Apologies for getting the newsletter out late. I just wrapped up an 18 hour solo drive from NJ to FL.
The highlight of the trip:
(If you know, you know.)
Here’s what I have for you this week.
How to close more sales
Lead response time (LRT) is one of the most important, but least measured sales metrics.
LRT is simply the time it takes for someone from your team to contact a lead.
Most biz owners underestimate how much a slow lead response time hurts sales.
To prove my point, here are some stats for you:
- The average LRT for a web lead is 17 hours.
- Less than 25% of businesses call web leads
- Businesses with a response time of < 1 hour are almost 7x more likely to speak with a decision-maker
- Businesses are 10x more likely to connect with a lead if they respond in < 5m versus 10+ minutes
This is crazy considering that the company that responds first wins the sales about 50% of the time.
When a buyer is ready to make a purchase decision, speed is everything. Large businesses in hyper-competitive industries understand this, and if you’ve ever put your phone number into a car dealer or insurance broker’s website, you understand it too.
If you’re in charge of revenue generation for your business, your goal should be to call leads in < 10 minutes. The only thing that should take precedence over nurturing a lead is a sales call.
When I was in the gym business, I would secret shop my gyms to test our LRT. Nothing drove me up the wall more than when a manager would take 1 hour + to respond to my inquiry.
It’s crazy to think about how many sales we lost and how much ad money we wasted due to slow LRT.
The Peter Drucker adage “what gets measured, gets managed” holds true with LRT.
If you’re not auditing your response time, chances are it’s embarrassingly slow.
And if you’ve never secret shopped your own business, I recommend running a test this week to see how long it takes for your team to get back to you.
Let me know how it goes.
Planet Fitness is printing money
“Don’t be the cheapest, be the best” is common biz advice.
This implies that being cheap doesn’t equate to being valuable. That’s not always true.
Being the low cost leader is tried and true business strategy and no one is doing it better in the gym industry than Planet Fitness.
With a market cap $6.37B they’re the most valuable gym chain in the world.
This week they reported revenues of $968M and adjusted EBITDA of $93M for the last 12 months. Management said there are 16.6 million members across 2,353 clubs meaning the average member pays just $58 a year.
They’re no longer accepting franchise applications and they’re actively buying back existing franchisees. Management sees more value in owning the businesses versus franchising them.
Being the low cost leader is a defensible position. You’d have to burn a lot of money before you could provide more value than Planet Fitness for a cheaper price AND make a profit.
Just check out what $20/mo gets you:
@ingzthinks What my $20 gets me #planetfitness #balleronabudget #fitlife #selfcaretiktok #gymtiktok #cheapthrills #budgetingtips #DontSweatIt #gymlife ♬ Astronaut In The Ocean – Masked Wolf
Until next week,