Last post I made here we talked about finding and retaining great quality people.

That’s the foundation.  Once you build this foundation of establishing a great group of like-minded employees, you will also find yourself getting and retaining like-minded clients.

Clients that stay, pay and bring you more clients.

Let’s start with a question.

How well do you know your client numbers?

How many active clients do you have?

How many new clients joined you over the last month?

How many clients did you lose over the last month?

What is your retention rate?

Here’s a quick exercise.  Pull a list of clients from a year ago.  Compare that to your list of clients today.  If you had 100 clients and 20 of those clients do not show up on your list today, then you have a client retention rate of 80%.

This may not seem so bad, but let’s do some math.

Let’s say these 20 clients pay you an average of $400/month over the course of a year.  That’s $4800 per client.  Multiply that by 20.

$96,000!!

That’s almost $100,000 in revenue you will need to recoup over the course of a year by not paying attention to client retention.  And that doesn’t even take into consideration the additional revenue generated from referrals and additional products bought by these clients.

If you’re not tracking your client numbers, you should be.  Understand your client acquisition and retention costs.  The old adage ‘it’s much more expensive to acquire a new client than it is to retain a current one’ is true.

Do the math.

In addition to building strong staff management systems and instilling your core values in your staff – you must also be establishing strong client management systems and cultivate your ‘client experience.’

What happens to your clients from the minute they walk in your door?  What are you doing to ensure they have an experience that they not only want to continue coming back to – but bring their friends and family to as well?

What is a quality client?

One that stays, pays and brings more clients.

All of us here at NPE are reading the book Secret Service by John DiJulius.  If you haven’t invested in the book – and gotten your entire staff to read the book as well, you should.

It teaches you the fundamentals for establishing the customer experience from beginning to end.  How to get clients to stay, buy more product and refer more customers.  After all, your current clients are the best marketing tools you have.

Two quotes resonant in my mind…first, ‘customers either want the best or the cheapest’…

…which are you going to be?

Second, ‘When the economy slows, consumers give their business only to those companies that have earned it.’

You must establish yourself as a ‘must have’.  When the budget cuts come – you want to be the last to be cut.

We all think like that…Here’s a story I’m almost embarrassed to share, but it proves the point.

When we first moved to Florida, I’d fly to Connecticut to get my hair done every few months or so…granted, I could visit with friends and catch up – but the real reason I was coming back was for my hair.

Yep, all the way to Connecticut from Florida to get my hair done.  Because I’d built such a great relationship with my current salon and they always gave me a great experience, I didn’t want to give them up.

My husband thought I was crazy, but I was not giving it up.

They earned my business and will always have my business.

Secret Service gives you some great ideas to establishing the client experience.

Here are a few additional ones – that as simple as they may seem, you’re probably not doing them on a consistent basis…

First, follow through.  Always do what you say you’re going to do.  If you promise information, send it.  If you say you’re going to follow-up on an item.  Do it.  Nothing is worse than unfulfilled promises, getting the runaround or being inaccessible.

Second, be consistent. Remember, when you’re on ‘work’ time, it’s game face time.  You’re on stage and every action that you do is being scrutinized.  Don’t let ‘moods’ affect your interactions.  It’s always about the customer experience.  They are not your friends.  They are your customers.

Third, Connect. Have fun.  Be funny.  Enjoy the time.  Share a story.  Be real.  Listen.  Share your experiences.  Doing so will get them to see you as dependable, credible, and trustworthy.

Finally, (and there really is so much more), establish yourself as a life long resource. Continual share knowledge, new ideas, new products and services.  The more you have to offer, the more the benefit, the longer they stay.

Remember, client retention.  It starts with you and your staff.  Set the example – live by your core values and mission.

Know your numbers – understand what your client retention numbers are.  If there are holes – fix them.

And, of course, build your client experience.

Quality clients.  Ones that stay, pay and and bring more clients.

Ready for Your “Best Month Ever?”

We’ve got 3 new team members in place and things are continuing to crank for us here at NPE.

If you’ve got questions on your business and/or any of our programs the BEST way to get them answered is to request a complimentary consultation with our team by filling out the webform here.

Click here to request a complimentary consultation on
how you can have your “Best Month Ever”

We’re celebrating our Independence Day (July 4th) here in the US this weekend, so lots of festivities and little work for us right now.

But I did want to break away and share a NEW video with you we just posted:

Freedom and Independence are BIG values in our book over here.

And I’m honored we’ve been able to play a role in helping so many folks experience much MORE of it in both their business and personal lives.

This is a really cool video that speaks to both those themes.

VIP Membership is Now Open

We’ve now reopened VIP Membership for a limited time and info-packs are flying out the door.

If you haven’t requested yours yet, then fill out the form here and we’ll get yours out in the mail to you today.

This is THE place where all the top fitness business owners come to grow.

Whether you’re a studio/facility owner, Crossfit affiliate, boot camp, or Gym… this is where it’s at for PROVEN systems and tools that put you on the profit path.

Click here to request a VIP Info-Pack and get all the details on this program

To your success,
Sean

P.S. You know once upon a time, on July 4th in 1776 a group of gentlemen signed a letter, sent it off to the King of England,  and CLAIMED the freedom and independence that they decided was rightfully theirs.

And that’s how America was born.

What are YOU waiting for in “making the decision” to claim YOUR freedom and independence?

In the fitness industry one thing we can say for certain is that a great coach changes lives.

Yeah, it takes two to tango, so client compliance is critical.

But a great coach finds a way to influence, motivate and hold the client’s feet to the fire so results are achieved.

A great coach INVESTS in the relationship with the client just as much, if not more so than the client invests in the coach.

Because a great coach cares about the client as an individual.

If you’re a great fitness coach, you understand what I’m saying.

Here at NPE, we’re blessed to have the two best fitness business coaches in the world.

Sean Greeley and Camelia Herndon.

You already know about Sean, but Camelia sometimes “flies under the radar”.

Unless you’re a VIP.

Camelia Herndon, Fitness Business Coach of the Year, with Eric Ruth at MEGA TRAINING 2010

Last year at MEGA TRAINING, our VIPs awarded Camelia Coach of the Year.

Four of our VIPs, led by Vaughn Bethell, picked up Camelia’s chair with her in it, and carried her – Cleopatra style – to the MEGA TRAINING stage while the crowd roared with approval.

Then I read a poem I wrote for her (it’s below).

One thing is for certain, Camelia is loved, appreciated and respected by our VIPs (and by all of us who work with her).

Because Camelia truly “goes the extra mile” to help all our VIPs get off to an explosively fast start – on the RIGHT path – and then guide them all the way to the top.

The incredible success of NPE VIPs is proof that Camelia delivers results and changes lives.

And here’s a fact you may not know: before joining NPE, Camelia was a SEVEN-figure fitness business owner. Yes, 7-figures. So she’s “been there, done that.”

If you want to be coached by the best, by someone who’s already climbed the mountain you want to climb, who truly cares about you and is as invested in your success as you are, then Camelia’s the one.

Grab your no-obligation VIP Info-Pack to learn more about working closely with Camelia and our entire team so THIS YEAR becomes your breakout year…THE year you get your fitness business “dialed-in” and humming along, producing clients and profits just like the hundreds of other VIPs.

Get your VIP Info-Pack here.

Great coaching changes lives,
Eric

P.S. Here’s the poem I wrote for Camelia and read to her on stage at last year’s MEGA TRAINING event:

This is a little poem for our minivan driving soccer mom, superstar fitness business coach, Camelia Herndon.

There once was a woman from Connecticut,
She has grace, intelligence and etiquette (hey, you try rhyming with Connecticut)
She’s stronger than most men,
By a factor of ten,
But you’ll never hear her brag, not even a little bit.

But the quality that means the most,
If I may be so bold…
Is that Camelia, more than anything else,
Has a big, beautiful heart of gold.

