Episode #599: Leveraging Incentives for Massive Growth-John Dwyer's Winning Gym Strategies

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This is Pete Moore on Halo Talks nyc. I have the pleasure of bringing

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John Dwyer, better known as jd, One of the

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marketing gurus around the world, coming from Australia, one

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of the best dressed Halo Talks guests to date, and we've had about

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600. So, JD, welcome to the show. Thank you,

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Pete. Yeah, I did dress up for the occasion. We appreciate that.

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So why don't you give people some of your background before we riff here so

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they know, you know, some of your legendary entrepreneurial

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ventures. And then to be in a place where, you know, you're an authority and

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you can tell other people, hey, I've seen this movie before. Let me tell you

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what talent's going to end positively or negatively. Gotcha. Gotcha.

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Yeah. Look, Pete, I've been doing this what we call direct response

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marketing stuff for a long time. I think I started

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back in the 1800s, as a matter of fact, and nothing really has

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changed. It's just a delivery platform. So whatever was working, perhaps

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back with newspapers and magazines and TV stations and so forth, is

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still working, working today. It's just that the platform might be, you know,

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Facebook or Instagram. And the difference, I think, with what we

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do than what a traditional advertising agency does is that if you went into

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an advertising agency, they'll probably tell you that they're going to help you

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get people to fall in love with your brand so that they'll taste your product.

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This direct response stuff, we flip that. We get them to taste your product so

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that they'll fall in love with your brand. And that's very different. So there's none

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of this face on the side of a bus or back of a taxi or

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sponsoring the local baseball team without getting any data, ours is very,

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very miserable. Yeah. And also, you obviously

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could live and die, you know, in a positive way, keeping

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accounts because you're delivering an roi, basically, on the entire

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campaign. Yeah, there's a lot of. There's a lot of advertising

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dollars that still gets wasted in this economy. I'm shocked

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by some of it because there's not a lot of accountability on

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behalf and there's excuses or, you know,

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it'll happen in the long term. You know. How many times does somebody see it?

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22 times, I think. Yeah, 22 times a week.

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And, Pete, I've got six millennials. And so therefore, they. They

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are not real keen on my sarcasm when I'm having a shot at millennials. But,

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you know, if you walk into a digital marketing agency and the bit of tipster

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tells you, look, we're going to Sponsor the local baseball team and we're going to

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put your face on the side of a bus. I would run the other way.

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Unless you're Coca Cola. I mean Coca Cola and Kellogg's and Nike, they can afford

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to throw it up against the wall and not have any measurability. But if you

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go home tonight and say to the kids, look, you know, Daddy got 150 likes

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today. The kids are probably going to say, but daddy, there's no food on the

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table. Right, right. So what have been some of your

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strategies that have proliferated and now it's kind of people come

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to you because they heard that one of their, you know, friends or someone in

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their network is optimizing their revenue.

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Pete, I had a look at Halo and what you guys do and there's a,

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a lot of similarities in that. I'm sure you have lots of people around you

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over the years say, look, I've got an idea. And of course,

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you know, that's great. You want ideas, people to be around you, but you want

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them to be practical ideas. You want them to be ideas that are going to

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bring home the bacon. And I think that's where we specialize. And you know,

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like, I know that you're in the, in the, you know,

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I'm not going to say wellness industry because I know your opinion. Yeah, it's okay.

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But you know, you're in the industry with regards to fitness and good health

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and so forth. And I would imagine that most fitness

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centers, we call them gymnasiums down under, but most would

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be spending a lot of money on Facebook and other social

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media and probably, you know, spending money

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with lead generation companies to get people to be interested in membership.

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You know, we've got some gymnasium too in Australia at the moment where we're getting

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leads for them on Facebook for between one and $5. And these

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people are normally paying anywhere between 50 and $150 to

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a leads company. And by the way, they're paying that to a leads company and

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the leads company gives that to two other competitors, which is crazy,

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crazy and how we do it. And I

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invite anyone to steal this idea and just swipe it. I mean you can use

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us if you wanted to, but you can swipe the idea. And that is just

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hold a contest on Facebook and give away a 6 or 12 month

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membership. And anyone who enters that contest obviously is interested

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in having better health and losing weight or whatever it might be.

