The Game with Alex Hormozi - Why what style of fitness you practice doesn't matter...and the SECRET equation that our $1M+ facility owners understand that your sales people dont. | Ep 70

Episode Date: August 11, 2018

"You have to meet someone where they are." Today, Alex (@AlexHormozi) discusses how gym owners can succeed regardless of location or fitness style and emphasizes the importance of focusing on the outcome rather than the method. He also introduces a value equation for fitness and stresses the need to meet clients where they are in their fitness understanding.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:(1:42) - Fitness style and location don't matter for success.(5:37) - Focus on outcome, not fitness style or details.(9:03) - Value equation: outcome × likelihood ÷ time and effort.(11:34) - Higher prices can increase earnings. Don't settle.(13:13) - Start with psychological win. Introduce advanced techniques.(14:05) - Psychological needs outweigh physiological perfection. Help progress.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

What's going on everybody? Happy Monday. We are back at it again with some gym lunch content. So I wanted to make a video for you guys about something that just comes up all the time. And so I figured, you know, I have this ongoing list of like content things that come to me in the middle of the night or at lunches or in places that they shouldn't come for whatever reason. And so one of them was related to where your gym is and what style of fitness you practice. And the reason I want to make this video is because there are always people who have gym owners specifically. who limit themselves and how funny they because they give themselves this reason to the story that they tell themselves about why their gym is different or why they're a special snowflake, et cetera, right?

And so I was looking at some of the pictures from our event this morning. And unfortunately, with Facebook, I can't share my screen. But if you guys look on our Facebook page, you can see all of our million-dollar-plus gyms, which at this point I think is over 24 or 25 that we have, and we had one or two that happened last week that passed the million-dollar run rate, which is cool because they'll get those sweet swords. So if you guys have seen those pictures with the gym owners who have swords, that's because they hit a million dollar run rate,

which is $83,000 in a month or more. So let me go full. Let me reel it back in. The reason that I wanted to make this, though, is that as I was looking at this picture, what I saw was kickboxing studios, martial arts studios, studios in the middle of nowhere, Oklahoma,

studios in Pat, Staten Island, gyms in the suburbs of Atlanta, gyms in Denver, gyms that like basically in every type of market that you can imagine, rich, poor, black, white, Hispanic, Asian, whatever, wealthy, east coast, west coast, north, south. And practicing the style of fitness, style of fitness being whatever your fulfillment looks like,

where you have a trainer and people receiving service, all of them were able to implement these steps and the framework that we outline specifically in Jim Lourdes to get their gym to a million dollars plus. Now, why is that possible, right? So that's kind of what I wanted to dive into, which is like, how is that even possible? The reason that your style of fitness does not matter, and the reason that your location does not matter is because humans are the same, right?

Women are going to die five times a year regardless. So the only caveat is, as long as you are comfortable offering a fitness solution or having a transformation aspect to your business, then the model that we espouse works. Whether you want them to kick a bag or do martial, arts or do boot camp or do crossfit or cross style whatever you know what i mean whatever your style of training is is irrelevant and the to further reinforce that they're only going to respond to the promotions that are that convert right they're only going to respond to the offers that convert and they're only going to pay for the price points that we already know work right which for

large group training is going to be between and like where you should be is between 150 and 225 a month, right? 150 on the very bare, bare, bare low end if you have a very high capacity facility. And for most people, $200 a month is going to be where you should be. And if you're not there, you're not profitable. And I can tell you that with a very high degree of certainty, that you're probably not taking much home because the math doesn't work out. I've made tons of other videos around that. But the point is that there are different buying segments that exist within like the elasticity

curve on pricing when it comes to weight loss for this specific service. People and women are willing to pay X amount for that result. And so the, and you know what, I'm going to bring this all the way back to when this started. So six, a lot of people don't know this, six or seven years ago, I don't know the math, I moved out to California. I emailed 40 gym owners because I was putting my management consulting job where I did strategy in a marketing firm in D.C. That's what I did right out of college. And anyways, I was like, I hate this. It's a soul sucking.

I don't want to do this. And so I emailed 40 gym owners and said, hey, I want to learn. Right. And I ended up in Chino, California, because only one of them got back to me. And at the time, the guy's name was Sam Bactiar. He actually owns the camp. And he was running, he had one location at the time. And they just opened a second one.

That was kind of like a mini, a mini smaller one that was like in Ranchoad Buckemonger. Anyways. And so they were offering a challenge where you lose weight and get your money back, right? And he was doing it as a semi-private program. And when I came in, I was like, hey, do you want more of these? I found out Facebook marketing works. And, like, there's this cool stuff. And he was like, I don't know if Facebook, I heard it doesn't work.

