The BOLD Show | Episode 06 | Adapting for Success
Running a business doesn't always go smoothly, and how you adapt can help or hurt your success. In this episode of the MINDBODY BOLD Show, Russell Jarrett, owner of Infinity Health Club, shares his tips on how to manage change.
(Mike) Today, I’m here with Russell Jarrett. With 30 years in the Australian fitness industry, Russell has been in every role you can think of: instructor, trainer, educator. Now, as a health club owner, employer, and mentor of young trainers. He’s also worked in elite sports for 20 years, has traveled all over the world with teams that have presented internationally. His unique center, Infinity Health Club, is the culmination of his work and experiences. And with over 2,000 paying members. We are going to talk about sales and being adaptable.
Growing a small business isn’t easy, and to be successful we know three things for sure: You have to work hard. You have to be bold. And you must constantly learn. We’re gathering some of the best minds in the business world to share their ideas and strategies with you, so you can grow your business easier, be more profitable, and have a lot more fun being a business owner. We are on a mission to connect the world of wellness, and this is The MINDBODY BOLD Show.
(Mike) What’s up, everybody! I’m Mike Arce, and welcome back to another episode of The BOLD Show. Russell, are you ready to be Bold? (Russell) I certainly am, Mike. It’s good to be here.
(Mike) Two thousand paying members. You don’t just get there. Your sales game has got to be on point. But you also have to be really good at retaining people, as well. So, I want to talk about that. But before we talk about that, you are one of the speakers at the MINDBODY BOLD Conference, and it’s really on the topic of being adaptable. So, we are going to talk about sales and retention, and how you do all that. But first, what do you mean by being adaptable?
(Russell) So, this is a presentation and a concept I’ve been working on for a little while, because when I look back on my time in the fitness industry—over 30 years. And as you spend a lot of time in the industry, you tend to review yourself a little bit more, rather than preview. Because you’ve got a lot of history there, and you’re like, why do I have all that history here? Why have I survived? And I think, the key thing I probably came up with is, that I have a skill, and that is to be adaptable. So, if I’ve got that skill, and it’s allowed me to succeed over this time, then why can’t I impart that skill and awareness onto other people? Adaptability is the ability to merge into your environment, and to be good in that situation and to develop your skills, your communication abilities, technical skills to make sure you can survive.
(Mike) Now you’ve been in the fitness industry for 30 years. Have you noticed a big change in the industry in that time frame? (Russell) Yeah, massive changes. It’s a dynamic industry, anyway. The fitness industry is dynamic. But when you’ve been in it for that long, there has been some massive changes. But, at the same time, I’ve seen some reinvention of the same stuff. So, some of the things I was doing back in the day, still apply now, still work now, they are still relevant now. But I think we change the way we go about it with technology, and with the way different business models evolve. Yeah, there are changes. There are massive changes, but some of the tried and true principles, I believe, still apply, and I still use them.
(Mike) So, I want to talk about some of the principles, right. What do we mean, what are some of the things that haven’t changed? (Russell) Good customer service is key in this industry. (Mike) And even that has changed a lot in the last 30 years. (Russell) Yeah, the way we do that. You change the way you are presenting good customer service. But people still know whether that is good or not. Smart consumers know that is good customer service. The way that makes them feel, the way it makes them feel supported. The way they feel like they are being treated as an individual. They know that. So, it’s just that we might package it up in a different way. I think that having good technical skills is still important. The fitness industry, I think over time, has struggled a bit with producing results, and that’s one of the things I always come back to. So, if someone comes into my club, if someone comes to me for advice, guidance, expertise—the overriding aim, from my viewpoint is, let’s get results. Let’s make sure this person succeeds. Because that’s critical.
(Mike) Awesome. When we talk about you having 2,000 paying members, we are not talking about a $9 membership, right? What does your average member pay you? (Russell) Yeah, our average or base rate membership is about AU$16.50 a week. (Mike) A week. So you are talking $33.66 a month. (Russell) Yes. (Mike) So in Australia, is that common to charge per week, versus per month? (Russell) That’s just the way I talk about it. We do mostly direct debit with our memberships now. Some people are still a little uncomfortable with that, but not many. Well over 90% of our members are on direct debit. And we don’t have locked-in contracts, which is a little bit unique. A lot of clubs that are similar to my business model have a lock-in contract. So, if you join, and you do a direct debit, it’s a minimum of 12 months. If you happen to decide that you don’t want to be a member after 6 months, well that’s just too bad. But I managed early on to not do that.
(Mike) OK, now your average member is paying you about $65 per month. That’s a decent amount. You are not at the highest or the lowest. You are right at that middle point. You have 2,000 members. That doesn’t happen unless you are retaining. So, what I want to do is ask you a few questions on how you got that many members, and then I’m going to dig in a little bit more as to how you are able to keep so many. I think that a lot of people that have a few hundred members, maybe would have thousands if they had kept them all. But because they are always turning, they just find themselves back in the same spot. (Russell) Treading water. (Mike) Exactly. So, 2,000 members. What are your top two or three lead sources—the way that most people walk in your doors? (Russell) Initially, it was a very heavy marketing campaign, and we just saturated every marketing avenue we possibly could to try to get some momentum. (Mike) What were the tops ones? (Russell) We went with Facebook ads. We went with local press. We went with some public relations. We went with some face-to-face marketing—getting out there and talking to the community, doing presentations.
