The Game with Alex Hormozi - How to Never Have a Trainer Steal Your Clients... | Ep 148

Episode Date: September 5, 2019

"People will always be your problem." Today, Alex (@AlexHormozi) discusses the challenges of scaling a service-based business and emphasizes the importance of properly managing and incentivizing employees to avoid losing clients to competitors. He also provides a threefold model for motivating employees and offers tips on how to effectively communicate and train staff.Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.Timestamps:(1:44) - People are the problem in scaling a service-based business.(3:16) - Lack of communication or skill hinders compliance.(4:47) - Motivating employees is key to getting work done.(6:14) - Seeing implementation improves learning.(8:05) - Recognition, opportunity, and motivation drive team success.(10:15) - Recognition and opportunity are more important motivators than money.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Happy Wednesday, everybody. Hope you guys are having a halfway awesome week, or an amazing week, but halfway through it. So I was having a conversation with a gym owner, an OG, gym owner of ours. And he was saying that he was struggling with some people problems. And so I've been putting some thoughts together about people stuff in general, and I thought this would be a great one to address. And so how to never have a trainer still your clients? So after you learn how to market and sell, the next bottleneck in your business is going to be your services, the thing that you are fulfilling with.

And if you're doing a brick and mortar service business, which just about everyone on here is, the product is someone else. Right. Whereas if you were selling widgets or selling retail, selling things, goods, whatever, or selling software, then you are selling a widget, which is unchanged for, you know, for the large part. and not really dependent on someone else, right? Whereas service, you're training someone to deliver a service, and then you have given them this skill that they can now leave with because it's inside of them, right? And then start doing that somewhere else on their own.

And so this is kind of the cost and the benefit of running a service business is that they're extremely easy to start. There's low barriers to entry. They're more difficult to scale. And so this is kind of the seesaw that goes into scaling, a business, especially a service-based business. And so one of the things that I consistently see is everyone consistently always wants to talk about acquisition.

And don't get me wrong. That's exactly what I'm going to give because that's what everyone wants to talk about. But the wiser business owners will understand that once you have acquired enough customers, the problem with your business is not acquisition. The problem is because you don't know how to service these people and you don't know how to scale a service business because the big secret is that people will always be your problem. say it again people will always be your problem because the skill set around managing people consistently gets harder and harder the more people you have and in order to scale a business

any business you have people even if you're scaling software even if you're scaling a retail product or good you're still going to have people now in those instances it's just a ratio of how much revenue you can generate per employee right and so that you know like a software business can usually generate more per employee, but no matter what any of those business, you have to scale people. And that is why operations is the least sexy thing in the world, but also the thing that is probably the bottleneck to getting you to where you want to go. And so what I want to give you is kind of three things of why someone's not going to do what they're doing, what you want them to do, and then a threefold model to get them to do,

which you want them to do. And then hopefully I'll end off with the prompt of how to never have trainers to your clients again. So I was actually reading this book, which is considered one of the best operations books of all time. Andrew Sgrove, he's the one who he was CEO of Intel. It's amazing book. You should definitely read it. He's phenomenal. He turned around Intel when Japan came in and undercut like he's amazing.

Anyways, he said it's really simple. He said there's only two things and I'm adding one more even though he's probably smarter than me. But he said there's only two reasons that someone is not going to do what you want them to do. It's either because they don't know how or they don't want to. That's it. And so your job is to train and to motivate. And that is all. The only piece that I would add at the third piece is that someone doesn't know what you want them to do, which would be communication, right?

Because some people might have the skill and might want to do it. They just, you're not communicating well. And so they don't even know what you want, which happens far more often than you think, way more often than you would take. And so those are what I would say, the three main reasons. But based on the, if you're assuming and you're very clear on what you want that person to do and you don't think there's any, way that they would not understand what you want them to do, they either don't know how to do it or they don't want to do it. And so when you understand that those are the fundamental issues, that is it. It is really that simple. Then it's like, okay, what are the action steps that we have to do in order

to get someone to want to do it beyond training? So I'm going to assume that you're training your staff on a regular basis. That is why having one-on-ones with your team are really important. That is why having group meetings with your team is important. That is why having leadership trainings, having skill-based trains with your team is important because you are selling their ability to service clients. And so would you not want your products, if you consider your staff, if you're selling service to be your products, to become more valuable? Right. Now, that also feeds into the three-fold model of keeping people. Now, I've heard this first from Peter Parks, who's an internet marketer guy.

He's huge in the affiliate world. But he had a three-fold model that he probably heard from somewhere else. But anyways, it was really good. And it's simply incentivize, motivate, inspire. And you incentivize with money, you motivate with opportunity, and you inspire with recognition. And so if you're unpacking this and you're thinking about how do I keep people, right? You keep people with those three things. The incentive around money, the opportunity to grow, and the inspiration that once they've achieved something, you recognize them publicly.

And so if you think about it, this is kind of before, during, and after, right? You get them to come on board with the incentive of money. You get them to reach for the opportunity when they see the future. And once they've achieved what you want them to achieve, you recognize them for it. Now, what's crazy about simple things is that they are the hard ones to do because they're so simple that you think there's something more complex. But the reality is that it is the boring shit that no one wants to do. And that is why most people don't do it. But it is the key.

And so how to never have a trainer still your clients comes down to the, ugly shit that no one wants to talk about, which is your culture. And that is a reflection of you, of you as a business owner, of how willing you are to sacrifice for your team, how much they know that you are investing in them, right? How much opportunity and how much vision you are projecting. For those of you who, unfortunately, you guys aren't on the inside of our company, but what happens is every gym owner that we've had who's come on as a coach, or like really, it's mostly just the coaches. And they've actually seen how we run the company on the inside. they're like, this was almost more valuable than anything I could have gotten from you to actually see you implementing all these things that you tell us to do.

