Filtering Niches: Deciding who to work with...
In this monologue, the speaker argues that deliberately choosing which client or employee types to work with—"filtering niches"—is a strategic decision for gym owners and small‑business operators. He outlines the advantages of selective client intake, such as cultural fit, higher retention, longer engagement, higher per‑client revenue, and greater staff satisfaction. He also acknowledges downsides, including missed market opportunities, higher advertising and screening costs, and the risk of alienating potential customers. The talk expands the concept to hiring, illustrating how a bad hire can cause client loss, financial errors, and reputational damage. The core recommendation is to base filtering on observable behaviors rather than purely on income or demographic characteristics. By identifying intolerant, know‑it‑all, or disruptive behaviors early, owners can protect existing members, improve profitability, and maintain a healthier community. The speaker concludes with a reminder that profit is a choice and encourages courage and wisdom in making filtering decisions.
Chapters
Hey everyone, uh, today I wanted to talk about niching. We're big fans of finding niches because it's really profitable, because when you do that, you're really familiar with all of the struggles or things that your clients are probably going to be good at or struggling with, um, just because you're familiar with their niche. Uh, but I wanted— we When it comes to niching, sometimes also we hear phrases with the business owners will say, we don't want to work with those types of people. And I've seen comments and discussions on Facebook or other social media platforms on both sides of the argument, very passionate. Just, you know, some people think it's super disrespectful to even say something like that, and then others, you know, fight it or argue against it and say why it's a good thing. So I want to give you pros and cons of both. I think it is absolutely super important that you can identify people you don't want to work with. But I want to talk about the pros and cons and get to the way I think a business owner should filter that decision. So first thing, this idea of we don't want to work with those types of people, some of the benefits. It means that the clients you're bringing in are probably already culturally going to fit within what you offer as a business. So for like your gym members, it means that if you are leaving out those you don't want to work with, it means those you do want to work with are automatically going to feel more comfortable when they come in. They're probably going to get along a lot easier with the current members. So what that means is that your retention rate should should improve. Your length of engagement, that metric, leg, should be improving if you're filtering clients the right way, because new members are going to feel like they're part of the community almost immediately because they're all similar people. Your current members are also going to like it because we just like people who are like us. It's just how it works. That's why you Your friends are who your friends are, right? You guys get along because you have things in common. It's because on the flip side, if you don't filter and you bring in new people that really are people you shouldn't be working with, your new members or your current members are probably going to get upset and likely not like the direction the gym takes. You hear horror stories of some of these gyms who who used to run these, you know, bait and switch type of marketing ads and the types of people that would bring in. And, you know, it took after a couple months of all these bringing in, it took them like a year to recover from that bad decision of running that one ad, just because their current members are like, I don't want to come to work out if these are the types of people you're bringing in. Again, There could be good or bad from saying that. And maybe some of you are like, man, this is John, you're crossing the line here. Or you're— I'm getting close to an edge. We have to make judgments in business and we make judgments in life. There are people who you've met who you are not friends with because you made a judgment call that they're not someone that you want to have a friendship with. There's nothing wrong with that. We're all different and we can find people who have similarities to us. Um, anyway, I mean, there's a whole discussion we go on that which I'm not going to get into from a political standpoint, but I do think we have to be tolerant of other people. But as a business owner, you can still make the decision of who you want to bring in as a client and who you don't. Okay, another pro is that if they're the right fit, they're going to value what you do. You don't have to sell them on paying your fee because they already see the benefit. Um, there's also likelihood that your team is going to have a higher job satisfaction because they're working with people who appreciate what they do, who value the service your gym offers. And it's just much more enjoyable instead of having that curmudgeon come into the gym who's complaining the whole time, maybe wants to correct everybody, but they don't know how to do it right themselves. Uh, they talk over the coach. I mean, we, we know what some of these members are that we're like, this isn't going to be a good fit. So ultimately, if we have the right niche and we're filtering our clients the right way, the length of engagement should increase, which means our— um, it means that we're more profitable per client we bring in, right? The revenue that you're going to make off of that member as they're in your business is going to be more than those who aren't the right fit, because then the people who aren't the right fit will eventually leave and do it in a lot faster way. Okay. Some of the cons though, is that there might end up being an underserved market. So one of the things I hear a lot in the financial planning world is as financial planners grow in their career, they often will say things like, oh, I only take people with minimum accounts of half a million dollars now, or I only deal with people who have a million dollars already. Well, there's a lot of people out there who have less than $1 million but still want to get started in financial