Episode 57: How to Set Your Rates

I'm going to ask you in a minute where your race came from and you can post that in a text reply to when I'm speaking to affiliates and I asked them this question though, the most common response I get is we chose based on what everybody around us was Tuesday . The problem was that if you go back a generation and you say to those people, how did you choose your race? They'll say, well, we did what everybody else did before that.

Before that or that and so rate setting has become kind of this dogmatic approach instead of using data, working backwards from what you need to be making and choosing based on that and so that's what we're going to do today. What we start, I'm going to warn you that after we work through this math , a lot of people are going to panic and say there's no way I can ever get to perfect day. There's no way I can leave it in this gym. What am I going to do? I can't start from scratch.

If that happens, don't worry. We both become some huge problems with affiliates and I'm sure we can probably help you stick around to the end and we're going to be going through not just the rate increase template if you do have to change your rates, but also some ways to get help if that's what you need to Supartz every decision guys, right? The first is logical, knowing what to do and this is actually doing it. The first part was a woman assaulted.

The second part is actually the harder part and make sure you stick around to the end and we'll give you some help doing that. Okay, so I'm going to be shutting off the camera here and talking over the slides, but again, ask questions at any point using that chat. Before

we start , uh , I just want to take a quick poll of who's on here because I want to spend the most time where it's going to help . If you are setting your rates for the first time, please comment in the text box below. If you're raising your rate , please comment in a text box below. If you're eliminating discount , please comment and I'll make sure that I addressed that so that everybody goes , they possibly can. All right .

The text box that you see is on the middle center of your screen at the bottom. You can type in there and anytime , but I can also receive private messages from some of you. And so if you're hesitant to post what your biggest challenge is because you're using your real name on this attendee list, that's fine. You can private message me and I'll get it and I'll be answering those questions

and a couple of questions about why , uh , eliminate discounts too . I'm not going to go deep into the math without a visual, a helper here because it's hard to see, but the bottom is if you're giving a 10% discount, that means you have to attract 10% more clients to make a sale without a profit and if you've got to attract 10% more because your staff costs are going to go up by about four and a half percent.

So he started getting this vicious circle of more and more and more and we know now after years of mentoring boxes and seeing data, some of which we share, some of which we don't, that you're not going to get 300 members and chasing that goal is going to be a real struggle. If you've got a 300 member gym, let's say that you do get to that point and you've got a 90% retention rate, which is tough. The more members you have, the tougher that retention gets.

If you have a 90% in month over month retention rate, that means you're recruiting 30 new members every month in a 300 member gym. And I want you to ask yourself, is that how I want to spend my time recruiting three new members every day? The next question I want to ask you is what was you most about setting or changing your rates? So I don't usually get this question from beginners.

I usually get this question from people who have gone down that road, you know they're three years in, they're not making or they're keeping like a, another job which is really hard, is not for Connor . They're not profitable sometimes even they're sleeping at the gym. Okay. I hate to see this

stuff . I'm going to share my story here right now while you think about it. Please feel free to post questions or are your worries in the text box or private message me, which is what most of you are doing. So first why I'm here. My name is, I said is Chris Cooper and this was me about 15 years ago. So this have been 2001 2002 everybody else in this picture is an inmate. This is a powerlifting competition at Kinross correctional facility in Northern Michigan. This is a level five facility.

These guys are here for the rest of their life. And I was competing in power lifting , I was doing West side type stuff and I wanted to open a gym so that my power lifting buddies can train and I wanted to have a reverse hyper and I wanted to have a glued hand race bands and chains and , and I thought that opening a gym was the best way to pay for the lifestyle that I wanted to live, which was powerful. That didn't work out. So my first gym, I was a personal training students .

Pretty successful, you know, it was paying me about 50,000 a year. I had another full time trainer working with me and we were working, you know, 1415 hours a day, how really my kids a lot, but we were making enough money to survive. My wife quit her job and we tried to make ends meet on that income. It really wasn't enough. So after a couple of years , uh , we opened up our CrossFit gym, which was our skin location. And I thought, okay , awesome, great environment.

You know, it's okay for me to have like these concrete walls. I can put up a pull up rig, but all my power lifters can still come and train here. And so I chose my race on what the global gyms around me were selling. Average was about 40 bucks a month. And I thought, okay, well we're going to have open gym time. All these power loops are going to show up. I'm going to get super strong. And that didn't work out either. So around 2009 I had the park bench mobile .

