I haven't published a post in this series since September, so this update is long overdue. Here we go...
1. Focus on optimism in training, but pessimism in business.
I'm in the process of reading The Founder's Dilemmas by Noam Wasserman. It's been excellent thus far, and this quote stood out to me, in particular:
"Higher optimism entrepreneurs have 20% lower revenue growth and 25% lower employment growth than lower optimism entrepreneurs who would be less susceptible to the perils of optimism."
Without even knowing it, Wasserman might have explained a big reason why so many fitness professionals struggle when they open their own business (as compared to working for someone else). The best trainers are upbeat, unconditionally positive, and energetic during their training sessions - but that doesn't mean that this approach also works well on the business side of things.
As I think about the most productive meetings I've had with my business partners over the years, they haven't been sit-downs to talk about all the great things we're doing. Rather, they were meetings where we nit-picked and scrutinized everything we were doing to find ways to improve. In a broad sense, they were very pessimistic.
Wasserman elaborates: "Excessive optimism can blind many founders to their start-ups' critical needs. So, they must be particularly vigilant in identifying the gaps in their skills, knowledge, and contacts - and evaluating whether and when those gaps should be filled by a co-founder."
There's your quick, two-part recipe for fitness industry business struggles:
a. Be overly optimistic on the business side of things and miss key opportunities for improvement and growth.
b. Fail to have the knowledge and resources needed to improve a problem even if you do actually identify it.
2. Effective loss leaders shouldn't devalue your service.
A while back, my business partner, Pete Dupuis, wrote up a great article: 3 Reasons We Don't Offer Free Training Consultations. In it, he outlined three primary reasons why offering free training consults at your gym might not be a good idea. One point he didn't make, though, is that you are effectively devaluing your services.
Now, to be clear, I am not at all opposed to loss leaders in the fitness industry - as long as we have a broader definition of "loss leader." Wikipedia defines it as "is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services." In my opinion, you can utilize "value addition leaders" with great impact without devaluing your services (the only "loss" is your time). You're simply finding ways to give potential customers something of value before they take the initial plunge with you.
This might be a free seminar at your facility that they attend, or a expedited referral to a physical therapist or sports orthopedist prior to them starting up with you. You might even go to this appointment with them to learn more about their injury and help make the transition as smooth as possible. It's a way to show you care and deliver value before the first transaction.
With our professional athlete clientele, we have a great opportunity to do this prior to them actually getting to Cressey Sports Performance for an evaluation. Maybe it's a function of helping them to find housing (sometimes even at the Cressey residence!), or passing along the information they need for the smoothest travel experience on the way to CSP. Or, maybe it's lining up a catcher for them to throw a bullpen when they're only in town for a short stint.
There are countless ways to add value to the client's experience with your training facility, but you do need to be a bit more creative to find ways to differentiate yourself even prior to the first transaction.
3. Lead Generation, Lead Conversion, and Retention are the big three of fitness business success.
Just as powerlifting has the big three - squat, bench press, deadlift - fitness business success has its own big three:
a. Lead Generation - how many people inquire about your services
b. Lead Conversion - how many of those prospects actually wind up paying for your services
c. Retention - how well you keep those clients
If you're a relatively experienced powerlifter, you can usually identify the quickest way to bring up your total. For me, I was always a strong deadlifter, decent bench, and mediocre squatter - so prioritizing the squat was the fastest way to bring up my overall performance.
Similarly, I think every business owner (even outside the fitness industry) would be wise to look at their businesses with this "largest window of adaptation" perspective. At CSP, lead conversion has never really been an issue for us, so we can devote most of our efforts on the business front to lead generation and retention.
Of course, don't overlook "ancillary" efforts like managing expenses, collecting outstanding payments, servicing equipment, and the like as important. While they are key considerations, they just usually aren't "big rocks" on the profitability front like these other three.
Enjoy the rest of your weekend!
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