Camelia, you’re simply the best. Thank you for all you do.

P.P.S. To all of our U.S.A. subscribers and clients…HAPPY INDEPENDENCE DAY! Have a great 4th of July!

Now go get your VIP Info-Pack here.

This past weekend we held our first annual VIP Spring Training event.  We invited all of our VIP’s to come together for a weekend of networking, workshops and top notch information.

The event was attended by over 80 of our top VIP clients and was a huge success.

As I wandered through the weekend listening to everyone talk and network with each other, it became apparent to me that one of the underlying struggles with many of our business owners is staffing.

Finding and retaining great quality people.

Coincidentally, later that weekend as I was waiting for the 6 inch nail to be taken out of my tire (yes, that’s the second one in 6 months – I think Orlando has a tire company conspiracy where they lay nails down on the road – but that’s another story), I came across an article in June 2011 issue of Inc. Magazine entitled “Core Values – The crucial element in well-run companies?  Leaders who know what they believe in”.

It’s an excellent article and one I highly recommend reading.

The main focus of the article is the importance of establishing core values and living by them – not only yourself, but the staff you surround yourself with.

It’s always important to consider the character of people you bring into your culture…some will fit, some won’t.  Your mission is to create an environment that allows those that do fit your culture and do choose to work with you succeed.

One of the first lessons we go through with any of our NPE clients is to establish your core values, mission and vision.

It’s the foundation of your business.

It’s what drives you – and should as a result, drive those that you surround yourself with.

Core values are the underlying factors to building a strong business base – not only in what you believe, but what you instill in your staff.

The article highlights a company I know you all are familiar with – TRX.  TRX’s founder, Randy Hetrick spent 14 years in the Navy SEALS.  To say he doesn’t have a strong core value of fitness and physical wellbeing would be an understatement.

He has built a company on the foundation of this fitness core value….as he says “A fit soldier is a happy soldier.”  Employees at TRX cycle, run, they are triathletes, they run the gamut of all fitness spectrums and believe in a culture of fitness.

What matters to the business is that employees be in the best shape possible.  Hetrick believes that folks at their physical best will deliver their best.   Business hours are flexible, the priority is health and wellbeing – not to say the work doesn’t get done, you’ll find many lights burning in the evenings and on the weekends.

Think you’re going to find someone lacking a core value of fitness working at TRX?

Probably not.

Think these folks stay around?

Absolutely.

It’s important that you establish this culture of values and shared beliefs.  This is how ultimately you will find the best people and keep them for life.

So, how do you do this?  First and foremost, as we do with all NPE clients, you must establish your own core values and mission.

What’s most important to you?

What is it that you want to instill in your clients and staff?

This is the foundation of your business – and it makes perfect sense that if you’re establishing these core values – they should also be the foundation of all employees that you bring on board.

Second, you must lead by example. One of my favorite Dick Chilton quotes is “Leadership is earned…not given”.   Folks are coming to work for you not because they are lucky to come work for you, but because they have chosen to come work for you.

If you keep this mindset in place and establish an environment where the goal of your business is to create productive, fulfilled employees, then you will have a culture that is like no other.

As a result, employees will give you their best – they will pull together in the best of times – and in the worst of times.    You will have earned the right to call yourself a leader and developed a community that works together and stays together.

I’m up here in Calgary for a few days visiting with my friends James & Leighanne Fitzgerald.

But wanted to take a moment today to shoot you a quick message about MEGA TRAINING 2011.

The date has been set, the hotel contract has been finalized, and this years event will be taking place on:

October 20-22nd, 2011
in Orlando, FL

Be sure to mark your calendar!

We’ve got some VERY exciting things in the works for this years event.

And while last years event won’t be easy to top, I do think this year is going to be our BEST YET!

Lots more to follow on this in the weeks and months ahead.

To your success,
Sean

Well it’s Friday afternoon before a long holiday weekend here.

And I don’t know about you, but I’m looking forward to “shutting things down” and heading out of town for a few days.

So no blog posts this weekend, and I’m keeping things “light” today.

But before we head out of here I wanted to share with you some really cool footage we shot last fall while over in Australia.

This video shows you a bit of what Sydney is like (if you’ve never been) and profiles Aussie Member of the Year 2009 Dirk Hansen.

Dirk was making all the “classic” mistakes running his facility like charging too little AND the BIG “no-no” of collecting payment for his training services in the rears.

Then Dirk heard about our VIP program, joined, launched our Raising The Rates Campaign, and brought in over $400,000 in sales.

Talk about LIFE changing… this was it for Dirk!

Check this out, and whether you’re heading out of town this weekend yourself or not… come on a little “virtual vacation” with us to Australia via this video.

Have a great weekend,
Sean

P.S. Dirk’s studio is right up the hill from Bondi Beach, as you’ll see in this video. The morning we were shooting this on the beach it was overcast and drizzling rain. But fortunately there was a  GREAT cafe up the hill we hit up for breakfast and coffee after this was over. If you’ve never been to Australia, one thing I’ll share with you is their coffee is like “liquid gold”.

I could drink it all day long. It’s THAT good.

P.P.S. We’re getting ready to re-open the VIP program very shortly. Stay tuned…

Ok, lots of good questions posted to the blog and sent in via email on this.

I’ve got my typing cut out for me this morning with these, so we’re going to skip the intros and jump right in.

Here are your questions… and my answers… in no particular order.

Also, because we’ve got PLENTY here to discuss that should address most (if not all) the points from my conversations the past couple weeks… I’m going to skip putting in questions/answers from the folks that I’ve already personally responded to.

Q: What is the best way to go about raising the rates with our members. Allow them time to sign up for a contract at the regular rate and give them a deadline? My next question is how much to raise it to without totally freaking out our members? -Mark & Nikki Snow

A: Ok, a 2-part question. Let’s address the “allowing people time to sign up at the old rate” one first. Because I’ve gotten that one several times now and you’ll see it repeated again down below here.

I’ll start with a little history to give this answer some context…

So the “original” version of the Raise The Rates Campaign… which has worked extremely well for over 5 several years… and has literally brought in millions of dollars/Euros/and other currencies for all our clients… included the option to “buy in now” at the old rate as part of the message.

I’m linking the first letter in that original (Version 1.0) sequence so you can see it here.

When you read it you’ll see that the main reason given for the price increase was to reinvest in staff and allow the facility to continue hiring the best coaches in town.

Very plausible argument and good “reason why.”

Because really, who doesn’t want good coaching and understand the value a good coach provides in a service environment?

Heck, if people just wanted cheap shit with no regard to quality of services then they’d be working out at the discounted globogym in town and not at your place, right?

Then to ‘soften the blow’ AND fill up the bank accounts with lots of cash… the letter was closed with an offer to purchases services at the old rate for as long as you’d like. But in order to do so, clients would have to ‘pre-pay’ the amount in full. Hence the name “cash flow surge” we gave the product when we packaged up the campaign and sold it with a training video and some coaching in our webstore.

Now, does this work?

Absolutely!

Is there anything wrong with the campaign or this strategy?

Not at all.

However, we’ve been working with several clients lately that have such very low current rates… and as a result they are really struggling with their businesses… that I created a second version (Version 2.0) of the campaign which does a couple things.

First, it adds more “reasons why” for the price increase and “builds the case” for the new rate.

Second, it lists “added value” that will now be included with client programs along with the rate increase… again going further to “build the case”.

Third, it removes the offer to buy in now at the old rate…because it really had to be removed for these clients who are suffering right now.

Having folks “buy in” at the old rate right now would only add to 6 or 12 more months of no profitability in their business… which would defeat the whole purpose of launching this campaign in the first place.

The goal is NOT to raise rates for the sake of raising rates. The goal is to build in more margin and find PROFITABILITY in your business RIGHT NOW.

However, I chose to “soften the blow” in another way… by announcing a referral rewards campaign that allows clients to get their choice of either cash or credit to their account when they refer a new client that signs up for the program.