But I've written about several times in my books where I literally sat on a bench and said, ah , this isn't working. I would make a lot more money working at a call center for 12 bucks an hour. I'd had health insurance, I'd work an eight hour day. I'd have no stress when I got home and I could just deadlift in my garage. You know, I've spent 300 bucks on this barbell.

So worse, I didn't know any 40 year old personal trainers and at that point, you know I was my early thirties I thought something's got to change here and it's probably me, so I'm going to learn how to do this right. I was tired of just sitting in assuming that I was going to figure it out on my own.

So I hired my first business consultants . I couldn't afford it. I wrote him a $500 check that probably should have bounced and I justified it by saying I'm going to record everything.

This guy teaches me to teach to other gym owners and I created the blog, don't buy ads and to do exactly that or other blog posts later that turned into two brand business net, which is now the bestselling fitness business book of all time and that sponsored my business 2.0 which was not just an updated version but a more tactical step by step approach to building a great gym and then help verse, which is how I market.

All right , so let's, let's get into your case here. The first thing I want you to do is take 45 seconds for introspection. I want you to answer this question for me. What is your perfect day? I want you to grab a piece of paper here. Hopefully you have a piece of paper and a pen. Elise , coming onto this pod or this webinar boat and I want you to write down in a perfect year from now, what does your day look like? There were some two brand clients on here.

I love seeing you guys on your thanks for being here. This is a great time for you . The updates to you already know the value of this . If you're new to this exercise though, what you're writing down is what does your perfect day entail? What time do you get up in the morning? What time do you go to the gym? What do you do when you're there? You know, are you coaching? Are you working out? Are you marketing? Write all that down minute by minute or even an hour increments.

Okay, what time do you go home at night? How much do you get to work out ? What are you doing at lunchtime? When do you see your wife? When you see the kids write that all down, even if it seems pretty distant from where you are right now. It's really important to have an end goal and it's really important that you can visualize that goal. So that goal is not going to be just money. That bowl is how do you spend your time?

Okay, I'm going to give you a 15 second right now while I have a sip of this coffee .

Okay, so we've got our perfect day. All right . If you were on the webinar two weeks ago, you saw how many refer to a chart called penis index, and I'm going to kind of ask that same question now. How much income net to you take home? Do you need to live in that picture?

So, for example, if you want to have a house to veterans and you need to make a mortgage payment, you want to have one car and you don't want your wife to work anymore or your husband to work anymore, how much do you have to take home to make that happen? In my neck of the woods, that's a minimum of $1,000 Canadian or about 50 U S so write down that number and that's the big number we're going to start with today. There are some of your business, I can't iterate this enough port .

This number business is not its own reward. Next, we're going to count how much gross you need. So even if

you chose an arbitrary number here, there's still a lot of value in walking through there and you can choose the real number later. Let's say that you've got $100,000 down as you go. Okay? Our goal at two brain is to work toward a 33% profit margin. That's not arbitrary. That is in a service industry. That's a great target. You know there's some data supporting that. A service industry that's kind of an operated business should be aiming for 33% profit margin.

That is tough for a lot of gyms to get to. I'll tell you that right now in the fitness industry, 33% is actually a little bit low, but businesses in the fitness industry don't learn on an owner operated model. So the CrossFit gyms that I work with, power lifting gyms that I work with, even some of the chiropractors that I work with, you guys are going to struggle to get to a 33% profit margin, but that doesn't mean it can't happen. All right. The next thing we're going to look at is taking

that net goal. So let's say it's $100,000 and extrapolating that to a gross goal, okay, so if I've got an 8% profit margin, that means a $300,000 gross goal for the year for the jet . That sounds like a huge number. If you're new to the business, you know, and you, you've never handled 10 $20,000 at a time before, but if you down into like a a monthly goal, you're going to see that's not crazy. Okay, so $300,000 divided by 12 is $25 a month.

Anybody who's been in this game for more than three years is going to say that's not as scary as it sounds, right? But now here's the trick here is the part of the equation that most people miss is that we're going to do that with 150 clients. We choose 150 clients based on dumbed hours number, which is a sociological measure of how many relationships that you can personally maintain.

If you're super secretive , maintaining relationships, you might be able to do 160 you know, bill Clinton, maybe like one 70 you know, but 150 is about what you should target at least as a primary goal. Okay, not 300 so how can we make $1,000 off 150 clients? And how do we ask

that? Our rates to do that? Well, you need diverse revenue streams, so you have to always be asking yourself, what does the client want? So here's the bell curve of client spending habits, okay? And again, this is based on wide research across the service industry. All of your clients are going to fall along this continuum somewhere, okay? First, you know at the bottom 20% they're not consents . They think overpay, okay? I really don't focus on these people.

