought in then they got behind it and this is from dallas who used the same process i'm going to show you a second you know something is funny cause i thought it'd be tricky to getting getting them on board the team on board with the new supplement they've never heard of but they're all fired up and even our coaches who hate sales are selling the out of them right and they did 20 grand in their first month and you can like aaron moos he owns a um

[31:01] he owns a gold he's like the amazing things happening the front desk from our trainers who never really had a chance to make more money has started to sell supplements today the confidence i'm seeing and how excited they are it's contagious i haven't sold hardly any supplements my head maybe 10 grand a year and we sold three fast packs there's about two grand um in a week like thanks again you know thanks for helping me break through the beliefs and so finally i had to get my team on board with supplements which i did and this is how i pitch it to them i was like listen people are going to buy them

[31:24] anyways we spent the marketing dollars to get them why would we let other people's profit we took the time to sell it we made the hard sale we know their goals we should be the ones advising them we should use every tool in our in our arsenal available to increase buy-in and perceive results and the more they pay the more they'll pay attention right i took supplements how could i rob them the same choice all my all my guys took supplements too so it was like we take them why would we not let them take them and it still even gets me excited to this day as soon as i start like a new

[31:48] cycle the first thing i do is i like go buy my supplements right anyone else do that get your like programming from your coach no okay just me um but naturally as soon as i like made the decision i was like we're gonna go all in on this is where i made a fool out of myself and lost a lot of money which leads me to secret number three which is how to sell someone's price competition risk or dollars out of pocket and so i was super excited to sell them but i ran into some problems the first was the money down problem all right as soon as i was like cool let's

[32:12] go buy some product they were like cool we you know we sell pallets and so it's like basically five thousand dollars is a minimum for like what i would need just for a basic amount i was like oh that sucks the second problem i had was the impossible flavor problem anyone here who's trying to buy 100 t-shirts for 100 people knows that you can't get the size right doesn't matter how many times you do it you cannot get the size right it's the same thing with flavors right like like i said i always end up with like 16 banana creams the next problem is that the flavor

[32:36] problem compounded my retail selection i couldn't make small orders so i was forced to wait until i sold out of almost everything before re-upping right which made my retail look like which slowed down sales it compounded the selection problem because then there was like i would it would be slower for me to re-up so then there was less likelihood that that would have the thing that they wanted and they made me even more feel for the next purchase which would be yet another cash outlay right the next thing that happened was that amazon came along right and there wasn't a lot of margin to begin with and then i

[33:01] tried to raise my prices and people came back pissed off because they found it on amazon right and then if i did raise my prices they'd look on their phone and match it for less one time i had 28 people in a room and i i like made this made the supplement pitch and i swear this girl was like i found it on amazon for five dollars cheaper and no one bought and i was like and i was like i never want to feel this again um and so we figured out a way around it the next one is again second sale loss if someone if i did finally somehow

[33:30] manage to sell someone they would then go to amazon for every sale after that i was actually mutant protein's number one facility and i never got a sale past the first right i even had a girl come in once two years after like leaving the gym because she lived she moved out of the area she came back to the gym and she was like alex are you here and i was like yeah what's going on she's like you know what i still use that protein that you sold me and i was like great glad you're glad you're enjoying it i'm glad i got my first ten dollars um and

[33:57] the company got everything else after that right and then the last problem was just the proprietary problem people just look at the label and then try and compare to something else and try and buy something comparable right next problem was the crap in a bottle problem right proctor head was crappy and i knew it i felt like i had to do that to buy cheap stuff to maximize at least the first transaction since i wasn't getting anything else after that right the next was a commodity problem no matter what i tried i was always the middle man right next was the money backs problem i wanted to sell high ticket i wanted to

[34:21] sell to the whales when they'd come in you all know you've seen them they roll up mercedes and you're like nice it's gonna be a good sale right but i was able to do it because they would empty me out and then i couldn't sell anyone else because i would want to sell everything but then i wouldn't be able to sell anyone else for theirs today so they'd actually leave undersold the next one was that i had the unhappy trainer problem they only wanted to sell stuff they were sponsored by anyone else have that just me all right even though they didn't make anything on them right which

