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Transcription – Rachel Cosgrove Show 188

Chantal:               Rachel, welcome along and thank you so much for joining us on the show today.

Rachel:                 Thank you for having me.

Chantal:               Now you’ve briefly mentioned in your pre-call quick 5-5 last week, that of course you have been in business, your business that you founded, Results Fitness for 18 years now which is a phenomenal achievement in itself. Can you talk us through any of the biggest business challenges that you’ve faced during that 18 years and how you overcome those challenges?

Rachel:                 Sure, I mean, gosh, there’s so many challenges throughout the … over 18 years you experience quite a bit. When we opened Results Fitness we knew nothing about running a business, so when you talk about challenges that come up, really as passionate fitness professionals who are wanting to change lives and who feel like you know, enough you can about training to help other people, but you know nothing about running a business.

Thinking we could get away with not knowing anything about business was definitely our first challenge. So having to learn how to market, how to sell, how to build a team, how to manage a team, how to … all of those things I think this is so awesome that you have this podcast that’s providing this kind of information, ’cause there just wasn’t anything like this when we first opened Results Fitness.

And so definitely with that, starting to learn everything that we learned, we put systems in place and we started to learn about how to systemize your business, and how to get everything running so that it would run without you, and really started to create all of that.

And one of our first biggest challenges that I hope not everyone has to face, was my husband was diagnosed with cancer. And so it was about four years into our business, and we had gotten enough things in place that business was running pretty smoothly without us. And so him being diagnosed with cancer, we were able to step out of the business while he fought cancer. And he went through chemotherapy for six months and after a year it came back a second time, and so he was then admitted into UCLA for a stem cell transplant.

So literally for a good year and a half, we weren’t completely able to be hands on with our business, but because we had all of the systems in place, and we had a good team in place, and we had all of the things we had learned to run a business in place, the business kept running and kept paying us. We were able to focus on him fighting this disease. And when we got back we had actually grown and we actually decided to take a year off after that, so he had gone into remission and he and I were like, “Well heck, the business is running well, let’s just take a year off and do some traveling.” And recover from everything that he had been through.

And so that was definitely … I don’t ever want anyone to be in that situation where they do get tested of whether or not your business will run without you. But you do want to get … if we hadn’t had all of those systems in place, and we hadn’t had really studied business and figured out how to run a business, I don’t know that it would have been still open with what we were going through.

And so definitely I think for everybody is just making sure that you do start to think about how can I put systems … even if you do want to be the one that’s still doing a lot of the day-to-day, could you step out and put somebody else in that role and do you have the scripts in place, the systems in place, everything that you need to be able to be hands off?

One, if something like that were to happen, I hope not, but two, so that you can free yourself up to think bigger, to focus on the vision for your company, and to really grow your company or look for your next opportunity of what else you want to do to reach your mission. So that I think it was one of the biggest challenges that we’ve been through was facing that.

Chantal:               Well Rachel, first of all I wanna thank you for sharing such a personal story with us today, and it really does go to show you mentioned the systems in your business and how important it is to have that, and I think one of the things you mentioned about four years into your business, but implementing those systems from day one is such an important step.

And as a matter of fact, we only recently had Travis Barnes on the show who of course has some amazing advice on systems and if anyone missed that show make sure you go and check that out. That was Show 185, where Travis Barnes shared some great business systems.

The other thing that occurred to me though Rachel, as you were telling that story is you must have had an incredible team of people in place to help you during that time.

Rachel:                 We did. We absolutely did. We had a manager in place by that point, and we had … So one of the things for running your business that I think most trainers make the mistake of, is they don’t hire an administrative assistant or somebody to handle the operations and the systems at first. I think that’s the first person everybody needs to hire.

So if you’ve just started your business, or you’re still a solopreneur, and you’re the one doing all the work, I think a lot of us as trainers think the first person we want to hire is another trainer. And that’s so common, and that was one of the mistakes we made is we hired a trainer first. We thought let’s get another trainer in here.

And pretty soon you have trainers working for you, and you’ve got more and more clients coming in, but you end up being the one that’s doing all of the busy work that you could actually pay someone a rate that’s probably not the same as your rate to train people.

And so that’s something that I think advice for everyone is just make sure that first hire you do, is you get somebody who’s organized, who can help you to really make sure the systems that are in place run that behind the scenes, whether you … she was like an office manager for us, so having that in place definitely makes a huge difference. So I think for most people as they start their business if you don’t get that person in place first, then you end up not being able to continue to build your team. So that’s definitely one of those first hires, is get that office manager in place.

Chantal:               I’m so glad that you touched on that. I think you’re so accurate when you say that when we first start off we think, “Oh, we gotta get more trainers on board. Service more clients.” But that role that you just described is absolutely pivotal in running a fitness business, so thank you for sharing that with us.

Now we are gonna be talking about sales shortly, but before we do that, I wanted to actually touch on something which really jumped out at me, ’cause when I was researching for this interview, one of the things I did was have a look at your website. And honestly let you know … I see a lot of different websites for fitness businesses all over the world, and with yours I just … it really jumped out at me.

The design is obviously beautiful, but the messaging is so strong. It’s clear and it’s not overcomplicated. It’s not cluttered with information. I’m wondering if you can talk to us about your marketing, your website, you know what role does that play for introducing new prospects to the business and what do you feel being those critical elements that have made your website a success?

Rachel:                 Sure, yeah, I think in marketing, you always, first of all want to start with putting yourself in your target market’s shoes. Like really thinking through who am I trying to talk to? And I think a lot of us as fitness professionals, we tend to market and build our websites and even our social media for our peers, for people that are like us. And that’s not necessarily who we’re trying to reach.

And so really thinking through, who is that person that I’m trying to reach? Who is the person I want to come walking through my gym who I’m gonna change their life? What conversation are they having in their head right now? And so yes, of course, your website is gonna be, at this point, people may find you on social media but they’re probably gonna Google you, they’re probably gonna look you up, look up your website. And so many times it can be one of their first impressions of who you are and what you do.

And so you really do want to make sure that it is super clear, that … and who you’re for. I think that’s the main thing. And so one of the things we use on our website, we have a lot of stories and testimonials and pictures of our clients. The client that might be ready to join our gym if they go to our website, they’re gonna know, “Oh, okay, there’s people there that are just like me.”

So, and I think every website we need to set it up, the goal is to get them to take action. And so the more like you said, cluttered or information or stuff you end up putting on your website, you’re just distracting them from actually clicking the button to take action to give you their information. And that’s really the what you want to do is hold them there long enough that you’re gonna capture them and if they’re interested, they’re gonna go ahead and start to fill in their information to let you know they’re interested in what you do.

And so making sure that that’s very easy and clear, so that that way, hopefully if they end up on your website, you’re gonna end up getting their information so that you can get to know them. And so from there, they get added to an email list and then that way we can start to build a relationship with them. And I think we all know that people do business with people they know, like and trust, and so if you have that time to be able to know, like, and trust … they get that time with you to get to know, like, and trust you, you’re gonna be more likely to turn them into a new client.

Chantal:               Yeah, that’s great advice and I really like how you started off that answer when you said how important it is that we put ourselves in the shoes of our customers. You know rather than trying to create a website that’s for our peers or for our industry. We’ve gotta keep thinking about who our target market, our avatar.

Rachel:                 Yeah, I mean so many times I see trainers that will put bullet points of all of their equipment. You know, like Kettlebell training, TRX training, and it’s like your target market doesn’t care. Or they don’t even know what that is, so … nobody cares about all your certifications and about all your … what they care about is, “Do you know how to help someone like me?”

Chantal:               Yeah, and like your business name is they care about results, right? That’s what it comes down to.

Rachel:                 Yeah.

Chantal:               I love that, Rachel. Thank you so much for taking us through that. So look, I do want to talk to you about sales today, because obviously as I mentioned right up front, you’ve had an incredibly successful business. You’ve been in business for 18 years, and I wanna really understand some of the successes that have … that you’ve had throughout that time. So you talk about the sales process being the backbone of your club. So can you talk us through what you mean by that?

Rachel:                 Sure, so everybody I think as fitness professionals, a lot of times we can be afraid of sales. Especially if you’re a trainer who is opening a business, and I know for us we were like when we first opened, we don’t want to sell anything, because God forbid, right?

And then realizing sales is not a bad thing. Sales is not a dirty word. It’s really what’s all sales is, is walking someone down the path to help them change their life. If we don’t understand how to sell and we don’t understand how to say the right things to be able to influence our potential client to take the next step to change their life, they’re gonna walk out the door and they’re never gonna change their life.

I always say for … it is so terrifying for our clients to walk through our door. To walk into a gym, if you’ve either never been in a gym, or you’ve had a bad experience, which a lot of people now have had bad experiences, and so by the time they walk up the courage to walk through your door, or to call you or to set up an appointment with you, be ready, ’cause you owe it to them.

