Our topic today is the sinking ship dilemma, or the sunk cost dilemma. To compensate for the holes in the bucket, do we add more water? In other words, I'm referring to your client acquisition process. And also in saying that, what we're missing out on and I will define this in just a second.
People always ask me how to get more leads. It has become an obsession for them. They think that will increase growth. In order to truly measure growth, we must look at whether the number of extra clients that we're getting is greater than the number of clients that we're losing. Because when we lose a client, we have to recruit to replace that client and we're actually breaking even with a number of clients. So we're not actually growing. We're staying the same. Unless of course, you've suddenly increased your prices, which we can talk about in another post. But if you've suddenly increased your prices, new people coming in may get you a little bit more of the profit that you desire, but at the same time overall you're still not going to get greater growth.
There's another metric (a third metric) that we can put in (a fourth metric) if you are recruiting clients and minimizing the number of clients that drop off or no longer train with you. The lever is increasing the average spend on each client who is training with you. So that's another way that we can increase our growth. And this might be a great option if you are limited with the number of people that you can train in your studio. Because there's always going to be a level to which you are reaching your capacity and you can still get past that capacity in terms of growth, if each member is spending just slightly more and we can do that by increasing the price or ancillary services for example.
Now, let's talk about retention. So retention of clients, when I'm talking about personal trainers or semi private sessions, retention is where 80% of your clients one year after they join and start training with you, are still training with you. So if 80% of your clients or more are continuing to train with you after one year of your services, you are doing great and you don't have a retention issue. If this number is much less, you might need to look at employing some of the strategies which I outlined in my client retention course on client gaining course. Reason being you can have all of the leads in the world, but then you've got to be able to convert those leads which is very difficult. And then on top of that you have to be able to retain them for any length of time and every time we are burning our warm leads and lukewarm leads.
Then we are also making the acquisition of more clients and more leads more and more expensive, because we're getting rid of our sort of immediate circles that we can easily recruit from that may have heard about you from someone from a recommendation or heard good things. And then as you get through that immediate kind of inner to slash outer circle. When you get past that you're now looking at getting clients through Facebook advertising, through putting out brochures and that sort of thing. Therefore each lead that you're getting is more expensive, but also each lead you're getting is less warm because they haven't heard about someone who knows how awesome you are. In fact they just saw it on their Facebook feed. So they're still very much on the fence. They don't know yet whether they know, like and trust you. So it takes a whole lot more effort to be able to get them on board. So that is why it's really good to have really great retention strategies.
There's a number of ways that you can do this, which I detail in the course but that's a benchmark for you. If you are not looking at your client retention strategies and showing people a level of value that far surpasses what they believe that they are paying for the service. So what I mean by that is, in the value equation if people believe they are getting the same amount of service that they are paying for… They'll be relatively okay, but they're not going to shout out loud about your services. And on top of that, you're entering a very, very narrow line here, where it's going to be very hard to upkeep that level of people finding your service to be on a power with what they're paying for it. When people start coming to use your service, they get the most value from you. So the longer that they spend with you the less value they perceive that they're getting, because the less attention they feel like they're getting and also they feel like it requires less effort from you in order to follow through with the services that they're paying for. So over time, the amount of value they feel like they're getting from you is going to diminish. So that is why it is really important to know some strategies that you want to use in order to be able to showcase to them that they are getting incredible value for money. One way which I'll add to the value equation, that you can do this is by constantly not just adding to your level of service but adding to your level of knowledge or adding to your level of offering.
So if you are a new PT and say your knowledge and experience is a four out of 10 when it comes to training someone and this person say is training with you for eight months. Typically personal training clients, the reliable ones, are over the age of say 30 years old, so therefore, they will tend to have an injury more likely than someone who's under that age, and have more niggly things going on and less of a maximum recoverable volume. Again, that's something that's covered in another post. But these clients tend to need more attention and more attention in acute phases of their training cycle. So the way that you can increase that perceived value to someone is for example, if they get injured, you find out as much as you can about that injury or you go out of your way to ask how you can be of assistance such as contacting the professionals (with their permission) and finding out how you can best employ more sophisticated techniques into your training to help that person.
They will feel like they are getting better value for money over time because you're learning more about them and you're spending more time on stuff that is meaningful to them. So that is one way that I personally use to help people feel like they're getting good value for money when they are training with me. And it may be one that's easier said than done, but it's just highlighting one way. There's more ways in some of the courses that you will see on My Courses page.
Now the other way is to find more leads and to be able to convert more leads. If you as a rule of thumb, if you are unable to convert any more than 60 to 70% of the leads that are directly coming into you, or 50 to 60 if it's Facebook advertising, you have a conversion problem, you don't have a leads problem. Personally, because I already have a very tight niche and it's very well defined, and it's very obvious from my website, people that reach out to me are about 90 to 95% likely to sign up with me. And usually the other percentage is someone that I unqualified from training with me simply because I don't think they meet the criteria for my ideal type of client and when they don't meet the ideal criteria for my type of client, I let someone else be that person's personal training hero because it's in none of our best interests to try and be someone that we're not. And I want that person to have the best time even if that time is not with myself because that's just going to dim my energy. I'm going to take away my energy for my other clients who are presumably enjoying what I'm putting out. They might have something else to say about our love-hate relationships. I don't know. But just putting it out there. So that's one thing.
Learning about that sales and conversion is another thing that we cover in another aspect of the course. But use that as a benchmark to help you understand where the issue might be. In terms of whether it's a hole in the bucket. You're not keeping people for long enough, or whether it's a conversion issue.
The caveat is if you don't need extra clients and you have turned off all your advertising and you're not really actively going out to find people I still think that organically you should be getting about two or three inquiries a week. They may not be qualified leads, but they should be organically coming towards you trying to find out about your services and you're having conversations with them. If you do not have that two to three if you're not actively doing it or five to eight if you are actively putting some effort into it as a minimum, then you have a lead problem.
I hope by going through this it's highlighting to you that there are some benchmarks here, and these are benchmarks that I've come up with and seen as a result of working with many successful businesses and many unsuccessful businesses to turn that around. So these are not pulled out of a hat. And these are also benchmarks that will help you to see moving forward where you need to address the issue the most. It may be you actually don't have any processes or any standardized recording for any of this stuff. And if that is the case, then you have more of a systems and processes issue.
It's common for the fitness industry to throw around buzzwords, but when you're a single person or a small team, it's easy to feel overwhelmed at the thought of implementing systems and processes. I get it, there's already so much to do! When you're getting busier and busier, you'll be grateful that you began implementing systems and processes. These are what will help you increase your business' capability and make sure that you don't drop the ball. Without these systems in place, it'll be a lot harder for you to scale your business, appoint a new staff member, or even sell your business. I've got courses that go into detail on this subject and will provide you with a plan to get your business on the right track and running autonomously. I'm not exaggerating when I say that - I've been in the industry for 16 years and had my own business for most of that time. I've certainly made some mistakes, but I've also made some good decisions as well.
I used to be one of those people who thought the busiest person was the most successful. I didn't realize that the busier you are, the less time you have for other stuff. I found out the hard way, but you're far wiser than me, which is why you're reading this! I tried doing more work to get more customers, and I can confidently say I was doing great - but it was taking a toll on my mental health. If you've done more than 100 sessions in a week, you know it's impossible to keep it up for long. So I made use of the techniques I know to get to a better place and even restart my business after I closed it and moved to another country! I've tried a lot of different approaches and if you want to hear more or if you don't agree with anything I said, I'd love to have a chat. Let's work together to make sure you reach a place where you're totally successful and smash it!
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