Episode 10 – The Exclusive Interview With Michael Parella

The Exclusive Interview With Michael Parella

Transcript of EPISODE 10:

Hello, and welcome to the FiiT Professional podcast, the number one podcast for fitness professionals looking to build a fitness business.  If you’re after more clients, more income, and more free time, then you’ve come to the right place. Visit podcast.fiitprofessional.com.au today.

Hello FiiT professionals and welcome to another fit podcast, I’m your host Brett Campbell and today, well actually it’s not today, it could be today when you’re listening, but for me currently it’s ten fourty-one P.M.  You’re probably thinking I’m crazy sitting up, calling a podcast at this time, but the reason for that is I have a very special gust today I’ve been trying to get this bloke on the call for a long time now and of course, both of us having busy schedules. We just always couldn’t clash. But this gentleman I’ve got on the air today, I met this guy about probably three years ago and I met him in San Diego.  We were at a mastermind group together and basically we just kicked it off on a few nice cold drinks later and we began chatting and we found some real good synergy there and this guy I’m going to introduce you to in a moment, he’s someone I actually look up to in the fitness industry and regards to how he’s been able to build what he’s been able to build and we’re going to talk a little more about that, but this guy’s name is Michael Parella or Master P as I call him and this guy here when he was telling us his story in San Diego, I just thought it was absolutely inspirational and I wanted to be able to share it with everyone, especially on this podcast, so Michael, well his background is in the martial arts area. You know a few years ago he created his own martial arts studio and then he found out all about the internet and the world wide web and you know he started creating websites for the martial arts and fast forward four years and Michael now has one of the fastest and largest growing fitness franchises in the United States and in the world with three-hundred and twenty franchises in four different countries and we’re just talking before the podcast is going to be going in to six countries; they are going to Germany.

Brett: Michael, mate where do we start here?  Tell us a little bit about your background Michael, because I really like your story from where you came from and how things erupted. So handing it over to you mate.

Michael: Cool, well listen I appreciate you giving me the opportunity to talk to all my buddies in Australia. So like you said before we had met a few years ago and I always think it’s kind of a humble story, but it does seem to get people a little excited because I was in such a low point and if I could do it anyone can do it.  I’ve been in the martial arts industry for about thirty years as far as training myself. I’m forty-six years old and up to about 2007, I had a very, very successful martial arts school, had several at different times, I did manage to sell a few successfully.

So through a series of really just bad decisions and some, I don’t know I don’t want to say bad luck because I think you make your own luck, but some bad decisions and I got a divorce and at the time my wife was very entrenched in the facility, I also got kind of like hoodwinked by this like phony investor guy that was coming in and I was really interested in chasing the money, you know, he promised all these things and I through judgment out the window and got a little greedy I think, and I made a series of bad decisions and I drove a facility that was doing probably about fifty-thousand dollars U.S. a month within a year I drove it down to ten grand a month. Which was no easy feat, I actually ditch it off every day, so it was just awful and it was the worst of the worst and you know, if anyone knows the story like I was the guy that my one of my employees was staying with me, his mother fortunately was a hoarder. I don’t know if you have any of those hoarding shows in Australia, but they have those awful shows here. People just keep every bit of things they’ve ever purchased in their life, just the house is a mess and it’s unlivable, so his mom is a hoarder, but she hoarded food amongst all things and she had some basement freezers that you were actually expecting like “Silence of the Lambs” with all the freezers having body parts in them, but they were frozen TV dinners, expired Microwave TV dinners, that kind of thing, so you know he would bring them and that’s what we’d eat every day, so I had a rule, you know, I’d only eat them if they were two years old or less.  So 2005 was the cutoff for what I would be willing to eat, but I was just broker than broke, you know, and I don’t know the way of explaining it, but like my house was in foreclosure, my car was in risk of being repossessed, I used to park in blocks away from the house and walk four or five blocks home every night, so the repo guy wouldn’t find it and I was actually stealing electricity from neighboring businesses to keep my facility open, and it was just the most awful thing ever, I never want to go back to it, so the only successful part in that is that I have such a great fear of going back to that position that it just drives me to move forward, so.  Fast-forwarding a bit, I was going to get out of the industry and I don’t know if most people have felt this way at some point, but I was just like so beaten, I was like, “I’m done”.  I’ve been doing this for twenty something years, it was like “I can’t do it anymore”.  And I decided to research internet marketing and direct response marketing and I wasn’t satisfied with the way that, for me, the way the martial arts industry had taught me how to market, you know how to acquire and leads or build relationships with clients and, but I thought I was really smart and I was going to go out in the internet marketing space and I was going to write an e-book and become a millionaire.  Not. You know, just didn’t happen that way.  So, but in the time that I did that and I kind of being like a hermit for a few months where I was working like fourteen to sixteen hours a day no joke, in my underwear, growing a beard, not showering for two days, I was just so engulfed in internet marketing and I was so enthralled by what I was learning, I was like “there’s got to be a good way to do this”.  And what I emerged from, like hanging out in a cave for a few months, I came up with the idea to build a great direct response website that would get me leads, you know I wasn’t satisfied with what my online marketing presence was doing before and I knew this was the way that we were going to market in the future, and I know that we know that now, but I still think that this is like you have to become a wizard at marketing your brand and yourself online, so I started doing that early on, about four years ago, and it worked amazingly.