If you listen to my pumpkin plan podcast, you'll know that these kind encouraged to leave. Not overtly, I'm not worried about it, but I don't make any concessions to keep them. The next 30% think that the price might be a bit high, but they're willing to stretch to do that. So there's lots of numbers of catalysts who wait tables honestly, or they have these part time jobs. Maybe they even work an extra day every week to pay for their gym membership. Okay?

We're going to talk about how to create that sense of value. So, so much that the client will actually do that. The next 30% believe they're getting fantastic value. They wouldn't change a thing. If anything. They want to keep my secret service because they don't want to share my time on other people. All right, and then the top 20% one more. So they want one on one attention. You know they want nutrition coaching, they want something else and they're willing to pay for it.

Now I think it's worth 30 seconds here. I'm going to limit myself to 30 seconds to say that before I was making what I currently make, I did not believe these guys existed. Okay? So I was projecting my onto my clients. Huge mistake. Now that I make you know , well over $300,000 a year, I know the value of personal training. I know the value of asking my coach to make a concession based on my schedule.

I know the value of going in there at 6:00 AM one day and eight 30 the next day when maybe there's not a CrossFit group and I know the value of optimizing my time. So if I want to work on my snatch, maybe I don't just want to go to the regular CrossFit group today, but now knowing that your clients follow up along this continuum, we can set your rates to address at least the top three segments, the people who want more, the people who

are getting great value right now and just love the service and the people also place might be a bit high, but they are willing to stretch to do that. Okay. First though, before we get to price, I want to say what are your revenue streams? I want to make sure that you've got a robust business, that you're antifragile , that you can survive a hit in any one of these categories. It's a week before Christmas.

A lot of gyms, right now we're reporting the people that are canceling their CrossFit memberships because they're broke. You know, they spent all their money buying stuff and I get that. I've been there in my gym though we see personal training spike in the last couple of weeks before Christmas. We have diverse revenue streams. So right now people are buying in packages of personal training .

One guy at this time every year spends $10,000 on personal training for himself and his wife, and that's their Christmas gift to each other. Okay? So obviously that boosts the segments that are lacking at some points of the year. One of these revenue streams are going to spike in September.

We get a lot more CrossFit if in January, in January we also get a lot more nutrition business, but then toward the open we get more specialty groups, and as I said, writing might spike around December and August, for example. Okay, so I want you to write down what your revenue streams are. Then to make it more robust, we're going to assume that 20% of your clients, so back to that bell curve, the top 20% that they will pay 50% more than the rest, okay? Now these are very conservative guesses.

So let's say that you're running a gym and you're charging a hundred bucks a month, you can assume that 20% of your current clients will pay at least $150 a month if you can provide the service that they actually want. Okay? We'll talk about how to determine that. Serve another webinar.

For right now, just know that these people exist. So what are those top services? Okay? What are your other revenue streams? Maybe that's personal training. For a lot of us it is personal training is part of your core business. You sell fitness. Personal training is one of the paths. If fitness nutrition is part of your core business, it's not a sideline, it's not a bonus. It's not an alternate. It's your business. So if we calculate this, let's go back to our numbers here.

If we say that our goal is to net $100,000 per year, take home, okay? And we know that our profit margin is 33% then we need $300,000 gross per year from the gym. Okay? If we divide that by 12 simple math says the $25,000 per month is the goal. If we believe and know that 20% of our clients will pay one and a half times as much as everybody else, then that makes that 30% of our monthly gross, right ? 20% times one and a half.

So that means that 25,000 7,500 is going to come from this top 20% of clients, okay ? 20% might sound high, but my gym is 38% of clients pay at least one and a half times the median . That leaves 80% of clients to pay 70% of the moment, oops, okay, what's leftover and does 70% of that $25,000 gross is 17,500 now, can we take 30 clients? Okay, so that's 30 out of 150 paying $7,500 is 250 bucks a month each . It doesn't mean that our cross membership has to be 250 bucks.

It means that the total of the services they buy from you should equal up to 150 or more. Okay? It also leaves 120 clients paying $17,500 together. The good news is that you're probably pretty divide 83 okay ? That's probably around your average CrossFit membership. Maybe that's your three day a week. Maybe that's just your mean average, whatever. That's probably the one that you're closest to. Okay . Where do you need most help is probably going to be that premium service.

