Vanity Metrics 101
Speak to any gym marketing guru and they’ll probably be happy to cite their gross sales:
Yeah bro, we did 32 new sign-ups in 7 days baby!
That’s called a vanity metric, sunshine. And it never tells the whole story. Ever. It’s never the true NET money-left-in-the-pocket at the end of the story.
Don't get me wrong , I'm not telling you stop doing free weeks or challenges...
They can actually be a SUPER effective way to drive cash-flow VERY FAST if done right.
One of the issues is the model is based on running them in perpetuity and constantly sifting through hundreds of leads to find the 3% of them who you can close today.
The problem with that is it goes against why we started doing this in the first place.
To build and coach a strong, tight-knit community of people who see the value in paying for what is considered a premium level of fitness membership.
Even though you've found a great short-term solution for traffic, you've created a TON more work for yourself and likely reached a point of burn out multiple times over....
...It's trading dollars for hours and simply not sustainable. We might as well get a job!
WELL... I DON'T DO ANY MARKETING...
The Buyer's Journey divides ANY marketplace into five buying segments:
- 3% are active buyers. These are the people that have a need and are actively shopping for vendors. They want to make a purchase in the next thirty to ninety days. These are hot sales leads.
- 7% intend to change. These prospects have a need, but aren’t proactively searching for options. A well timed cold call or marketing campaign can be very effective on this segment, because they are receptive to new ideas.
- 30% have a need, but not enough to act.This group is not buying. They may look like and act like prospects, but they won’t make a commitment. They have other priorities. Until there is a big opportunity with a sense of urgency built in, they won’t make a purchase. You can turn these people in to members.
- 30% do not have a need. This segment of the market do not have a need for your products and services, and are not receptive to any marketing messages. They may have just made a purchase, they may not be actively searching, or they may not be ready for your services.
- 30% are not interested in your company. There is a segment of the market that do not fit your brand. Basically, these people are never going to choose you. They may be loyal to the competition. They may use alternative options. Don’t sweat it. Just recognize that this dynamic occurs, and your brand can’t be all things to all people.
What an offer will do is find the first two types of buyers...
And that is actually spot on, because my lifetime average for conversions on all campaigns we've ever run for our gym is just a little more than 10% of all leads (see below for actual stats from a recent campaigns).
These are the people and companies who have a need for your services right now, typically described as “inbound marketing.”
- The active buyers
- Those with the intend to change
What gets completely ignored is the next 90%.
The ones that have a NEED, but not enough information to act.
These are usually all those who sign-up and "no-show" or you don't close up during the first visit, and probably a LOT of the leads that maybe opted-in but didn't convert to the next step of your funnel.
This is what we've begun to discover, that gym owners and even those that coach gym owners on how to market generally have no concept of how to focus on the lower 90%, build relationships with potential members, and secure their place as their customers’ first call when they’re ready to buy.
It makes no sense...
On one hand, if it was a well run campaign you'll make money on the front end and pay for the ads...
But that means we should just let the other 90% of the leads that we paid a SMALL FORTUNE for get ice cold and die?
Not even make an effort to put them in a system that works for us and turns them in to members when they evolve in to the top 3% of the buyers journey?
Especially when we can automate the whole thing to do the work for us while we sleep....
If you can net at LEAST the next 30% of the leads you've ALREADY paid for that means you'll triple your conversion rate of the campaign.
Traditional 6 week challenge example:
Ad Spend: $1,820.00
Cost per lead: $6.72
Deals Closed: 27 @ $497
Percentage of closed leads: 10%
Total revenue: $13,057
Now, that's a re great challenge campaign.
Let's see what happens if we convert another 15% to to a $225 evergreen offer with ongoing 6 month $155 membership.
Remaining leads: 243
Percentage of closed leads: 15%
Deals closed: 36 @ $225
Total additional up front revenue: $8100
Total Added Accounts receivable: $33,480
Ad Spend: $0
New total value of the original campaign: $54,637
That's THREE TIMES the revenue.
If you can do THAT, you don't need to run challenges in perpetuity.
You won't be handcuffed by a single marketing model.
Not to mention, these members came in as RAVING FANS through a much longer nurture campaign. They're much more likely to refer people and tell their friends and support your businesses additional upsell services. It's HUGE.
Here’s a suggestion:
Leave the status quo to run their challenges or give out Free weeks of classes and treat the engine of their businesses as a commodity, and then do the opposite.
Instead of, “let’s get paid first, then we’ll deliver value (the product),” what about flipping that thinking on its head?
Towards more authenticity and transparency and customer-centric value-first preeminence, underpinned by evergreen “give a shit” marketing.
Put another more blunt way:
It’s about focusing on the needs of our audience BEFORE money ever changes hands…
BEFORE we bribe our audience to sign up for our crazy "get fit quick" challenge or give ANY free classes…
And BEFORE the prospect is coerced and arm wrestled for their credit card to take on yet more debt in exchange for a promise of value down the pike.
I’ve been doing the “value first” thing to the best of my abilities since around 2014 after being exposed to something that completely shifted my mindset and behavior.
I got lucky maybe.
So I want to share what I found with you now. The rest of this letter is about how you can do the opposite and thrive as a result.
Because what I discovered back in 2014/15, completely shifted how I approach my gym business and presenting it to the world.
It changed everything. And perhaps it can help you, too.
- Challenges and Crazy Low Barrier Offers used to work great, but now not so much. It’s harder and more risky to rely on today.
- The infrastructure needed to pull off a successful challenge has grown bigger and more complex.
- But there is another way, a way that puts the customer (visitor) FIRST, instead of looking at prospects as a commodity and means to drive cash.
- There is an order of magnitude difference between persuasion and influence: