SNM271 Turning Muscles into Dollars with Hensley Ellefritz

Jonathan Green: Turning muscles into dollars with special guest Hensley Ellefritz on today's episode.

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Announcer: All are you tired of dealing with your boss? Do you feel underpaid and underappreciated? If you want to make it online, fire your boss and start living your retirement dreams now, then you've come to the right place. Welcome to Serve No Master podcast, where you'll learn how to open new revenue streams and make money while you sleep. Presented live from a tropical island in the South Pacific by bestselling author Jonathan Green. Now, here's your host.

Jonathan Green: Now, this is an industry that I've always been interested in, because it's where a lot of people start their entrepreneurship journeys, and a lot of people start thinking, oh, I know about fitness. So I'll teach other people fitness, and they start working for another gym and realize, oh, I'm getting $8 an hour. While they're charging $50 an hour for my personal training. I got to go out on my own. But there's this part that I think is the hurdle for a lot of people, which is the sales process, which everyone wants to do what they love, not sell what they love, and that's the biggest hurdle. So I'd love to know how your journey began and how you became passionate about sales and fitness.

Hensley Ellefritz: Yeah, I think sales is not easy, but it was an easy niche for me to carve into because it's something that not a lot of people like, frankly. So I was one of those weird people that always knew I wanted to be in this industry. But obviously health and wellness has completely transformed over the last ten years and it's even accelerated post COVID. So wasn't initially sure what that would look like for me. So started just checking people in at a front desk at a gym and from there grew in rank, found my momentum in sales, and then went on to build out sales models for Pure Bar and then most recently Club Pilates. So when I came on, they were at about location 100, and then when I left, we were at about 700. So really figured out, especially as club pilates became exponential and they took on pure bar and row, house and CycleBar, and ten of these other fitness brands saw what worked and what didn't when it came to selling fitness. And became really passionate as one out of every three studios was closing. During COVID at bringing what I knew worked to independent studio owners and fitness entrepreneurs. So that was end of 2020. I had no intent of starting a business. I really just wanted to consult and work for myself. But we have grown tenfold and we've worked with a little over 100 brands in the last two years.

Jonathan Green: So having worked with so many brands and going on this journey of your own where you suddenly were almost forced into entrepreneurship in a way you weren't expecting, what are the most common mistakes that small businesses are making?

Hensley Ellefritz: Oh, I love this question. I think understanding firstly and selfishly as an entrepreneur and as a business owner, what you want your role to be in the business. Because so many of us go into it wanting to focus in the business, right? And that's why we break off and do it on our own. And then as you grow and scale, you're focusing more on growing the business versus actually interfacing with clients or interfacing and selling your product. And so I was forced into this decision making process about three months in of did I want employees, did I want to grow for the sake of growing or did I want to keep it really small and within this agency tight climate that we had created, what was my role going to be? And I think as fitness entrepreneurs, so many of the clients that we work with are really passionate about fitness. They're really passionate about teaching fitness. They're not as passionate about selling. Right? And getting those people moved on to a membership model and telling them, hey, you have to pay $500 in order to continue working with me. And so being able to build those models and build those processes in a way that maintains the integrity of the client and of their product, but makes them feel confident in selling and empowered to be able to sell their product without sacrificing their voice and sacrificing their brand integrity. It's something we're really passionate about, and it's something that this industry really desperately needs.

Jonathan Green: Now you're onto something that I've always found interesting. A lot of gyms. Their business model is to sell a ton of memberships in January to people they know are never going to come back. If all the people had memberships came at the same time, the gym couldn't handle it, right? There's this averages thing and that's the model for a lot, especially of the larger national chains. Right. They don't want everyone to show up. They lock people in these long contracts and I think that independent operators are pulling away from that. Right. They hate that business model and so they go in the opposite direction, right? Of like, oh, just pay when you show up or quit anytime. And they are rejecting the same way. A lot of people, when they think of sales, they think of the used car salesman, right. They think of someone selling people stuff that doesn't work in a dishonest type of selling rather than thinking about the actual product. Right. The solution is really what you're selling, not yourself. And if you can make someone's life better, they live longer, they could spend more time with their kids. That's really valuable. But it is hard for a lot of people in sales, whatever industry, to ask for what they're worth or what the solution is worth. A lot of people start really low $7 an hour, $10 an hour, even though that's one fifth of what their previous employer was charging. How can people accelerate that process and get away from the I have to charge really low because it's all my customers can afford mindset, and instead charge a number that allows them to continue running the business, because if you charge too low and you go out of business, it doesn't help anyone.