I included this for a couple reasons…

Because anytime you can ‘soften the blow’ (and the more you increase price, the more you’re going to want to have ways to soften it) you build goodwill with your clients.

You also now build yourself in a virtually bullet proof “objection handler”.

If some folks are really persistent, and want to get on your case about the price increase even though you’ve already addressed a number of strong ‘reasons why’ you’re raising the rate, and listed out how you are going to ‘add value’ to the program… then you can always fall back on this as a last resort.

If someone can’t afford the increase, all they have to do is send you some referrals and they can get their training for free.

Now the reality of the situation is that the real whiners probably WON’T do this, that’s why we call them whiners in the first place. They don’t do a whole lot of anything, except “whine” and complain.

I suspect the best and highest number of referrals will come from the clients who love you, value what you do for them, and have no problem with the price increase. They still think you’re too cheap, and they feel they “owe it” to you to share info on your programs with their friends and family they care about who can really benefit from the introduction.

But regardless, you’ve got a strong fallback here to defend your position.

Nobody can say you’ve haven’t given them “options” to be able to continue with your program if they truly value it.

If you haven’t downloaded that first letter of the Version 2.o of the campaign I posted to the blog the other day, then you can do so now by clicking here.

Ok, now to the second part of your question.

How much to raise it to without totally freaking out our members?

Now we’re getting to the good stuff.

There are no hard or fast answers here.

I don’t know what exactly is the “perfect” number for you.

But let’s talk about some things that need to be considered in you figuring out what that number will be.

Right now I’m teaching a class about 52 students with my friend James Fitgerald as part of his OPT CCP certification course for coaches. And it just so happens we came up to the lesson on packaging and pricing just 10 days ago, so this question is coming up a lot with those students.

This question also came up in my initial phone call with Bob too (sorry Bob that we’ve gotta keep talking about this here).

Bob told me in our first conversation he researched some gyms doing price increase (which means he called up a few Crossfit buddies) and the ‘average’ price increase folks are implementing is 20%, so that’s intel he used make the decision he made about raising his rates from $75/month to a $100/month.

The only problem here is I suspect Bob’s Crossfit buddies are running just as unprofitable a business as he is!

So now we’ve just got bad genes doing more inbreading. And the offspring all look the same… which means they are both ugly AND stupid.

Sorry, not calling anyone ugly or stupid, just had to go with the metaphor… so laugh at that one, OK?

You see Bob increased price by 20%, but he still hasn’t found profitably in his business. He’s just found maybe breakeven. Which isn’t really breakeven yet, because he needs to hire an admin, increase his salary, pay off that loan, invest in a new location, and a whole lot more.

So that kinda defeats the purpose of the whole thing.

Plus, Bob’s services are also still too cheap if he’s really delivering a ton of value.

Look, as I shared with you in another post.. there are KNUCKLEHEADS in the marketplace right now charging and GETTING $300/month for holding a stopwatch and having people run cones and do pushups/situps in the local park. And I think we could all agree it ain’t hard to match or exceed THAT level of service. So why should you be priced so much less than THEM?

But let’s continue…

Here are some things you want to consider when finding what your “number” for what the rate increase will be:

Leave your thoughts about your current rate, and what % of increase will be, and your fear about ‘freaking out the current clients’ off the table right now.

Let’s talk about what you’d do and how you’d redesign this whole thing… knowing what you know now… if you were starting over from scratch.

What would you pay yourself for a salary in your business (and therefore build that number into the payroll expenses of the biz)?

What would you pay your coaches?

What kinda of money would you want to take out of net profits and reinvest back in more marketing, investments in new/better/more equipment?

What would you want to save for business expansion, relocation, commercial real estate purchase?

What would you reinvest back into hiring more staff like a full-time administrative assistant to handle all the little things and free you up from that stuff?

What money would you use to repay any loans or debt service you have from when you started building the business and had to leverage credit to get started?

Start to think about the answers to those questions, and reverse engineer some numbers on number of clients, package rates, and gross revenue/net profits at different price points.

This is the type of work that will lead you in the right direction and what you really need to be thinking about.

For some clients, that are a real mess, they will NOT benefit from minor business ‘repair’ or ‘improvement’ right now.

What they need to be thinking about is more along the lines of complete business ‘RE-INVENTION’.

Because their model just isn’t working.

And a small increase ain’t gonna dramatically change things here for them or the business.

So Mark & Nikki, spend some time with this. Run some numbers and do some work thinking about the answers to these questions. Then if you’d like some more feedback, go into the EA class forums and post your current “menu” rates. Along with what you think you want to set your “new” rates at. And ask for specific feedback from our team and your peers. Leverage the group to assist you here. We’re got lots of VERY sharp clients posting in those forums everyday now and I’m continually impressed when I have a moment to hop over there and read all the comments/posts/and discussions. Our clients and this community are on POINT!

Q: What can you say to your clients about why the rate is changing? Increase in costs, inflation, etc?? How do you phrase it. Thanks for tackling this topic!! -Laura Lynn

Laura, think I’ve answered this in the answer above.

But download the RTR Version 2.0 letter template here, and you’ll see some ‘reasons why’ I’ve given you to use in “building your case” here.

You can use “reasons why” I’ve given you, add your own, or start over building them from scratch.

Think of yourself as an attorney. And the jury is your clients.

Your job is to “prove your case” and win over the jury.

So spend some time working on your argument and brief.

You need to have a strong position that you can defend well.

But it’s pretty straightforward process and you don’t have to be O.J.’s dream team to win this case.

So don’t over think or stress about it too much.

Make your list and go for it.

Q: Raising the Rates Campaign – one legitimate reason – to afford highly qualified fitness professionals – per RTR VIP Product. Is this no longer a strong enough reason to your clients…is the question…..I could think of 100 more reasons why to raise the rates, but guess it all goes back to sticking with how ‘well you know your market’. -Jerremy

Jerremy, great observation.

And I’ve addressed this in the previous 2 answers.

Version 2.0 of the campaign I’ve “beefed up” the argument with more reasons why here and it builds a stronger case.

You have also correctly pointed out that your market (AKA “the jury”) are the ones you have to convince here with your case.

Doesn’t matter what I think about your reasons why.

And for that matter it doesn’t really matter what YOU think about your reasons why either, though you better BELIEVE in them so you can back them up with confidence.

Your market is the jury and they are the ones who will decide if your business is “innocent” or “guilty”.

So make sure you’re tuning into THEIR reasons why in your letter, not yours.

For example, this would NOT be a good letter:

Hi clients, I’m raising your rates because I:

1. Really want to buy a new sports car
2. Plan to take all your cash and go on vacation for 2 months
3. Have some credit cards I think you should pay off for me

NOT a good letter.

As you can see the “reasons why” we’re using in the RTR Version 2.0 template are all justified as business reinvestments which include:

1.    Hiring and retaining the top coaches in the area.
2.    Continuing education from leading experts in the field.
3.    New equipment purchases. _______________.
4.    Expansion and improvement in our facility.
5.    ANY OTHER REASONS WHY? List and describe them here…

SO MAKE SURE THE ‘REASONS WHY’ YOU CHOOSE TO USE IN ‘BUILDING YOUR CASE’ ARE IMPORTANT TO YOUR MARKET… NOT YOU.

SORRY, BUT NOBODY CARES ABOUT YOU HERE.

YOU HAVE TO POSITION THIS IN TERMS OF BENEFITS TO THEM.

Q: I have a very small boutique style gym in my home. I am in the countryside. Oddly enough there is uber competition in little towns around mine. I believe I offer quality personal training, nutrition and group classes. People still go to the cheaper or “easier – like Curves” gyms. How can I financially get the edge on the competition? -Ginette Kitchener

Ginette you got some comments and feedback to your question on the last post from other clients of ours. Review them because they are all spot on.