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So therefore of course you give one of those prizes away. But you've got

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99.9% of them that you can then follow up and say, look, you

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didn't win, but we've got a special deal on at the moment because you wouldn't

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have entered the contest if you're not interested in getting healthier.

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And they're bringing in. We had one last week. He started

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on Tuesday, and by the following Monday, he

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spent what was. It was about $50 a day on Facebook. And we

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ran a contest to win this prize. He had a thousand leads in the first

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week. I mean, we're not talking 12 or 15 or 20 leads. This is blowing

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their mind. And of course, when they can't get back to them, we just put

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an AI robot onto phoning up the other people and offering membership.

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This is Pete Moore. I want to let you in on a little secret. There's

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this company called Promotion Vault. And what they do is they give out rewards

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from retailers that allow you to incentivize your

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members without having to do zero down and one month free

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or giving away shakes or giving away T shirts. What you want to

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do is build a rewards program that lasts, that people

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value and that doesn't discount your own products and services.

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So here's the deal. There's something called Rewards Vault. The Rewards

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Vault is going to allow a member to set up their own profile.

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They are going to answer questions. You are going to get those answers. You're going

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to be able to target those members and you're going to reward them inside your

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club, inside your spa, and outside of the club and outside

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of the spa to get them to become loyal, to get them to

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pay their monthly dues and to be rewarded properly

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for the actions. A lot of companies are cutting back on rewards. You shouldn't

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be. Promotion Vault, your answer, trust me, this is real.

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A lot of the ideas that work in marketing and sales and

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behavior have been the same for hundreds of years.

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And I think we've abandoned. We used to work with Gold's Gym, and

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Gold's Gym used to have the 90 day

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body transformation challenge. And that would bring a significant

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amount of leads into the clubs as well as people that, you know,

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bought a membership after their initial free period. And then they

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ran away from that, that challenge and they ran away from some of these campaigns

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and just focused on brand building, which really was not, you know,

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bringing the traffic in the door. But what you're talking about here, about doing a,

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doing a contest, like, there aren't that many health clubs that I know of that

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are running those types of, you know, easy, simple, one on

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One type of campaigns, we work with a company that I'll tell you about

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after the show, but company called Promotion Vault. And what they do is

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they put gift card incentives up when people drop out of

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either try to fill out a referral, booking

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a personal training session, showing up for

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evaluation. So every time there's a pain point, throw an incentive at it and

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just keep that membership going or that lead into the next

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phase. So what have you been doing yesterday? I'm

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glad you brought up the word incentive because a big part of direct response marketing

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is incentives. And we teach people to put their McDonald's

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hat on and provide Happy Meal toys to their prospects. Because

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I got six kids, as I said, they're all growing up and adults these days,

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but we had six under 12 at one stage. And I think throughout that period

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we gave McDonald's about $8 billion. And nothing to

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do with the hamburger. It was all about the free toys. So the reason we

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suggest to people to go down the incentive marketing path is because

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really it takes the rights off the price. That's what you want. Yep,

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exactly. So what have you been doing in and around our sector? So

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you've got some gymnasiums down in Australia, but are there other companies that

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you could disclose? Yeah, one that's been very, very successful for gymnasiums. And in

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fact, it's one of the five industries that we target. So it's ironic that you

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were kind enough to invite me onto your program because it is, you know, one

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of the five industries that we target. When I did

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a campaign for a bank down under some years ago, we got

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this bank an extra 15 billion. Not, not million. We're talking

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about Australia, which is the population of California, by the way. So we've got the

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same landmass as you, but we've got a tiny population of 26 million.