Hensley Ellefritz: Yeah. I think what all of us need to be empowered and remember, especially if you've been in this game long enough, is that you're selling something that people not just want, but something that people need, and they need it specifically from you. So the example I like to use is when you go to the doctor and they tell you, hey, we've identified you have X Y disease, you need this specific prescription. Right. You need to take this pill every morning for the rest of your life. Let's say that's very different than, oh, you're hurting. Here's a handful of Oxycodone or something. Take it as you see fit. So especially in the health and wellness space, whether you like it or not, we are proactive preventative health technicians. Right. Your clients are looking to you for the same guidance and direction as they would a doctor. And so it's important for you in whatever you're selling to position it as the solution to a need that you've identified. And if you haven't identified that need, then absolutely you can't afford to charge even $7. Right. Because the consumer doesn't know why they should be purchasing something from you for $7. But if you've done a good enough job of doing that needs analysis and finding that common foundation and really understanding, all right, here's the problem. Here's what I can provide. And this just happens to be the price point to get there. You win every single time when you're dealing with emotion versus logic. And that's what we're doing. We're selling livelihood, we're selling longevity, we're selling lack of stress, we're selling relaxation. Right. And all of those are again, if I can understand what makes Jonathan tick and what's preventing him from living a more fulfilling life, and then I provide the solution for that, likely he's willing to pay a higher price point than I'm charging today.

Jonathan Green: Yeah, I think that there is a lot missing when people are especially trying to sell fitness, because there are so many reasons for people to go to a gym. A lot of gyms really focus on, like, for at least three to six months a year. It's all about getting your beach body back without realizing that that's such a small segment of the market. Right. Like, I spend a lot of money on fitness. I have a personal trainer. My personal trainer lives in my house now, so we can watch everything me and my wife eat because we're on like, a major kick. And it's not because I want to be better looking. I've got four kids, married for ten years. I want to be around when they get married. It's about longevity for me, right. The things I measure are very different. And it's very interesting because I always look at marketing. It's so often we forget people have a lot of other reasons why they want to lose weight or get healthy. And sometimes, yeah, it's looking better, like when you're 1825, maybe. But there's a lot of other reasons. So I always pay attention to people that have a more sophisticated marketing or pay attention to other motivational reasons. I was in terrible shape and I lost a ton of weight when I couldn't keep up with my kids. I was like, my one year old can outrun me. That's not good. I don't want that. Like, I need to be the alpha in the house or these kids are going to take over. So those were things that were going through my mind as I entered my late thirty s and forty s. So how can people who are in fitness and in this industry or in any industry start to have a deeper understanding of their customers so that they can match the right needs? Because I'll give you a great example about me is that there are two ends of the spectrum. Gyms where I live. One is in a five star resort, and it feels like you're exercising in a spaceship. And after you use it, you have to flip over a disc to let them know to clean it for the next person uses it. And while you're working out, they bring you glasses of water. I hate it there. I hate it so much because it doesn't feel real. The gym I go to is one where you only have to clean up the bench if you bleed on it. It's the complete opposite end of the spectrum. It's where all the bouncers who work on all the different places exercise. So everyone there is massive and I'm not. But I never feel that intimidation thing. I know some people don't like to wear on massive. I want to work somewhere dirty because I feel that way. I'm like exercise is supposed to be dirty because then you feel like something's happening because it's hard. Right. One gym is air conditioned. The one I use is not. It's super hot. It's really smelly. But that's what I like. But most people would assume, based on my lifestyle, and I've got four kids, I'm older, that I would like the more spaceshippy Gym. But that's not what I like at all.