All right , so this is what we summed up all that math on the previous page. I wanted to put it on its own slide, so it was really easy to visualize. 30 clients paying $7,500 is $250 age 120 clients paying is one 45 83 each . Okay . So your premium service needs to be two 50 your average is on 45 this is why a catalyst, our arm average revenue per member is $270 and above every month because our premium service personal training is 390 bucks a month.

And that pulls the whole arm over was top 20% in that Belker pulls the whole curve to the right. Okay. So what is your

premium service? Can you sell access to more group training or very private groups that maybe not everybody has access to? And that's a hard road. Personal training is a lot simpler . You, Tricia . Very simple. If you watched the last webinar on the prescriptive model, you'll know why Sony two brain gyms are doing so well with nutrition right now is online coaching may be an option.

You know, is this something that you can do that will add a lot of revenue, help a lot of people without taking a lot more time? Okay, so I want you to write down what your premium service is. What do you do now? If you priced too low? So let's say they don't have a robust revenue streams. Okay? Let's say you're just selling group training and you've just done the math and you are starting to think, Oh, there's no way I can get there. I can't get to profit on twice too low.

I don't have alternate revenue streams. I don't have a premium service. Let's figure that out. Let's go back to your perfect day income goal. Hopefully that's written down right in front of you. Then I want you to take your profit margin and use that to determine your gross income goal. So if your perfect day income is 100,000 and your profit margin is 33% then you need $300,000 gross. If your profit margin is 25% then you need $400,000 gross . Okay? I hope you see how this expands.

Then I want you to separate your clients by your different revenues. Okay? So what are your different revenue streams? So a percentage of your business comes from those other revenue streams and what declined date for those? Right? With West leftover, I want you to divide by your current rate. So instead of that one 45 or instead of dividing by 120 clients to get to that one 45 just plug in your current rate.

If that's 99 bucks a month, divide how many clients you need by 99 and that'll tell you exactly how many you need to get in there. Okay? And how many people you need to keep. I think that's key. Not how many you need to recruit, how many you need to keep.

So what if you don't know your income? Well, hopefully you do because we did that together. What if you don't know your profit margin? What if you don't have different revenue streams? What if you need more than 150 clients? Like you build your pricing around getting 300 if you don't know the answer to any of these numbers, stop here. This tells me you don't actually have a business, but you don't have a software necessary to give you these numbers.

So if your software can't tell you how many members you have, what the average person is paying, who's paying what and where are your revenues coming from. If you don't know how to figure this stuff out, but you think your software is fine, stop here and phone a friend. Okay, book a free call on Subaru visit com and we'll do our best to get you moving in that direction. It's a free calls , 30 minutes one of the two brain mentors we dedicate this time to helping Jim succeed.

It's not a sales pitch, it's just helping at these numbers. Okay? What if you do know these numbers or you know, or at least you've got a sinking feeling that your rates too low. How do you raise them ? We're going to move on to part two here, how to raise your rates , but before we do, I really want you to download the res template. If you look at the shared files section here, little download box right beside it, you can download our rate increase temp rate.

This is a big part of how we increase rates in over two 50 gyms with, you know, all but one doing exceptionally well. Okay , so, so the examples that we did in part one $145 a month was the right number. Okay. Now you've got to ask yourself, how far am I from that? If I'm charging 99 and the light number to get me to where I need to be is one 45 a , I'm going to have to really do something here. Okay? So we're going to figure out rates too .

I don't recommend putting a bunch of little incremental raises here. People are averse to change more than they're averse to. The scope of change. Okay. Is the change itself they don't like, instead of how much change. So if you're going to change your rates , I strongly suggest you just do it all in one . It's how does it affect your clients the most? Okay, so we're going to find out what the right number is. Then we're going to identify the worst offenders.

Worst offenders is more negative term than I should probably use because these people are not ripping you off on purpose. Okay? They're not asking you for discounts probably because you grandfathered them or you're still charging them the same price in this beautiful facility that you charge the back in your garage. Or you know, your, your pricing has gone up. Like your bills have gone up.

You know, you're in a bigger space, your heating costs have gone up, your coaching costs have gone up, but you haven't increased your membership price to reflect that. So the worst offenders are people who are paying the furthest from what they should be paying. Like a great example, somebody starts with you in your garage and you tell them you're grandfathered and they're paying 70 bucks a month. Since then, you've invested another $20,000 in equipment. You've hired another part time coach.

Maybe you've moved locations, you know, there's toilet paper in the bathrooms every day now and they're still paying 70 bucks a month for getting this brand new, beautiful big experience. And they're paying the same price as the old experience. So I want you to identify who these people are who are furthest from what they should be paying. Now I want you to do the math and calculate how many clients you can afford to lose if you raise rates and still be able to make the same amount.