(Mike) When you did Facebook ads, was there an offer? Like, come for a free workout, or a free week, or a discounted price? (Russell) Yeah, we had an offer, which was essentially try us for a free week. We knew once we got people in the venue that the venue and the people, or myself and the staff, could convert from there. So one of the things, which I believe is critical to our success, is that we established a venue that was different. It was special. We put a lot of time, a lot of effort, a lot of money into the presentation because we wanted it to be a little unique and we wanted it to be something that when people walked in they would go, wow, this is cool.
(Mike) So that’s what we will talk about then. You have people come in, say, through Facebook ads. They walk in the door for their free week. When does the salesperson begin the conversation of becoming an ongoing member? Is that in the first conversation? Is that after their first session? At the end of the week? When does that happen? (Russell) Yeah, so I think for me the conversation starts there and then. But the conversation is not so much about selling a membership, it’s about creating a rapport. Because for me, that’s where the sales process starts. So, I’ve had different roles over my lifetime, too, in terms of sales and all of that. And I think my greatest success has always been when I’ve been able to connect on some kind of level with that person and understand. I don’t sell from a features and benefits point of view. I sell from a needs perspective. I need to understand what that person needs. Why are you here? Because I think that underpins their motivation to purchase a membership eventually. That’s how I train all my staff. Because, especially in Australia, it’s a slightly different culture. It’s a slightly different expectation. But if you come straight out of the gates and try to sell someone on a membership, they are going to block you straight up. No matter how amazing the venue is or what you’ve got, if you come out too hard—it’s just kind of the way we are—they are going to block you and go, just back off. Let me have a look around. Let me feel the place. So, my understanding of the Australian culture is to just go gently and connect with people, and then it will work.
(Mike) OK, so now once you get that person, they get their free week, now it’s time to go into the close and really see if we can convert them into a paying member. What are some of the objections that you deal with, that you have learned to overcome? (Russell) Price is not so much of an objection because we think we are well-priced for what we offer. In fact, we think we are really well-priced. I think that most of the time, it comes down to people’s availability. People’s time. Their self-questioning: Can I actually commit to this? Is this going to work? And that is something that we try to overcome early on. People seem to have this fear of, can I commit to this? Am I able to be disciplined enough to commit the time, the effort and the energy, and use my membership effectively. That’s not everyone. But that’s a lot of people that we deal with.
(Mike) Now, you take fast food companies, right? They sell burgers for really cheap, which is really crazy because there is no way they can make money off that burger. But they make most of their money off the fries and the shake, right. The side dishes have very low cost, great margins. In every business, that is possible, as well. So, when I had a chance to talk with you, you have your burger, which is your $65 membership, but you also have availability of upsells and add-ons, all those different things. So, talk to me about the different things that you can offer that you really get extra margins from, extra profit from, every single month. (Russell) So, our club is what we term as a full-service club. We’ve got a 24/7 gym, which in the area we are in, is unique as well. Because there has never been one there before. We have group exercises classes, which are included in the membership. So that is your base, right. Your membership and your group exercise. But then, we have clinical Pilates. We have physiotherapy. We have podiatry. We have personal training. And we have a small indoor pool. And again, it’s the only one in the region. So, we get a lot of business through that, for private swimming lessons for children and aquafit classes for adults. So, I guess what happens, is that people come in with the intention of using the gym and doing group exercise, and after a couple of sessions, they walk around and go, “Wow! You’ve got Pilates. I’ve never tried that. What happens there? You’ve got a pool. I’ve got three children. And I’ve never had them be able to do swimming lessons, so I’m going to bring them in.”
So, people come into maybe experience something small about the club. And then they realize there are other things that they can buy into. Again, we don’t really push too hard to try and sell that because we believe that the experience will sell that on our behalf. (Mike) So, we talked about Facebook ads. We talked about other ways you were able to get in business. But let’s talk about how you are able to keep so many members. And obviously, customer service—but that is such a broad thing. Jay Baer said, in his episode, that 80% of businesses believe they give superior customer service. But when they survey their customers, only 8% agree. So, a lot of the people that are listening or watching are going, “Oh yeah, well I’ve got that down.” So, let’s talk about customer service in your eyes. Because even though they think they have it down, they may not have 2,000 paying members. So, you have it down. Talk to me about how you are able to keep so many people.
(Russell) That’s because I learned a lesson many years ago when I first started working in the fitness industry. I started working as a personal trainer at a private PT studio, which was one of the first of its kind in Melbourne. And I’m still very, very close friends with that guy today. And he’s been a mentor of mine. The one unique thing that they had going on at that venue, which I’ve tried to replicate in my club, is almost a sense of belonging. A community within a community. And all of my staff are very adept and aware of creating rapport with people, of talking with people, of knowing your name, of knowing your needs, of knowing a little bit about you outside of the club. And whenever anyone walks into the club or is in there doing their thing, they get acknowledged, no matter how much time they’ve been there for. So, you might have been a member for four years and I’ve seen you thousands of times, I’ll still acknowledge you. So, from day 1 to day 1,001, you’ll still feel like he wants me to be here. He appreciates me being here. So, we try to create this atmosphere where everyone feels welcome, acknowledged, supported, serviced, and accepted, all of that.