Hensley Ellefritz: Yeah. I want to point out a word that you use four times, which is one that we really harp on, and you use the word feel, and ultimately that's what we're selling, right? Because odds are, and I worked at a really high end gym for ten years called Equinox, and same thing, right? At the time, we were charging $250 a month. You could go across town and pay $10 a month for Planet Fitness. Same treadmills, right? The workout is pretty much going to be the same, but it was the experience, it was a feel, it was a sense of clout, it was a reputation. It was all of those things that you pay for experientially beyond just the workout. And ultimately, I can't sell you on that unless I know that appeals to you. And so what I implore all of you to look at before you continue to run, right, slow down. Before you speed up is really look at the two or three clients that you're working with or members or whatever it is that you're selling to that can either continue to come to you, continue to refer others to you, or that you have found the most ease in working with. Like, when you work with them, you just feel like you're in your flow. You're not counting the seconds on the clock because ultimately, by pulling those people, understanding what are the commonalities between these people, what's keeping them coming back, those are identifiers of who your target, Avatar is. And ultimately all of us, I don't care what industry you're in, all of us are looking for going deeper before we can go wider. Right? When you look at brands like Amazon and Lululemon and Nike, right, they came up with a very specific lululemon wanted to sell yoga pants to women, and today they have Mirror, right? Like Amazon, the same way they were an online bookstore. But you have to get really good at figuring out, this is our is it's a male or female? This is how old they are, right. Envisioning exactly who this person is and seeking out those people first and figuring out, how can I give that person the very best experience? Once you have that momentum unearths itself, right, then the messaging comes out of that, and your brand voice comes out of that, and your marketing campaigns come out of that. But you really have to understand who you're serving and what unique needs they tend to share across personas to really figure out what you're going to sell. Right? And if I were selling you, ultimately I wouldn't even bring up that gym, or I would have the courage to say, hey, we're probably not your spot. We're not going to have the best success serving you, and you're not going to have the best experience being here.

Jonathan Green: One of the unique challenges of gyms, especially, is culture. Most of the interactions your customers have are with other customers. So with the physical business, there are certain gyms, right, where everyone is super strong and it's unwelcoming to people that aren't huge. Right. It feels like a strong man gym. And then there are other gyms where strong men aren't allowed. Right. I know at certain gyms, if you lived above a certain weight, they're going to ask you to leave. You're too strong to work out here. Right. We don't want that because it's intimidating other people. How can you create the culture before it starts? Because you have to figure out right. You talked about your customer avatar, what customers you want, and there are certain gyms right. Like that women don't feel comfortable working out in. And there are certain gyms that I don't feel comfortable working out in. So it's totally normal. Right. But how can you plan the culture before it starts and create an environment where people are nice to each other? Right. Like there are certain gyms where you can ask someone to spot for you, and certain gyms where no one will ever help you. You're on your own. Don't lift too heavy, save yourself. Right. So how can you create the right type of culture? Because I feel like that's one of the biggest hurdles for new gyms. Because they just accept anyone and suddenly they have the wrong culture and they're not sure how to fix it.

Hensley Ellefritz: Yeah. This is such a good question and you kind of answered it yourself. One of the big pieces of our curriculum, we work with each of our clients for twelve weeks, but we spend about the back third of it really focusing on client and member retention for a few reasons. Right. It's a lot easier. It's six times less expensive to keep a member than it is to generate a new one. It's a hell of a lot more fun right. To just see that person and continue cultivating a relationship with them versus working leads from the top of the funnel. And ultimately, those are the people that are going to bring in other like minded individuals that help you grow this thing organically versus having to continue spending marketing dollars. So if I rewind when I was running sales for Club Pilates, we looked at the studios that had high retention rates, right. Members that were staying one and a half to two years versus those that were cycling through the average tenure might have been three months. What were they doing differently? And we adapted that to what we knew worked across the industry. And again, over the past two years, we've continued to make tiny tweaks. But I would say, by and large, is how the member is onboarded that is going to translate into their perception of how they see your gym or your business as fundamental in their life long term. Right. So if I onboard you, Jonathan, and say, hey, if you join today, I'll waive the first month of membership, and that's the reason that you join. There is no foundational value there. So that when you tell me, you know what I'm not seeing results. I'm going to go ahead and cancel. I'm grasping at straws to get you to stay versus if you tell me, hey, I've been shopping around gyms, I'm not feeling comfortable anywhere. Everyone is scrolling on their phone when they check me in, right? And I ask these needs assessment questions. I, first of all, should be recording all of that and we call that whole emotional goal. But then when I present, hey, if you do join today, we'll go ahead and waive that next month, or whatever it might be. That's just the icing on the cake. That's not the decision maker. So it's onboarding your member or your client based on value. And then having those touch points I e speaking with them. Crazy enough, it's a very fundamental piece of your business regularly throughout their membership, but especially in their 1st 30 days. And what those sound is not just checking in on like, hey, how are you feeling? Or how's your progress? It's, how was your son's baseball game? Or I know you were out of town for the last week. How was vacation? Right? Or, I saw you add an extra weight to the barbell. Like, Amazing job, we've been watching you. Or making a connection with another member, hey, this person also her son goes to XYZ Elementary School because ultimately people will cancel memberships. They won't cancel relationships. So the more that you can make this feel like if they were to cancel, they would be canceling all of these connections that they've created through your business, you have a member forever if you do it right.

