Episode #510: Unlocking Engagement-Lauren Foundos Discusses Engagement and Retention Strategies

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1:03 This is Pete Moore on Halo Talks NYC. I am bringing back to the podcast from episode number 76. Y'all remember number 70 6. Epic classic. Amazing. Lauren coming in from Forte. She's been around since COVID, prior to COVID, and she'll be around after COVID and after that and after that. So welcome back to the show. Go, girl. Boom. That was quite an intro. Thanks. Yeah. I'm not gonna repeat that. Let's go in. Thank you, ma'am. Good to see you. I'm psyched for everything you've been doing. For sure. I need an update as does our audience because digital was everything people were talking about. Yep. Then it kinda took some time off, and now, obviously, it's gotta be a revenue stream from a hybrid standpoint. So Totally. Tell us where you're at, how things have evolved, and, where we're headed. Yeah. For sure. So we initially had built a marketplace. We then switched to white labeling, so b to b SaaS, right before the pandemic. Obviously, the pandemic then happened not knowing that. Really scaled that business really fast. And and, you know, it was it was we scaled, but it wasn't a fun time. It wasn't an innovative time. It was a very intense time. It was, you know, we were just try everyone was just trying to survive and figure out how to do that. And so I think now we're actually at a place where the pandemic is over. Work from home. I mean, in New York City, I feel like people have landed on 3 days a week. So this hybrid life, I would say the gym and the work from home have really kind of mirrored each other. So now we're in a point where people are like, okay, how do I adjust to those consumer needs and that what the consumer's doing? How do I, you know, use digital going forward and just continue to innovate. So we've innovated, you know, just beyond the video element. We have social features, messaging, HRV tracking. So all these other

2:33 tools as well, that are applicable applicable to people that are, you know, hybrid users, digital only, or gym goers. So we've been innovating. A lot has been going on. When I started this industry back in 1999 on a private side, then I'm in a software company for three and a half years with with our boy, Shane. Shout out to Shane Edmonds. Mhmm. One of the great minds in the space on the tech side. You know, we we we got people's attention, and then, like, we lost attention for something else that went on. And then if you think about, like, during COVID, you had everybody's attention. You had all these clients come on, and then they actually have to focus on their bricks and mortar business again. So how have you kind of been able to, like, get their resource allocation, get them to say, like, you know, when I was doing the Internet, they were, like, hoping the Internet was a fad. Yeah. And then there's, like, gonna go away. Totally. So you wanna have to embrace it. Same. So how have you kinda, like, kept the clients that you had? Yep. Get them to understand, look. I don't need you I know this isn't, like, your top revenue stream. It was for a period of time. Now it's not. So, like, you're gonna downshift, I'm gonna upshift, and we're gonna meet here. So talk about how clients have, like, been able to work with you, what kind of resources they're putting towards it, and how relevant it is for them going forward. Totally. I think from our clients, we see a myriad of executions. So some people are their digital business is making 1,000,000 of dollars, and they have just a couple studios, so people execute it really well. And then we see people that, to your point, have, like, kinda let it fall as some in the waistline and have not prioritized it. Right. And so we've seen all variations, but what we have all the evidence to know that this works and can be executed really, really well. I would say that that when people travel and freeze their memberships and all that stuff, there's there's easy low hanging

4:06 fruit that I think people can get easily get behind, which is when somebody goes away for the summer, you tell them to stay engaged by taking classes. Right? Or people that do a tour of the gym and don't join instead of offering them half off. They're not joining because they don't feel ready. And so, like, those are, like, easy low hanging fruit opportunities, for people to get engaged. And then we've also built a studio player where people can live stream their content from one location into the other location. So digitizing the brick and mortar. So we've kind of evolved the video in in many, many ways now as opposed to just, you know, the at home experience. The other thing is if you look around the gym, everyone is on their phone watching content. I'm like, listen, you need to figure out what they're doing and you need to make it better. Put it on a bigger screen, just enhance them. So I think, you know, things have been really isolated. There was Peloton at home, and then there's there the equipment guys have great apps. And so I think, really, I'm I'm hoping to see everyone playing together because some you wanna bike at home for that kind of day. You wanna go to the gym and some days I wanna run outside. And so I think I I hope that people are gonna start realizing, like, meeting the customer's behavior as opposed to wanting the customer to operate a different way. We now know their behavior. So how do we work together, you know, to to help them enhance that and stay engaged and not fall off the wagon? So if you take a look at the number of instructors inside of a location, and they're still doing group exercise. Yep. And you take a look at, like, how strong that that relationship is between the instructor. And, like, if I go to SoulCycle, I go to, like, 3 or 4 people, and they're, like, my go to. My relationship's with them, not necessarily with this the low the studio bricks and mortar site, but