I mean, I was stuck in a business where I wasn’t getting seven or eight prospects a month within my facility and now it was within the first months of launching a new website I made I was getting nineteen to twenty, like in the first month, I got nineteen paid introductory enrollments.  So I went away from the free thirty-day type offers that so many martial arts schools and fitness centers are doing still, and you know what, it doesn’t work, there’s a myriad of reasons why that relationship is kind of tricky, you know, people don’t believe you get something for nothing, and they’re very suspect and we all know it’s a trick, you know, you try and get them in for the free thirty-days and then you kind of present them with a hopefully irresistible offer to get them started, and I just didn’t like it.  So I went with the paid introductory enrollment and it was the same time kind of like the group-on as a deal site emerged, you know about four years ago and it was widely successful, so I did that the same time, not even knowing that group-on existed or any of the deal sites at the time and it worked really well and I got more prospects in one month than I had seen in probably three months, and I think we closed sixteen of the nineteen people, like they were the last humans on earth that were going to come in to the facility.

So that worked well, it was like next month twenty six people we closed,  then it was twenty two, then it was seven people we closed, twenty nine, and we were doing great and in a few months I kind of got my facility back on its feet again were I went back from like ten grand I think we were doing the high twenties and thirties and you know, I could pay my car off and save my house and things like that, so from there I started marketing a fitness kickboxing program that I was doing for years but I just didn’t know how to brand it and market it right, and that program proved so well that I decided to license a website app. That was creating a website service where I was going to help generate online enrollment for locations throughout the country. The trick was that I decided to offer the very inexpensively but I was going to do the online marketing  and I was going to collect the introductory fee, it was like a twenty-dollar fee, you got 3 classes and it worked really well, so you know, fast forwarding we’d probably do three to four thousand of those a month right now, at the same time I started reaching out to every contact I had and everyone I knew and tell them about this wonderful service that I would guarantee for ninety days if you didn’t get at least ten online registrations I’d give you all your money back no questions asked. I think maybe I had to do that 5 times over 3 years, it worked so well, but fast forwarding now, I took a business that didn’t exist four years ago with no money and a home office and with no debt and I think that this year at the end of four years will crack the 5 million dollar mark.  So that was a big, you know, big jump from expired microwave TV dinners, and worried about my car being repossessed, so now we converted from a kickboxing license, we converted to a franchise which was the next logical step and we packed the entire system up, I currently own 3 franchises myself, so I’m the franchiser but I’m also a franchise-e of three locations, soon to be a fourth, that was I was there yesterday to close on a few leases that should be done within the next few weeks.  So I should have 6 before the year ends.  But I have 3 of them that are operational now that have been open for my original one for several years and one I opened 20 months ago and one I opened 9 months ago. We’re currently doing three-hundred new memberships a month, collectively, and that is consistently for the last seven or eight months I have one of them that I opened up not exactly cheap, they cost me about 180,000$ to open, no debt on those, I hit the breakeven points at somewhere between six and eight months and I got my entire investment month in about eighteen months, but I have one facility that’s not very big, it’s got nineteen hundred sq. feet up and down stairs, it’s currently doing about eighty five to ninety-two thousand a month, and it only cost me maybe forty-eight grand a month to run. Another one I opened up about eight months ago, it just broke seventy thousand dollars a month, it costs me somewhere in the low forties to run. So they’re doing really great and my plan is to really open up about 100 corporate units throughout this country along with building a franchise as well, and you know I had told you we’re all going to go to Germany next month. We’re going to be doing about ten locations there, we have two locations in Australia currently we’re hoping to get more there in Perth area and we’re in Canada, we’re about to go into Argentina. So it’s really exciting and almost a bit surreal, but that’s kind of like the whole story in a nutshell, what we still do is my company provides website marketing services for the martial arts industry and we really have a kind of out of the box approach of teaching people the importance of a different type of customer service experience, how we market and brand a business and the way we connect with clients or perspective clients, and there’s just so much difference, I feel like everything I learned in the first twenty years of my business was just wrong,  I literally, on like a personal level I purged every marketing book I had ever purchased prior to three years ago, I threw everything out because I thought it was just, you know, there were marketing tricks and techniques but it wasn’t like a global perspective of how I want my brand to be perceived, it was like, oh, turn your business card into a marketing tool or use a long sign, it just really wasn’t what I was looking for, it wasn’t really what the big brands, look at Nike, Harley Davidson and these brands and I wasn’t doing that and that’s kind of what every day I’m working to become more of and learn more about, does that make sense?

Brett: Yeah, mate look, 100%, and I mean I could, I could just let you keep talking and like I said earlier for hours and questions just pop up from that and I guess what I always look to is when I hear people like yourself talking about new beginnings and where it comes from and something I really took out of that was when you said you closed these people like they were the last humans on earth, so that right there is lesson, and if you’re a regular listener, that we really preach that whole thing where you treat every single customer like they’re your last one and because you know while someone like yourself, you’re doing so many memberships per month and I think you said 300 memberships per month for one of your locations.

Michael: Well that’s 300 total, so it’s about 100 per month on average at each of them.  The funny thing is, you know, and I hope this is in line with where you’re going with this, so I have 3 locations averaging 300 memberships per month and I look back like 5 or 6 years ago at the customer service experience (CSE) I would sit at the front desk and if members came in, they weren’t even important enough for me a lot of the time for me to even avert my eyes from the computer screen to them or stop whatever I was doing, I wouldn’t even acknowledge them, that’s how bad it was. I learned how to service members and I didn’t even acknowledge them when they walked in. I didn’t thank them for coming in, I didn’t thank them when they left, it was awful, the worst thing possible.