So let's say that we move up from one 30 okay? Every client is going to go up, you know , to that one 45 bar , take your total number of clients and multiply by one 45 right? So if you've got a hundred clients, $8,500 then subtract what you're making per month gross from CrossFit group memberships.

So if everybody's in 30 right now, and we're going to go to one 45 then I'm going to say that's a hundred members times 1.5 is 14,500 the same hundred members paying one 30 is 13,000 for a difference of $1,500 14,500 minus 13,000 is $1,500 okay? Now we're going to divide that by one 45 to tell us how many clients we can afford to lose. Okay, so $1,500 is the difference.

Why do I want 45 leads that I can lose 10.34 clients or 10 clients and still be making this amount of money so I can go down to 90 clients, but if they're all paying one 45 instead of one 30 I'm going to make the same amount of money. I could probably give them temper more attention each. I can probably cut my coaching costs a little bit too. So we've identified what the right number is. We've identified what the worst case scenario is. How many of you can afford to lose?

Now we need to go through this from a more emotional standpoint. So I want you to print out your client list. I'm not going to wait while you do that. Just kidding. Print out that list. Go through everyone. Okay. We know that we can afford to lose 10 I want you to draw a line. Cross those guys out. If you raise your rates, who will definitely quit? Ask yourself that as you're going through that list, right? Then I want you to visualize those hard conversations. So you're looking at your list.

Oh, Mary bat , I know she is going to quit. She's going to be pissed. She's out of here. If I raise my race , 15 bucks, okay? First of all, of course Mary Beth is now your ideal client if that's going to happen, but I want you to visualize that conversation. We want to be stoic about this. We want to imagine the worst case scenario and ask ourselves how we can deal with it. So if you raise your rates, how will Mary Beth react? Will she blow up on Facebook? Is that like her? Will she call you?

Will she make a disturbance in class? Okay. And then what you have to do is set up a strategy to deal with those things. So if she's going to blow up on Facebook, how are we going to deal with that? And we delete her posts and contact her privately. Okay. If she blows up in class, how will the coaches deal with that? You need to educate your coaches in advance. Okay, plan blurs.

Next I need you to prepare coaches, but a day before you've announced for rate increase, going to have a conversation with your coaches, tell them the reasons your rates are going up. It's not because you need to make bigger income, it's because you need to be sustainable so that they can keep their jobs so that you can help kids play hockey. I just posted that in the affiliate owners group this morning.

It's so that you were to give your staff an envelope full of cash and say here are a shopping spree for Christmas. Okay, these are the reasons that you want to share with your coaches because they're the real ones. We are not chasing property or guys, we are chasing the ability to help more people over the long term. Next, use our template.

All right, so and in that shared file section, please download that rate increase template. Here is how valuable that thing is. A lot of affiliates will say to me, Hey man, I use your template and they haven't worked with a mentor. They've just downloaded the free template, gone on their own, you know, whatever. And they've moved up as much as $20,000 over the course of a year just from boosting their rates. Okay. That is super remarkable.

If you think that template isn't valuable, do the math, you know just said that this increase in our, in our imaginary case here brought us from 1300 a month to 1450 a month, right ? So if I say that the difference is 1500 bucks a month as well, I mean this could literally be an $18,000 template in value to you. Okay? This is not replace mentoring. You know, I'll say that this is a tiny, tiny piece of the mentoring puzzle, but this is just a glimpse of how valuable it is. Okay? Now you're

going to address the worst offenders individually, so the people, if you promise them grandfathered rate, you're going to have to deal with that. Ask yourself, what happens 15 years from now when these guys are still paying 70 bucks and a value is over $500 you know it's better to do it right now. You're going to have to admit, maybe they made a mistake. Sorry. It is a mistake. You have to correct it, address it the proper way. If you haven't said the word grandfathering, good for you.

High five I certainly made that mistake and I had to eat Crow, but if you haven't done it, then what you're going to do is address them individually. So you'll call them, you'll email them one-on-one, you'll catch them after class and say, starting January 1st our 2017 rates are this. I've been so proud to be able to honor you. A military discount, you know , totaling $1,412 I hope that's been helpful to you.

Our 2017 rates start January 1st okay, now you're going to plan for the worst case reaction. You know, so you go back to that list and you say, who's going to blow up the most? How can I deal with that in advance? If that were me at this stage, honestly, and I was increasing my rates and I knew that one member was going to explode on social media, I'd probably fire that member before I raise my rates. You know? I would just eliminate the stress from that.