5:37 it's with them, whoever they are. I'm I'm coming. So how have you seen or how have you been able to, like, educate people to say, look. Let me get your top 5 instructors and let's, like, get those people and, like, celebritize them to an extent. Not to, like, own the relationship, but, like, to make sure that they know that, like, they're relevant. Yeah. I know that they have these relationships. I don't wanna, like, disintermediate them. I don't want them disintermediate me. Totally. But how have you kinda find out? Have you figured out how to do that and then get, like, a real core client base that says, like, I want that person online. Like, that's that's my lifeblood to this club. Totally. Yeah. I think you touched on a great point. So we have, you know, we have a couple that was a very good point. He's got this cute little smiley face bell here that's hard not to ring.

6:18 Yeah. Be a picture on it. Yeah. But but so basically, some people have said to us, like, don't share the trainer the data with the trainer, so they don't know they're so popular. That is like, it guts my inside when they say it. Right? Like, I'm like, then they're they like, the Peloton trainers are constantly promoting it, constantly talking about it. So you need them to do all those things if you want to have a great result. Right? And so there's a push pull between not wanting to pay them more to do more, but then also so there's this dynamic and we see the people that are able to invest a little bit, and maybe you just pay the trainer when they get new people to sign up or people buy engagement and stuff like that, so there's not a real cost to it. But there needs to be an incentive to your point where they're inspired and motivated to do it and, you know, everybody kinda wins. So I think we struggle with that with some people where they they worry it's gonna quote unquote cost more, but obviously, we have the data that they're getting 22% more workouts when they have digital and all the things that really, you know, kinda debunk that theory. But I think we definitely see that push and pull where people are not totally ready to invest in it.

7:18 But then we have the opposite where people are doing, you know, doing incredible things and scaling really business, and their digital outweighs their their brick and mortar business. This is Pete Moore. I wanna let you in on a little secret. There's this company called Promotion Vault, and what they do is they give out rewards from retailers that allow you to incentivize your members without having to do 0 down and 1 month free or giving away shakes or giving away t shirts. What you wanna do is build a rewards program that lasts, that people value, and that doesn't discount your own products and services. So here's the deal. There's something called rewards vault. The rewards vault is going to allow a member to set up their own profile. They are going to answer questions. You are gonna get those answers. You're gonna be able to target those members, and you're gonna reward them inside your club, inside your spa, and outside of the club and outside of the spa to get them to become loyal, to get them to pay their monthly dues, and to be rewarded properly for the actions. A lot of companies are cutting back on rewards.

8:24 You shouldn't be. Promotion Vault's your answer. Trust me. This is real. I didn't know you were doing this, but I, you know, a buddy of mine, Eric over at Swerve, kind of pivoted, and they're doing some live classes. And then they're replicating that and doing some other stuff in the background. I didn't know you were doing that. I think that's awesome. How have you found the rest of the receptivity on a studio that's streaming live from New York and it's going and streaming live into some secondary market? Do people feel like like New Year's Eve? Like, hey, I could either be in Times Square or I I'm I'm watching it live and that's, like, just as good. And how is that experience? Because that, I think, to me would be a huge opportunity to leverage the the fixed cost of that class Totally. And leverage an instructor that is an actor or an actress in New York that's not living in Macon, Georgia Totally. So I can't accommodate that. So how is that picked up and how how big of a, how how important is that? Because I feel like that could be a huge, like, private label scalability opportunity.

9:23 Totally. Did you bring up Swerve? Because we are about announce a partnership with them. So Oh, I did not bring up for that reason. No. Just you can try to find out. Guys. Yeah. Those guys. Well, it's not gonna launch for a couple months. Yeah. So, like yeah. So congrats on the Swerve deal. Yep. Sorry, guys. I just We'll put this to the announcement here. Hoping to the non nonbinding letter of intent. It's nonbinding me. This means fucking probably not gonna happen. Okay. Anyway, 2 go. Yeah. So anyways, yeah. So we're we're partners with those with those guys. So, yeah. So basically, what we're seeing, I think, one, people are trying to cut cost. Some gym chains like UFC we work with, they have 24 hours, so there's a lot of times that they don't have a class schedule. So being able to disseminate one live class into many places is awesome. And to your point, they UFC brought in champion fighter. They brought in Frankie Edgar to LA. I tried to take a pay per view. Totally. And it was awesome. And they and the the cool thing was they had it so people went to the gym and took it. And so you got to see inside all these different locations around the world, like, everyone there taking it together. He can they can ask questions and see him. So I think, like, the beauty part of the Internet is it makes this big world, a much, smaller place. So connecting the the actual brick and mortars too was a really great use case. And it's two way. So the trucker can see the people in the room. That's a big difference too. Can see all the people across all the all the stages. All those yeah. Exactly. Like on like on a dashboard or, like like, like a camera? So the instructor all the leaderboard. The leaderboard and the tiles and locations. So so it's not like they're just teeing up a class class and they can watch it and decide, I'm not feeling it, walk out. If you walked out of a real spin class, the instructor would be like, hey, where are you going? So with the two way and the live element, it really it's it's like as good as the instructor being

10:53 there, you know. One one of the things that, we we at one point, we were trying to buy Gold's Gym back during COVID. And one of the ideas that that we were trying to get across to this investor was, like, look, we could take, like, 500 Gold's Gyms. Okay? On on any given Sunday, like, the New York Giants are playing the Philadelphia Eagles. Like, let's have a spin class at 10 AM Yep. That basically would have 2 instructors. But now I'm thinking maybe it should be 1 instructor and then and basically everyone's doing that and basically whatever the data is, like, who wins Totally. Against that, you know, on a on a city by city basis. So there's a lot of competitive and challenge opportunity with what you're building. How much do people embrace that? And, like, are are people coming to you and say, like, hey, I got some ideas. Or are you, like, hey, look. Let let's test all these things out. Because I think, like, a morning challenge Yep. Before any kind of professional game or college game, like, Alabama versus LSU. Okay. Yep. Every club in Alabama is against every club that I have in LSU. Totally. And just one badass instructor, and like, let's see who wins, like, the pregame Yep. Cycling. Totally.

11:54 Is that happening? Or Well, so we excited about it. I wanna go right. Yeah. I just wanna go right now. Now. Yeah. You just got me fired up. Yeah. Let's just go. Yeah. I can Don't get me 2 spin bikes. I can beat I can compete against you any day. Why do you say that? I mean, he he's wearing a suit jacket, and he couldn't button. Button. So I just feel like I'm going up and he's going up. From 3 Halloweens ago. That's my point. I could wear something from high school still. This podcast officially over. Yeah. I would say You need me, I'll agree with that. Watch bomb? No problem. Alright. Pete is the only person I think talks faster than than I do. Yeah. No. So we actually work with MyZone and that that's basically the vision, to be able to have rooms and clubs competing against one another. And we also were our investors are the Dodgers. So, you know, the the goal with them is to do, like, kind of train like an athlete and have the teams competing. That's the that's where we're trying to take this. I'm so surprised that a lot of these sports teams have not done that yet. Like, what are they waiting for? I don't know. I'm like, you have the audience, the captive audience. You have the programming, like, it's So if I owe a PSL license and I and and I'm paying $800 to go to a a giant game per ticket, why would I not wanna, like, spend, like, the next 30 days to do, like, a Shaquan Barkley, like, workout, but actually do it with him. Totally. You know? And and Yeah. The winner flies in a private jet and gets to go, so you know, the other one. Yeah. I'm on the sidelines with Shaquan, and, like, yeah, dude. I just did his workout. The same exact thing that he ate. I ate that still Totally. I mean, all the money going into sports is going into gambling. I'm like, this is a chance for them to do something really good for the fans. And to your point, people already, like, adore these people, would get so into it, and they can do it against the team. So that's that's something that we're working