As I’ve said in other posts, the key to differentiating yourself IN THE SERVICE BUSINESS, is in the RESULTS and CUSTOMER SERVICE you deliver.

Which, fortunately for you, are 2 things those “cheap and easy” places you mentioned know virtually nothing about.

When I first started working as a fitness coach years ago, my first client was an old retired guy that just wanted to kinda stay active. Didn’t really care about doing so much with this fitness beyond that.

But my SECOND client, Mary, was a 30-year old ex-stripper who had gained a ton of weight. I focused on delivering a great program and getting her results. And made sure to assess the client (with photos of course) every 4 weeks. I made sure the client got AMAZING results, and at the end of 12 weeks her before and after photos were incredible.

I made some marketing materials with her before and after photos, and then I got FLOODED with folks who wanted to hire me as their coach.

With her “new” hot body Mary eventually stopped training, went back to stripping, and got back on cocaine. But that’s another story for another time.

The point is all you need in the beginning is 1 client who is committed to their goals. Service the heck out of them, get them great results, document the change (photos being the key since a picture of REAL person getting results is worth a thousand words), then use their story/results in your marketing to go attract more clients.

You do this and you will soon be SWAMPED.

Q: If I have about 50 clients and I do the RTR campaign but offer existing clients to sign a contract at the old price, should I limit that contract length? It seems that if I do the RTR and most sign a 12 month agreement at the old rate I will barely make any extra profit for a long time. I know having a ton of clients signing 12 month contracts isn’t the biggest problem you can have, but if one goal is to have a nice cash infusion, won’t this cause problems? -David Bears

David, as I’ve answered in the first question, if allowing existing clients to buy in at the old rate doesn’t do much to ‘move the needle’ in terms of finding profitability in your business right now… then ditch that and use the VERSION 2.0 of the campaign.

Q: This may take the conversation off-topic but the RTR solution seems to be a small piece of the puzzle. As discussed in the other related threads the expenses in this case and value proposition required a thorough review as well. RTR will most likely help his top line but will he be able to tighten expenses and improve his branding, market position to increase profitability? The advice and sample letter are spot on for just solving the “to RTR or not to RTR” question. I’d like to see it taken a step further to see how scalable and sustainable this would be. Say we work w/ the $30,000/month the person above is bringing in. I’m assuming they have a staff but it doesn’t sound like the original “case study” does. If you project providing revenue generating services 6 days/week, 8 hours per day then that is about 192 hours per month of revenue generating time. That’s pretty much maxing it out and grinding it out. If you pull in $30,000/month, that averages out to $156.25 per hour, nice $$$! That means this guy is producing revenue 192 hours per month, not sustainable for most I don’t care how passionate you are about fitness. So, a bigger piece becomes how does he staff up? What passive income revenue streams does he create? Do you have to start as a “one man/woman show” and work these type of hours before you add staff? If you add staff that adds expenses and impacts profitability. What is the tipping point? Do you provide a plan/strategy/business model where you can start out having the business work for you and not having to work for the business? Also assume this guy wants to have a family, house, health insurance, savings, a vacation, you know, grown up things. Most of the advice and solutions offered seem to be tailored to someone just starting out or with minimal responsibilities (i.e. supporting a family, needing health insurance, planning for retirement, etc). Apologies if this took the conversation too far off the path but as I read the posts on this topic the past several days these are the questions I started thinking about. -Curt

Ok Curt.

This is a blog post, remember?

Not a full day of consulting.

But yes, you are correct in bringing some good points into the conversation that I’ve touched on previously. In finding profitability, a thorough review of expenses, margins, staff increases as certain capacity points, should all be looked at for long term planning.

If you wanted to do a real thorough job on that, then you’d use the $15,000 sales forecast/proforma modeling tool we give our students in the CONTROLLER™ Fitness Finance System course (NOTE: this is also included in Level 5 of the Studio/Facility version of our EVOLUTION ACCELERATOR™ program.)

Also, yes, in the example shared with Bob, he will benefit from some time invested in business RE-positioning as well.

But Rome wasn’t built in a day, and I don’t think it’s realistic to ask Bob (or anyone else for that matter) to try and do all those things at the same time.

So in coaching our clients over here, we look to see what is the FIRST thing we can do to make the BIGGEST IMPACT in bottom line results/net profit RIGHT NOW.

And in this case, if we do nothing else but RTR… Bob’s business gets a whole lot more profitable IMMEDIATELY.

The rest will come with time, and will a whole lot easier to work on with some “breathing room” in terms of profitability of his business.

Comment: If you mail your Raising the Rates letter to your current clients, I would strongly recommend also handing them a copy at their next session and taking 5 minutes to explain it. People don’t always open all of their mail, and they may just skim it and not completely understand how to take advantage of any special offer you put with it. This personal attention and explanation more than doubled the return for me when we did this last summer. -Tony Maslan

Ok, this isn’t a question but just a comment on best practices made by Tony Maslan. And it’s VERY good advice, based on Tony’s actual results implementing this campaign the last time he did it 2 years ago.

So I wanted to be sure you caught it here and didn’t miss this.

Thanks as always for chiming in and sharing here Tony!

Q: As someone who is approaching 50 years old, I too am sometimes frustrated with advice that often times seems to be geared to a much younger audience. The action steps I was able to consider with I started my first fitness business over 21 years ago (lost this business in a divorce 5 years ago and have been working hard over the past 18 months to get started again) are more limited today with kids, a hefty mortgage etc. not to mention a part-time job to make ends meet as I get my new Nutrition & Fitness business up to speed. My wife has several health concerns which limit the type and duration of her physical activities. She is also a full-time mom and stays home with our kids. So, this means there isn’t any significant second income in our house. However, I am constantly searching for and working on incorporating ways to bring passive income streams into play for my business to benefit my family. I have had some minor successes with that so far. I already tried e-books, and I am currently an affiliate for a few nutrition & weight loss products too. If anyone has some different passive income ideas that have worked for you regarding this , I welcome your input, thank you! -Steve Loder

Steve, first off let me say the advice on building businesses we share isn’t “age specific”.

What we share are tested and proven systems, strategies, and tools that work if you apply them… regardless if you’re 25 or 65… and we’ve got MANY clients that span all across that age range.

And regardless of the difficulties or obstacles you face, you can improve your business in a dramatic way in you study and apply them.

In fact MANY of our clients, and I’m not going to share people’s very personal stories about spouses/health challenges here, have worked through obstacles like you’re mentioning and are KILLING IT.

In every case I can think of right now, it was those challenges that gave them the MOTIVATION to keep searching for answers and doing the work required that led them to success.

So, “saddle up” I say.

But the real reason I included your question in our discussion today is because I wanted to address your comments on looking for “passive income” and “back-end” revenue.

They are both very important topics.

And when you have an established business, they can be a total GAME CHANGER in terms of infusing your business with more net profits through better monetizing and selling more into the “lifecycle” of your existing customer/client base.

But if you’re focusing on that as a solution to finding profitability… in a business that has only a small number of clients or has bad economics in the model in terms of pricing/margins in the first place… then you “trying to climb a ladder that is against the wrong wall” as they say.

I would encourage you to examine your core business and look at what may need to be done to make it profitable on it’s own with your core product/service offerings FIRST, before trying to solve a profitability problem by focusing on the back-end.

And it may be that the economics of your business model are already very sound, and the only problem you have is that you just need to go market and get more clients signed up to experience it.

I don’t know.

But I often see many folks… who aren’t making much money… going on and on about “passive income” and the “backend” of a business… like it’s the holy grail solution… meanwhile if we examined bank accounts these folks are generally the ones who are broke.

So, again, don’t know where you’re at… but thought I’d address some things to consider here.

Q: Two questions: 1. RTR for PT/BC is one thing…..how should we address the membership prices for our member base? We have some monster clubs nearby….we don’t want to raise our rates out of the market for this area. 2. Looking for the V2.0 RTR Campaign – is it on the member site?

