What People Pay For Now Ep 195

In the latest Gym Secrets podcast, the host emphasizes adapting business strategies to thrive during economic downturns. He advocates shifting from a prosperity-focused message to one of preservation, catering to consumers' heightened value sensitivity. By offering more for the same price and focusing on operational efficiency, businesses can maintain customer loyalty and position themselves for growth post-recession. The host also highlights the importance of personal attention in service delivery, particularly in fitness, where calling out individuals by name during remote workouts can enhance the perceived value of the service. Additionally, he suggests leveraging free and discounted offers, backed by a solid monetization strategy, to attract and retain customers in a budget-conscious market.

• In times of economic downturn, businesses need to adapt their messaging to align with customer’s shifted priorities.
• The focus should move from promoting aspirational transformations to preserving what customers already have.
• This shift in messaging can lead to stronger buying behavior when done correctly.
• Businesses that fail to adapt may struggle as consumer behavior changes.

"And so you have to make sure that your messaging, in terms of how you're communicating clients, is no longer about the opportunity of necessarily crazy before and after transformation, et cetera, but more so preserving what they have already."

This quote emphasizes the need to adjust marketing strategies to focus on preservation rather than transformation, which resonates more with consumers during uncertain economic times.

• Economic recessions result in consumers becoming more budget-conscious.
• They still spend money but prioritize getting deals, bargains, and discounts.
• Marketing and offers should reflect this by presenting the best value rather than premium offers.
• Large companies like Walmart have historically thrived by adapting to this change in consumer behavior.

"And it happens because people were now super budget conscious. It didn't mean they didn't spend money. They just wanted to make sure they were getting a deal."

This quote highlights the importance of understanding that consumers still make purchases during a recession, but they are more focused on the value and savings they receive.

• Offering more for the same price can be an effective strategy to maintain and attract customers.
• Businesses should consider how to provide the same value at a lower operational cost.
• Efficiency in operations positions a business to emerge stronger post-recession.
• Businesses like Amazon focus on improving value to charge less, as a long-term strategy for success.

"So we're going to give you more than we ever did before for the same price."

This quote suggests a strategy for businesses to retain customers by increasing the value of their offerings without increasing the price, which can be particularly effective during a recession.

"Jeff Bezos said there are some businesses that are structured to provide value so that they can charge as much as possible. And there are other businesses that seek to continue to improve so they can charge as little as possible. He said, we are the latter."

This quote reflects Amazon's strategy of focusing on operational efficiency and continuous improvement to offer lower prices, which is a sustainable approach in both recessionary and normal economic conditions.

• The importance of structuring operations for maximum efficiency.
• Offering more value to customers as a key strategy.
• Gym Launch's internal theme of "more for the same" as a guiding principle.
• The focus on creating products, packaging, and pricing around this theme.

"But the fact of the matter still remains is that right now you have to look at your operations and think, how can I structure this so that I can be as operationally efficient as possible so that I can provide as much value as possible to the people that I have, right?"

This quote emphasizes the need for businesses to reevaluate their operational strategies to maximize efficiency and value for their customers, which is a central focus for Gym Launch.

• The shift in consumer preference towards savings and preservation.
• In the current market, offers that emphasize savings have a higher conversion rate.
• The typical response rate for prosperity is usually double that of preservation, but this has changed to being four times higher for preservation.
• The necessity of focusing marketing on discounts, bargains, and deals due to the change in buyer dynamics.

"So typically, prosperity compared to preservation is two to one in terms of response rates on advertisements, right. That's why most people advertise that way for most of the time. But when it flips, it becomes four to one towards preservation compared to growth."

This quote highlights the significant change in consumer behavior, with a current preference for preservation overgrowth, and the resultant impact this has on marketing strategies and advertisement response rates.

• The concept that customers are paying for attention rather than just a service or product.
• In the context of live workouts, the focus should be on giving attention to individuals rather than the exercise itself.
• The importance of personal engagement and acknowledgment during remote workout sessions.
• Using names and personalized encouragement as a method to provide attention and recognition.

"That is what they want. They want attention. They want you to pay attention to them."

This quote captures the essence of what customers are seeking—personal attention. It underscores the importance of making customers feel seen and attended to, especially in service-oriented businesses like fitness.

• Acknowledging the presence of customers by name during live workouts.
• The psychological impact of being recognized and credited for participation.
• The expectation of personal attention as a driving factor for customer loyalty.
• The role of personal engagement in creating a sense of accountability and community among customers.

"And so the thing is, as we say, that people know that someone is checking on the fact that they're there, people want credit for showing up to the workout."

This quote explains the psychological need for recognition and how it motivates customers to participate and remain loyal. It also illustrates the importance of personal engagement in fostering a sense of community and accountability.

• The speaker's commitment to helping entrepreneurs without running ads or selling products.
• The request for assistance in spreading the word to support the entrepreneurial community.
• The goal of helping entrepreneurs succeed, support their families, improve products, and enhance customer and employee experiences.

"And so the only ask that I can ever have of you guys is that you help me spread the word so we can help more entrepreneurs make more money, feed their families, make better products, and have better experiences for their employees and customers."

This quote is a call to action for listeners to help in the dissemination of the speaker's message, with the aim of providing support to the wider entrepreneurial community. It reflects the speaker's commitment to fostering success and improvement within the entrepreneurial ecosystem.