13:25 on, but in the in the background. So so one of the things, obviously, during COVID, people talk about how much money they're making online, you know, how how how big their membership base is. There are a couple, like, huge deals, like, one in Australia with some woman named Kaylee, I think. Or Yeah. Like, 3 200, 3 100,000,000, $200,000,000 revenue, whatever it was, or deal trend, transaction value. No? Yeah. I heard they bought it back. So it's obviously, like, been a lot of hype that it kinda came down to earth. You've obviously stayed true to, like, look, I'm a b to b to c. Yep. And, like, I'm under the radar, and I don't have to acquire customers. I'm not building my own brand. I'm building it through my partnerships. Totally. So you kinda had, like, a lot of, you know, cloud cover Yeah. If you will, from, like, what some of these other companies are. Yep. Are are people still making a lot of money online? Totally. That's so that's my point. So you That's a good question. Right? Because I feel like like people think, like, it just went away. Like, shit's not going on anymore. It's like, oh, dude. I I got it a little on that. I didn't get it. I'm done. Totally. But it's like then I went something like some of the girls got, like, doing $20,000,000 on YouTube on, like, some videos. Totally. It's like So tell me what's going on because I don't think people fully appreciate that, like, this shit's live. It's happening. There's money to be made.

14:27 Totally. It's not something that didn't just happen. No. It's like Peloton too. Like, people have always been working out at home. That didn't just appear. That's always been a market. They made a better, more beautiful market and product, but, like, that's always been going on. It's not all or nothing. Right? We they they talk in the extremes, and that's where the press gets excited, but people are doing all these things. It's not all or nothing. And I think some people have that if their experience is because they focus on digital. They had, you know, thousands of people doing livestreams during the pandemic. And the reason that they they don't have that is because they stopped doing it. Right. They're not they're they're they're I think people dare to kind of change the model and encourage people to if you know, like, it they, you know, the gym sort of operate on a sign up and maybe you come, maybe you don't, as opposed to being like, this person is at risk of canceling. They are not coming. Maybe their kid's soccer time changed, they actually can't get there. Give them that content to stay engaged. Right? So the the marketing tactic has always been a little bit, you know, instead of trying to meet the customer where they are, figure out what's going on, it's always been, like, let's communicate a little bit less. Mhmm. And I think that's where there's a there's a big miss in opportunity. And also, it doesn't the business. It actually gets people to get another workout in, which keeps them on the wagon. So I think that's really important about, you know, we have the data to support this. So, you know, these were initially my theories back when it was episode 76, but now I have, you know, 9 years of of hard data to show also when you're live streaming, the engagement is much higher because the people are watching the content.

15:45 There's new content being created. They become, like fans of the person. You know, the coach is saying, I moved to Brooklyn, my boyfriend and I, versus just traditional content that says, welcome to there's a lot of great content on the Internet. The reason that people love certain Peloton instructors is they feel like they know them. Right? So Yeah. I mean, it's all about this, like, if you're in the middle market, it's like we turn our relationships and results. Like, that's basically all you got. Absolutely. I have 2 follow-up questions if you have time. For sure. Thank you. My first question is related to, like, you know, I talk about winning and losing, time to win against the book and everything. Yeah. You're in it. What constitutes a win? If I have, like, 5 people in an online live class Yeah. Like, I could you could argue to me and say, like, hey, man. That's 5 more people than you woulda had. Totally. Or somebody might be, like, you know, I spent this time on it and, like, I'm paying you a certain amount. Like, how do you respond to, like, low usage, but usage is usage is usage, and somebody's getting Totally. Endorphins out of it. Somebody's, like, has a better day than they did before.