Brett: What’s the turning point, what was it that when you said you didn’t acknowledge your members, etc; what made that change for you? And what are you doing now?

Michael: I think you hit the nail on the head, I mean I was so desperate to sign up every single person I was so broke, I think what happened was I began to appreciate people when they came in because like, oh these guys are saving my car, these seven people I enrolled this week are saving my house, so it was a totally different mindset than before.  Before I didn’t give a shit whether someone came in or you didn’t come in. I was like wow. I think I was doing well when I was in a complacent stage, but like I didn’t care, I didn’t equate the success. But now in my life, I have nice things I have a nice home I have two luxury cars that are paid off, no loans on them and I really thank my clients, even just mentally every single day because I recognize that they’re responsible for me having these things, having a lifestyle where I don’t have financial worry or stress or pressure and I can enjoy myself, but I acknowledge that by doing good things for my clients, by helping them and being sincere in my motivation to help them get to wherever they need to get.  So I think that was it, just I was so appreciative to have anyone, I was going to feed my dogs, I have two labs, I had to go to the supermarket, I don’t know if you guys have those over there, but like I had to take all the change in my pocket and dump it into a machine that counts how much it is and you bring a receipt and you had to bring it from there over to the cashier, it’s like a walk of shame, you had to walk down and hand the cashier a receipt and she gives you 37$ in cash and I had to go buy dog food and it was, because I didn’t feed them expired TV dinners of course and it was like I couldn’t get any worse, I couldn’t get worse, and I think that everyone says oh you have to hit that point of desperation, and I wish I didn’t hit it, it wasn’t a fun time by any means, it’s easy to look back now, but it was really painful, but again in a long roundabout way I’m getting back to the fact that I appreciate every single person who came in because I knew that this person was going to enable me to eat tomorrow, this person was going to enable me to feed my dogs, pay my car insurance, you know save my house. And I just don’t think I’ve lost that, does that kind of answer the question I guess?

Brett: Yeah, 100%, mate and again thanks for being so open with that, so I guess what the listeners sitting at home thinking or whatever they’re doing while they’re listening to this, the big question everyone is going to have and the question that  I get quite often is how do you get all these members turning up to your facilities, so obviously it is a whole heap of tricks and strategies that you’ve learned over time, but what would be a couple of your key marketing strategies that would be most beneficial for the fitness professional and personal trainers to look at first?

