Alex Hormozi: How I became #1 in a "saturated" industry in my 20s...

The video is about how Alex Hormozi solved the problem of churn in the gym industry by gathering information from the top 2% of gym owners who had achieved less than 3% monthly churn for six straight months.

This video by Alex Hormozi was published on Nov 10, 2021.
Video length: 12:43.

In this video, Alex Hormozi shares his story of how he solved the churn problem in the gym industry and how this can be applied to any service-based business with a recurring revenue model.

He explains how he gathered a group of gym owners who had achieved less than 3% monthly churn for six straight months and learned from them about their strategies to combat churn.

He emphasizes the importance of tracking metrics and having multiple strategies to retain customers.

• Alex Hormozi is an entrepreneur, investor, and CEO of Acquisition.com.
• He grew a chain of gyms in California using cash flow from the growth of the facilities.
• Gym owners were struggling with churn, which made their businesses unsellable.
• Alex solved the problem of churn by gathering information from the top 2% of gym owners who had achieved less than 3% monthly churn for six straight months.
• He identified five things that these gyms were doing to maintain their members, including escalating non-consuming customers and having member events.
• They had accountability around consumption and exit interviews to collect data.
• They also had a community component that happened on a regular basis.

How I became #1 in a "saturated" industry in my 20s... - YouTube

Alex Hormozi's Background

• Alex Hormozi is an entrepreneur, investor, and CEO of Acquisition.com.
• He had a chain of gyms in California that he grew using cash flow from the growth of the facilities.
• He was very good at the marketing and selling process of getting people in the gyms and opening them at full capacity.
• He pivoted to licensing that acquisition system to other gym owners across the U.S.
• He did turnarounds and filled other people's gyms up for a percentage of the revenue that he was bringing in.

The Problem of Churn in the Gym Industry

• Gym owners were bringing people in the door but couldn't retain them for a long time.
• They couldn't keep any of their customers for a long time.
• This was for any type of service-based business that has any kind of recurring revenue model whatsoever.
• The industry average for monthly churn was about nine percent.
• This makes the business unsellable.

Solving the Problem of Churn

• Alex Hormozi put a poll in the group and invited gym owners who had achieved less than three percent monthly churn for six straight months to a round table.
• 20 people out of the thousands in the community at the time met this qualification.
• He had them all together on a call and asked them to tell him every single thing that they do to provide excellent value or a customer surplus to their members.
• He wrote down every single thing that every one of them had.
• He looked through all the notes and re-categorized them.

How I became #1 in a "saturated" industry in my 20s... - YouTube

The Solution to Churn

• All of the gym owners tracked and focused on the metric, which 95% of people don't even do.
• All of them had lots of different strategies to combat churn.
• They knew that churn was a problem because it costs a lot of money to acquire new customers.
• They had a lot of different strategies to combat churn, such as tracking metrics, providing excellent value, and having a customer surplus.
• They had a lot of different strategies to combat churn, such as tracking metrics, providing excellent value, and having a customer surplus.

Identifying the Problem

• Alex Hormozi solved the problem of churn in the gym industry.
• He gathered information from the top 2% of gym owners who had achieved less than 3% monthly churn for six straight months.
• He calculated the lifetime value (LTV) of a customer for these gyms.
• The gyms that conquered their churn made three times more revenue per customer than everyone else.
• They also made a lot more profit per customer.

Identifying the Solutions

• Alex consolidated all the things that the gyms were doing into buckets.
• He identified the things that every single one of them was doing.
• He found that there were five things that they were all doing to maintain their members.
• The first thing was to escalate customers who were not consuming the service.
• The second thing was to have exit interviews to collect data and to resell existing customers.

Community Building

• The third thing was that they all did member events.
• They had some sort of community component that happened on a regular basis.
• The extent to which they had it was different, but doing it on a quarterly basis usually works.
• The fourth thing was that they had handwritten cards that they would send out on a regular basis to each of the people in their community.
• The cards had to be personalized and remind them of the victories that are happening.

Personalization and Accountability

• The fifth thing was not remembered, but the point of the story is the process of solving the problem.
• The handwritten cards had to be personalized and remind them of the victories that are happening.
• They had accountability around consumption and exit interviews to collect data.
• They also had a community component that happened on a regular basis.
• The gyms that conquered their churn made three times more revenue per customer than everyone else.

The Process of Solving Complex Problems

• Consult with experts in the space to gather information and solutions to the problem.
• Interview the smartest people in the community and tabulate their answers.
• Weigh the answers to determine which ones come up most frequently.
• Consolidate the answers to determine the fewest number of things that everyone is doing to solve the problem.
• Contact customers on a personal basis every two weeks to check in on them as humans.
• Systematize, but do not automate, communication with customers to maintain human touch and goodwill.

Watch the video on YouTube:
How I became #1 in a "saturated" industry in my 20s... - YouTube