16:40 So how do you answer that question? Totally. That's question 1. Yeah. Question 1. Okay. So I think I think it also you get into it. You know, you get what you put into it. So I think there's that side of it. The people that stream a class and don't acknowledge the home people, it's a little bit of a voyeuristic experience. It's not a great experience. The people that really engage it and have you know, are chatting with them and stuff like that, they do much better. So I think if you follow sort of the things that we know work, you get the outcome above 5 people. So I think that's really important to note. The other thing that we see too, which is so cute, is, like, our client is HealthWorks. You'll see the women go up to the screen and wave to their friends that are taking it that are on vacation. Like, so even if it's not a 1000000 people, it's just that, like, they see their friend, they're they're seeing their background of the house they rented. Like, just these things that keep people engaged, and I think all these little things do add up. Yeah. To your point So I feel like those anecdotal commentary is, like, what would convince me to say, like, okay, maybe looking at the numbers, they have to look underneath the number. Yep. And 80% of the people aren't members of the gym. Right? I mean, let's face it. Like, the the the biggest barrier to entry is you gotta feel really bad about yourself and finally join the gym. Most people don't. So how do you get those people involved, like, in as as a stepping stone? I think that's the that's, like, my happy dream is that Right. Everybody finds a way to actually get their foot in the door, which is not in the door originally. It's starting virtually. I think that's the biggest opportunity. There's a there's a a a question, one part b. Okay. No doubt on question g. Okay. And thanks for spending time with us here. Of course.

18:06 Question 2 is, what's the return on investment if I just if I am a numbers person Yep. And I say, hey. I'm paying forte x per month, and I'm charging, like, $20 on online. I'm adding it to a membership. How low is that number to be, like, look. Even if you were, like, thinking about, like, that this is somehow, like, a cost center, not a profit center, not a relationship building center Yep. It's called what it really is. Right? Building relationships or you're destroying them. Yep. I'm gonna choose to build them. Right? I'm gonna build a relationship here. So what would you say, like, if I have 10, 20 people online, like, that's enough? Like, don't don't think you need, like, 300 people on my system that is gonna give you ancillary benefits and, like, bottom line return. Is that is that a is there a number Yeah. I mean, I guess for, like, the quant people? I guess as far if you're trying to quantify You're, like, you are quant person. I'm a good volunteer. Yeah. So I guess if you're trying to quantify it, then it's like, if you include it in a membership, like, quote and go give it for free, how many of those people are utilizing it, which is a small cost center to you, a dollar or something a month. Right? And that may be retention more engagement. And so and then how many people do you have digital only to subsidize that, right, that are paying out. Right? So, like, those are the numbers that you can figure out how you net break even depending on what they are. If there's a certain amount of engagement on the side where you're, quote and go, giving it to that community. And then the other side of it is, like, you know, a lot of people can't really easily track LTV and and churn, which is surprising. Through the CRMs, it's not that easy to check check-in data and stuff like that as as easy as one would think. And so being able to we do some of this stuff manually to show that people are getting more workouts. Right? If engagement's higher, churn is lower, all those all those things. And so we also have data where we see clients trying the classes that are in the studio, and then they actually go check into the class too.

19:39 Like so, you know, we see that a lot as well. So we have all of that data. People take classes, their retention is higher because they're part of the community. So we have all this data and and, you know, to be able to show what the return on investment is because I don't wanna pontificate if this is a good or bad thing. I just wanna tell you guys the facts. Yeah. Yeah. No. But it's I think it's important that people don't, like you don't have to get 20% of your members online to, like, say, like, this Forte is a good partnership for us. Totally. You gotta, like, lower it. You gotta look at the long game, and you gotta look at all these little things that might be happening behind the scenes that might not show up in, like, the actual, like, dashboard. Totally. It actually is happening, like, in the community. And they're paying for some other app. They're following other things. Like, if you, you know, you should keep them engaged in your community. Everyone has their phone propped up doing things. You want them doing stuff that's applicable to your facility. Make it so the content is in that area, so it's a really good experience. Right? Like, they're already doing it, so you want them to be doing your thing. Right? Just because, otherwise, they can go to a really low costume if they're just following content at a certain point.

20:38 This is Pete Moore. Here's the last tip for you of the podcast. We are partnered up with a company called Higher Dose, higher dose dot com. They are the leader in workout recovery products, infrared technology, LED light masks, neck enhancers, and other products such as PMF mats and sauna blankets. If you have not gotten on the workout recovery train yet, your time and your stop is now. You gotta get these products in there before these workout recovery and spas end up saturating your market. Having your members walk out of the club and going into one of their locations for $200 per month where they're paid 39 to you. Let's become an expert in workout recovery if we are already the authority in workouts. Higher dose, check it out. There's a wholesale code, and we look forward to helping you augment your products and services to meet the demands of your members. And, hey, let's get people happy, healthy, and sweaty, and the recovery should be just as good as the workout.

