The Game with Alex Hormozi - What I Would Do If I Had My Gyms | Ep 194

Episode Date: April 3, 2020

*Disclaimer* "I am NOT saying you should do this. You should live your own life and make your own decisions. I have a very high-risk tolerance and conviction in my skill set. So I make this decision with this data set as a backdrop.""And so when you get on the phone, if you wanna sell right, you gotta make 'em feel good." Today, Alex (@AlexHormozi) discusses what he would do if he were in the position of having six gyms during the Covid pandemic. He outlines a step-by-step plan to flip the facilities into a remote model, cut overhead costs, and focus on accountability to maintain recurring revenue.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:(0:57) - Give advice to the audience to achieve 80% win for a 90% marketplace.(4:58) - Provide accountability for $3000/month while working from home.(9:01) - Trainers do daily reach-outs, maintain customers, and workout.(10:26) - Work hard to succeed; don't be afraid of change.(11:37) - Remote fulfillment makes more money; take advantage of the opportunity.(12:35) - People want to feel good; make customers feel good.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

I wanted to bring you a question that Layla asked me yesterday. She was like, what would you actually do? Like right now, you're like, if you had, if you were, you know, roll back the time clock and this has happened when we had our six gyms. Like, what would your actual, what would you do to approach this and what would your play be? Welcome to the Jim Secrets podcast where you talk about how to get more customers, how to make more per customer and how to keep them longer. And the many failures and lessons that we have learned along the way. I hope you enjoy and subscribe.

Oh, no, no, everyone. Happy Wednesday. I slept like a cherub, which is a small angel baby last night. My gosh, I feel like a human being. And so I wanted to bring you a question that Layla asked me yesterday. And I thought that would be a good podcast topic. She was like, what would you actually do? Like right now, like, if you had, if you were, you know, roll back the time clock and this has happened when we had our six gyms. Like, what would your actual, what would you do to approach this and what would your play be? And so. And so, So I want to first just at least say with my big disclaimer here is that something that I don't discuss a lot, but I think is worth mentioning, is that the advice that I give in general, I try to cater to the audience that I'm speaking to. If I ran a gym, I would probably run it somewhat differently than what we espouse. And that is because I am not you and you are not me. And so I would rather have a solution that I can get 90% of the marketplace to get an 80% win rather than have 5% of the marketplace to get 100% win. And I've run my business that way.

And I think that is why we've been really successful is because it's the same thing with like a weight loss program. Like if I can get, if I could get, you know, 90% of people to have a great result rather than, you know, 10% of people to have a crazy, crazy result, then I would rather than, you know, 10% of people to have a crazy result, then I would rather rather. served the 90. Elon Musk even talks about this. He's like, I'd rather do a good amount for a ton of people rather than a lot for a very small amount. And so we've taken the same approach in terms of how we, you know, like when we make offers, all my focus is like, how can I make the best offer that anyone can sell, right?

How can I make a sales process? It's so easy. Anyone can do it. Not necessarily like, like for me, I'd be selling, I'd take it over the phone all day long, right? But a very small, small segment could actually do that successfully at Skate. So that's my first disclaimer. Now, that being said, this is exactly what I would do if my gyms were in the midst of this, you know, COVID stuff. So first off, I would get out of the leases that I have.

Now, independent of because there's some people who are like, well, we're going to get out of this soon or we're going to know of this later. I have no idea. But what I know is just opportunity. If I have the opportunity to flip my facilities in an environment, where I'm being encouraged by both government and my clients to make the flip and remain open, then I'm going to take that opportunity and flip to a more profitable model. We're being given permission in this instance to do that with the zero repercussions. It's even being encouraged.

And so the first thing is I would take all six. I have my recurring base of members and I would flip them to remote. Now then I would try and cut all of the rent for each of those locations, maybe even get out the lease. I would likely just try and negotiate three to six months of free rent, see how it shakes out. But likely, this is what I'm saying I would do. You don't need to do this. All right. I'm saying like, this is how I would play my cards. All right. And so what happened is let's say each of those gyms is at 30,000 a month, right? In recurrent. Just EFTs, not running cash flow, nothing else, not supplement, just like they're doing 30,000 a month. Cool. So now I've got 180,000

a month that I have in recurring. Now, let's be realistic. Let's say 25% of those people drop off because it's not an owner-operated facility. I've got staff. They don't care as much. They're not rubbing bellies and kissing babies the way I would if I were at a single location. And so let's say I lose 25%.

So that means I lose roughly, you know, 45,000 off that, I think. No, 40. Yeah. 40-ish, right? So I lose 40,000 of that. So I'm down to like 140-ish or 135. per month. That's my recurring none. Okay. There's a lot of cash there. Then I would take my best trainer at each facility, the guy or gal who cared the most, who is the most engaged with

members, who is the most upbeat, the most positive, and truly cared about keeping them. And I might have to take two at each facility if there's too many for one person to handle. That's fine. The rest of my personnel would be considered non-essential because in this new model, they would not be able to provide value. That's what I would do. All right. So I've got, That's what we got six. That means I've got 12 staff that I'm keeping on to maintain $135,000 in recurring revenue per month. Now, let's say conservatively, I pay each of these people $3,000 a month, right?