Most of you listening are not in that position and so what you're going to do instead is say, how can I manage this? So you'll talk to your coaches about it. You'll come up with a strategy. Okay, if this person posts publicly on Facebook, then they're going to delete their posts immediately. We're going to address them individually so that we can give them all the attention that they want and we can alleviate their concerns or we can say goodbye and then execute.

The biggest challenge, the hardest part of all of these is step number 10 and that is pulling

the trigger. I can give you guys all kinds of reassurances how? Nine times out of 10 when the rate increase goes up, the gym member gets all kinds of love and support and the members, man, I'd pay anything to come here. You guys are worth it. I've been waiting for this. You know, this is usually the feeble get. We project our own fear onto people and we believe they're all going to quit, but that's not what happens . However, I know that just me saying that is not enough.

So you've got to come to grips with this. I recommend using a silica approach like I've outlined above, imagining the worst case scenario. All right . I talked about a little bit about the mentoring system that we go through. A wish rate increase might or might not be a part. We measure the success of the gym based on seven areas of excellence. I've got six of them here laid out metrics. This is, you know , some of the metrics that you need , uh, the owners lifestyle.

We don't consider your gym successful until you're working as much as you want to and earning as much as you want to the coaching. How do we improve your coaching in the gym? It's not just knowledge, you know, it's not teaching people how to squat with their knees caving in. It's how to get people to want to keep coming back. The client experience, you know, toilet paper every day as part of it . Resilience. How well can your business withstand threats like Christmas?

You know, people aren't buying CrossFit memberships. They're asking for holds or discounts . Longterm planning is also part of it. How do you retire? One of the comments yesterday on my threatening Agee was, okay, yeah. You know, your nozzles of dollars to your coaches to give them a shopping spree and you just had the idea this morning, but it took you 14 years to get there. Uh , I'll tell you guys, it took me three years to get there and 11 years to screw it up.

Bad enough to realize that I had to change things. Okay . Just for context. All right .

We take the two brands and this model, which is completely transparent and we drop it down to your GM so you can use our system, use our templates, use our methods, keep your soul, you know, to change your name. You don't change your land. You don't have to change anything except the way that you deliver your business. We use two stages to mentoring. Now the first stage is an incubation stage. It's about six, eight weeks long. You're working one on one with a mentor.

The mentor will talk to you, live over the phone at the start of the week or middle of the week, and then I'll assign you some homework. So if your homework is to raise your rates, they're going to say, here's the template that I want you to use. Okay, we're going to go into much greater depth than we have on this webinar. Then we're going to say for reinforcement, here are some modules that'll help you figure out what your arm is, what your rates need to be, all the math stuff.

I'm going to give you the complete templates. So here's the staff handbook that you can use. You can tweak any part of it that you want to and make it your own. Here are the contracts that you need to the evaluation tools that you need. Intake forms, on-ramp procedures, automated emails. We give you all of that. Okay? We're gonna wrap up the incubation stage with a 10 step marketing marketing strategies that we walk you through step by step so you know exactly what you're doing.

Everybody never be lapped in doubt about what you need to do. From there. We move people into a growth stage, which is a monthly call with a mentor. We introduce them to our private Facebook group. A few of the people on this webinar are in that Facebook group. I'm sure they'll comment about how Austin is. What we've basically done here is still like the top leader dollars and put them into this private group. We'll also assign you accountability partners.

This is something that's new for 2017 you'll set up like a secret shopping program so that we can get some great measurable feedback on how well your gym actually attracts and converts people from your website and your phone call process . You'll also get some specialty on retirement planning, profit allocation, how to buy a building, you know , should your employees be 10 99 or W2 contractors.

But the point here is that we made your June profitable so that you can do all these other things, right? We've got a new platform coming. You know, if your super two group is brand new to you too . We have an entire new software programs set up to help us mentor better and biggest of all I'd say is we're now going to guarantee 100% ROI on your investment. This is really easy for me to do. I just wasn't really sure how to launch it.

The average return on investment that we see in mentoring clients after six months is 26 times what they initially spent. So , um, the incubation stage is 24 99 after six months, most gyms have seen a return on that investment of 26 times six times 2,500 bucks, almost $65,000 we're going to guarantee 100% ROI because even if you are slow to get your calls in slogan homework, just kind of like true it , it's not really hard to make $2,500. So now we're just going to guarantee it.