AND via email…

Hi Sean, We’ve been following all the posts over the last several days and want to know what the best approach would be for a health club to raise the rates? We offer personal training, bootcamps, class passes, and memberships. We have already raised our rates for our new training clients, but we want to know if it would be easier to raise all rates across the board 15%, or raise the PT rate percentage separately from the membership, and the bootcamps, and just include an explanation and rate sheet for all three different services. Most clients are members and a percentage of them pay additionally for PT, Bootcamp, and membership. We are ready to pull the trigger on the rate increase this week for about 50 PT clients, but do we also need to send a letter to all the individual members as well? Our membership rates are already higher than all the chain clubs at $39 per month. We were thinking of going to $44. Our PT Rates are $69 at 1x per Week, $64 at 2x per week, and $59 at three times per week. Boot camps are too low averaging $99 per month. Thanks. -Dave Mugavero

Ok, guys… let’s see what we can do here.

First, yes the RTR version 2.0 letter was linked in one of the previous posts (how could you have missed it with all that reading?) and I’ve linked it a few times already in this letter here.

But… to be sure to don’t miss it… here it is again.

Now, Dave don’t think you were on the entire VIP Studio/Facility mastermind call we had on Wednesday… and if that’s case… I recommend you download and listen to the recording.

What was NOT included in your question, but I think is the real BIG opportunity for you here… is to RTR on PT AND simultaneously launch semi-private training. Which would more the double your net profits per hour from the rates you’ve proposed here.

Let’s run the math…

Private training at $70/session VS. 4 semi-private clients at $50/session = $200

Which is almost 3X the gross, and even if you pay out a little more in labor (refer to that VIP mastermind call recording where we went in-depth on discussion for staff base pay + commission compensation examples for this), YOU STILL HAVE A LOT MORE NET!

And you can now increase capacity of the ‘prime time’ hours dramatically without adding more staff.

So, if I were to pick 1 THING for you guys to do right now that would have the BIGGEST IMPACT that would be it.

But, since you’re asking let’s also talk about the membership increase.

$39 –> $44 ain’t a big increase.

And at the end of the day, you wouldn’t have to give a whole lot more to me as a member to ask me for an extra $5/month.

My guess is that because you’re already higher than all the other big box gyms in town, and nobody is complaining, then your members aren’t buying from you because you’ve got the newest equipment, coolest paint colors, or nicest carpet.

They are buying for “other” reasons.

I think you would benefit from uncovering and understanding those better.

Why do your members buy from you rather than the other big box gym that is priced less?

My guess is it’s probably a number of factors including location/convenicence, community/relationship, maybe cleanliness, quality of coaching/classes that are offered, etc.

But what are their reasons?

And how do they prioritize/rank their reasons?

And if you want to raise price… how can you increase the value (or do you already have enough ‘built in) to justify the increase?

I think the biggest point of leverage you have here in terms of delivering value.. all things being equal… is in COMMUNITY and RELATIONSHIP.

If I were you’d I’d be doing BBQ’s in the parking lot on Saturdays, having a monthly member “social” type event/outing, maybe a quarterly client appreciation event with giveaways, all that kinda stuff.

How many members do you have right now?

500 X $5 = $2,500 extra a month (not a big number).

2,500 X $5 = $10,000 extra a month (much more significant).

Do you raise price on membership, bootcamp, private training, and launch semi-private all at once?

Maybe. I’m a “rip the band-aid off all at once” kinda guy, but even this might take some serious balls to do.

Dunno.

But since you guys are VIP clients, why don’t you complete a menu with everything you’ve got now and current pricing. Then the new menu of proposed pricing. And get the answers to some of the other questions I’ve asked. Post all to the VIP forum and ask for some input and feedback from your VIP peers. And you can also shoot everything over in an email to support@netprofitexplosion.com and schedule a call with Camelia to review… or if Lauren can find some time on my schedule… I’m more than happy to also jump on the call with you myself if you’d like.

Q: Hello, I really appreciate this site and all the fantastic information… just wondering if anyone has a ‘generic type’ template on tier pricing? I am looking to do something based on the amount of services I will be providing where the price will increase according to what is offered. I am not sure how to implement as I have a pay by class type packages now. I am adding classes and going to unlimited packages (hence the tier pricing). I would greatly appreciate any information and insight on how to do the cross-over and examples or templates on any tier packages. Thank you so much in advance, Don Poore

Don, not trying to be self-serving here… but really you need to go through our AUTO-CLOSER™ Fitness Sales Training program.

It will answer all your questions on this, give you access to all our best students who can assist you through the class forums, and you can even review your packaging/pricing worksheet with our coaches when you’ve worked it out.

Plus you will benefit greatly from mastering a sales process to sell at the high price point/bigger packages on the front end with NEW clients coming in the door.

AUTO-CLOSER™ is available in our webstore here or in EVOLUTION ACCELERATOR™ which includes that and a whole lot more for a much better savings. You can learn more about the EA program here.

Q: I currently have several clients paying different rates due in part because they bought a training package under the old training package structure which offered blocks of personal training sessions at a set rate per session or because they’ve been on an automatic renewal and their rate hasn’t been updated in a few years years – My question is, I would like to raise the rates and the new minimum rate will be a substantially higher increase for some more so than for others, what do you suggest?.. One increase across the board or two incremental increases to bring everyone current once and for all? -Joe Green

Joe, now your situation is not quite as dramatic as Dave and Paula’s.

You’re not trying to raise prices on 3/4 programs all at once. You’re just asking about bringing everyone “in line” at once with current rate increase.

So if you believe your delivering the value and you’ve got “stored equity” in your client relationships, then I would “rip the band-aid off all at once” and go for it here.

A lot of folks avoid doing this out of fear of losing clients, or because they can kinda ‘get by’ with how they’re doing now and aren’t in extreme pain yet where they HAVE to do it now.

So they avoid it… and the business just kinda limps along.

Usually avoiding this makes things worse because clients talk to each other and get pissed when one is paying “X” and the other is paying “Y”. And while you thought you were doing all this to be a “nice guy” you’ve really just shot yourself in the foot here and look like an asshole.

Don’t be one of those guys.

So if you’ve delivering the value… and you’ve got stored equity in the relationship… then I’d balls up and do it now.

Summary

Ok, time for me to head to the beach while there’s still some time left in the day here.

So I’m going to wrap this up by saying that I hope all this discussion INSPIRES YOU TO TAKE ACTION.

There continues to be great conversation, and a lot of personal/professional growth going on right now in our community as a result of these conversations.

Let’s not let up until we get you to where you want to be!

I want to thank EVERYONE who’s posted comments and added great points to all the posts. And I want to especially thank all our clients who’ve shared their stories of success and lended their support to others here.

I’m very proud of the fact that all you guys are awesome. And how everything continues to snowball in a positive direction for us all AS A RESULT of YOUR support. THANK YOU!

Lastly, if you’ve got remaining questions on raising the rates or your business right now, then the best thing to do is post a comment here and also request a diagnostics phone consultation with one of our team by filling out the webform here.

Just be patient in getting a call scheduled. I’m told we’re just about booked out for 2 weeks right now… AGAIN.

Camelia and I were juggling schedules Friday to look at what we could rearrange, and the new coach we’ve hired won’t be done here for another 2 week yet. But we’re here to help, are committed to your success, and WILL GET TO YOU!

Have a great Sunday,

Sean

P.S. So if you’re curious, I had a follow-up phone conversation with “Bob” on Thursday. And Bob said he’s been reading all these posts many times and agreed with all the points of discussion.

However, given that he just signed his clients to a 6 month contract approximately 30 days ago… and since he can ‘get by’ with where he’s at now… he’s not comfortable going back and raising rates on those clients at this moment.

But he HAS committed to doing so in 5 months when their contracts expire. And he wants to do a lot of work to improve his business in the meantime. So, I accepted him into our VIP program.