Michael: Well, I think the first thing is, you need the right website to communicate to your prospects and I think when you look at your website, you get very involved with who we are and what we think everyone wants to know and I think that’s the big mistake.  You need to find out exactly what people need to do to get started with you and you have to eliminate everything on your website that’s not about that, it’s not about you and the 742 certifications you have and all the accomplishments you have done, it’s really about what’s in it for them so using and changing your website and saying, ok, first of all when I go here the person going online has the attention span of a ferret on a double espresso. So they want to know in like a millisecond what do I do, where do I go, and how do I do it, and if you’re website isn’t answering that question like in seconds, then psychologically you’re losing your clients, they may not click off your website, but they’re already in another world. So I think you have to be really clear, you have to collect a lead base on your website so you need to make sure you have an opt-in area on your website to get people in, you need to have a great series of success stories, showing people what happens when they use a product, you have to make sure your website is designed not by a 13-yr old kid with bracers in your neighbors basement, but by a company that is great graphically, because listen, aesthetics are important, aesthetics you know, you have a luxury car and you have a baseline car and aesthetics come into play, it’s the aesthetics on the car, it’s the stitching on the seats, it’s all those little details that make the difference because otherwise for all we know the engines are all the same, the chassis are all the same, the axels are all the same, if you’re not a car buff it doesn’t  matter to you, I press the gas, the car goes, so it’s all the other features that make it special. You have to think of your website that way, you have to make sure it’s designed extremely well, you can’t look cheesy.  You have to have all the bells and whistles, but you also have to follow the rules of simplicity and making sure people get what they want as fast as they can see it, you need to make sure you have a compelling offer, you need to make sure you have an iron-clad guarantee, you don’t stand behind your product, you know, no one is going to.  So I think that has to happen, I also think you need to have a great responder, because it’s not prospects and members, its suspects, prospects, and members. Its people who are interested in buying, but maybe not people who are interested in buying right now and you have to take that opportunity as a good friend of ours says all the time you have to get them to trust you.  I think you have to get those in place to have leads, and then you have to make sure in this day and age your reputation is probably one of the most important things to manage online and you have to either subscribe to a service or diligently register yourself on every directory site for your area, build citations, things that link back to your website to get you a high page rank, you have to make sure you’re managing your online reputation and I’ll give you one or two quick tricks that work really well for us, we do those bracelets, you know the rubber bracelets that people have today where you have either your logo branded on it or your website or the name of your company and every time one of our members writes a review on either yelp or Google + we give them a bracelet as long as they show us a link, so we have been giving out about 60 or 70 of them per month in every facility. And that works really well. Another way that we help is, I ran a client contest for everyone who had purchased a website from us. I had given 500$ out to a member who, I’ll give you the link and tell you the person’s name so you can look them up online yourself, but this person got a 100 Google+ reviews inside 7 days.  And I hope he doesn’t mind me saying his name, his name is John Wai and if you do look, I know it’s in Florida, but if you do look up John Wai Kung Fu, or John Wai Plantation Florida, some as semblance of those strings. You’ll find his Google+ account and you’ll find that it’s over 100 reviews and if you look at the dates of when they happen you’ll find that it’s within a 7 day period, so here’s what happened with this.  I baited my clients because I want them to do well, with a contest that I’d give away to anyone, any school and any martial arts school who had 100 reviews or more in whatever period of time, the first one to get 100 reviews starting from this day, I gave them 500$ dollars.  What John did, which was smart, is he gave them a member appreciation party and would use the 500$ towards throwing them a party.  Within 7 days he had all the reviews.  So I wish I had thought of that idea as well, it was a great idea by John, so if you guess browse his website you’ll find that as well, so it’s how that’s so important because say if you’re a restaurant or movie theatre I mean people are looking at reviews, I mean I wouldn’t check out any movie without looking at reviews and searching for online reviews because I don’t want to waste my time with a bad meal or stuck in a 2 hour movie that’s a bomb.  Although I don’t think that fitness centers and martial arts aren’t the most mobile, because I’m not just standing in the middle of an apartment like hey where’s the nearest fitness center, let me check it out, but people are searching for, they are looking for you on yelp and Google+ to see if you’re reputable or not and if don’t manage your reputation, I mean I see clients, new clients all the time and you guys can probably do the same thing in Australia, I see people at 2 reviews, 3 reviews, and 2 of them are crappy, people are more inclined to right something crappy than good so your bad reviews are going to rack up first and if you can be the kind who gets 50, 60, 70 reviews, you are head and shoulders above everyone else.  So I think that is an important key, and you can do it as simple as making a spreadsheet, taking links of all the directories, to find them type 50 best directories in all of Australia or whatever country you’re in, and the internet will supply you with the data.  The Google gods will be kind and give you a list of them and all you do is make a directory and make sure it’s the same address and phone number/business information on every one of them and you plug all that stuff in, and every week you see if you got a review, if you didn’t get a review, how to ask your members to review, give them the links on Facebook, ask them, say hey I’m really feeling the love lately in class and I was wondering if you guys could do me a favor and tell me the thing you love best about our facility or the thing you love the best about training with us and if you would write a little giddy about it on xyz site here, I’d really appreciate it, and people don’t mind doing that, you know, if you’ve done a good job in your business and you’ve shown people that you care about them, they’re feeling very reciprocal.  The 3rd thing I think is so important today, besides your website and reviews, is using deal sites. Now, I convinced a rep on group-on 4 years ago to let me become an aggregate, which means to let me post deals on behalf on my license to franchise. Well fast forward 4 years in the states I’m group-on’s 4th largest customer and we’re the #1 fitness deal in all of the United States, I run about 6 deals per year per location and I run about 2 national deals, which means there are, you know the 290 or so of them in the United States, they’re all on one weekend or all for one week.  We are currently doing about 2 million dollars a year in total group-on sales. It’s about half for us half for group-on so that actually, you know we’re at the half million dollar mark this year, group-on is responsible for 1 million of it, which is really cool and especially now because I’ve done the work it’s kind of plug-n-play just kind of sit back and leads come in. The locations are happy because they get so many deals per year that they could never get if they got it on their own, but group-on also emailed our brand out, I think last year alone hit 24 million subscribers.  I don’t know what that would cost if I were to buy lists or something like that, also that it’s a trusted site, you know, I couldn’t pay for that, and that’s been huge for us, not just because it’s generated revenue from the sales, but it has driven lots of traffic to our websites, and that has resulted in residual sales, so I think that people sometimes look at these deal sites and think oh that’s bad, let me tell you, I teach clients how to convert between 25 and 45% of those members to come in and pay. So you’re not going to close 90% of them, but I mean you’re getting free leads, you’re getting paid to get leads and you’re getting paid for exposure, I mean there’s nothing better than that, you might say oh yeah but it’s a pain in the ass I have to sit there and this person’s not serious and, first of all, you have an opportunity there to convince these people that you’re the business to continue going to.  They didn’t buy from you, they bought from group-on or another deal site as the trusted vendor, you we’re a 3rd party and they’re giving you a shot and you have an opportunity to just knock them over with just an amazing customer service experience. And there are some people that no matter what you do they’re never going to join, and that’s ok, be cool with those people, give them a free t-shirt you know.  Make sure they say something awesome about you, as opposed to them being pissed that you tried to pressure them into a sale.  But I think that deal sites are the number one way that you can get traffic, you can’t  beat it, you know you can’t do immediate buying or paper click stuff that will ever amount to the volume that you can do through group-on and if you are, and I think group-on is pretty big in Australia as well, there’s so many deal sites over there.  But dude I mean it’s free traffic, yeah go ahead.

Brett: My question on the group-on is now, for those in Australia, and I’m not too sure what the States is like with that, what you’ll find now is there’s so many personal trainers out there or fitness businesses that are basically prostituting your services so you’ll pay, the deal may be 19$ and you’ll get 6 weeks worth of a boot camp and you’ll pay, 19$ and you’ll get 5 personal training lessons within a month of boot camp.

Michael: Well I mean, the same type of deals happen here as well.  What’s the primary question though about it?

Brett: Yeah, so what is your way around that, that makes for your deal getting taken up as opposed to the price shoppers who will go and click for the 6 week boot camp or the 6 week program, the 19$ versus the offer that you’re going to produce.  Because I guess that if you look at it, you’re offer that you’re producing on the deal that I saw it needs to be a comfortable deal on an ongoing basis right?

Michael: Well, I think that’s where the rub is, I think that in that past, and let me ask yourself the same thing, did you offer free, any type of free trial in the past? You know going back a while?

Brett: Yeah, so we actually, we run, we utilized a paid trial and also we still are utilizing a single day, we used to run that and that never worked and we got it down to, we do offer a day tryout, but we’ve moved on from people attending, but we still do dabble with that.

Michael: All right well let me give you a take on that, number one, I don’t think the free trial will ever do as well for you in the long run as a paid trial, with that being said what I’ve learned from dealing with group-on, I’ve run this year alone, I’ve run over 650 deals, so the data that I compile and that group-on shares with me, is invaluable, I’ve run 16 hundred deals in the last 4 years, so just to imagine the amount of data, and I’ve run maybe 180 thousand buys actual things people bought, so mass amount of data, so here’s what I know sessions for adults, sessions sell better than time, when it’s time, people think that I’m going to run out of it, it’s something that’s going to happen that next week anyway, so I won’t be able to go that next week it’s not a good deal anyway.  Don’t sell time, sell sessions and sell things with a long term expiration date, go for the 1 yr, you’ll get more people in and I know some people will say, well I wanted to come in earlier, ok well you know I want lots of things to happen, doesn’t mean it’s going to happen the way you want it to, so I want to get maximum amount of people coming in, so I  want to do something with number of sessions, 4 sessions, 10 sessions, 15 sessions, whatever it is, people seem to respond better to that, so that would be the number one thing you could do differently  that would set you aside from the competitors in the area.  The second part of that is, it’s like, if you can’t convince somebody, in 5 or 6 sessions to join your facility, you might as well just pack up and leave because if you try to bang people over the head, that come in from a deal site, that come in on the first day, you’re making a very big mistake.  Your first day is about first impressions, not about asking them to join, although we do ask people, we do let them know that there’s an offer like you can save 100$ off the initial startup fee by starting today, but we don’t pressure them and we only keep it limited to that one day.  We’ll allow them to do that pretty much throughout the entire trial period and it’s a no pressure thing that’s going to be very important, but you have an opportunity and I think that you should look at deal sites as equal opportunity, you are different from other people, where other competitors will try to bang them over the head the first day, you have a chance here to say hey, I’m going to show you how awesome this place is, I’m going to make it so that you never want to leave and you can’t wait to come back.  And if you keep those 2 things in mind you’ll begin to create a great experience because if you don’t have the kind of mindset to start creating great experience by knowing I want to make sure that when people leave I have to push them out the door and I want there to be a line of people out there before I open up in the morning.  If you just keep that in mind, you’ll be able to answer all the proper questions, you’ll know what I can do to make them do that, that’s not a problem, but as far as the sites go, time does not sell as well as sessions, sessions are tangible. I hand you a ticket to go somewhere, you know 5 sessions, it’s like a punch card or you know 5 individual passes like there’s something tangible, time, you know, there’s something we’re all losing, we’ll never have enough of, and we’re all running out of, so I don’t think that’s the right thing there. Did I pretty much answer the question Brett? I kind of talk sometimes…

Brett: I’m listening and I’m sure everyone else is too because there’s so many golden gyms out there and I think that it was, I guess that the main part of the question was what’s your take on other businesses.

Michael: Oh, I remember where we were, my A.D.D. was ticking in, ok. So you offer a service free, so anything paid makes it more valuable than free, so if you’re able to convert people from free, you’re going to be able to convert people from paid, but nobody will ever think that the prospects equate, oh it’s 19$ for these 4 sessions, that values them at 5$ per session, oh wow now he’s going to tell me that they’re at 15$ a session? I can’t possibly understand that, I don’t think that happens, because people are going to base the value of your service on the service.  And the facility, and the experience.  They know it’s a deal, you’re going to a restaurant for a third of the price of what it’s going to cost for dinner, they know that’s the deal but they have a very low risk way to try you out, so I don’t think like many people say, my monthly rate is 149$, how am I going to give them 6 weeks for 69$ or 6 weeks for 39$ it doesn’t equate. It’s not supposed, and don’t think that.  When you hear that and you hear people asking you for a discount and you hear people saying well, it’s only 39$ for 6 weeks or it’s 149$ well my friend is paying someone down the road 69$ that means you messed up.  When you go into a high end car dealership, a Mercedes dealership, a BMW dealership, you don’t even think of haggling on the price, you don’t even think of haggling for a discount, because you’re in a showroom that’s as posh as a Las Vegas hotel, you are being handled by a guy who’s dressed nicely, whose very accommodating, who calls you sir, or Mr. and your last name and they’re providing a certain level of high end experience for you. You feel important when you go in there, you feel respected.  Now if your facility doesn’t do those things, if you’ve got shitty fold up chairs in your lobby, if you’ve got a ratty carpet, if you’ve got dirty equipment or your stuff is all disheveled, you’re going to be discount center and then when you do a 39$ for 6 weeks, they’re going to think you’re worth that.  It’s up to you to make sure that the core of your facility and the design that the classes you actually have are kick-ass, that your customer service experience is exemplary, you need to make sure those things are in place, and that your marketing needs to be as good as all those things because that’s how they’re going to first perceive you when you’re first coming in, so you need those 4 or 5 steps to make sure that no one complains about the bugs and people look at it like they got a gift getting it for 39$ and they’re happy to pay whatever it is.  Now I think I answered it right?