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So 15 billion home loans over a few years is pretty big time. All we

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did is that we stopped the honeymoon rate that most banks give. So if you

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go and get a home loan from a bank and let's say the interest rate

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was 6%, they'll give it to you for 5% for the first year. And so

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therefore we said, well, okay, let's give that 1% to a travel discount

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company. And what we did is we came on television and we said, and

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social media and said, swap your home loan from the Wells Fargo or the bank

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of America, come across to this bank and we'll give you a free vacation. The

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thing went nuts. Absolutely nuts. And as you know, you're probably going

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to ask the question. But, you know, I got Jerry Seinfeld to do the ad.

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So you put Seinfeld with the pre vacation and of course it went mad.

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Yeah. How did you pull that? How'd you pull that off? Just

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look, persistence beats intelligence. I just annoyed George Shapiro, his manager,

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for, you know, six months and eventually Jerry gave it. I said to Jerry, why

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did you say yes? Because I had to fly back as a force to New

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York all the time and, you know, and do the ads. And he said, well,

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two reasons, J.D. number one, I liked the sense of humor that you had behind

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this. You were going to take the pistol out of the banks and I take

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the piss for a living. And he said, the second thing is, is that I

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thought if I didn't say yes, you'd never ever go away. You're the most annoying

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person I've ever come across. That's good marketing

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persistence, base intelligence. Yeah. But

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to answer your question, what happened is that that went mad. And after that

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we were. We got into bed with a travel

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discount company. And what we do now is that we provide gymnasiums and

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fitness centres with exhibit A, these things which are

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vacation vouchers. And what they do is that they say, look, join my

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gymnasium. Instead of giving up the first month membership, which of course every

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gymnasium does, or every fitness center, they replace that by

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saying, join my fitness center and I will give you a free vacation to Disney

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World, New York, Orlando, call the hotspots, and

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we give these vacation vouchers to them for $50. So they've got a thousand

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dollar reward, but they're paying $50 for it. And

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the reason the hotels are involved is because outside school

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vacations, they've got 30, 40% empty rooms and they're

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happy to give those rooms up for free in the hope that whoever stays there

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is going to spend money on food and beverage. So that's why I should get

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it for free. That's great. Yeah. So you got. You go to Disney World for

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three nights free, absolutely free. Yeah. So health clubs,

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historically, you know, say, you know, no initiation fee, first

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month free. When we started working with promotion Vault and said,

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look, don't give away that amount because it's similar to when you buy a

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TV back in the day at like a Circuit City. And they said it's a

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$200 rebate, but you have to go through the mail, you have to put that

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process together, you have to fill out the forms, you have to get it there.

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And then you never even knew if it came back in the Mail anyway, but

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they were able to market that up front. So Promotion Vault is

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basically trying to say, don't give away your own product because you're losing the

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revenue. The one thing that

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I want to question you about is even though the client is doing direct

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response and knows how much revenue, potentially knows how much

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revenue they're getting and they look at the size of the budget or what they're

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paying you, do they sometimes like pop their eyes and forget how much

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revenue and the return that was on that promotion

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I'm running into right now? Yeah, sure. A couple things. Yeah. Because

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what happens is that within a month or two of a wild success,

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they forget that you even exist. Because it was their idea. It was their idea.

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Right, right, right. Of course, now that didn't, that didn't happen with this bank

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down under. It was called the Greater Bank. It didn't happen with them. I,

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I, they were a client for 11 years. And the reason that they, I mean

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they were paying me 34,000amonth, which is a nice client to have. And

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they, I kept on saying to them, why are you paying me this money? Because

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they kept on putting the price up, which is very, very unusual. It was almost

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a Seinfeld episode by itself. And I said, why are you doing this? And they

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said, we don't know what's going to come out of your backside next week because

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you're an idea. So we don't want you to go to the opposition, you know.

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Well, so, so you had to. Basically you were paid for a non compete

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without asking for it. Sort of. Yeah, sort of. But you know what, the

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thing, I've sort of come from a background where you jump on something that's hot.