And so they see me every month going over the vision of the company, what we're trying to accomplish, who we're trying to help, how we're going to do it, and what the plan forward looks like, right? And they see that every single month. They see every single month. We talk about our values, what we stand for, who exemplify these values, our employee of the month. Like, we have all of these things and we do them every month, right? And on the weekly meetings, ours for ours is departmental because we have too many people. to do bigger ones. But inside of there, it's like, here's where we're going. Here's the opportunity, right? Here's the, like, recognition of who did an awesome job. And so each department also says,

like, here's our star of last week or last month based on XYZ. You know, Chelsea totally crushed this build out for all the gym owners and she did it in like two days and she worked overtime and she crushed it, right? These are the things that people live for. You know what I mean? Like, no one, like most people, most humans think they want. more money. But the emotional increase that you get from having more money lasts like 14 days. And after that, you don't feel it anymore. Mosy Nation, real quick, if you are a business owner that has a big old business and wants to get to a much bigger business, going to $50, $100 million plus. We would love to talk to you.

And if you like that, we'd like to hear more about it, go to acquisition.com. You can apply anywhere on the page and talk to one of our team and see if we can help you get there. And so, knowing that, being smart individuals, you are, who are listening to this, you can keep your profit the same. You can keep your profit higher by giving them the other things that people want. The money is really there to attract the right people because people have bear. They have bars of what they're willing to come in for, right? But after that, everything is going to be about the opportunity to the future of how they're going to grow and the recognition that you give them for accomplishing what you need them to

accomplish. And if they are not accomplishing what you want them to accomplish, then you have to look at how am I motivating them, how am I training them, right? And how am I communicating to make sure that they know exactly what I want them to do? And so if you look at that and you look at the team that you have and you're like, am I communicating in a way that they understand and that they are duplicating what I'm trying to say? They understand. Fantastic. Then there's only two things that are left that either don't know how to do it or they're not motivated to do it. And then you have to figure out once they are trained, then they are not motivated. And once you were there, then it becomes very clear of is this the right person or is this the wrong person for the team?

And then if they are the wrong person, get them out because there's nothing more demotivating for a team of A players than someone who isn't. And one of the things I asked that our coach of mastermind is if anyone on here has ever been on a winning team, right, many of us, I mean, we're mostly fitness people who are listening to this, most of us played sports at some time in our life, right? And hopefully on multiple teams. if you played on a winning team with a great coach, you know how different it felt how you practiced,

how you showed up to games, how prepared you were, right? How you treated everything, the details, how you set up your bag, everything, like there was a process,

there was a system, there was an expectation, and there was a bar that was set by the coach, and that was the culture of the team. In your company right now, you are a team and you are the coach. and if your company does not feel like the winning team that you remember when you were playing ball, that is your fault.

You're the shitty coach. And so those players are going to leave and go on their own. That's it. It's all it is. And so if you're able to think about your company as a team and think about what it felt like to be on a team that wins, right, to be on a team that sets the bar high that expects more of people, people place more. for free. In fact, people pay to play sports. So you can see that money is not the primary motivator. People are there for recognition and because they feel like they have an opportunity to

grow, right? Most people aren't going to go play pro. And a lot of people don't even have that feeling that's going to happen. And so understanding that, and I think that if you can put that lens in your eyes, like, how am I running my team? Right. How am I running my team? When you had practice, how many times a week did you practice? Right. The more you practiced, the better you got. your practice are going to be the meetings. Your skill development is the one-on-ones that you're having. These are the basics. These are the things that you have to do.

And if you're not doing them, your company is not going to grow, right? And then you're going to wonder when you check out because you have a modicum of success. You have a certain average amount of success that you deemed as now I'm successful. You check out and you forgot the things that got you there. And then what happens? Your company slowly unwinds, right? And then all of a sudden you get surprised when someone leaves with 70 clients. But the indicators of that were from three or four months prior when you stopped giving a shit or they felt like you stopped giving a shit

And so you have to paint the future of where the opportunities for them you have to train them You have to invest in them so that they feel like they are continuing to grow with you and you have to recognize them when they do the things that they're supposed to do it And you have to do it regularly because people forget people need to need to be daily they need to be motivated daily right And so if you have huddles like if like on our huddles that we have every morning we're like What are the wins? And so everyone just gets on and says their wins. It's a great way to start the day. It sets the tone that like we're a winning team. We move forward. And by no means, it's Jim Launch perfect. There's many things that we can do better. But I'm just saying if you have that much intention behind it, your team will grow and will be better. And ultimately, if you're scaling service, you're scaling people. You're scaling people playing on a team together. And so like scaling service is a lot like sports. And so if you can take that mindset and you can apply it to your. business you will be one among among the winners because as soon as you know how to market and sell you will realize that that is no longer the bottleneck in your business and the bottleneck is you and that's what a lot of people don't want to face

i don't market that because no one wants to admit on an ad that they suck right so i'm like yeah you need more clients that's what it is you need more clients you need hybrid you need a new way of running your business right i'll market that because that's what people want to hear but the reality is that you just don't know how to service your clients right you don't know how to more important service your team who is then servicing your clients for you. So anyways, I hope that makes sense. I hope you have an amazing Wednesday. I hope that was valuable.

If you did like this, I know this was in sales oriented, but please drop a comment, drop a tag. Drop a like if you feel like that. If you're actually listening on a podcast, if you can drop a review, that'd be sweet too. I've never even think I've asked for one of those. So if you could leave a review, that would be fantastic. Otherwise, having amazing to you guys.

I hope you guys keep crushing life and talk to you soon. Bye. Bye.