The Game with Alex Hormozi - What Happened to Hybrid??? | Ep 161

Episode Date: October 30, 2019

"No one likes change." Today, Alex (@AlexHormozi) talks about the lessons he learned from his failed attempt at marketing a new service called "Hybrid" that combined in-person and online nutrition and accountability coaching. He discusses the importance of effective messaging and understanding the needs and expectations of real business owners.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:(1:50) Lesson learned: headline or hook matters.(4:34) Combined service made nutrition and accountability easy to understand.(6:33) Real business owners have real expectations.(8:28) Sell to their goal to solve their problem.(10:45) Hybrid still exists but called one-on-one nutrition accountability.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

What's going on, everyone? Happy Friday. I hope you guys are crushing your goals and having an amazing start to your day. I wanted to bring something up that I got a question from the sales team looping back around, but they'd have gotten a couple of times. So I wanted to address it, and I would imagine that you might want the answer too. It is also a really good kind of like looking in the past case study that you can learn from, the good, the bad, the ugly, everything that I learned. So I'm calling this, you know, what happened to hybrid?

I might change the title to like why I stopped talking about hybrid. But basically, so hybrid, for those you don't know, was essentially having nutrition and accountability 101 for people who walk into the facility, right? This isn't a really foreign concept. I just put a name on it because I like branding things to make them new and different. So that is a good thing most times. Now, once we started marketing aggressively for hybrid, what happened was there was there's an online component to it, right, in a remote component, because you could, in theory, just train someone

for nutrition and hold them accountable to that, and they wouldn't even necessarily need to go to the gym, right? I mean, this is what Weight Watchers has done. This is what Jenny Craig has done. This is what tons of weight loss centers across America for, you know, decades have been doing, right? And so simply adding this on top, but having the personal training anchor because they're coming into a gym allows us to charge much more for it. Okay.

Now, that is, that is hybrid in a nutshell, right? The reason I stopped talking about it was because I honestly had a huge revolt within my community of people who thought I no longer wanted to work with gyms, right? And so that was kind of on the internal side. So people were like, you don't want to serve gyms anymore. And I was like, no, I'm just saying that this is a more profitable service. And it doesn't require as much square footage and you can make more profit. Like that was kind of the whole argument.

But they were like, no, you don't want that. And so I think part of that was chair picking like one or two sentences and then like not listening to the whole story. That's okay. You know what I mean? It happens. And it's a good lesson for me because I have to now, I learned how much one headline or one hook matters. And I, and David Oblevey, who's a great advertisers, like no

prospect, every ad has to contain the full concept of a product because consumers don't consume advertising in series. They only really consume one ad, right? Like they don't remember your advertisements like you do, right? And so that was a huge lesson for me. And so what I shifted towards, you may have heard me talking about it, is I just now say, one of I want nutrition and accountability rather than hybrid. And it was because when I said hybrid, it had tied to it the online component. So when I say internally, I had some gyms who thought that I no longer wanted to serve gyms, which is crazy to me because literally all we serve as gym owners.

But that's okay. It was my mistake. Externally, when I had any kind of mentions of online, it attracted a lot of trash. It brought a lot of entrepreneurs. It brought a lot of people who were dabbling, who wanted to side hustle. So a laptop lifestyle, like that type of person into our business. And it was horrible by and large. Now that being said, obviously you saw tons of people who were successful with it.

It's just that the people who were successful with it were a gym owners, not people who could have a gym or could have done this, et cetera. Obviously, we did have people who were. But if I'm looking at bigger percentages, they weren't. And so we did this as a 90-day run. So we did it from June until end of September. where we were marketing it. I think we might have even ended halfway through September

in terms of the marketing externally. And by doing that, we just saw that the people, we had more sales than we never had to do so much, so much inbound, so much inquiries, right? But the quality of the prospect was lower. And so when we looked at after 90 days, who was still with us, right?

And who had been successful? It was literally just gym owners. I mean, there were obviously PTs and things like that that were successful. but the vast majority were gym owners. And specifically gym owners that over had over 25 clients, they were full-time gym owners, they had real leases, they have employees. So like real business owners, right?

And so once we saw that, we totally changed the messaging externally. And so I changed the messaging internally to 101 nutrition and accountability, so people wouldn't freak out about it being a new thing. And what ends up happening as well is that a lot of the gyms that we had were like, well, I know that this is a better model, but I'm kind of tied to my lease already. So I can't really change that aspect of the overhead and are like I already have enough people in large group. So I'm just going to kind of keep that. And so that is what when we combine with the diagnostic sale as in taking large group and adding the one-on-one nutrition and accountability on top of it made it really easy for everyone to understand.

It made it real. There was no beliefs I had to break about adding nutrition and accountability to an existing service like everyone was okay with that. And so what it ended up doing is allowing us to have $400 plus per month. for large group. And so that was ultimately kind of the easier way of explaining it. And so I think this is a great like, I mean, it was a huge learning experience for me. But for you, if you're taking this and listening like, okay, if I'm going to communicate change, one is always understanding that no one likes change, no one, no one, no one, no one, no one, no one, no one,

no one likes change. Employees don't like change. Clients don't like change. Your mother doesn't like change. No one likes change, right? And so it was a huge lesson for me. in terms of messaging, right? So if I could do it all over again,

I wouldn't have called it hybrid. I would not have said any, I would never have said the word online, dear God. Just the amount of trash that you get in from that was ridiculous. I would have simply said, take your large group, add this on top, make more money, separate yourself, and don't sell workouts all.