Brett: I think you did mate, you got it

Michael: I’m old it takes me a while

Brett: It’s all right, so it’s just I’m aware of the timing and I know you’ve got to go and start your day off and I’ve got to go get to bed in a moment, but quick question, what have you found today to best offer, that you’ve utilized before have you changed it up, have you tested different offers with group-on or what have you found to be most successful for your business?

Michael: Well, I’ll give you a, we in July 2 years ago, we did our first split test with group-on and we actually asked them about it, and they were right at the time when I guess they were experimenting with it, and I think we were one of the first companies to actually do the split test offer. So we initially had 4 classes and they had personal trainers and training sessions. We decided to do a hop over where when you click on the offer, it now says 4 classes for 30$ or 10 classes for 50$.  Wow, the higher price offer change, was a game changer for us because for about 70% of people took the higher price offer.  That created a lot more revenue for my company but from my client’s point of view; they had an easier time converting people who had a higher investment, people who became more invested and purchased a high number of sessions seemed to convert better. Now as far as the offers, I think six weeks eight weeks is long, I don’t think adults need that long to make a decision about something, if it was concerning kid facilities I think that would be a little bit different. But I think the short term less than 10 classes, because the facility wants to make money from it, that, that’s not the reason to do it. I think sticking with the, like on the website we do 3 or 5 classes on our group-on site we do 4 to 10, and overwhelmingly the higher number either the 5 or 10 always sells more. So that’s one thing I’ve found out for sure and having a price point anywhere between 5-6 dollars a class seems to work really well.  If you’re hearing oh it’s expensive or oh I don’t know I have to think about it, you messed up, it’s nothing to do with the deal, the deal site just brought you free people. If you screw that up it’s all on you not the deal site.

Brett: Fantastic mate, and you, thanks for sharing that perfect, that’ll give a lot of people some great information.  I guess a couple of key things that I want to bring out there because I felt this way with many trainers as well in regards to people who have gone and seen out the deal and, for example, you know, their website how to collect the leads and the process from once you actually get the lead to then becoming a client, make sure that you got that all taught and….

Michael: Can I make a suggestion? The problem is with deal sites is they don’t give you the leads.  Here’s something that we’ve done, and we don’t do it all the time but we do it when we run national deals and it works very well, first of all, your website has to look like the service you’re offering, if you’re offering a cow bell class your website can’t look like a zimbra website, there has to be a consistency between your website and the deal you’re offering.  Even using the same images, same colors, don’t just go with the stock photo, don’t let them pick the photo for you they’re all going to want to write the copy for you, try to use something that connects you to the website, most websites don’t let you brand, they don’t let you put a logo anymore.  The first year with did that with group-on and then they scratched that and everyone else followed suit.  However, 83% of all people from group-on at least refer to the company’s website, make sure that group-on gets a schedule link, this is really important, so it should say in your schedule. Huge difference in sales between having it and not having it.  Make sure that your website is congruent with the deal site.  So if you have an offer that’s the group-on deal, make sure that the offer on the other site is not as good as the group-on deal, but here’s one kicker that will make a big difference. Make a popover on your website during the time that you’re running a group-on deal and say for group-on clients only, put your name and email in here to receive this free report on xyz and what you’ll do is even group-on people who do not buy, you’ll be able to leverage the traffic from the group-on site and start collecting leads that you put into your funnel and just like you said a few moments ago that the responder is going and everything else. So using that popover and it comes up 2 seconds after the website loads where they’re going to click the link from group-on.  The other way to do it is to actually give group-on a specific link where the popover only comes up using that link and if they go say if you were Australianfitness.com you’d give group-on Australianfitness.com/popover.html that would be the link and that’s where your website would come and 2 seconds later the popover would show up. So that’s the way to get the most out of the deal site. Now you average the leads over a year and you’ve got maybe 180 leads, converted 30 more or 20 more contracts throughout that year, which is not unreasonable, and if you’re average contract is 1000$ that’s a 20000$ nugget you just got per year just doing that one thing. Not increasing your work output, not spending more money, but doing one little twist, one little tweak that will make a difference online.

Brett: If you’re sitting there listening and you head’s spinning right now I really suggest you go back through this podcast and actually put it on slow-mo and write down everything that might stick out to you because honestly the..

Michael: Now I’m in New York and I’m doing my best not to speak fast, because you guys in Australia actually speak as fast as we do, but slow-mo might help, but I’m trying to slow it down guys.

Brett: Nah it’s wonderful mate, you can speak fast because the more information you share, it’s quite funny you say that because I actually would’ve been probably 2 years ago I ran a deal and I actually did it with my online workout product I was amongst the first personal trainers to work with scoup-on which is another big one over here in Australia, and ended up doing about 700 sales and getting about 1200 leads from it and those people came on to the database because we had that setup.  So I totally agree with the setting up of…

Michael: Now that’s an interesting thing you bring up I think here’s where you have to understand something about your business to understand whether or not your deals sites are the best thing ever, do you know, not on a deal site, what your average cost to sell that product was, like what was the cost to acquire a lead and what was the cost to acquire a purchase? Do you recall on that number?

Brett: Back in that day, my lead that was one of the big starts to my lead I only had like about a 300 leads in my database at that time and now obviously it’s grown substantially in that area, but the cost I wouldn’t have even known. I’ve hardly sold any of the product as it was and I guess I’ve used the deal sites just to leverage it from that angle.