They’ve done the hard thing, they’ve made the move, they’ve taken action and they’ve decided to do something for themselves. And so if you don’t know how to sell or to say the right things to keep them moving forward, then you’re gonna end up doing them a disservice, ’cause they’re not gonna follow through on what they wanted to accomplish. And so yeah, I think definitely sales is a huge part of what we need to learn as fitness business owners. That’s definitely a backbone of what we need.

Chantal:               Okay, so can you maybe share with us or talk us through the sales process that has been successful for Results Fitness?

Rachel:                 Sure, so I think some of the things I was gonna talk about were the three ways that you can make more revenue. So there’s actually only three ways in your business. And I think this is one of the things, just to kind of simplify it. ‘Cause I think a lot of people, when they think about, “Oh I need to make more income.” Or “I’m not making enough money.” It can be so overwhelming because you’ve got so many moving parts in a business, and so how do you really think about adding revenue to your business?

And so really when you break it down, there’s only three ways you can make money. And that’s the cool part, is it’s pretty simple. The first way is to add more clients. So real simple, we need to add more clients. And like we were just talking about marketing, that’s the key to adding more clients. If you’re not getting clients coming through your door, if you’re not getting new members. And one of the easiest way to get new members is referrals.

And so if I always say if you’re not getting referrals then we need to look at your product. Why aren’t your clients referring you people? Because they should be referring you people. You should be getting referrals every single month. And people will say, “Well the referrals dried up.” And I’m like, “No, 18 years in the business, we still, our number one source of new clients is referrals.” Because the new people that just got referred, then refer people. So it doesn’t dry up. So if you’re thinking like, “Oh, I already got all my referrals. I’m done with referrals.” Like nope, it’s actually ongoing.

So make sure you have a system in place to continue to get referrals and that that’s something that you’re constantly … they know that’s part of your culture. That’s part of what we do a Results Fitness is bring in your friends. So referrals is always going to be number one to add new clients. And then just like I mentioned, really knowing who your target market is, and figuring out your messaging so that you can get super clear with who you’re talking to and how to get through to them to get them to show up at your door. So that’s the first one.

And then the second one is to get clients to spend more per transaction. So yes, I had more clients, but then the next way is let’s get people to spend more. Especially when we first get them signed up, what else could we offer them? What other value add could we do? What other upsells could we do?

And so most people when they first join a gym, they’re also looking for help on their nutrition, so maybe you could offer them a nutrition program. Maybe they have something specific or something that they’re getting ready for and you could offer them extra training sessions, or maybe something, a more specific training plan or something that’s upgraded.

So thinking through … definitely like if you have supplements that you’re offering, things like that. So how could you increase … it goes back to the McDonald’s famous question of “What you like fries with that?” They’ve added billions of dollars to their bottom line in french fries because they’ve added that one question to when people were ordering their food.

And I always say think through what do you use? If you’re using it, if it’s a supplement that you’re using or something that you’re using for your own health, maybe a recovery tool that you’re using, why not offer it to your clients? Why not give them the opportunity to also take advantage of that? And so that’s the second one. So number one is add more clients. Number two is get them to pay more per transaction.

And then the third one, the third way to make money, and this is all there is, is these three, is get them to spend more often. And so if we can get them to come in more often, so loyalty programs are a great way to do that if you have some kind of loyalty program in place where you’re incentivizing them to come in eight times a month, or however many times, making sure that they are coming in consistently.

And also making sure you’re following up, and if people haven’t been in for a week, how long does it take you to catch that and give them a call and make sure that they’re gonna be coming in. So the more often they’re coming in … and then also the other thing we have huge success with is offering other programs. Some more specific programs. We call our Executive Athlete program. So we have a power lifting team. We have an OCR team. We had triathlon teams, we’ve had marathon, half marathon teams.

So things like that that once your clients have maybe lost the weight, maybe they’re feeling good, what else are you offering them that they could then accomplish a new goal? And so with all of those teams we offer a special clinic that goes over specific skills for that event. Team t-shirt, and they get race day coaching. And so we can charge more for that. So that’s on top of their regular membership. They’re gonna purchase that as an extra add-on.

So those work really great, or even just transformation. We’ll do a metabolism makeover, a 30-day transformation program where if they’re ready to kick it into gear and have a little more accountability and just get a specific meal plan, that all can be something you can add on and give to those clients.

And so those are the three things that … it’s looking at ways to add more members, looking at ways to get them to spend more per transaction, and then getting them to spend more often. And that’s plain and simple, those are the three ways to add more revenue to your business.