(Mike) Now, you get a lot of member referrals. Do you have a system in place to make sure you are asking for the referral and not just sitting back and waiting for them? (Russell) Yeah, we do “bring a friend” weeks. And we have events outside of the club. (Mike) So, you have a full week where you can bring a friend for free? (Russell) Absolutely. (Mike) How often do you do that? (Russell) We probably run that maybe once every three months—two or three months. We don’t want to do it too often. Like most good health clubs will have a good 12-month marketing plan, which we roll out and we review. So you know, in January, we tend to do a—as you know people are thinking about the New Year—so we tend to do a New You type promotion. In the colder months of where I’m from, which is May, June, July, August— (Mike) It’s colder over there then. (Russell) Yeah, switch the hemispheres and switch the seasons. We tend to do a transformation or an eight-week program. Because those are the months when people tend to hibernate a little bit and find it harder to get out of the house and into the gym. So we try and come up with programs. We put in place programs which get people up, motivated, and into the gym when maybe they are not using it quite so much.
(Mike) Awesome. So, we’ve talked about the sales now. We’ve talked about retention. I want to talk about the employees. Because in order to manage 2,000 customers, paying members, you have to have a decent staff. So, how many staff members do you have? (Russell) We’ve got five full time. And we’ve got about 20, in total, which would be five full time and 15 part-time employees. (Mike) If you had to give two or three great tips on building a great team. What are some things that you think are extremely important to keep in mind? (Russell) It’s hard. Everyone knows that. But, I live by a philosophy of hire slow, fire fast. So, I take my time. As amazing as someone presents themselves, and as well qualified as they are, and as personable as they are, and as amazing as they seem—no one is really that good after 6-12 months. Everyone presents themselves as an A-grader, but they don’t always maintain that. So, we are slow to hire people. We make it difficult for people to get into our organization. But that’s kind of the way we start them out. We want to know that they really want to be there. We want to know that we are comfortable about putting them in the position. And then, once we get them in position, we spend a lot of time working with them, and supporting them, and understanding them, and keeping them focused and making sure that they are developing.
(Mike) When you say “fire fast,” tell me more about that. (Russell) Well, I’ve made plenty of mistakes over time in bringing people into my company and into my business. You are not going to get it right 100% of the time. You’ll make mistakes, and people change. So, people come in and they think the job involves one thing, and it’s totally different to what they thought. So, sometimes they make mistakes as well. But, I think once you make the decision or get the feeling that this person doesn’t fit and you can’t seem to find them fitting into your organization elsewhere, I don’t see the point of them continuing on. Because, in the end, it just creates a lot of stress for the business owner and it probably creates a lot of stress for the employee. Because people know. People know when they don’t fit. I mean, I went to a presentation yesterday by Jay, who works in the hairdressing business, and he was awesome. And he talked about culture, and he talked about the fact that he will work with his staff to make sure they buy into that culture and buy into the way that they do things. But if it doesn’t work, he doesn’t hesitate. And I’m probably, a little bit, the same way.
(Mike) Awesome. Alright, the last thing before we part here—you’ve probably read some great books in order to build you up to where you are today. So, what would you say are one or two books that you would say, wow, that was really instrumental to you and got some really great takeaways there? (Russell) I’m a great reader of biographies and autobiographies. Business books, yeah, a little bit. But I like to read more biographies of people that have changed stuff.
(Mike) Yeah, you can still totally learn from those. The same principles apply. (Russell) So, Richard Branson, I’ve read a lot of his stuff. I’ve recently read Arnold Schwarzenegger’s book, Total Recall, which I found really cool. There’s a number of people that are quite famous and successful in our country, which you wouldn’t know about, but I’ve read their biographies as well. There is a gentleman by the name of Eddie McGuire, who’s pretty big in our country. He came from very humble beginnings and has become a very prominent person in Australian TV and in Australian sport. He’s the president of the biggest sporting team in the country, and as I said, he came from very humble beginnings. Just to read what he’s done, and how he’s gone about it, and how he’s moved through the different circles of his life. Yeah, so that kind of stuff.
(Mike) So guys, now you have some homework, some reading to do. Thank you so much. This is something that a lot of people just can’t imagine doing themselves, that 2,000 member mark. And so I’m really glad you were able to share some of those strategies with us today. For all of you guys that have listened in and watched, I hope you enjoyed the episode and all of Russell’s tips. And we will see you next week.
Thank you so much for joining us today. If you like this episode, then subscribe to our podcast on iTunes, Google Play, or Stitcher, and to our YouTube channel to never miss an episode. You can get all the links by going to BOLDshow.com. Thanks, and see you next time.
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