[34:47] is crazy to me and then last was the techno battle probably i had no idea how to sell them i was like hypertrophy lean body mass and people were like i'm good thanks though and so this is kind of the old way of doing it buy a lot of product type cash inventory run out of popular flavors you have no margin left over with amazon you have high price competition you lose the second sale no matter what you have crappy retail selection crappy product see you're seen as the middle man there's no way to sell big high ticket front-end packages you have no trainer commissions sponsorships

[35:11] or certifications to get buy-in from the team and you don't know how to sell them right and so despite having my gyms and doing what was supplement sales i always had to work around those things until now so this is the new way so this was kind of like the dream supplement company that i had in my mind i wanted no inventory costs i wanted recurring revenue with autoship i wanted to keep getting paid if someone kept buying this stuff even if it wasn't for me like that girl who came back i wanted the option to sell in bulk up front i wanted premium price protection and

[35:35] premium positioning i wanted celebrity endorsements to leverage i wanted not i wanted proprietary blends and not generic names to further protect from price comparison i want as much margin as possible i wanted endless supply and choices so i never ran out like the banana cream issue and i only want to sell someone's high margins right not mess around with low margin stuff that gives the money to someone else instead of me right and since it didn't exist we decided to make it and so this is the new retail model that'll put all the other ones out of business and reclaim the businesses lost to the gncs and vitamin shops of the

[36:01] world no beef with them just as an example so we created a dropship model that's actually our warehouse so that there's no inventory costs you never have to buy you never have to re-up there's never any cash out of pocket which means you have no risk right the next is that i wanted to have auto-ship cash flow because i wanted recurring revenue from this i wanted to get paid if they kept buying stuff so we created sticky commission so that if susan decides to leave and she loves the protein i still get keep getting paid on it right one year later still i wanted the option to sell bulk up

[36:30] front three six 12 month packages 300 to 5 000 packages up front talk about liquidating acquisition costs you sell a couple 5 000 packages happens real fast i wanted trainer buy-in so we created commission tracking trainer certifications and sponsorship programs so that every trainer at every facility pretty much gets sponsored for free so they all get free product and then they post about all the time and all your clients buy it i want a price protection premium positioning so we actually have it listed online at 40 higher than distributors backdoor prices and the centralized preference section and for those of you who know me prices only

[36:59] go one way it's up i wanted celebrity endorsements to leverage so we got phds olympians and pros to endorse the product we have a phd who made it and so um that's why there's that little label on every bottle that we have we wanted the proprietary proprietary blends and non-generic names so all of them are proprietary but we pulled out the expensive ingredients so that you could always say like look they're not going to have the amount of this stuff anything that's commoditized like like a creatine monohydrate we're going to put inside of a blend because that's something that's like we want to say this is something that's unique to

[37:29] this whereas the really expensive things you want to pull out so you can say like there's nothing that's going to compare to this you get the best of both worlds i want as much margin as possible so 300 300 x the sorry 300x not 300x 3x uh the industry average so it's more absolute than you would if you're making them yourself and this is kind of like money math visualize so a typical zero inventory type commission is usually like 15 on a 39 fat burner making six bucks like forget about paying a rep right the new ways you get 47 on a 67 product you're making 31 right so you're

[37:58] literally five times a payout for selling the best product i wanted endless supply and choices so we have some centralized warehouses which enables like unlimited selection and quantity without ever running out and we ship to canada anyone in canada any canadians here hey right and i only want to sell products with a high margin so the average margin is 42 which is three times the industry average of a gym service model industry interesting right three times and i want to actually have the best product and not just say it so this is dr cashy he um he worked he actually was recruited when he was a teenager to run all of the

[38:31] olympic facilities in azerbaijan um he got his masters in chemistry when he's 17. he got his phd when he was 20 youngest biochemist in the united states ever um he actually is the same person who coaches mike to work with him as five thousand dollars just to like get on the phone with him uh really really really smart dude um also a really cool guy wounded beautiful retail selection not have to carry it so we actually created a one-time retail kit of all empties so you have a beautiful retail selection that you never have to worry about from a cash flow standpoint it's all there it

[39:00] always looks beautiful it's always full which anyone who sells retail knows that you have to have full retail selections in order to increase speed velocity of sales we want to top-tier manufacturers who's the same company manufactures whole food products cgmp whatever twice tested they've never filmed an inspection fun fact they said this was the most expensive line they've ever made i always believe that there's two winners in every marketplace the cheapest and the best and we're definitely not the cheapest and of course i wanted to get paid out immediately not on a 30 60 day timetable which is traditional and so for us we get paid four times a month so it's