Chantal:               Rachel, that you so much for talking us through those. And I wanna circle right back to the first one that you mentioned which was the referrals. ‘Cause you said you have systems in place that you actually, that allows you to have re-occurring referrals from new members as they come in, and I’m fascinated with this because I know that there’s always the question in people’s minds, at what point in the last cycle of a member do we ask for a referral? So can you share with us what you do in terms of your strategy around asking for referrals?

Rachel:                 Sure. The best time to ask is actually right when they join. That’s, we right away, because when you think about it, when a client is just joining a gym, and they’re just becoming a member, that’s when they’re talking to their friends and family about it. Because it’s exciting, it’s something new, they’re doing something new for themselves, and they’re gonna be talking about it.

When they’ve been a member for a while, it can be harder. ‘Cause this is now just part of their life, and so it’s not necessarily something that they’re talking about, bringing up in a conversation with a friend or a family members. So right away when they join, we give them a VIP pass, and we say, “Hey, congratulations on joining Results Fitness. What we’ve found is our members if they have a friend or family member here to support them, going along the journey with them, that they tend to have even better success.”

Ideally throughout the sales process if they mentioned a specific person, that’s the best because then you’re gonna hand them that VIP card and say, “I heard you mention your sister, and that she was possibly interested in coming in. Listen I wanna go ahead and give you this VIP card to give her a 30-day membership to get started right away with you, so if you could go ahead and give that to your sister, Heather, and let her know that we’d love to have her come in and join you for this first 30 days.”

And so right away we turn one membership into two, ’cause basically then Heather comes in and we’re gonna sit down with her and build value. But then what we do is we incentivize if they are ready to sign up, they don’t necessarily, most of the people don’t end up doing the 30 days for free because we end up making them a member right when they come in.

And so literally you can turn one membership into two, and then when Heather comes in you can do the same thing. Two memberships into three, and that’s how we do it. And even on the phone when they first call to get information, they’re setting up their first strategy session, ask them, “Hey, do you have someone you want to bring with you?” That’s one of the best times is right away when they’re already excited, when they’re already talking about you. That’s the best time to ask for referrals.

Chantal:               You know what I think is really important that is the language that you just used. Because it’s not like you’re saying, “Would you like to refer a friend to the club?” You’re like, “Would you like to bring a friend with you, to train with you?” And I think that language is pivotal.

Rachel:                 Right. Yeah, ’cause it’s for their benefit. You’re looking out for them. And you are, because it is gonna be more likely that they’re gonna come more consistently, and they’re gonna get better results if they have somebody who’s doing it with them.

Chantal:               Yeah. Thank you so much Rachel. Now over an 18-year period, I’m gonna guess that you’ve had a couple of price rises during that time for your membership rates. Can you tell us a little bit about that? Do you have an annual price increase that you apply? Or do you have a set strategy around pricing increases? Is there any insights you can give us around that?

Rachel:                 Sure, yeah, we do raise our prices every year. I think it’s important to do so, a 3 – 5% increase every year. I think because cost of doing business goes up every year, and so I think if you don’t raise your prices every year and you wait too long and you keep your prices the same, you’re gonna have to play catch up and make a huge jump, a huge increase in your prices which can be hard to do. So I do recommend raising your prices every year.

One thing that we do, is we do have a loyalty program, so if you’re a member, we’re never gonna raise your prices. So existing members get to keep their current prices. And so we have members that have been members for 18 years that still pay what they paid when they first joined 18 years ago. But they’re raving fans and they’ve been members for 18 years. And if you walk in my gym and one of them is there, they’re gonna do the tour for me, they love the place so much. And so it’s worth it to have that loyalty. And so we’ve never raised prices on our existing members.

We’ve always … as long as they renew within 30 days, and that is the key. We have had members who leave and they don’t come back and maybe they go try another gym, or take some time off. Maybe they come back three months later or even a year later, they’re gonna be on our existing prices.

So this is really more of a reward for members who never leave. They’ve been there right through and they’ve renewed within 30 days every time their membership’s up for renewal. And so that’s something that I think … the other cool part about it is that when you do raise your prices, you can make a big deal about it. You can actually turn it into a membership drive and let all of your current clients know that, “Hey guys, we’re raising our prices on this day. We wanna make sure you know, so that if you know anybody,” speaking of referrals, “that we can get them in here now on our current prices.” And then so every year you can do a membership drive to get all of the referrals that you wanna get before you raise your prices coming in to join your gym. And so it can work really great to do that as well.