To stay at home. Now, that's a great, for some of these guys that might actually be a big pay jump from what they were doing in person. Cool. So now they're making $3,000 a month staying home to just provide accountability. All right. That is it. So big thing here.

Now, like at Jim Lanch, what we're doing is we have. So I'm kicking this off today. Starting on Monday, we're running 16 remote workouts per day, basically every hour during the normal workday, there's going to be a class that's being held. And that way all of our gyms can cut their overhead and just have all of those workouts as fulfillment for their online clients. Right. And so now they don't even have to staff that stuff. It's already being taken care of centrally by all of us.

All of our gyms can participate that cut their over and even further. Right. Now, rewind. back to the six gems. So step one, I'm going to get out of the leases that I can because right now you have a pretty good opportunity to be able to break leases and or at the very least to get three, six months of free rent right now. So that's one. Two, I would flip my recurring revenue into remote, which would be nutrition and accountability primarily. I'd have the workouts that are being done. If I have 12 trainers, I can say each of you guys

are response for one workout a day. That's it. So that's one every hour. And that allows all of my people to participate in a session at any given time, but it's not that hard because each them can do it from home, right? And the whole point is that like, I'd love to say it's going to be from the gym, but reality, if you're getting quarantined, you might not be able to even go to the gym. So, and most of the clients are being consuming this from their homes. And so it would make sense to have a train of this from home, not a big deal. So that's, that's what I'd have on the workout part. Big, big caveat here. No one cares about the workouts. If you're selling over the phone, you can get workout apps online, you know, like, you know, Beachbody and Keill-Itzian's got a

a sweat app. Like, there's all these other apps that are like $10 to $20 a month that have probably better already preexisting stuff. You're not going to win on the workout front, right? You're going to win on the accountability and the service. That's how we've always won and that's how we need to keep like, remember the rules haven't changed.

Your workouts never matter. They don't matter now, right? What matters is the relationship that you have these people that they feel like someone is checking in on them, right? They pay for you to pay attention. That's how it works. All right. So I have my 12 trainers.

Let's say I'm paying them $3,000 a month. So I'm paying $3,000 a month. So I'm paying $3, 36,000 a month in overhead for those trainers, right? And the only thing they have to do every day is one workout and then reach us to the customers. So make sure that they are being taken care of, making sure that their headspace is good, making sure that they're not going to the pantry and rating it and getting cookies every day, making sure that they attend one of the workouts.

That's what they do all day now. That's it. It's all they have to do. All right. Now, overnight by doing this. Hey guys, love that you're listening to the podcast. If you ever want to have the video version of this, which usually has, more effects, more visuals, more graphs, you know, drawn out stuff.

Sometimes it can help hit the brain centers in different ways. You can check on my YouTube channel. It's absolutely free. Go check that out if that's what you are into. And if not, keep enjoying the show. I have 100,000 a month that's left over in all profit. Holy smokes. That's a pretty good deal.

But wait, now what do I do with my time, right? So my time would be focused. The other thing that I would ask them to do is, I would dedicate their first two hours of the day every day to doing 100 cold reachouts. All right. They want to pay for themselves. Cool. A hundred cold reachouts.

What you do is if you have someone who's interested, you book them on my calendar. I'll close them. All right. So I'm going to fill my day up with appointments that my team, my 12 people doing reachouts are going to set for me. All right? And then I'm going to close. Beyond that, I'm going to start turning on cold traffic.

And I'm going to run because right now, in this hypothetical environment, which is the real environment currently, lead costs are like 50% to 75% off. It's nuts, right? I've never seen anything like this. It's crazy. And so we would be scheduling phone calls to sell. And so my trainer's day looks like this.

First two hours of the day, all they're doing is doing cold reachouts. They get their daily 100 in. You give me 100 reachouts. That's what you owe me. All right. Get me one schedule today. I don't care. Just get me one schedule today.

All right. What are they going to say? they're going to say hey name do you know anybody who's trying to stay in shape during the quarantine who doesn't want to get make turn their sweatpants into yoga pants by the end of this ha right whatever now when you say that all of a sudden the people who are responding are like oh this person's not fishing they're asking genuinely if I know anybody right and now more than ever people have a lot of goodwill that they want to help out other small business owners like that is definitely the zeitgeist of this moment zeitgeist a german word for the general vibe of an era anyway so people are trying to help out small

business owner. So if you're asking like that, you're not even soliciting them. You're just saying, hey, do you know, I'm trying to lose weight. Perfect. Or gain weight. Perfect. Let's get you booked for a call. We have a totally remote thing to make sure that you stay healthy, et cetera, right? So their first two hours, they're doing the daily reachouts. Then they're doing all the reachouts to their existing customers that they're maintaining, right? And then one hour of the day, they're required to do their workout. Now, most of the time, you'd want to have your trainers are working out anyways at home. So it's like, just record it. Like, have fun with it. Right. And then that way, all of my people can actually have more sessions than they ever had in person.