Michael: Well, look at this for a second. Say you’re a fitness center and you run an advertisement in a local newspaper. And it’s 400$, let’s just imagine you get eight calls, now you have paid 50$ per call and of the 8 calls 4 of them show up, now you have paid 400$ to get those 4 to show up. And let’s say of the 4 you’re really good and you close ¾  you paid 400$ to get 3 people to sign up. It is 125$ per sign up. It’s a lot. Now you had a product, and let’s just say on average you had a 97$ info product many people would say it might cost them 15$ to 20 $ to make a sale and you might say hey great it’s an initial product it doesn’t cost much money, but it cost me 4$ to get a lead and every one of 4 leads gets me a sale, I’m selling for 100 and I’m making 84$ profit I’m doing great I’m making 4 and ½ times profit.  That’s awesome, now you were in a deal site, collected leads, now the great part about this is, so 700 people bought, you now have those customers you got paid to get those leads so you’re in negative, you didn’t pay anything and you got potential 1200 clients, because what happens is it’s not the product that you sell today, it’s the product you sell tomorrow and the next day, so what’s the lead worth in the future and the next time you sell to 700 people, guess how much you have to pay? Zero. You send out an email, you’ve got people who have gained trust in you and have bought from you once before which scientifically makes them more likely to buy from you a second time 15 times more than the 1st purchase, so then you’ve got 1200 leads doing something else that got you leads from people who didn’t buy from group-on or scoup-on, whatever it was, and now you have an opportunity to market those people for free.  No cost. So if you do your cost-analysis in your fitness center, first of all, you don’t know what your average person costs you to acquire then you need to go back to your drawing board and figure that out, but once you do know that you could say, you know, you cost me 47$ to acquire a 1 yr contract on average which, let’s just say is 1500$ but I can get, since it’s only 47$, I can get paid 20$ to get the lead and I can close 30% of them and it’s an astronomically better number.  So I think that if you think about it in that context you say, well why wouldn’t I do that don’t think about what their perceived value is of what they spent that’s not important, think about what it costs for your lead and think about it now as an opportunity for free, not only free, you got paid to get them. You know which is the part you’ve got to wrap your head around.  And you’ve always done that and I’ve always done that and now, there’s this new revolution where you’re getting paid to give you leads, it doesn’t get any better than that.

Brett: No, I definitely agree mate, it’s actually a good little wake up, for everyone out there to actually if you don’t know what it costs you to get a lead or even a client or contract you need to sit down and you need to look at numbers because when it comes down to, and I noticed you said 15 times more likely to buy after they’ve already purchased from you and that’s where it comes down to because it’s quite funny you say this because I know one person where actually bought one of those highly discounted items, it was a 47$ product the guy was selling it for 15$ and I got half of it of course, little did I know one of those people had actually gone on to purchase a product worth several hundred dollars which was quite amazing when you look back through it, the journey, little did I know when I set up  this deal that I’d be selling hundreds of dollars worth of products.

Michael: I think you hit the nail on the head, I think that giving it away for free would’ve still made sense to you.

Brett: Yeah.

Michael: I met with someone yesterday who owns Marilyn Monroe, I met with a company in New York, that owns the license to her and he shared a story with me and they own a lot of licenses actually as they’re a licensing company, they were approached by a cosmetic company that wanted to use this license and it would cost x and we’re going to do y amount of business and this company said ok we want x number of million dollars and they said, well, we’ll give you a couple hundred thousand, and they said why would we do that, well we’re going to be advertising a 20million dollar campaign advertising this.  So this guy gave this company the license for free, or close to free, and I thought this is insane, then he told me about all the deals he subsequently closed and one of them has to do with apple, and now apple is dealing with Marilyn Monroe’s image he was able to close more deals because of the advertising campaign that the cosmetics did, so it’s really cool if you think about things in that context, so it’s a little bit like blows your mind in the big picture but that’s the way you have to think, so if you gave your membership away for nothing granted they have to pay somebody for it, so there’s perceived value there for it and there’s commitment but man if you gave your stuff away like that how could you use that idea in other things? For instance if you make a product you know that you always trying to find people with big lists because you want to partner with them, but imagine you gave those guys 100% commission on whatever you felt the product was going to be and like wow that’s crazy I’m losing all my money, but no you’re acquiring maybe hundreds or thousands of potential customers for you to sell your next products or services.  Just think who you could give your stuff away to that would promote you and advertise you more and there’s so many neat things you can think of, you know how can you find a local drink manufacturer, that you can find a way to get your offer on the other side of their cap and you know you’ll agree to sell it in your facilities if they’ll agree to put this offer under all the caps or you’ll pay whatever loyalty or coupon code online, or approach a local brand of fitness wear in your facility, and something that’s your demographic, maybe a skate shop or something beachy, I know you guys have water in Australia right? So something like surfing and there was another tag put in every shirt that gave you, once you bought this it gave you two free sessions at xyz fitness center, like using things like that, using other brands to bring you leverage, like this is what I do with my franchise, I got group-on to partner with me, they fortunately paid me money to but I got them to give me brand exposure and I think that all of us no matter how big or small we are we are a brand and we always have to look at our 1200 sq. ft. fitness center or our chain of 50000 sq. ft. fitness centers we have to look at us as a brand and the internet provides you will the ability to be as big as anybody, because anybody can make a website, anybody can do lead generation, anybody can do link building, can build citations, build a reputation and can link with almost anybody. The cool thing is that anyone you know that’s in reach and whether you’re reaching out to someone that helps a life or whatever site it is, there’s ways man you got to start thinking outside of the box, and this is what I’m spending my time doing now, I mean I’m telling you all these things and I haven’t done all these things yet, but it’s a direction I’m moving in and it’s where I want o align myself with, so I can have other people benefit from my service or product but also promote it for me.  So I hope that that little story from yesterday helps a little bit, but really for me it was like wow.