planning. And so if you're filtering that way and you don't want to work with those people because they don't have enough money in the financial planning scenario, then there's a whole market out there then that's not getting served. Now, that's not to say it's— I know that some business mentors talk about, and I understand the importance of when you're doing your ads and filtering it, you filter it in such a way so that you are trying to find clients who can afford what you offer. And that's great. That's great. I'm gonna get to my point on that a little bit later. One of the other cons though is that you are filtering your clients, which means you're likely gonna have more one-on-one meetings, the no-sweat intros, Because you are filtering in such a way that you're not going to bring on someone who you don't feel like is the right fit for your gym. So more meetings. It also means your ad costs are likely going to be higher. I know that there's companies out there who can filter things for you and send it to the right demographic. I'm telling you, it's just going to be higher from a financial standpoint, but that's okay. If you remember, the pros is that when you do bring on that right client, they should be sticking with you a lot longer. And most of the time, they also pay you more than those who maybe aren't the right fit. Okay, so those are some things from that aspect. I also wanna say, it's worth mentioning here briefly, this also applies to when we hire team. We don't want to hire those types of people. That is a true fact. And I can tell you from experience, You know, we've hired the wrong people in the past, and that caused a lot of work for us. It caused, uh, an increase in lost clients that were assigned to that particular professional. Um, I mean, we're— we have a current gym owner that we really appreciate his business, and he got the perfect storm of who he was assigned to. this team member that wasn't good, so he had a bad experience there. And then we implemented a new service and it didn't work out there. Also come to find out he has the exact same business name as another one of our clients, so we accidentally sent the wrong financial statements to him a couple times. And then we switched him to a new professional who wasn't familiar Because we apparently didn't make the right notes. Like, we just made a ton of bad mistakes in this scenario, and he's mad, and rightly so. We totally dropped the ball for this client. All of it stems back, though, to the fact that he was initially assigned to a person, a team member that I hired, who is not the right fit. He's one of those types of people that I don't want to have working for us. So from a financial standpoint, This is a big deal because obviously this is Profit First for Microgyms, so I want to focus on the financial side of things. When you hire the wrong person and you know you hired the wrong person and you keep talking for months about how are we going to help their improvement, and you're to the point finally where you're like, man, should I— should we get rid of this person or not? Because I hate that. I hate the conflict. I'm not very good at it. I want to believe in people that they can improve. But when you get to that point, the reality is if you're considering firing them, especially because of lack of performance, it's a lot worse than you think. And that's what I found when I ended up firing some of these people who don't— who were producing in a way I'm like, man, this is a struggle. It was always worse once we fired them and actually got into the nitty-gritty of trying to help the clients that were assigned to that person. So it's a financial mistake to keep someone on longer than they need to, which also tells me— which what we've been working on— how do we improve our hiring process? Because we want to find those who are the right fit for us. So with all that being said, here's how I suggest you filter. We don't want to work with those people. I would not ever base it solely on income. Especially since I have that experience with financial planning. I think there's some wonderful clients out there who probably would make great clients for a financial planner who are just starting off. They don't have $50,000, $100,000, half a million, a million dollars, whatever these minimums these are. You could have really great clients out there that on paper don't look like they can afford what you offer, but they likely are really great clients and will value what you do. And they're maybe just earlier in their life and they are already that person and they're just walking the path to become that person. So I would, again, never base it solely on a financial metric. The only thing I would base it on is our behaviors of people. I wouldn't filter someone off of anything other than behaviors. Yes. Like for us, we love working with gym owners, so we run ads for gym owners. That's not necessarily a behavior, it's a characteristic of who that person is. Um, and but so like maybe you want to work with, uh, first responders, military people, maybe you want to work with teachers. That's fine doing an ad that way, but once they come in the door and they start referring other people, I'm not going to turn up— I don't turn away other business because they're not gym owners. But from a behavior standpoint, If someone is the type who's like, well, I don't tolerate mistakes from other people, that doesn't work for us because we make mistakes. And so like, that's just not someone we want to be around with. They have— they're intolerant of any sort of mistakes, which again, that behavior shows up in ways that we don't enjoy. Know-it-alls. We Those, those types of behaviors. We don't, we don't really like know-it-alls. Um, I'm sure you can think of a list of behaviors you've seen in your gym, whether it's, uh, someone who talks back to the coach or always wants to do a different workout because whatever they're doing is more important than what you've programmed for the gym. So think about filtering people that way. And I think your business will be better for it because you avoid a whole lot of problems, and it's really a protection for your current members who've already said, I like what you do. Let's keep them longer. Anyway, so those are my thoughts, guys, today. Uh, remember, profit is a choice. Have the courage and wisdom to choose it.