Chantal:               That is such an important piece, Rachel, because I think that as a business owner we can get caught up in the mindset of the guilt of raising our prices, whereas you’ve just framed it as an opportunity, really.

Rachel:                 Right, yeah. Absolutely.

Chantal:               So we can turn that around and so what you’re suggesting is that when it comes to the time of year that we actually are implementing that price increase, we need to put our marketing hat on and think about, “Okay, can we get a campaign out to the public, to our prospects, to our existing members,” to suggest to them that now is the time to get in before the prices rise.

Rachel:                 Yeah, and if you think about it you’re also building that loyalty. So your members, if you never raise your prices and your members can leave and come back and your prices are gonna stay the same, that gives them no incentive to stay, right? Of course you want them to want to stay, but if have these price increases, and they’re not raising their price, it does build loyalty if they thinking about, “Oh, I think I’m gonna take a month off, or I’m gonna take some time off.” They’re gonna rethink it ’cause then they gotta come back on the current prices.

Chantal:               Yeah, and would I be correct to assume that in your member contracts you stipulate that? So do you actually have a clause that says if you continue to stay with the club forever more, you won’t have a price increase, but if you leave then this is the price that you’ll incur upon your return?

Rachel:                 Yeah, so our memberships are all … we do 12-month agreements. And so people do commit for a year, and so when that 12-month agreement is up, at that point … so basically we let them know that we will never raise your prices as long as you remain a member. As long as you remain an active member at Results Fitness. But once you leave, then you’re no longer an active member, so when you come back-

Chantal:               You get the new price.

Rachel:                 Yeah, what we charge now.

Chantal:               Okay, Rachel. Well look we’ll finish off with our fitness inspiration. So can you share with everyone three tips on attracting new members into a club?

Rachel:                 Three tips on attracting new members into a club. I would definitely … we talked about referrals already and that like I said is gonna be your number one source of new members, is always gonna be referrals. The second one that I recommend is what we call gifting. See, getting in front of them. And so once you know who your target market is and you know where they’re at or what they’re doing, think through how can I get in front of them.

I think all of us are passionate about what we do and we can connect with people, and so building those connections and really getting out and doing the legwork of meeting people, even if it’s just going to the Starbucks that you know your target market are hanging out at, or the wine bar that you know they’re hanging out at. It doesn’t have to be where you’re giving a presentation or it’s anything formal. Doesn’t have to be like a networking group, it can be, but … how can you get in front of your target market? So looking for opportunities every single month to gift, to get in front of them. How can I get in front of my target market? Just asking yourself that question, to meet somebody who could potentially be your next new member.

And then the third way is really just … I have a whole marketing wheel, but being consistent with your marketing, I think and the other things that all fall into that, would be everything from posting on social media, putting out emails. If you do an advertisement in your local magazine. All the different ways that you can definitely get your message out there.

Whatever you choose to do be consistent with it. That’s the key to marketing. I think a lot of people they think, they’ll try doing an ad in a magazine, or they’ll try doing a direct mail piece, or they’ll try doing a Facebook ad, and they’ll do it once, and they’ll be like, “Oh, it’s not working.” And then they go, “Marketing’s not working.” And well you didn’t actually give it a chance, and that’s all of marketing, it’s all about that consistency.

So really keep your eyes on that bigger picture, and whatever you do choose to use for your marketing, commit to it for a period of time to give it time really get in front of your audience. If you think about it, how many times have you seen or something that you think would be cool to do, and then when you see it again and you’re like, “Oh, gosh, I should really think about that.” And how many times does it take? There’s so many things that we’re inundated with that you just have to stay consistent with your marketing, and so that’d be the main thing.

Chantal:               Yeah, that last point is super important, Rachel, and I think that applies to anything that you do. Consistency really is key and it’s not … I have this saying which is it’s not about being perfect, it’s about just getting out there, get started and be consistent with what you deliver. And I think marketing is a great area first to apply that rule to.

Listen I want to thank you so much for coming on this show. It’s been such a pleasure getting to chat to you and hearing about the amazing business that you’ve built with Results Fitness. It’s really a privilege for us to have you on the show ’cause I know how incredibly busy you are. And you do so much to not only work with consumers in the industry, but also to help fitness professionals in the industry. So that’s obviously an area that both you and I are totally aligned with, and I want to thank you so much for the work that you do to help professionals within our industry, and thank you for coming on today and sharing your knowledge with the listeners of the Fitness Business Podcast.

Rachel:                 Well thank you. Thank you for this opportunity. I appreciate you also creating this to give people a resource to learn from. So thank you.

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