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So, you know, when the Ninja Turtles were hot, I would take the license out

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and I would do all the bubblegum cards and I'd do all the books, you

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know, and Disney of course is Evergreen. So therefore I take out the licenses for

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Beauty and the Beast and the Lion King and Little Mermaid and all of that

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stuff. So I do all the ch. In fact, I've got exhibit A. I brought

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this up. Just what company was this under? Is this under

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Upside Down? But this here is a Disney poster. So therefore what we did

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is that we took out a license with Disney, we put all the characters on

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the one sheet and then that became a giveaway for that particular business,

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which of course is, it's a Disney poster from heaven. Nobody's ever seen all the

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characters in one poster. And it would work for any business. We even

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a Gymnasium, join my gymnasium and get this unbelievable Disney poster that's

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not available in Cayman. So what I would do is I'd jump onto all of

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these things that were a fad at the time. Not that Disney's a fad, but

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certainly a lot of the other things are. Could be a skateboard, it could be

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anything. And if you jump on that, then what you're doing is

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borrowing the equity that someone else has paid a lot of money to create.

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Gotcha. When you say you're buying the license, you bought

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the license for the art, not for like a territory.

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Yeah, for both. Yeah, for both. So therefore I take out, in Disney's instance, I

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take out the license for the Little Mermaid or Lion King or whatever it may

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have been for bubblegum cards and for storage books and for caps and maybe for

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T shirts. And so therefore that territory would be Australia. If I

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wanted to take out another territory, then you paid more money. The way I look

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at it is that Disney have spent a lot of money in a lot of

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years building up a huge equity value of their property. So why not give them

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10% and saves me having to draw up a new cartoon character. Yeah,

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totally. The one thing on those contracts, as you've, you know, over time,

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have you been better able to forecast what the

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opportunity is? So if there's a minimum that they try and push into the

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deal that you kind of know where your high water mark is?

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Yeah, pretty much. I mean, look, Zuckerberg, you know, moves the

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goalpost every day, as you know. So therefore it's very hard to predict

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your cpl. But yeah, most of the time you can. I mean,

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this contest formula that we've got, we only

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launched that six months ago. And, and Pete, this sounds like

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this seems a ridiculous boast, but in all the years that I've been doing this,

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I've Never had a 100% success rate with ideas because obviously

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some are good, some are not. In that instance, this contest

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formula brings a red hot lead because they won't enter the contest to

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win a gymnasium membership unless they want to lose weight and get fit.

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We haven't had a failure. It's 100% success rate and we're

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talking about leads. $1 to $5 a lead, and that depends on

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the business. We have a Hawaiian tree trimming

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business. He only wants to advertise in four zip codes. So therefore his

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leads are going to be more likely $9, which is still good, by the way,

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compared to a fitness center that would get a lead for maybe a dollar or

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Two dollars. So, yeah, I have to say to you that most of the time

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you can have a rough prediction of what the result would be. But even me,

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this thing, the leads formula on Facebook, I never in my wildest

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dreams imagined that it would just be almost infallible. It just works every time.

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And then when you're set up with a client, are you inside of all their

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marketing? Are you using their, are you publishing for them?

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Are you having access to their member data? Because there's sometimes

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a wall that kind of occurs where people feel like,

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hey, we want to manage this, you give us the content. There are others that

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want to just outsource. It kind of ebbs and flows, I think, over time.

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Right now, I think people are trying to get some of their proprietary data back

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that they maybe thought, you know, they, they owned or

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shared or what have you. I don't know what you're saying. Well, because I

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moved because I moved from the corporate sector where I was doing McDonald's

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and KFC and 711 and all those sorts of things. And I, about 10 years

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ago I moved away from that sector and moved more

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over into the small to medium sized sector. So most of our

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clients are doing south of 3 or 4 million. And so they

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don't really have the budget to put me inside their business like the bank did.

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Okay, with the bank, yes, I was inside their business. I'd visit them once every

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week and all the stuff that goes on with the consultancy. So what we do

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with the smaller businesses, because they don't have the budget to pay the likes of

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me and you probably, then what we do is provide them with the package

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promotion. So we do it all for them. We, we manage the campaign,

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we put the concept together, we do all the artwork, or should I say

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chat. GPT does all the artwork and yeah, so we

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do it all for them. So we promote ourselves as being an instant

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fix that's an external supplier. We don't get involved in their business

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too much. We just give it to them and say, press the green button.