21:48 Okay. My second question, I think it's important and I and it's not Is this number 2 or we still on 1 c? This is the last question. And then I need a quote from you so you can think about a quote while I'm asking this question. I'll try to keep it brief. Kind of quote? I mean, where am I supposed to quote this? Like a quote it could be like a celebrity. It could be somebody that you, that like a philosopher. Okay. Quote, it could be Yeah. I don't know a lot about celebrities. They're pretty nerdy. It could be, like, you know, you can't have artificial intelligence without intelligence. Like that. You can read that if you Coin that term. Read that off and, like, take credit for it. Cool. One of the things I had an issue with when I was selling software is, like, I was selling to the owner, and then the owner sends me to, like, their IT person. And then the IT person says, like, this is not in marketing. And then the marketing person says, that is really in the group exercise. So, like, if you if I'm a a prospective client Yep. And you are and you are contacting me and I'm a multi chain, who do you wanna talk to? Like, who's the champion internally? Yep. Is it is it group x? Is it marketing? Is it the owner? Is it CFO? Like, who is it? It's the owner. Because it's a it's a business decision. They need to be behind promoting it. They need to believe in this. If they don't believe in it, a lot of times the group x person either loves it or hates it depending on their fear about digital, but, you know, they get really excited. But if the finance team is if everyone's not behind it, it just ends up kind of, we want this to be in their eath. There's especially a big chain where they're opening locations and they need to roll this out as they open locations. Right. And so, you know, otherwise, I would I got I used to try to sell people really hard. Now I'm like, I need them to want this, or I'm setting myself up for just a lot of work too. So But once the once the owner embraces and says, we're doing this. Yep. Like, I like you. I trust you. Yep.

23:16 This makes sense to me. Does it go to the director of marketing? Like, who's it under? Yeah. I wanna understand. Because a lot of people say, like, like, oh, my digital. That's what I know, like, my IT guy. Yeah. The group exercise content, like, that's under here, but then I have, like, a digital manager. And I feel like if if if everything was put under the right division or under the right person, it would probably work better because it's part of, like, how they think about optimizing their job or their unit or Totally. No. Like, in a dream world, they would have a person that yeah. They would have a person that this was their focus. Right? Be digital, or what would it be called? Yeah. I mean, yeah, just con yeah. Dig you know, digital, whatever. Engagement, just community engagement too because a lot of features we have are are are, like, outside of the digital side just like following people, messaging, groups, challenges, chat like stuff that's applicable to in studio. So it's like member engage like, they had a member engage ahead of your member engagement. Totally. This would be, like, right underneath the head of memory. Totally. Because I feel like a lot of people don't know where to put this, and then it doesn't Yeah. When it goes into the tech side, is there other It's like the tech, they just wanna make sure, like, it works. Yeah. They don't The AI is connected. That's it. So, like, yeah, I think that's where it falls. It needs to be part of the plan and and the onboarding for members. Right? So when you onboard a member, they can do and, like, look at all the equipment. It needs to be a part of the whole process. And I think the other opportunity too is when they're rolling out locations, you know, using it presale and stuff like that too, which is important. So it's it needs to be part of the whole strategy. That's why if we just get one person excited, it doesn't work. Everyone needs to be behind it. Got it. Got it. And then in closing here, from 76 to by 500 and something, Any any quotes that are, like, you know, or, like, things that you like or things that, like, remind you,

24:49 like, hey. I'm I'm building progress every day. Might not feel like it, but I know my my business model's I'm focused. It's gonna happen. I just gotta kinda wait till everybody knows about it. Totally. I think for me, yeah, every day, I, you just gotta work hard. You gotta work real hard. That's it. Just do it. Work hard. Work hard. Do the worst thing on your That's somebody said the other day, do the work. Do the work. On a on if you have something you're procrastinating about, that should be the first thing you do in the morning because then the rest of your day is gonna be so good after that. So I'm gonna take that do the work, and I'm gonna get fit into my slim Yeah. Riddler costume by Next Door. So I'll be a 38 small. Exactly. Anybody wants to buy me a medium t shirt? Yep. Bring it on. Right now, I'm a large. Alright. Great to see you again. I'm glad everything's going well. Hit the hit the bell. Here. Hit the bell going. Thank you for having me. Go forte or stay home. Yeah.