Jonathan Green: You brought up two things that are things I really like to talk about. The first is that a lot of people make the mistake of competing on price. My family, we rent a hotel for a couple of years, and everyone saw our success. And so we went from competing with about ten other hotels to about 500 got built in those two years. Everyone copied us. Every house turned into a hotel, and they all started competing on price. So the price dropped by 90%. And we said, oh, we're not doing this anymore. So we got out of the business at the right time, sold off all our equipment. A month before the lockdown started, every single person who was competing on price went out of business. They lost massive amounts of money because they were competing on the wrong thing. What we learned is that when you drop your prices, you get the worst customers, right? Like, our main revenue share was actually renting surfboards after we made the biggest money. You buy a surfboard once, you can rent it a thousand times. Much better than renting motorcycles because those you have to repair surfboard you never have to fix. And we saw all these competitors focus on the wrong thing. And people that come in paying the lowest price 90% less, they don't rent any of the amenities, right? They bring their own food with them, so they don't make money in the restaurant. So the chase to the bottom is what I know kills a lot of small businesses. Because there's this thought, how can I compete with this gym? It's bigger than me. And you dialed into the most important thing, which is what we talk about with any type of membership, which is people will stay for a community so much longer. People will stay so much longer. If you have a Facebook group they love, or forum they love, where they're meeting friends and connecting, than if it's just the service. It's often the thought of you go to the gym, you get out and there's no interpersonal connection. I know some people come, they have the headphones in on the way out and headphones in the way out. They don't want to talk to anyone. But that's just a small segment. Often we are afraid to interact with the customers, especially in the gym. Oh, I don't want to interrupt anyone. Right. There's like sometimes this thought and so often the people there, especially persons the most aloof and alone, is the one who most wants attention. So I think you dialed into something that's so important, which is to get to know your customers. It's very interesting. One of the reasons my really experienced success in my business is that I just remember stuff about people. And I don't remember as much anymore. Now that I'm older, I have an app to help me remember when people tell me things. But I remember someone's hobby or if they're married, or if their marriage broke up. Those small things do matter and that's what people want. People want to feel significant. And it's not about who else is in the gym. It's about how you feel when you are. So I think you're teaching something really important that a lot of people miss. And it's hard, I know it's hard to build a small business. You're busy training one person, how can you help the next person? But I'll give you an example. My wife went to had a really good experience at a yoga studio last week. She went the next day and the person was like filming themselves in really aloof and it was a different teacher. She came home, she's like, I don't know if that person was a teacher, but I didn't like them. They were not nice to me. And she's like, I don't even know if they're a teacher. I didn't find out. So it's very easy. It's so easy to lose a customer and it's so hard to gain a customer. So it's creating that culture, especially as you start hiring staff. I've been to so many gyms. My wife and I went to a gym a few years ago where she asked a guy working in the gym for personal training help and he was having her do extremely dangerous exercises for a woman. These were strong man exercises, some of the heaviest lifts. He's like, let's go straight to the clean and jerk, which he'd never done before. Heavy. Okay. Like, really? And the weights right above her head and her arms are wiggling, and he's not watching her. So obviously, I went crazy in the guy. We don't go to that gym anymore. We hired someone else to train us because it's so fast. One bad employee who doesn't take it really seriously, right, can kill your business. And also that business went out of business for a lot of other reasons. They wouldn't repair anything. So I fell through a hole in the floor. Like, that's how bad they treated it. And it's the same guy, right. So when you put your business in someone else's hands, they can make or break your business. So when people want to scale, right. The next phase is, I can't do it all myself. I have to start hiring people. What are the right things and what are some of the biggest mistakes people make when they start hiring?