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This is Pete Moore. Here's the last tip for you of the podcast.

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We are partnered up with a company called Higherdose.

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Higherdose.com they are the leader in

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workout recovery products, infrared technology,

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LED light masks, neck enhancers, and

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00:17:30,590 --> 00:17:34,230
other products such as PEMF mats and sauna

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00:17:34,230 --> 00:17:37,470
blankets. If you have not gotten on the workout

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00:17:37,470 --> 00:17:40,910
recovery train yet, your time and your stop

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00:17:41,070 --> 00:17:44,640
is now. You got to get these products in there before these workout

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recovery and spas end up saturating your Market

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having your members walk out of the club and going into one of their locations

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for 200 bucks per month, where they're paying 39 to

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00:17:55,440 --> 00:17:59,280
you. Let's become an expert in workout recovery. If we

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00:17:59,280 --> 00:18:02,600
are already an authority in workouts, higher dose,

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00:18:03,000 --> 00:18:06,680
check it out. There's a wholesale code, and we look

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forward to helping you augment your products and services

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00:18:10,590 --> 00:18:14,190
to meet the demands of your members. And hey, let's get people

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happy, healthy and sweating. And the recovery should be

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just as good as the workout.

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And then from a standpoint of winning clients, you've got

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a lot of stories, you got a lot of successes.

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How, how disappointed are you sometimes in the fact that, you know, someone

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thinks this startup, you know, marketing digital firm with 20 people in

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a high loft is somehow qualified to, you know, take on certain

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budgets? So how do you kind of compete about that? Compete with that or like,

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digest it? Yeah, well, you know, the thing is that when you've got a few

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wrinkles and you get to my age, I'm a baby boomer, then of course you're

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up against the, the young kids that are the marketing experts in their bedrooms with

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a green screen behind them that shows an office. And so

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I just figured that the best way to combat that, and keep in mind I

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got six millennials, so they keep me on my toes in terms of being the

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old fart dad. I just always say to people, look, if you're getting a

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heart transplant for your body, okay, you're looking

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for a heart transplant for your business, but if you were getting a heart transplant

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for your body, would you pick the kid that came out of medical school, you

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know, a month ago, and he's 25 years of age and he's still using

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pimple gram, or would you pick the surgeon that's done this in his sleep for

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the last 40 years? And of course, there you go. So I always say to

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them, look, with wrinkles comes wisdom. And if you're looking for

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someone that's done this a million times before, then you knock on our door. If

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you want to roll the dice, then go and talk to a 25 year old.

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Yeah, gotcha. And then what are your operations like in the US

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for, you know, people that are listening to this podcast? Yeah, we have a, we

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have an office in Las Vegas. There's only one person operating out of that office.

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So therefore, obviously, we're mainly in Australia. But it doesn't matter. I mean, when

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people say to us, look, I want 50 of your vacation vouchers because I want

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to give These away with a gym membership, we just say, good, we will email

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them to you in about an hour's time. And you give us, you know,

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$50 a voucher and this is how you should run it. So we give them

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a resource, online resource center where they get all the Facebook ad and the landing

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pages and we help them through it, of course. But really, because it's not

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a consultancy agreement, we bakes, we make sure we give them a done for you

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package. And it's the same with the, with any of these. I mean,

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we have, you know, we do a lot with Lloyds of London. So therefore we've

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got fitness centers down under the saying, look, join my gymnasium and you've got the

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chance to win a million dollars. We get a million dollars for about 20 grand.