[39:31] basically it's every eight days because if we're trying to liquidate ad costs we need the we need the payouts immediate right and so like i said i wanted this at 40 to 50 gross margins across the board to me as a gym owner without any risk and so having put the better part of 22 months to create this the relationships the products the technology backing in the five years owning my gyms to perfect the selling system i like to proudly introduce prestige labs it's made by gym owner for gym owners all right just to protect us so we wanted like this to my knowledge the first time that a selling system and a

[40:04] product line's been made at the same time so they're made in tandem so they can maximize one another all right and this way you can sell top-notch products and you can sell with conviction because ultimately the person who's the most conviction wins and so i had to make something that was like amazing that would like gym owners and really people who actually know what's inside of a bottle would be proud of it right and so i actually had one of our gyms like why are you giving away so much margin um and it's because as we've grown as a company we've learned one simple truth the more money we make other people the

[40:31] more money we make is what it is that's what we did so you're like cool alex i get it this is awesome but how do i make money next 30 days okay so how to get all your existing customers to big to sign up for supplements immediately so we do a free commemorative 28-day challenge okay and so we do is like this is an example if you have let's say 200 efts so recurring members at your gym you participate in a free challenge you do this big thing big hoo-ha everyone signs up because it's free right 85 of people or more will sign up for it

[40:59] what you do is you do an assume close at the nutrition orientation and you get 80 or more to actually buy the products on subscription all right price points 201 and so just like that you had an extra 27 000 of recurring revenue to the gym given this example in numbers and it's at two to three times the margin of your existing service and you add no overhead and you're like these numbers sound unreasonable alex no one actually hits those numbers well you heard casey but here's chris joynette hey you just released the 28th day so you don't have to call it that he called it a belly fat

[41:29] um shit's blowing up that's the 27th of august 28th of august he's like dude 107 signups in two days we'll be able to do two ones on saturday sunday monday we should hit 160 by then 90 on something's 140 144 people that's 28 000 in sales holy that was his prediction three days later i got all 160 people signed up for internal challenge they're one of supplements too and there it is 28 days later almost to the t exactly what the prediction should have been here's kate and dallas they actually only sold 30 members because they didn't follow it to the tee they're like well we're going to charge for it and i was

[42:04] like all right you can make less money if you want to um and so then they came back and made it free and sold 90 more and so she's like oh did 90 90 signups i guess reworked i made a video and said exactly you told me to say ha ha that 90 is just current clients and doesn't include the referrals that come with it it's crazy how they can't afford a 98 challenge but sign up for recurring supplements like it's nothing i was against the free thing because i thought they wouldn't buy supplements that's not the case note to self just listen the first time and that's not to boost me up

[42:30] it's just because i it up the first time i did it wrong that's why here's brian um mailbox money i've been selling supplements to rtb since we opened the issues been continuity and high cost of inventory usually keep three to five k in stock at the gym at all times without a continuity system there were months were just inventory just sits there the opportunity procedure is massive gennady are incredibly grateful to be included uh mailbox money is the name of the game moving forward no inventory frequent commission payouts repeat sales so good and there's brian he did 26 thousand his first month and here's some reasonable ones because

[42:58] a lot of people have limiting beliefs i like to put some some reasonable reason once for those who are like well i don't know um here's kelly she ran a 2018 internal play still 10 grand in two and a half weeks here's amy did 56 did 10 000 in supplement sales or first go around right and so ultimately the biggest deal that you make to your trainers and gym clients the bigger deal they will make it and the more people will participate and buy period so i know we covered a lot do you feel like we covered a lot talk as fast as i can so um the first thing we went over is

[43:30] that people pay you twice as much for supplements as they do for fitness all right number two not selling supplements to your clients is doing a massive disservice to them you're not allowing them the opportunity to be more invested in your service than they already are you're not allowing your business to profit more per customer so that you can have more outreach and help more people three you can do it without risk competition or dollars out of pocket and you can do it using the internal challenge to wft next 14 days thank you all so much for your time i love you guys you guys are gym owners

[44:00] thank you [Music]

[44:14] [Music] you

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