We're not going to do this for everybody. We're just going to try this first in January for the gym. We only take 15 gyms a month. Six of these spots are already sold for January. You can sign up right now if you want to. I'm going to introduce a guest here in a moment, Jamie from CrossFit. Better than yesterday is joining us to tell us just a couple of really good feel good stories from her GM. But while we're doing that, I want to open up the floor to Q

and a. So Jamie, I'll be adding you in a moment here, but if you have questions about how to increase your rates , uh , why you need a business mentor or just how to do the calculations, feel free to open this up in the chat below . All right . The other thing that you can do if you have other questions is feel free to private message me. Okay. Sherman just sold a $1,200 package yesterday and it's awesome. Yeah, if you want to private message me, any client , any questions, go ahead too.

There's a few, there's a few little pieces of chatter going on in the chat box. Now feel free to post there also. So a great question Jennifer would go to to bring business.com forward slash mentoring if you want to see how to sign up for the incubation. Okay? Kalita if you just open your gym or you're only a year in, when is the right time to raise rates? Uh, and that is when we can draw a clear picture of your service right now and draw a clear picture of your service as it was a year ago.

And notice that there's a clear difference. So in other words, when there's a measurable improvement in your service, it's time to raise roommates. Okay ? Now, if you've been open for three years, your service hasn't improved. It's going to be very tough for us to say to a client, here's what you're paying for now versus what you're paying for that. I've seen it done one time where the gym owner said, guys, I made a mistake. This gym is sustainable. I priced your memberships way too low.

I have to move them up if you can't afford this, I understand. Here's our new rates. And it actually turned out really well for them. And the owner was really scared, really scared, share the entire experience with us and the entire two brain community, but it's still worked out by the membership. Understood. I think what we forget a lot of the times is that we're dealing with humans here.

We spend some time staring at our screens and talking about leads and usually if we explain to two people like I really screwed up, they're going to understand. The other thing to remember too is that you might project friendship on people, but you have a transactional relationship. They're paying you money. Most of your friends are not paying you money, so it's okay to talk about money in front of your clients because they're paying you. Right. They understand it's a transactional relationship.

All right , so Ryan, great question. What do you, what are some of my particular specialty programs that you can watch prior to the open? So number one, you want to set up the intramural open, you mind that download guide on the site and why ? I know that you're in the incubator right now. You're going to get to that. Okay. The goal of the intramural open is to maximize how many people are going to do the opening box. Okay?

So if you want to sell specialty programs for the open, lots of the intermural open like January 1st. Okay. So that more people are signed up, especially the people who didn't think they were going to be signing up. You want them in there. Okay . Then you say here's an open prep group. So if you're signing up for your first open, there's going to be some double unders. Okay. There's going to be some or head squats, there's going to be some , what else guys? Chest to bar pull-ups.

Maybe you haven't done that before. So here is our program on Olympic lifting. Here's our six week program on basic gymnastics, how to do an stance, you know, how to do it , uh, toes to bar, that kind of stuff. And then you launched those in advance. You kept the sign up , so maybe 12 people, 15 people per group, and then you price it out so that making more money for your time than you typically would just running a CrossFit group.

Okay. So the open is super valuable to an affiliate if you know what to do with it and what to do with it is not just charging for the open. It's using that to anchor the need to improve in specific areas. All right . I hope that helped. Right . That was a great question Mark. How do you develop PT clients? Man, we've got a ton of articles and personal training is going to come from your intake process.

Tough to look at the clients that you currently have who've been brought up in this paradigm of group training and say, you should be doing this one on one now. Okay. Because you're taking two steps backward in your relationship, your S , you know , it's like, it's like you're dating this girl and she starts dating this other guy and you're like, Whoa , Whoa, Whoa, Whoa, Whoa, shit . Back up. Two steps here. I want to be excluded . Okay, it's too late after she started seeing this other guy.

Well , you need to do is change your intake process to ask people, are you more comfortable exercising one-on-one with me? Are you more comfortable exercising? Yeah, you need to do some stuff like you need to rank high in your SEO for personal training in your city, but you also need to make that a core art of the client relationship. So a catalyst, at least 30% of clients do some sort of one on one training every month. Okay, think about that for a minute.

There's some other good questions coming to develop. The other way that we're developing a lot of personal training right now in gyms who started off completely without any personal training, his gold review. And on the last webinar I talked about the prescriptive model, how you need to be meeting with clients at least every three, four months reevaluating their goals and making a new prescription. Okay , great questions . Great question .