So I'm adding value than from what I used to have. They have more availability than we've ever had. They have more variety because they probably have access to trainers that they couldn't have had access to before. And it's also my best coaches. So it's like, you know, we all know, we've got a couple coaches you run stuff. And if somebody use news coming in, you probably want to put them with Jessica and not Eric. And you're like, no, Jessica's awesome. Don't put it in Eric's as their first session, right?

Maybe save that for some of the later people who already like us. right so those are the trainers we're going to be getting those at-home workouts big picture again big reminder no one cares right no one cares about the workouts they only care about the capability all right so if i flip my gyms right i renegotiate my leases i push them out where i break them i take my recurring i would get into 100% remote i would let go of not essential personnel who are not who are not generating revenue or keeping revenue through fulfillment right they're generating revenue in their first two hours of the day by getting new calls the rest of their day they're focused on doing the fulfillment for the clients that they already have and maintaining that

EFT and recurring. They're feeling back to the bucket because I'm going to be doing the sales because in a time of strife, I'm going to do what I knew and know how to do best and make it rain, right? And so the people who are not going to be able to succeed are the ones you don't want to roll up their sleeves and get dirty. If you're the best salesman at your gym, then you should sell. That's what you should be doing, right? And then they do their one workout out of day.

So that's all I have trainers to do. Three things. Reach outs to get new customers. Reach out to existing customers to make sure they know we're paying attention. And then finally that they're doing one workout a day, which they should be doing for themselves anyways. they're just going to record it. Awesome. Boxes checked. All right. My day is going to be making sure that we're marketing and filling the bucket back up. All right. That's it. That's my dad. All right. So I'm marketing and taking sales calls. I'm taking sales calls from pay traffic,

taking sales calls from outbound. I'm taking sales calls all day long. That is what my job is to make it rain and feed the machine. All right. That is what I would have done. If I had been in that situation or in this situation, I'm not necessarily saying you do that. I'm selling you what I would have done. And that would be the play that I would do because it would give me permission to overnight transform six facilities into one massive recurring revenue stream that's 100% remote that is a way higher profit margin of fulfillment. And I will say what I said yesterday, but I'll say it again. So hopefully it sinks in is that just because this has changed does not mean it's bad, right? Eight months ago, I walked through all the math about why having a remote fulfillment is a

better solution. There's a reason people like going online, right? There are better margins. Right? There are. The thing is that a lot of people felt like for some reason that that was bad. That's okay. But now people are being forced to do it. Doesn't mean it's bad. It actually makes more money. And now we're getting permission from the government and from society to do this for ourselves. So I would take that opportunity and run with it. So that's my recommend. Not my recommendation. That's what I would have done. That's what I would have done. That's what I would have done. That's what I would have redefined their proper. responsibilities as and then beyond just lead them through the crisis. I would also try and paint a vision or for a better future. It's like, guys, you liking this. You're staying at home. You can work out whatever you want. You're just actually getting people good results because we're making sure that they're just

staying accountable and they need us the most, right? And one small note that I want to add to this, when you're selling or when you're talking to customers, everyone right now is at the airport. So have you noticed, everyone at the airport is always just like immediately a three out of 10, three out of five stressed, right? They're already at six out of 10 stress levels. What people want is to feel good. All right. And so that's going to, and so when you get on the phone, if you want to sell, right, you got to make them feel good. Like the fundamentals have not changed. It's just you got a little bit more resistance when you're starting because

they're already at a negative point. They're not at neutral. Most people are now going to be a little bit negative because they're quarantined. They got their kids around. They feel like shit. They're smelly. They're, you know, they feel sloppy and bloated because they're eating cookies all the day, right? And, you know, they're uncertain about the future. What they want from you, what your employees want from you, what your clients want from you, and what your prospects, when you get on the phone with them, want from you, is one word, hope. All right? So you have to be the hopeless motherfucker that exists, all right? And the way that you have hope is that you have optimism about what you are willing to do to endure. And as long as you know that you're willing to

endure just about anything to get through this, then you have confidence and certainty in the fact that you will get through this. And you can convey that conviction to your prospects, to your team, and to your customers, because that's what they're going to want. Right now, therapy's blowing up. Life coaching's blowing up in terms of like growth. Tons of people want life coaches. Tons of people want therapists right now because they're stressed out of their minds. And so if you're looking for more ways to provide value, someone will buy after how you've made them feel from the first 15 minutes of the phone call. The first 15 minutes is just like caring about them, throwing them some love, making them feel good about like, hey, we're going to get through this. No worries, right? They want to

be around more of that. They want more of that feeling. The fact that you're going to sell them weight loss and that's going to be the vehicle that you monetize is almost secondary to how you will make them feel in that moment because they're just going to want to feel more of that. And so that goes for your trainers reminding them, dude, like we're just trying to make people feel good right now. All right? We're trying to get people through this. Like, if we can get them to put down the cookies and move a little bit, they're probably going to feel better. And if that's what, that's what our value is right now, then that's what it's going to be. All right. So that is what I would do step by step. If I have my gym during COVID right now, I make no recommendations. You are all grown-ass

individuals and make your own decisions for yourself, but that is what I would do. So anyways, hope you have an amazing Wednesday. Keep rocking. You can make it through this. You just got to want it.