Brett: Mate, I’m an advocate for that and whenever I’m talking to you about whatever it’s the whole thing of what are you willing to give up at the front to get the sale.  You know I get emails everyday from trainers going, help me, how’d you build your fan page so fast?  How’d you get so many people in your database? And it all comes back to what did I give up at the front to get there? And that’s something that I was living true to was, it’s just something that keeps me focused and holding on to, like a said a few minutes ago I know you have to keep to a schedule and we could talk all day, but I want to leave the call with any words of wisdom or any advice you’d give someone out there, and I know that you gave some earlier like businesses, and you’re a man of many analogies and so forth so give us your favorite analogy and something we can take home and give out.

Michael: Well, I think we talked earlier and I always think of business like a hand you’ve got a bunch of different fingers and each one of them is a different fastest of your business and you just don’t know when you start which direction you’re going to go in.  But as you move forward and you try to grow each one of these fingers, you’ll find which one grows the fastest, becomes the fattest, where the low hanging ones are, you can’t always know what the end is, you have to monitor all these different areas, see where your best opportunity is and then run with it, but the other part is, my first business mentor I ever had told me one thing I’ve never forgotten and it always pushes me forward and his name is Andrew Wood and his, he always said action creates opportunity and sometimes you don’t know what’s going to happen. You initiate conversation, you have lunch, I once organized a business lunch with a bunch of businesses in my community, as a way to get us all together on the same page to fortify ourselves with the commerce of the area.  The hair salon wasn’t referring people to me, I wasn’t referring people to the restaurant and from that a lot of really cool things happen, I won’t go into detail about that today, but I just took action, I didn’t know what the result was going to be but I started moving forward and it’s kind of luck ready, fire, aim. You know everyone’s kind of luck ready, aim, fire.  Sometimes you just have to shoot and see what you hit, and those are the things that really drive me forward and I try and remind myself of every day so I can make things happen because to think that you can figure it all out and I know that we’re all, listen, as business owner’s we’re a type personalities right? But as like fitness guys, we’re like triple personalities so we want to control everything.  We want to really know what’s going to happen next and what’s the next step and it’s like man, just get out there and do stuff and the other part of that for me is that done is better than perfect.  You can take time to perfect things, but if everyone who entered the fitness competition did it at the peak of their career, no one would ever enter them.  You’ve got to just do some things when you’re not ready, you’ve got to put your feet to the fire. I don’t know how it’s like in Australia, but like when you buy a house in the States, you’re never ready, you’ve just got to make a commitment and just do it you can’t always have everything in place beforehand. I think there’s too many people so fearful they wait until every condition is right, the planets have aligned, the right horoscope, just get out there and do shit man, just do think about it all day, just get out there and make something happen, and you’re going to make a lot of mistakes, you’re going to screw things up, but as it was explained to me as a young man, to guys stand on the corner, one guy asks every girl to get laid, the other guy doesn’t ask any girl to get laid, so here’s what happens, the guy who doesn’t ask any girl, he doesn’t get slapped in the face, but he doesn’t get laid, the guy who asks every girl to get laid, he gets slapped in the face a lot, but in the end he gets laid too. So if you keep that bizarre analogy in mind, that was actually told by my father, believe it or not, when I was about 15 years old, that’s it man, just get out there and do some shit man, you know, if you mess up, you mess up, make something, happen, and if you have an open mind, you talk to enough people, something cool is going to happen to you.

Brett: Man, I love it! Perfect! Words of wisdom right there.  Look mate I guess, just thanks so much for taking the time out of your day, you know it’s been great chatting to you again and we’ll have to get you on a future episode. No doubt we’re going to get some comments on this and with many questions and we’ll just if you can find time to hop off your new boat that you’ve got there that I’ve seen, well deserved…

Michael: Thanks.

Brett: Look thank you very much mate and to everyone out there listening, I really suggest you re-listen to this podcast, I’m going to do it tomorrow myself, take down some extra notes and some key things, and head over to podcast.professional.com and listen to any future episodes, you can download it on ITunes and to your mobile phone, so, Mike, thanks a lot again my friend and you have a fantastic day.

Michael: Hey it was my pleasure and if any of your clients have any questions feel free to reach out to me on Facebook if it’s something pertaining to this, you know if I can get to you I certainly will, and yeah listen it was a real pleasure…

Brett: Yeah mate and what I’m trying to do is I’m going to put your details underneath this episode in here so people will be able to find you on Facebook and also I’d like to, any other trainers out there who are interested in looking at the kickboxing franchise, it’s all at kickboxing.com and we’ll put some details there as well so you can check it out, and so hey, we’ll see you branching into Australia a lot more rapidly and yeah, looking forward to it.

Michael: Well I hope to see you down there sometime before 2014 and again thanks for the opportunity to chat with you, and the people over there and wish you guys the best of luck, and now I know it’s late for you so go get some rest and I’ll speak to you real soon.

Brett: No problems mate, thanks a lot.

Michael: Thanks Brett. All right. Bye.

Brett: Bye now.

Thanks you for listening to another episode of the FiiT Professional podcast, the number one podcast that will help fitness professionals grow their fitness business. Head over to fiitprofessional.com now to check out the number one business opportunity for fitness professionals.