And I actually see more coming here, so I hope that helps a little bit. Let's, let's keep moving on here guys. I don't see Janie on the call here, so Jimmy , if you are here, please just shoot me a private message. I'd love to get you on here. She's got some amazing stories guys. It's related to the Josh [inaudible] podcast from weeks ago on sobriety. Why you haven't heard that? I really encourage you to tune into that.

Josh talks about the parallels between CrossFit and AA and how everything comes back to service. How can we help other people more? That's what I'm all about. All right , so guys , um , I know there's a couple of more questions being typed in here. If you have systems, I really encourage you to get them in here right now. If not, I don't want to smoke up your Sunday talking about that . So I will be sending this out again later. You can replay as much of it as you want to.

We're going to give it another minute or so here on a , Oh, thank you Jennifer. And now we've got eight spots open for January. You can get into the incubator, right? So Jared, this is a long question brother. I'm going to read this. Have you worked with gyms before and recommended for them to consolidate in order to retain? We have three locations in over 500 members, but they seem uncontrolled and Dunbar's number seems like a pipe dream at this point. This is a bad question, Jared. Thank you.

So I think that every business goes through periods of expansion and consolidation. And yes, I have worked with gyms in this exact situation before where sometimes they chose to consolidate down to the gyms. You know , I can think of one specific example right now in the Pittsburgh area.

Sometimes though, what they needed to do, consolidate the processes and remove the owners or replace them with a process as much as they could so that they consolidate it down to two gyms, cutting back their overhead, cutting back their staffing costs, what they had to do was solidify everything across all locations. So Jared , um, one thing that I'd look at it there is like, you know, do your clients get to attend each gym whenever they want to.

So we have to make sure that the experience is exactly the same. So first we need to make decisions about, you know , what your coaches , where seriously, how is a CrossFit class run, you know , um, what are your rules? How do the clients know that? What are your rates? Are they spell they stratify across all three locations? Okay, Ryan, that's fantastic brother. Jared, I am going to come back to this in a second, right? And that's awesome. I think you're going to see that price go up too.

So guys, here's a great example. We don't tell gyms. You have to do this thing and you have to charge this price for it, okay? What we'll do is say, let's try this. Let's go for this price. Let's go for three months. Let's measure the gap . Okay? So here's Ryan. He's charging 100 bucks for four 30 minute PT sections. Okay? I would charge him double that. And I do. He'll probably move up to that, right? But he needs to see it work in action.

He needs to prove it to himself and measured the outcome. Good for you brother. Man, I'm so proud of you. So charity , back to your question. This really comes down to numbers and what we'd have to look at is like individually first, which gyms are profitably . Students are making that profit margin of 30% and which ones are supporting the other tips .

Okay. So when I started, you know, from 2008 to about 2010 a personal training facility was really paying for my CrossFit gym , you know, and when I sprayed it out, that was a pretty painful exercise. I did not want to , when I did it, I realized that my CrossFit gym had to be fixed because it was bleeding. The personal training gym dry.

Okay. So then from there, after we get the metrics together and we've got this clear blue picture, we know what to do, then we have to decide, you know, what's the best way to go about it. So I would say that your mentor would probably start by making the process as objective as possible, removing all emotion from it. You know, we all want to have 500 members.

We all want to have three locations because it's this romantic notion that we're held where people that, you know , more members equals a better gym for the blind. Your brother is that if you're not making what you want to make 500 a thousand members, it doesn't matter.

You know, we talked to a gym this year in 2016, I don't want to get too specific here cause the obvious who they are, but I mean, well over 500 members, you know, millions of dollars in gross revenue, the partners aren't making it to survive. Okay? Like they're splitting way below the poverty line in net income to that. So what happens, you know , you're helping hundreds and hundreds of people, but you're not surviving or you're not thriving. Can you really afford to keep going?

These guys would have been better to get jobs at McDonald's and buy a CrossFit membership somewhere seriously. So , uh , yeah, we started with hard metrics, you know, be as objective as possible, remove emotion and then from there you make the decision and then the mentor works with you to work through the implementation of that decision. Sometimes man, it's a keep all three gyms , you know, fix them all. Sometimes it's consolidate down to, sometimes it's go down.

It all depends what you and your partners are going to do as far as perfect day. So guys, we got about two minutes left here. Um, I'm trying to be as specific as I possibly can here. If you need help with the math, you know, get into the incubator. All right ? Yeah. Thanks man. I hope that helps. Uh, Sherman, thanks for your comments as always, bro. Guys, it's been a real pleasure having you here. It's a 10 to 10:00 AM Eastern. It's my birthday. I going to go get some pour over coffee.

Thanks for sharing this time with me and doing this math . It's really rad. Have you.