Hensley Ellefritz: This is so important. Yes. I think, going back to my initial point, first of all, I'm so sorry. I think that your experience is why this industry has such a bad stigma and we're trying to move away from it. But I'm sorry that you had the unfortunate circumstance that you did, and I think it's more proof that the more involved you are as a business owner, clients and customers know they really do. So the more involved and interfacing you can be with your clients, the more successful your brand is going to be long term. And I don't care what kind of business that is. I think that's pretty universal. But going back to my initial point, understanding out of the gates or at least pausing to make this decision now before you scale what role you want to play in the business, because ultimately, no one is going to care about your business as much as you do. It's a curse and a blessing at the same time. And very quickly, I realized that I was wearing every hat, and I wasn't doing it all well, that I was doing it perfectionistically. I was wasting a lot of time. So understanding, what are the things that you want to do? And then on the flip side, what are going to be the roles that you then need to fill? Right? I knew that I was going to be great at selling go ahead. At selling the business. And so I needed to find someone who was going to be really operationally sound, really good at understanding brand identity and marketing strategy, and then someone who was going to help with graphic design and social media and so forth. And my whole thing, and a lot of what we teach our clients is how to hire and manage their staff. But if they can do it 75% as good as you on the first round and then 90% as good as you. And I know that feels hard, but after 30 days, it's something they should own. Long term is my stance, and ultimately that allows you to stay ahead and be at the helm of your business versus being in the trenches with it and just trying to keep your head above water.

Jonathan Green: Yeah, I think that kills a lot of different types of businesses, is that you're like, oh, I'm too busy to hire someone. Right. Or they wouldn't do it as good as me. And there's this idea to hire the panacea employee who's like, the employee is better than me. Well, if they're better than you, they're probably going to start their own business. That's happened to a lot of my employees. They went off and started their own businesses, and there's this fear of, oh, they won't do it as right? And so we kind of sometimes you focus on the technical skill, not the soft skill. Like, how do they interact with customers? I've had certain employees was like, you can never talk to a customer. They were in the non customer facing part of the business. They're amazing at their technical skills. Like, your personality is terrible, you're great at your job. Don't ever talk to a customer. You'll never do customer support. You'll never be in front of house and other people. They're very good soft skills. They're friendly. They're able to talk people out of refunding. They're able to make people feel comfortable and create those results. And those people are front of house. I feel like, especially for a fitness type business, a lot of the hiring you do initially, you're like, well, I have to hire really good looking people, or I have to hire people with a lot of technical skill. Or they just hire people, like, straight out of high school and they say, oh, we'll just get you on the path to getting your certification. So they hire people with no skill at all because they can really low pay them. So these are some of the mistakes that I've seen. Obviously, you know a lot more than me. What are some of the ways to do better decision making? I know the first thing you said, which is so important, is like, make a list of the roles you want to fill because a lot of people just fill roles based on emergency. Like, oh, we really have this problem. We need to hire someone. Right. And they end up with kind of a patchwork of employees instead of a strategic hiring. But when you're actually talking to someone or when you're posting an ad, what are some really big mistakes you can make and what are the right ways to correct them with your hiring process?

Hensley Ellefritz: Yeah, I think this is a loaded question, but ultimately the best candidates are already employed, so they're not going to be actively seeking jobs on LinkedIn or. Indeed, or whatever it might be. So if you want top talent, what we teach our clients is how I found all of my team members. None of them were actively looking for roles. I had to approach them, and ultimately, none of them were, I would say, cookie cutter candidates for the roles that they were in. So being able to prioritize coachability and desire for growth, I think if you can find someone who is coachable and desires growth within your organization, certainly there are certain skills that are not teachable, right? I would say creativity. People are either creative or they're not. Or organizational or math minded. Like understanding. Yes, there are certain for a marketing position. I would never hire someone who, again, doesn't want to be customer facing and deals in Excel all day. But if you love it and you want to learn and you're hungry, I will take that all day over pedigree and professional reputation.