Hey, Mosin, Asian, quick break just to let you know that we've been starting to post on LinkedIn and want to connect with you. All right, so send me a connection. request and note letting me know that you listen to the show and i will accept it there's anyone you think that we should be connected with tag them in one of my or layless posts and i will give you all the love in the world all right so let's get back to the show right that's what i would have said and it would have probably gone over way smoother than it did um internally and then externally i wouldn't have

had all the trash that came in because that just kind of crushes morale for the team right they have people not showing up for calls they have you know people who are non-starters who like you know they're three weeks in and they're like hey we're like we're like dude where you're like why haven't you launched your ads yet they're like yeah I haven't got logged in the portal yet you're like what are you doing you know what I mean so real business owners um do much better with us because we are real business owners and um real business owners also have like real expectations in terms of understanding how like yes if you're going to sell for four hours a day it's going to take four hours right it's like well can I do this for an hour

day like people think that online means you don't work right I can tell you I have an online business I fucking work right and so it was kind of just bringing in the wrong type of people so that's why I said I stopped talking about that way externally and why I call it one-on-one nutrition and accountability internally now as well and in and in the marketing so whenever I say one-on-one nutrition and accountability it's me saying hybrid really fast just without the marketing spin on it but all of these things were really necessary though for us to get to where we are now and so that's kind of like the the pros and

cons of innovation right and so we needed to I mean I needed to I needed to fail that way I found out another way not to do something and luckily it was a 90 day sprint we learned and then we adapted and so but what came from that was the combination of the diagnostic sale which is the probably the single greatest fundamental change that we've had in gym launch in the last year to the model right And it took the components of hybrid and took the best components of the gym and just made it easy for everyone to understand, easy for them to differentiate from their competitors, easy for them to provide more value to the end user and ultimately make more money. Right. And so now when someone walks in the door at one of our gyms, they walk in and it doesn't matter what promotion they're marketing, whether it's a 28 day, a 6 week, a 42 day, a 12 week, a 21 day.

It doesn't matter, right? seven day it all is irrelevant because when that person walks in the door we're going to sell the goal we're going to sell to their goal so we can actually solve their problem right because we can all agree when that person comes in that 10 days ain't going to solve shit right and you can usually get most people to agree with that pretty easily and so once we take them through a diagnostic selling process we can say let me solve your problem it's going to take this amount of time and by the end of this period of time you won't need me anymore right and if you choose to stay it's because you want to stay for the community and that's awesome. But like you will not you will be able to have

cake, you'll be able to count your macros, you'll be able to know how to train by the end of this period of time so that you can keep this off for life and actually enjoy the process, right? And so I think so many more gyms got on board with that because I mean, just like anyone, like we just want to solve people's problems and we just happen to have this vehicle of large group workouts, right? It's like, okay, you know, when my mom, who's 60 comes in, like she really shouldn't do boot camp, right? She's got a bad hip. Like, you know what I mean? She shouldn't do that. But it would be great for her to have help with nutrition and accountability and just walk every day. And then over time, if she gets in shape enough and she gets the confidence to come into the gym, she can do that.

But if someone is able to do the workouts, then it also allows you to really work on the 95% that's going to drive the results, which is the food, right? And actually making sure they show up. And what's interesting is that people actually value that at a much higher level, right? People value someone falling up with them every day and helping them with their food more than they value workouts. And we know that because, you know, the big chains are coming in and doing group workouts for $59 a month unlimited. So it's like if you want to differentiate from that, you have to find more ways to provide more personalization and more service. Right. And so instead of necessarily eliminating your large group, you can just keep the large group the way it is, bolt this on on top to your existing membership base overnight at $10, $15,000 a month recurring with basically almost all margin.

And then on the front end, you can sell people into 5K, 4K, K, 3K packages for large group. which I mean is pretty unheard of. And so that was the biggest fundamental change that we had in the business model. That's what allows us to now get to, you only need 180 EFTs to get to a million dollar run rate, which if you have 8% of Trition, takes 12 months if you start at zero,

if you start at, and that's with only 100 leads a month. So if you have 5% of Tritia, you can hit it in like seven months or something, I can't remember the math. But like it's very fast because each client's $425 a month, right? And so if you were, wondering what happened to hybrid hybrid is still here it is just it is going it is silent it is in ninja clothes it is in in normal normal messaging clothes uh that i call one-on-one nutrition accountability so that

people didn't freak out and i never say the word online ever again in the online space because dear god the trash that you attract so um anywho that was the lessons that i got um from hybrid um for us and so um the big the big takeaway is that by going through that process I really hunted in our messaging. We are super exclusive in our messaging now after we saw like, we're like, we only work with gym owners. You must have a gym.

You must be full time. You must have employees. You must have rent. You must actually be a legitimate real business owner. And if you're not, that's cool. I wish you the best. I hope you find value in our stuff. But it's just like we're not going to work.

So anyhow, that is the history of hybrid. That kind of little alliteration, the history of hybrid. And where it is now and how it is massively a part of the business model that we espouse. I just don't talk about it that way. I just say one-on-one attrition accountability because no one loses their minds when I say that.

So anyways, I hope you guys have an amazing day. Drop a like if you like this. Don't drop a like if you did not like this. If you're listening at home or on the podcast, please leave a review because we always appreciate those. Anyways, have an amazing day, and I'll catch you guys on the flip side. All right, bye.