Quantum Leap Club Winner:
January 2008
From Eric: This month our featured QL’er is Gold Plus Member Doug Krueger. I first met Doug at Phil Kaplan’s Forum in 2005. He told me about his success using my Lance Armstrong LiveStrong letter and how he built what has become a multi-location studio business from nothing, selling out of the back of his car. Here’s Doug’s story...
NAME: Doug Krueger
BUSINESS: Peak Performance Personal Training
Location: Pewaukee and Hartland, WI
How Long In Business: Five Years
NPE Status: Gold Plus
WOW! What a year. Thanks to NPE, I’ve EXPLODED my business in 2007:
- 62% revenue growth
- Significant double digit NET PROFIT
- New client acquisition: Sept ‘07-22; Oct ‘07-15; Nov ‘07-12; Dec ‘07-7 (as of first week)
- Retention: 95% of clients stay with us OVER 12 months
All this after opening a new $150,000 studio (my second). Revenue growth and net profit margin would have been even better without all the additional start-up expenses from the second studio. But I’m not complaining, in the first 4 days of December alone, we did $20,000 in revenue.
Let me tell you about our marketing.
Joint Ventures: I’m leveraging a $6 million salon/spa with 8,000 clients by sending out gifts of a fitness consultation and private session to their clients, plus they get a $50 spa gift card when they purchase our Peak program. I’m leveraging a 20-location dry cleaner by mailing to his GOLD clients (1,200 of them) with a gift of one week free personal training.
Direct Mail: I consistently3 mail to a list of 10,000 residents with $400K home value within a 5 mile radius of both studios. All my mail has offers. Results—the last two mailings brought in $30,000 each at a cost of just $3,500. Whoohoo.
Email: I send bi-weekly email promos to both my internal and external4 lists (2,000 contacts total) which bring me 1-2 new clients or referrals per month.
Mistakes I made in the past that have since been rectified:
1) No consistent marketing— we’d throw money at the wall and pray to God it stuck. Didn’t track any of it. NOW I have a monthly marketing budget5 of $5K for direct mail, email, radio (limited) and space ads/inserts6. I’m planning to invest in Infusion CRM/database management/marketing in 2008 to automate everything!2) No sales process, trainers handling sales... a complete disaster. Close rate was a measly 50% (on a good day) with an average ticket of just $720. NOW AUTO-CLOSER™ is locked in and we’re rockin’ it. Pre-screening prospects, set-in-stone consult days/times, no more free sessions7. My close rate is now holding steady at 90% with average ticket sale of $22508 (not counting nutrition sales). We now sell from a position of power!9 We actually have a waiting list for our primetime spots. We’re also going to bundling Shaklee’s Vitalizer with all packages (3-6-12 month training), then up-sell the weight loss products during the nutrition consultation. Thanks Sean!
3) Poor management— I wasn’t managing anything. Trainers sucked, systems sucked and my business sucked. Now we have systemized everything. Checklist for consult, demo session, eval session, nutrition consult, client management, staff training and reviews. I’ve also hired a bookkeeper who does ALL my QB entering, pays bills (I sign checks), meets with me monthly to review/analyze P&L’s, budgets, balance statements and forecast for the next month10. This is in addition to my quarterly meeting with my CPA for tax planning and deeper analysis of the numbers.
I walked into my bank last week (I called them to set the meeting) and came armed with report after report: P&L, Balance Sheet, Trained Sessions comparisons 2006 vs. 2007, Average Trained session revenue (this number is more important than total number of sessions), Average revenue per visit, client renewal and retention numbers, etc. They were blown away!11 They said whatever I need in 2008, they’ll support me. Oh, they were also so impressed they want me to consult with another one of their clients... and they’ll pay me!!!
You guys better feature me in an advertisement and let me in Platinum! :)
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