And I was like, well, you know, let me try it out. So anyways, I tried out. And obviously, it works. And what, but the conversation that happened was he said, we can't take any more in our semi-private. Like, we're full, right? And I said, not an issue, man. And I was like, just give them a nutrition plan and put them in the boot camp.

And he was like, you think people are going to pay $500 for that? And I was like, yeah, I was like, they could come here and do puzzles that made three days a week. You know, and if they lost 20 pounds, they'll be stoked, right? And that's because it kind of underlines the main concept, which is like it does not matter how you get them to Maui, how you get them to the island that they're trying to get to. No one cares about the plane flight. They don't care. They don't care. They don't care really they take a train there or a boat or a plane.

There's obviously some ways that are more comfortable than others. but they care about getting to Maui. And so whatever fitness style you have is the plane flight. No one cares. That's why in the sale you shouldn't talk about it because all of that is cost. All of that is the stuff that someone has to do to achieve Maui, right? No one wants to hear the TSA lines. No one wants to hear that they have to take off their belt and their shoes

and they have to check their bags and they have to get certain. And then they have to sit next to someone who's coughing. No one wants to hear about your meal plans or your macros or the cutting-edge workouts that you're going to do and upgrade the trainer certification. No one cares. They don't care because all that's going to do is remind them of the cost and the pain that's associated with achieving their goal, right? And so to circle this all the way back is that it does not matter whether you're doing puzzles with your clients or you're giving them martial arts lessons or you're doing a boot camp. The reality is what is the offering, what is the outcome, right?

And if we know that the price points are tested, which is why you test stuff, right? And if we already know that, which we do, which is why we have, you know, all these students making all this money, is that they're just running a model that's already tested. We know this promotion works. We know six-week challenges at this moment for the last six and a half years have run basically untested because it's a long enough amount of time that people believe that they can achieve the outcome that is significant, but short enough that they believe in themselves that they can achieve it. And that's the balance point. 12 weeks, everyone thinks that they can achieve a lot then, but a lot of people don't think that they can finish it. That's why. It doesn't work as well.

It works. Don't get me wrong. It works for a type of customer, but not for large general population, right? Hey, Moza Nation, 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.

And so when you have a promotion that's already tested and you have a price point that you know that on the front end is what the market will bear, which FYI is about $600. For a first time visit off of cold traffic, $600 is right about the. breaking point and that's actually um if you can look at different franchises that have been in the weight loss space so i like studying other people that are in adjacent industry so um you guys hear me talk about thinique a lot because uh chris polly's a good friend of mine she ran day 220 locations their front end offer was six hundred dollars right and then they ended upselling people on day five to a 1500 to six thousand dollar package the remainder of the year yeah without any income demographics most people are underestimating how much people will pay for a result, right?

Now, the beauty of her process is that they don't tell people about the cost. And what I mean by that is that all those people have to do is come in and show up once a week for 15 minutes to show their food log to show that they've lost weight, right? So there's not a lot of cost there. With fitness, we actually have more cost. So it would behoove us, even though we know that fitness is going to be the way that they keep it off in the long term, right? It would behoove us to not mention that because the only thing it does is it increases the cost on the customer. Their perceived value, oh man, I'm going to give you something good. I'm probably

going to make another video about just this one thing, but I'm going to give it to anyways. So I was writing, so for someone selling secrets, which is something that may be coming out soon, for our gem owners, which is really cool, and we'll make a lot of money for them. Anyways, there's one value equation that I was coming up with when I was making me, the presentations, right? And it is significance of outcome multiplied by likelihood of achievement. Okay. So, significance of outcome, multiplied by likelihood of achievement, how likely that you're actually going to get that significant outcome, divided by time and effort equals value. So, here's an example. If you were to give someone a pill like Xanax that helps someone go to sleep, right, or relax, which is probably a medium at magnitude, depends on, like, how stressed out they are, but, like, medium to high magnitude outcome,

the time and effort required to do that is zero, and the likelihood that they're going to achieve it is basically 100%, because they take it and then their body response, right? And so when people are like, I can't believe Big Pharma is a bazillion dollar industry, that's why they have a huge significant outcome, a 100% likelihood of it happening, and then they have zero time and effort.

So what does that mean? Money, lots of value. Here's the flip side. If you were to say, hey, I can give you that same level of relaxation and or preparation for going to sleep when all you have to do, right, is learn how to meditate. And then in 30 minutes, you will be like as pristine as a whatever and you won't have the side effects of having a chemical addiction, right? What is that? Same magnitude of outcome. Likelihood of achievement, much lower because you have to actually learn how to meditate, right, and do it right.

