Helping a Kickboxing Gym Cut 25% Churn

0:00Unternehmer/Gast Hey Alex, my name is Jordan. We own a gym. I >> [laughter] >> We sell We sell memberships and subs. We do gym launch. We just acquired the the company about 3 months ago. >> Is it a big box or is it a micro gym? >> It's micro. Women's only kickboxing. Yeah. >> You talked to Ed? >> Yeah. [laughter] He We bought from him. >> Yeah. Okay. Okay. Okay. Yeah.

0:25>> So, I want your opinion. >> Yeah. Yeah. >> Um so, we have about 560,000 revenue. Obviously trying to get it to 1.2 and then we're going to sell it and then buy our next bigger business. Yeah. What's stopping us? Well, Ed was really concentrated on acquisition and really just getting as many customers as possible and so kind of inherited a lot of, you know, customers that weren't necessarily getting their full value. And so, our churn is at 25% on average. We really got to lower that and that's going to really really help us cuz we have no problem getting new customers, really. Um although we do need to work on more referrals.

1:03Um but, my question to you is how quickly and how would you go about lowering that 25% churn um going into 2025? >> Can I have that book real quick? Thank you. So, did you go through the four horsemen five horsemen of retention? >> Yes. >> So, those are the things that we have done consistently to cut churn. Are you doing all of them?

1:29Alex >> Not consistently, yeah. >> Well, I would do them consistently and I'm not saying that as a like The interesting thing about the the horsemen of retention is that they when when you realize how much work it is, you're like, "Holy this is a lot of work." But, that's also why people stay. And so, the point of the five horsemen of retention is to approximate what having a small tribe feels like in a disorganized manner doing it on purpose. And so some of some of you guys are familiar with Dunbar's number which is basically like people can maintain whatever 125 to 150 basically acquaintances in their mind.

2:09And that's I think the reason that the vast majority of gyms tend to cap around 100 to 150 cuz that's about as many as the owner can manage in their mind without it becoming too big. And then beyond that new people come in they never really get assimilated and they turn back out. And so it's like what are we doing with the original 150 people that we're not doing with these other ones. And so that's where the touch bases on a regular cadence are super helpful. So Mike Ferreira has his retention system where they he updated the five horsemen. Sorry I'm getting really tactical about gyms.

2:42Uh huh. >> [laughter] >> So um but basically alternating between an internal referral play. They've got fast cash Fridays which is how they get you know how they generate the referrals. They have a weekly theme that that's gives you the thing to talk to them about cuz it's like how do I approximate a relationship? It's like I check in on people and I let them know the thing that's new that's cool. And so the tweak from the system that I have here is that I used to check in about people's results and we realized that people didn't care and just wanted to work out and have fun. And so us reminding them about the fact that they were still overweight didn't actually help.

3:17Real talk. And so we're like okay so that that's probably the big major shift between what is in here and what is kind of now the the most up-to-date. And the every other month is when you run the internal play. So internal plays are like when you hit your list up and say hey we're doing It's the last chapter of the offers book. It's whatever our internal seasonal promotion is. So it's you know Valentine's Day you know get fit to fudge with your you know with your loved one whatever you know [laughter] whatever.

3:52Accountability buddy you know, lean by Halloween, you know, whatever. And so, um, the churn though is still going to be the quality of the sessions. I mean, the fundamentals are still going to be there. The sessions have to be good, music has to be good, the trainers have to be solid. You want to reach out on a on a once every other week basis, you want to check in around the promotion that you're running or the bring a friend to component that you're that you're doing.

4:18And obviously the sales stuff I'm getting the pre-pays and stuff Ed's already given you. So, that's the big stuff. But the main thing that drives down churn is consumption. And so, all of the objective has to be around how do we get them to use the membership? No one cancels a membership they use. And so, people will cancel $10 gym memberships if they don't use them. Like nothing is worth it if you don't use it. And so, that's the that's the TLDR. If you're a business owner and you're not growing as fast as you'd like, I'd like to give you a free gift. So, my team and I put together the $100 million scaling roadmap, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly where they got stuck and how they got past it. And so, we broke it in these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources, and finance. And so, no matter what you're struggling with, someone else has already struggled with it and solved it. And so, I'd like to give you this thing absolutely free, you can go to acquisition.com/roadmap, plug in your business information, and if you want us to actually help you deconstruct the business and you're trying to scale, we'd love to help you out. On the thank you page, you can book a call with my team and we will look at the business, see if we can help, and if we can, we'll invite you out to Vegas and we'll do this in person live.