He’ll be attending the VIP Spring Training event in June so I figure he’ll also benefit from our veteran “varsity” squad VIPs giving him some shit.. err, I mean “support”. So Bob, welcome to the family! Onward we go…

So the last week has brought MANY into the discussion on raising your rates.

And our office has been getting a ton of emails and calls from folks ready to “make the leap”.

I’ve even had my personal inbox blowing up with messages from some “big dawgs” who’ve been inspired by all this discussion to tackle it too.

But many have questions they’d like answered/clarified on this before implementing.

So I’ve been making a list of all the questions as we bang them out over here.

But I want to make sure we don’t miss any.

So if YOU’VE got some questions on this topic, let’s get them addressed now.

Here’s the deal..

Post your questions on Raising the Rates to our blog here in the comments section OR shoot them over in an email to support@netprofitexplosion.com with the subject line “Raising the Rates Q & A”.

I’m going to compile all the questions and answer them in Sunday’s blog post when I’ve got a little more time to write.

Right now I have to head to a call with Dan Kennedy and then onto more BIG project work today.

Sean

P.S. Since we’ve come this far it’s probably best to continue pressing forward on this topic. Because really if this is the ONLY thing we focus on right now, but 50 people raise their rates and now find profitability in their business as a result, I’ll feel like we’ve done a good job here of advancing the greater mission.

So post whatever questions you’ve got and let’s finish this.

P.P.S. As I said to some clients on a coaching call yesterday, until you get THIS right… working on any other area of your business if futile.

NOTE: This post is a follow up to another post titled The Unsustainable Business Model dated May 12th, 2011. So if you haven’t read that yet, this probably isn’t going to make a whole lot of sense to you. So click on the link and go back to read that first.

ALSO, that post links to another post which really is also part of this discussion now, so if you want to start from the beginning and get the FULL story… then you should really start by reading the post titled Unspoken Conversations and the Hierarchy of Responsibility dated May 1, 2011.

Ok.

Now to bring us all up to speed, let’s review where we last left off:

1. We discussed Bob’s numbers and the fact that he needs to raise his rates to get more margin in his business.

2. We talked out Bob’s initial objections for NOT raising price.

And how Bob is now in full agreement with me on this point. He’s ready and willing to raise prices now and realizes that his initial objections weren’t really valid because of the arguments I presented to him.

If you need a refresher on those points, then be sure to reread the last post again.

3. The “dilemma” on where we’re stuck right now is Bob just raised prices up from $75/month to $100/month with his 100 clients and promised them that this would be their “new rate for life”.

Bob doesn’t want to go back on his word and lose his integrity.

And though we haven’t spoken about this… if we’re all going to be completely honest with ourselves here… I’m sure Bob’s also confronting a healthy dose of FEAR on top of his concerns about integrity.

Because this is unknown territory.

And truth be told, he could, and probably WILL lose some clients if he decides to make this move and raise rates to those old clients.

But from what I know about Bob so far, I think he has the ‘cajones’ to face that FEAR and push though that piece… IF he decides to make the leap.

After all, if there is one thing I love about the Crossfit community, is the fact that they have balls.

For the most part, you show them a wall and these guys and gals will run through it.

So I’m not as concerned about that piece for Bob.

But like I said, this still is new territory for Bob so we need to acknowledge that will be part of “making the leap” here.

Some Thoughts

From a “love your clients” perspective, Bob telling his clients “this will be your new rate for life” was a very noble and admirable thing to do.

But from a business perspective, this was NOT a smart move, and you don’t ever want to say this to your clients or anybody else for that matter.

Because listen, life happens, things change, and you don’t want to paint yourself into a corner making promises that are unrealistic for you to keep.

Inflation, rising costs of doing business, growth of a company, changes in product/service offerings… all mean that it’s IMPOSSIBLE for you or I to commit and follow through on ANYTHING for the entire lifecyle of a client/customer in your business.

What if the supermarket still charged 25 cents for a gallon of milk?

Or going to the movies still only cost a nickel?

Both the supermarket and the movie theater would be out of business.

They could never afford to cover their operating costs, let alone make a profit by charging 1950′s prices today.

That CAN’T work.

So, to be frank…Bob’s mouth has written a check his ass can’t handle cashing.

Where are we REALLY stuck?

So where are we REALLY “stuck” here?

Bob is uncomfortable with moving forward because he is a good guy, values INTEGRITY, and feels like he’s going to be a real asshole and sleezeball if he now goes against his word and raises his rates to those clients.

So we’re not really talking about business or pricing anymore right now.

We’re talking about the much more personal topic of our values and ethics.

You with me?

Ok, so let’s now drill down further on these 2 areas…

YOUR VALUES

Values are a very personal thing.

For the most part they are programmed into us by how we were raised, the people in our life, our environment, out teachers, coaches, and our parents.

But as an adult, you get to choose your own values.

You get to decide what values are most important to you and which ones you decide to live your life by.

It doesn’t really matter what your values are.

There are no ‘right’ or ‘wrong’ values.

You either have them or you don’t.

And the IMPORTANT thing is that you take the time to define them.

That’s why defining CVMVGP (Core Values, Mission, Vision, Goals, Projects)  is the first lesson we take all our clients through when we work together.

We walk our clients through this exercise in the context of defining it for their business, but we also strongly recommend everyone complete this same exercise for themselves and their personal life.

I’m quite sure that many don’t take it further with completing that next step, but they (and you) really should.

I like to call values “the stars in the sky you use to steer the ship by.”

Because when I think of them they remind me of the great stories back in the day when the famous explorers set sail from Europe to discover new worlds (including the Americas) with nothing but a compass and celestial navigation.

All of this during a time when people actually thought the world was flat… and that you’d sail right off the end of it.

The night sky is filled with stars.

But YOU get to choose which ones you want to focus on and use in navigating your course.

And then as you’re traveling through life, when you’re not quite sure which way to go… wondering if you’re ‘on course’ or not… you can look up in the night sky… find those stars… and make adjustments based on where you are in relation to them.

When you have them… no matter where you find yourself in business or in life… or how lost or confused you may feel… you can ALWAYS look up in the sky and find your way.

Ok, we’re not done yet.

We’re just getting started here.

So take a deep breath and grab a drink of water if you need to.

Because now that we’re making some headway, we need to continue going further here…

Living A Life Congruent With Your Values

So once you’ve defined your values… living a life congruent with them allows us to feel good about ourselves and the things we do.

When we make decisions that keep us on track with living our values we feel good.

When we make decisions or act in a way that is incongruent with our values we feel bad.

This “voice” inside of you, that is always talking (giving you feedback when you listen to it), is your “moral compass”.

And everybody has one… expect sociopaths.

But we’re going to leave those nut jobs out of the conversation for right now.

So back to Bob…

Bob’s “moral compass” is telling him right now that he’s a jerk if he raises prices.

Because one of his values is INTEGRITY and his compass is telling him that if he goes against his word he is “steering the ship” in the opposite direction of his values.

And that doesn’t feel so good.

So where does that leave us?

Well I think there is nothing wrong with Bob’s “compass”.

That’s working just fine.

But I’ll submit to you, and Bob, that we need to revisit how he’s looking up at those stars in the sky.

Because I think we’ve got a bit of haze there which is clouding his vision… and getting better clarity on those stars… on a much deeper level will do him.. and you… a whole lot of good right now.

Onto the next…

Valuing YOURSELF

To me my PERSONAL VALUES have to come before anything I do in business.

I VALUE my own health and well being, including both my physical and financial health, first and foremost.

I also VALUE my time, and achievement of my own personal life and business goals.

And I VALUE being there for my immediate family and friends that count on me for support.

ALL WHICH ARE WAY HIGHER UP ON MY LIST OF RESPONSIBILITIES BEFORE ANYTHING TO DO WITH ‘CLIENTS’.