Jonathan Green: I think you've dialed into something that's really critical. I don't know where any of my employees have gone to college. I very rarely look at resumes. When people send me a resume, I'm like, that's the least important piece of information, because my resume is terrible. I had a misspelling on my resume for ten years and didn't realize it. And I was teaching English, and it's like I was still getting hired all the time. That's why I never noticed it. I didn't change my resume until I was 30. I had the same resume from 18 to 30. But have larger companies, right? They have the resume, or they have you fill out the form. They really don't care. They don't look at it, right? It's like, do you pass the post? And then the rest of it's the important part. And when I hire employees, it really is, can you do it or not do it? And again, I love you. Talk about being teachable. A lot of people think, oh, they don't apply for jobs that they would get because they think, oh, I need to have these preexisting skills. And there are some jobs that are specific, like graphic designer. Obviously you have to have graphic design skills. But my video editor no video editing skills. His resume doesn't mention video at all. But I simply send out a two minute clip to about 50 people, and he made the best video. So I was like, well, no, you're a video editor now. Surprise. There's this assumption that people make when looking for jobs that they're very limited. Oh, I didn't go to college, or I don't have this skill, or I don't have this experience, and I'm always interested in this. There's a lot of jobs in social media and email marketing that I'm not qualified for because I haven't worked for a large company for five years in social media. I don't have a social media degree. Right? I only have a track record of very large revenue for running my own business in social media, but that doesn't count, right? I ran my own SEO agency and made a lot of money when I started out in 2010, but that doesn't count. So a lot of large companies do have really bad hiring processes, which I see as the opportunity for smaller businesses. I love the people that a larger company won't hire because then they won't poach them from me, right? Then I have someone I can really teach and grow, and that's so important. Teachability? You're absolutely right. In Coachability, what I look for when I'm hiring someone really is someone who has a little bit of experience or at least understand what I'm talking about. And then they have that desire to grow, because sometimes I get employees and I go, hey, I'd like to move you up to management. They go, oh, I don't want a promotion. And I'm like, well, okay, you won't get another offer. You get that one chance, but that's it. But that's what some people want. So I think you're talking about something really important. So a lot of people who are listening are underestimating themselves thinking, I could never do this job because I don't have a bunch of experience. But mostly, yeah, it is like likability. Kindness are so important. Being comfortable around customers, being comfortable, learning new things, and admitting when you don't know how to do something. Like, I have this policy, you can make a mistake once, but don't make it twice. Right? You should learn from your mistakes. That's what I really look for. So I think this is really helpful to people that are listening, whether they're thinking of starting their own business or looking for that next job. I really like talking about customer retainment because a lot of people don't talk about that. Everyone talks about the initial customer. And you're exactly right that it is really, really hard to get a new customer. I know this. I've been doing this for over twelve years now. Keeping a customer is where the magic happens, because the customers who fall in love with you are the ones who will buy whatever you have. They'll take every upgrade, they'll invite all their friends, and they become like the core of your business. So for people who want to learn more, whether they want to learn more about fitness or just more about a lady running her own company, kind of showing that things can really be done these year days, where can people connect with you online and find out more about what you have to teach and do?

Hensley Ellefritz: Yeah, I would love to connect with you, even if it's not to work with me. I always say, if you're watching this, I'm already proud of you. But I would love to be able to tell you that, at least virtually, because this is hard and we're all kind of in the eye of a storm, and it's hard to remember that there are other people that are doing the same thing and having the same challenges as you have right now. So our website is reboot rebootfc.com and my email is just hensley hensley@rebootsc.com.

Jonathan Green: Amazing. We'll put that in the show notes and right below the video on YouTube. Thank you so much for being here. I really appreciate you giving us so much of your time.

Hensley Ellefritz: Yeah, thanks for having me. And again, congrats to all you guys.

Jonathan Green: Thanks for listening to today's episode. Making that first dollar online doesn't have to be daunting. I've got you covered. Get my free guide on how to make your 1st right now@servemaster.com.

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