And then what's the time and effort? All the time that it's going to take to do it, all the effort of sitting down and being distracted and not actually succeeding and the learning, learn, learning. All of that is cost, right? So why don't meditation lessons sell for, why are meditation lessons of a billion dollar industry instead of Zanets? They have the same outcome. Why not? Because it's not as valuable. That's why, right?

And so to go super, super duper full circle, that is why the type of fitness that you have does not matter. The only thing that matters is the outcome that you are selling. And so as long as you have a fitness slant, then you're in the weight loss industry. You can accept that or not. That's fine. But if you do accept that, then that's the industry that you are in. And the rest of it is just the widget. It's just the plane.

But your price point is going to need to be between 150 and 225 a month, period. If you have a large group facility that can service over 16 people per session, that's what it has to be. Right. And then your upsell into semi-privates is going to have to be between 500 to $700. a month. Period. It's math. It doesn't work out any other way. Can you make money the other way? Yes. Will you make a lot? No. And my argument would be that if you find someone who's like, well, hold on, I charge $400 a month for my summer private and we make money. I'd be like, cool, you'd make 50% more money if you charge 600. You're just not making as much as you could.

And that's really the argument. So anyways, I probably should have covered the where your gym doesn't matter. I'll probably do that in another video because it's probably, hopefully, hopefully I said enough things in this video. But the style of fitness that you practice does not matter because they do not care about it. They do not care about the plane. They care about Maui and don't talk about the plane because it's only going to lose you sales. Okay. And yeah. So anyways, I hope you guys found this valuable. So I hope this was high magnitude, high likelihood of you understanding the information and the time of effort for you to understand it was low. But anyways, that is the value equation and that is how you can apply to fitness. And that is why what type of fitness you have

does not matter provided you can have a sufficient amount of people in a space with a single trainer who says do this and then they can follow. And it doesn't require a ton of skill or effort to onboard people, which is why we are advocates of not having super complex things for general population, mostly because it doesn't matter for them because most of them are just trying to not drink coke. And so we are fitness purists and we always assume, or at least I did for a very long time, that I need to give people exactly what I needed to give myself, right? I wanted people to start lifting weights and counting their macros immediately. But the reality is that is that is not what they need when they start because that overwhelms them and it stresses them out

and when I say, hey, you're going to lose a pound and a half of fat every week and then a 50 or a 100 pound overweight girl says, hold on, I'm going to have to do this for two years is what you're telling me. You've lost them. And so you can't do it that way. You have to give them a big immediate psychological way in the short term so that psychologically they have bought it and then they will listen to you so that you can say, hey, now that you've lost 40 pounds in your first eight weeks, whatever. Listen, I want you to start trying this. I want you to start logging stuff on my fitness. I want you to learn how to count this so that we can actually get some of those food that you like back in. You guys know this conversation, but we have this

purest feeling that we have to tell them this in the beginning. And if you're like, if someone doesn't do it, they don't want it. No, that's stupid. You're not meeting someone where they're at. You have to meet someone where they are. You don't talk to a five-year-old the way you talk to a 15-year-old, right? And some of these people are five-year-olds in their fitness understanding. I can't say that you know. People in your family right now think that almond butter is a good source of protein. People think that sweet potatoes are a good source of protein. People think that quino is a good source of protein. People think that beans are a good source of protein. Right. Like they have no idea. So like you have to meet them where they're at. And then be okay with giving them the thing that they need right now, which is not perfect from a physiological standpoint, but will be exactly what they need from a psychological standpoint to get them to the next step.

So anyways, sorry. I don't know. Was that a rant or was that like just like a, I don't know, expounding on anything. But if you guys found this valuable, please throw up for a like so that another gym owner can tag their trainers in it who want to just do macrosin and lifting for everyone on their first trial. And hopefully that explains somewhat for those of you who are like, I'm not sure if gym launch will work for my gym model. It will as long as you're providing weight loss and fitness to your customers as an end result. It really doesn't matter. As long as you can fit that model on top, the gym lunch model on top of any business that is a fitness-based business that is brick and mortar and service.

It works. And that's why we have, you know, every month we're minting one or three or four more million-dollar-plus facilities, which is super exciting for me. And it's really cool because with each one, more people run the four-minute mile and then it stops being this unattainable thing. And it stops being the names of the groups. It just becomes something that your gym should be doing if you're doing it right. So lots of love. Have an amazing Monday, and I will see you guys on the flipy. Right.