So I don’t care what I said to who or when I said it, if things weren’t working in my life, I was broke and unhappy, unable to reach my personal financial goals or provide the things I wanted to for my family…

… and I gotta make a choice between going nowhere and “suffering for another 6-12 months” or shutting the business down…

…I would shut that shit down and go work at Micky D’s FASTER than you can say “would you like to fries with that?”!

Seriously.

I have no problem blowing it all up and walking away.

It’s not that important.

Taking care of MYSELF and MY FRIENDS & FAMILY are way more important to me than my business or clients.

I’ll share with you that just few years ago in life, as a younger man, I didn’t really get this or have it straight.

I’ve tried things the other way around and I’ll tell you what… it don’t work.

And I continue to push it pretty hard with attacking business goals, so I do “ride the edge” of this line.

But make no mistake, I know what my values are and have my priorities straight at this point.

I’ve had to do some “learning” to grow and evolve in getting here, but that’s all part of the process.

We’re all challenged to continue living by our values each and every day.

And everything works… and feels… a whole lot better when you get this stuff straight.

So I challenge you to do your own work to get to this right for yourself.

And I think it all starts with prioritizing the people and responsibilities you have in life in the following order:

YOU are the foundation of everything. And therefore you must put YOURSELF first and then the rest of the people in your life in the following order. When you get this right everything works. When something is off, I believe you can almost always trace it back to this hierarchy being "out of whack".

See right now Bob’s pyramid doesn’t look like that.

It looks more like this:

The foundation is broken. Current business structure and too much client focus, while ignoring Bob's own health and success, and the responsibilities he has to himself first, his family and friends who count on him second, has left him with a very WEAK foundation. Could he continue like this? I guess so... But all you need is the slightest push to send the whole thing crashing down. Hence I THINK the very real urgency in addressing this now... not later.

This is a very weak position and foundation.

And he… AND YOU… have got to get it straight.

Because when you put YOURSELF and YOUR FAMILY first… you really don’t care as much about what happens at the business or client level.

You’ve got your priorities in order.

And you do what needs to be done, when it needs to be done, in your business.

Integrity with Yourself

We’re talking about integrity, so let’s flush that out.

Integrity is defined as being consistent in our words and actions. Living a life that is congruent with our values.

So I get that Bob said “X” and he doesn’t want to then do “Y”.

But what about integrity with taking care of his own health?

Making decisions in his business and life that allow him to be more “healthy”… have less stress in his life… and have better financial health?

Let alone have the resources needed to invest in hiring more staff so he can take some time off… and then reinvesting in upgrading to a better facility when he chooses to… with some showers, working A/C, more equipment, etc.

You see the DECISION to raise price really is tied to both Bob’s best interest AND the best interest of continuing to improve the level of service he provides to his clients.

AND THE ONLY ONE HOLDING THAT BACK FROM HAPPENING RIGHT NOW IS BOB.

So when things aren’t working we need to step back and make sure that the decisions and commitments we make are in the right order and hierarchy of responsibilities we have in our lives.

And when then aren’t… have the courage to make adjustments as required.

When you move in the direction of realigning your priorities and responsibilities in the right order IT IS ALWAYS THE RIGHT THING TO DO.

Regardless of your fears about how things may ‘flush out’ in the short term.

Those are simply called ‘adjustments’ and you allow them to happen.

They’ll work themselves out.

Usually pretty quickly and without much pain at all.

In my experience, we always build these things up to a way bigger deal in our mind than they actually end up being.

Once you get into it, it ain’t so bad.

And a few weeks later… you… and everyone else… has forgotten about the whole damn thing anyway.

Because really, there are a lot bigger things in life to worry about and deal with than investing an extra $100-200/month in your health & fitness program.

As much as you may think this is some kinda huge drama ordeal, it really isn’t all that important to lose endless hours of sleep over.

But I also think there is one more piece we also need to touch on here…

Boundaries With Client Relationships

I think one of the big reasons people struggle with raising price on clients (maybe Bob included, not sure) is that people are afraid because they are ‘friends with their clients’ and ‘don’t want to upset or offend their friends’.

I addressed this in the last post, but probably good we talk a little more about it here now.

A frequent quote I use around our office is “Clients will come and go”.

And they will.

Don’t get caught up in getting too sucked into the relationship you have with your clients where you let that relationship hold you back from making appropriate adjustments in your business as they need to be made.

Or allow a negative interaction with a client affect yourself and your day.

Client’s issues are THEIR issues.

Not yours.

Your responsibility is to take care of yourself.

Own your side of the street.

And take care of your team.

If a client has some major hangup or problem, that’s THEIR PROBLEM.

Don’t accept ownership of their shit or issues.

And sometimes IT IS TIME FOR THEM TO GO.

Very few client relationships will ever last a lifetime.

As a coach and service provider clients will come to your business for certain reasons, at certain times in their life, and that’s all good.

You work with them, you serve them the best you can, hopefully delivering as much value to their lives as you can.

But have some boundaries in your relationships.

Listen, I care very much about our clients and all our subscribers.

My company’s mission is to “Empower entrepreneurs to achieve their goals and fulfill their dreams”.

And my team and I are all here to serve you the best we can.

But I’m not living my life for you.

My life is for me.

Yes, there are a few clients we’ve had for several years now that I always look forward to seeing and spending time with at events, etc.

And there are a couple that I would call “friends” today.

But for the most part, I would submit to you that it’s important for you to be “friendly, but not friends” with your clients.

You and I can’t do the best job we need to do as business owners and coaches when there is not a healthy boundary in the relationship you have with a client.

I know a lot of people want to go on and on about how “they love their clients, their clients love them” like it’s some big emotional Woodstock festival of free love where we all hug each other every day and sing ‘Kum Ba Yah’ together.

But that’s not healthy.

Go try to train your friends and family members and let me know how well that works out for you.

Not too well right?

I know that as coaches we’ve all made VERY significant impacts on the lives of many, many clients we’ve worked with.

And it gets emotional to talk and think about.

For us and for them.

No doubt.

But for you and I to do what we do best, we need to have healthy boundaries in client relationships.

If you need a hug, go get one from a friend or family member.

Don’t seek emotional fulfillment in your life from your clients and base your self-esteem on “how much they love you today.”

That’s insane.

My Recommendations For Bob (and You)

Alright, we’ve talked about a lot here today.

This was a big therapy session.

And it’s going to take some time to digest for sure.

So here are my recommendations to Bob (and you):

1. Go for a walk and spend some “alone time” thinking about all this stuff.

The business changes are simple to implement and execute here. But they can only be done (sustainably) on the foundation of an evolution of your belief system, clarification of your values, and adjusting the way you prioritize and make decisions around the order of responsibilities you have in your life.

The BIGGER and much more IMPORTANT life lesson and personal growth opportunity here is in recognizing that you are, in fact, VERY valuable my friend.

And you DESERVE to be compensated accordingly.

You DESERVE to enjoy all the success, happiness, and freedom that is yours for the taking here.

NOT in 6 or 12 months from today.

But NOW.

And YOU are the ONLY one holding yourself back from enjoying all that good stuff RIGHT NOW.

2. Clarify your VALUES

Think about what you’ve defined as your values.

And if they include health as a value, then think about honoring INTEGRITY with yourself (including your own health and well being) before you stretch things out to include INTEGRITY regarding words you’ve spoken to anyone else.

Because if you don’t, you will wake up with a big hangover one day… feeling absolutely miserable… wondering “what the hell happened to my life these last few years?”

You don’t want to be dealing with that kind of regret.

3. Reset and recalibrate your “hierarchy of responsibility”.

Prioritize your responsibilities and the people in your life in the following order:

1. YOU
2. YOUR FRIENDS & FAMILY
3. YOUR TEAM
4. YOUR CLIENTS

IN THAT ORDER.

When the shit is hitting the fan, and everything around you seems crazy, check in on your foundation. Make sure that is solid.