• Emphasizing the importance of calling out customers by name during remote workouts to provide a sense of value and personalization.
• Highlighting the competitive advantage of service-based facilities over fitness apps due to personalized attention.
• The significance of giving feedback, form corrections, and motivation to clients in a remote setting to keep them engaged.
• The need for fitness services to adapt their business models to maintain customer engagement and value in a remote environment.

"And you have to be able to call people out by name, give them feedback in the remote setting, in the live workout, so they feel like they're getting continued value."

This quote underlines the necessity of direct engagement with clients during remote workouts to ensure they feel valued and receive a service that fitness apps cannot replicate.

"Everyone loves to hear their own name."

This quote speaks to the psychological aspect of personalization, where hearing one's own name can increase engagement and satisfaction with the service.

"They're going to pay for attention. That's what they want..."

This quote identifies attention as a key commodity in the fitness industry, especially in a remote setting where personal interaction is limited.

• Discusses the need for fitness businesses to rethink their operational and pricing strategies to offer remote services effectively.
• Suggests that businesses can still provide high value at a lower cost by implementing efficient systems.
• Encourages maintaining a value discrepancy between services offered remotely and those that were provided in-person.

"What would I do in the old setting for 500, $600,000 a month, right. And of those things that I would do for that value that I would normally charge, how can I still provide those and structure my business from an operational standpoint, how can I put systems in place so that I can do that at $200 a month or $300 a month."

This quote addresses the need for businesses to consider how they can translate the value of their in-person services to a remote model while adjusting their pricing to reflect the new delivery method.

• Acknowledges the challenges of change, especially in the context of adapting to a remote business environment.
• Notes that entrepreneurs may be better equipped to handle change and even find excitement in the opportunity to innovate.
• Stresses the importance of effective communication when presenting changes to both team members and customers, emphasizing the increased value and benefits.

"Most people don't like change entrepreneurs. We tend to deal with change better."

This quote recognizes the adaptability of entrepreneurs, suggesting they are more comfortable with change and may even thrive in changing circumstances.

"Making sure that when you're communicating change to them, talking about how it's going to be more valuable than what you did before and how they're going to get a better deal and how it's discounted."

This quote emphasizes the importance of framing changes in a positive light, focusing on the added value and benefits to the customer to facilitate acceptance and maintain loyalty.

• Discusses the pricing strategy of providing remote one-on-one fitness services at a lower cost compared to previous in-person rates.
• Highlights the concept of value discrepancy, where customers perceive they are getting more for less, which can be a strong selling point.
• Indicates that by maintaining this perceived value, businesses can retain customers and remain competitive.

"So if you just keep your membership, you're getting what we used to sell for $400 or $500 a month, for only 169 or $200 a month."

This quote explains the new pricing strategy, where remote services are offered at a significantly lower price than the traditional in-person sessions, creating a sense of increased value for the customer.

• Current economic conditions have increased the value of the dollar, leading consumers to expect more for their money.
• The economic shift necessitates adjustments in business strategies, particularly in marketing and pricing.
• Businesses should avoid selling premium-priced products unless targeting very wealthy individuals.

And so right now people value things less because the dollars are worth more every dollar, two people now is worth more to them.

This quote explains the increased purchasing power of the dollar, implying that consumers are more careful with their spending and expect greater value.

• General population (gen pop) is more responsive to free and discount offers.
• These types of offers should be the focus for at least the next six months.
• Consumer buying behavior will not change quickly even if the coronavirus situation improves.

But if you're talking gen pop, which most of us are, it's going to be free and discount offers.

This quote suggests that businesses should focus on offers that appeal to the general population, which currently favors free and discounted products or services.

• There are numerous methods to monetize free or discount offers.
• Examples include free plus penalty, free with deposit, free with commitment, limited free offers, and free bribe offers.
• The same monetization strategies can be applied to discount offers, such as discounting the first month and having optional one-time fees.

There's a zillion ways to make money off free offers and discount offers.

This quote emphasizes the variety of strategies available to businesses to generate revenue from free or discount offers.

• Advertising costs have dropped significantly, with impressions being 60% off.
• Google and Facebook are projected to lose $44 billion in advertising revenue due to the coronavirus.
• The auction-based system of advertising has become more affordable, providing opportunities for businesses.

And as I said earlier, impressions are 60% off. Advertising is off. Google and Facebook are going to lose 44 billion this year in advertising because of corona.

This quote highlights the substantial decrease in advertising costs, presenting a chance for businesses to capitalize on cheaper customer acquisition.

• Recessions force businesses to become more operationally efficient and profitable.
• Businesses that adapt and survive become more valuable to consumers and have the potential to grow more post-recession.
• Entrepreneurs should view the current challenges as an opportunity to improve their business models.

More efficient, potentially more profitable, and more valuable to consumers, which is exactly what happens in recessions.

This quote explains that economic downturns can lead to a stronger, more efficient business for those who manage to adapt and survive.

• The speaker is actively changing marketing approaches and structuring programs and offerings to adapt to the current economic climate.
• The goal is to maintain or increase customer spending by providing more value.
• The speaker encourages businesses to be proactive and self-reliant during these times.

That is how I change my marketing, which is what we're doing for our people right now. And how I would structure the actual programs and offerings and pricing on the back end in order to get people to pay now just as much as they were before.

This quote describes the speaker's approach to adjusting marketing and business strategies to ensure continued customer spending despite economic challenges.