It’s STRENGTH will determine how much you can offer to the world and the energy you have to lead the growth of your organization.

4. Raise your rates

It’s time to raise rates.

Write your clients a letter about it, including a new rate sheet with the letter, and set a deadline for implementation.

The clients that don’t value your services enough to invest in the increase let go of.

You’ll market to get new ones and build a better core community in the long run (as several folks have shared in their comments on the last post).

Bob’s never done any marketing for his business. Ever.

The only people he’s got, have come from “word of mouth”… which doesn’t even include a structured referral campaign.

So what he doesn’t know yet, is that when you learn and apply some marketing skills and systems to your business YOU CAN ALWAYS FIND ANOTHER CLIENT OR GO ATTRACT ONES ALREADY IN THE MARKETPLACE TO COME BUY FROM YOU INSTEAD OF BUYING FROM A COMPETITOR.

The key to raising rates though, is being VERY clear about the good ‘reasons why’ you are increasing price.

And just being upfront and honest about acknowledging to the clients that you made a very poor decision and commitment, that needs to now be adjusted in order for the business to grow and you to continue improving the level of service you provide to them.

I’ve started writing the letter for you.

And you can download it by clicking here.

Take a look and review it.

I’ve included my notes in the file for personalization.

Any existing clients of ours that ALSO need to raise rates, I encourage you to personalize this letter then post it in the class forums for peer review by your fellow EA and VIP members.

Might as well all work together and support each other in getting this done pronto.

4. Get clarity on your numbers and review expenses

As several folks correctly pointed out in their comments to the last post, these numbers don’t add up.

Bob really has no idea about his numbers.

So I don’t think we’re even talking accurately about the real numbers on business expenses… and maybe not even the actual revenue for that matter either.

So this needs some time spent on greater analysis.

The simple way to do it is to go download or request the last 3 months bank statements from your bank.

Then list out and categorize all the debits by category/vendor, by month.

Then add up all 3 months and divide by 3 to get the average expense for each category/vendor so we can review that and see what the heck is really going on here.

A full audit should also be done on the revenue side with whatever client billing system is being used.

I just spoke with another one of our clients on Friday, also a Crossfit Affiliate, who just completed a full billing audit and found thousands of dollars in lost revenue from incorrect billing going on the last couple years.

So I’m sure in depth revenue on the billing/revenue side would also uncover items for clean up here.

5. Work on better positioning your business as the leader in the marketplace.

I love Crossfit-type programming and workouts.

I think what Coach Glassman has done over the last several years is truly remarkable.

I do the workouts myself, even hold a Crossfit Level I certification, and I’m looking forward to being at the Games this year and seeing my good friend James Fitzgerald AKA OPT, who won the first Crossfit Games several year ago, compete in the competition.

But as several affiliates who posted to our blog have pointed out, saturation in the marketplace and lack of “unique” positioning for affiliates who are offering great programming and transforming lives… as compared with someone who just sat through a weekend course and paid a $1,000… is a real problem.

Hence why Crossfit headquarters has continued to work on their evolution and have their certification accredited to include some stricter requirements now.

But still, you’ve got the general public that is NOT educated, hears “Crossfit”, and calls around town to 10 places promoting Crossfit classes… at all different price points… and you’ve got the perception that everyone is the same and it’s just a commodity… so might as well go with the ‘cheapest’ option if we’re buying widgets here.

We all know there are GREAT coaches out there delivering AMAZING results to their clients… and then there are the guys just putting a workout on the board and clicking a stopwatch.

And their is a BIG difference between the two.

So the GREAT providers are going to need to continue finding ways to advance their positioning in the marketplace and PROVE THEIR CASE of why they are worth more and a prospect should choose to buy from them over someone else.

That means continuing to improve the level of service you provide and results you deliver.

In addition to added value you create in building the relationships with your community.

And a whole lot more.

I do think “Joe’s Gym” who also happens to be a Crossfit Affiliate is better positioned to do this than “Crossfit ____” in terms of a business name and branding in the local marketplace.

But that’s another topic of conversation for another time.

Some Additional Thoughts

This post has gotten a tremendous amount of people engaged in discussion.

And I’m glad we’re all having a very REAL and healthy conversation about important issues here.

Because if I have to read or write another email/blog post on “X # tips for growing your biz”… or some new “tool”… I’m about to the point now where I’m ready to pick up a revolver and blow my freakin’ brains out!

So from my point of view, this is great.

And I want to thank everyone whose posted comments to these posts (over 60 on the last one as I write this) and participated in the conversation.

Now I don’t want to get off track here, but do want to address some comments made to the last post that I think are relevant to the conversation today.

A comment was made by one of our VIP clients about his using some marketing tools that didn’t work for him… and as a result he thinks this is the ‘reason why’ he has lost some clients.

And then another comment by an EVOLUTION ACCELERATOR client, not a VIP, who said he likes our stuff, has learned a ton and has great success with our systems, but was concerned about some of the content we provide in done-for-you marketing tools being too ‘salesy’.

Then both these points were countered by several other VIP clients… including multiple Crossfit affiliate owners who are also clients… about how the systems and tools we provide have worked great for them… and business is up all across the board… but of course they’ve accepted their responsibility to personalize any marketing tool and make sure it’s congruent with their voice/message before sending it out the door.

Eric and I have ALWAYS make this recommendation to everyone with all the done-for-you tools we provide.

I responded to the post and offered the client to schedule a call with me to further discuss what he’s doing, results he’s getting, and where HE can continue to improve and how WE may or may not be able to help him.

I believe he emailed in Friday and connected with Lauren for scheduling a call in the next week or so.

Listen, I’m more than comfortable to have a very open conversation in public or private anytime about any of our programs with anyone.

We’ve got a PROVEN track record of unbelievable success with thousands of clients for over 5 years running now.

But I also accept the fact that neither you nor I will EVER keep 100% of the clients we work with happy 100% of the time.

Try inviting several hundred people over for a party at your house, and seeing if everyone is happy and getting along the entire night.

Ain’t gonna happen.

Then pass around a microphone and see what people have to say after they’re a couple drinks into the night.

Fun stuff for sure.

But this is all good and part of the good times!

The bottom line is if YOU’RE not where you want to be right now then it’s always YOUR responsibility to make changes as required.

Not my responsibility.

YOURS.

Everything works, when YOU take 100% responsibility for your own success.

So… as I’ve said before in this post.. own your shit!

Alright, that’s it for today.

I’m out.

Sean

P.S. If you follow the recommendations shared in this post, and you DO raise your rates using the tool provided, I’d appreciate you sharing your results and experience with us here. Let’s keep this conversation going…

We have 2 health club owners in our VIP program who are KILLING IT.

They are both champion bodybuilders, but they are anything but “meatheads”.

They are two of the hardest working, most dedicated guys I know.

Over the last 2 years Jeff & Vern Gauthier, owners of Fit For You Health Club in Traverse City, MI have literally ‘transformed’ their business (and their lives) from overworked and stressed-out trainers, to serious fitness marketers… driving leads and sales like crazy for their business.

And they’re also tremendous leaders, who’ve built a heck of a team that now gives them a whole lot of freedom to get away from the business and do the things they like to do.

Like ride motorcycles.

Check out their story in the video above.

It’s a great one.

To your success,
Sean

P.S. Finally we’ve got a couple new hires coming on board here in the next couple weeks to support our continued growth. But until they’re trained and up to speed, I’m still helping out on the frontlines with doing some diagnostic calls. So if you request a call with us by filling out the webform here, you’ve got a chance to get on the phone with me personally to answer questions about your business and our programs.

Please just be patient in getting a call scheduled. We’re booked out for 2-3 weeks in advance, but continuing to juggle things to open up more call slots where we can!

P.P.S. We’re getting ready to re-open membership in our exclusive VIP program in just a couple weeks. Stay tuned for more info…