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That's the biggest. That's normally the big chains that do that, but yeah,

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we, we have a whole bunch of, you know, package

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promotions from gas discounts to win a million dollars to, you know,

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not win a vacation if you're going to get a vacation. The reason

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the McDonald's toy works, they get that toy out of China for 20

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cents, but in Kmart, that's worth $5. So therefore, the reason

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that incentives work more than others is because it's a low

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cost, but it's a high perceived value. And if you are, for example, a

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fitness center and you say, look, join my fitness center and I'll give you a

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free vacation, stick with me for six months and I'll give you another free

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vacation. Then of course, that's worth $1,000, but it

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only cost them 50. So to the person that's joining the fitness center, they get

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a thousand dollar Happy Meal toy. But of course, they don't know that the gymnasium's

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only paying $50 for it. Yep, excellent. Well, send us

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the results on that so we can post that with the show notes.

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One question I have for you before we close here is you've got a lot

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of wisdom. Sounds like you're, you know, you've raised a, you know, several children

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and you're an educator at heart. Talk a little bit about the master

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classes or the seminars you're doing and how important is that to your

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overall. Sorry, Pete. Talk about the master classes. The master. Yeah, the master

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class and seminars that you're doing. Do you have like an educational

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seminar? Oh, yeah, yeah, yeah. Well, mostly, mostly they're webinars

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these days. I mean, the only good thing that came out of COVID is that

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we're doing this more often these days. You don't have to jump in a plane

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and rent out a hotel room. And yeah, look, really what we

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teach people is how to stop marketing their business on price.

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And yeah, it's problem solution

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marketing. But there's five components to this direct response stuff. Number one,

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it's, you know, highlight their problem. Are you overweight? Number two,

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it's aggravate the problem. Do you know the spring and summer's just around the corner?

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Do you want to look good in your swimsuit? Number three, provide them with a

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solution. And that is join my, you know, gymnasium or take on this fitness

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program or this diet program. Number four, provide proof, which of course is

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testimonials. And I've seen your website, you've got millions of them, you know, and then

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number five are strong cta, a strong call to action. And normally

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it's number five where they fall down. They might tick the problem

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solution boxes, but the call to action is weak. And

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that's where the incentive based marketing comes in. Because you can

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imagine with the Facebook contest formula, if you get,

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let's say 300 leads this week and you contact the

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299 people who didn't win and you say to them, look,

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you obviously want my product or service because you entered the contest for this.

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We've got a special deal for you. If that special deal is not good, then

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you've just let yourself down because you've paid, albeit a lot less

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CPL than most of the times, but you've just attracted 299 people

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and you haven't got a good call to action. What we do is we say,

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look, call them and say to them, look, you didn't win our gym membership, but

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guess what? If you get in by Friday, we will give you a free vacation.

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So therefore we actually use the Happy Meal toys. That close. Yep.

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Like it. So look, welcome to officially to the Halo sector.

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Appreciate you using the acronym. We'll dress up for you. My partner,

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Dave Gallon is going to love the fact that you said CTA at

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the end because it reminds me all the time, every time I

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produce something, he's like, there's no cta. You're my cmo.

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I'm the CMO here. I'm supposed to tell you this. And I said, okay, fine,

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00:23:56,040 --> 00:23:59,720
sorry. Well, look, I think a lot of your

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ideas and actions, it doesn't matter what

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the distribution platform is. The ideas need to just be executed

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upon and shared properly. I look forward to

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helping you get into the US market broader. We'll make some introductions and

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you know, if you're on the state side, we'll see you soon. And if I'm

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in Australia with the Greg Oliver at any point, if he invites me or Emmett

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Williams or two guys that I'm sure you know or need to know. I'll see

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00:24:27,149 --> 00:24:30,510
you down in. Down there. I'll do some seminars. Have you been, have you been

404
00:24:30,510 --> 00:24:34,190
down underpinned? I'm not, I'm not yet. No. I did go on a Contiki tour

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when I was in college there, so I met a lot of Australians

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into that pursuit. I feel like in closing this

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podcast, Ganolin and I just bought whatever you were selling. We're taking

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00:24:45,620 --> 00:24:49,100
all the incentives. We're booking our trip and

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00:24:49,180 --> 00:24:52,220
we'll get you the credit card. Okay. What do you need? Tell us where to

410
00:24:52,220 --> 00:24:55,820
send it. But paid Harry while stock's last. All right.

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00:24:56,300 --> 00:25:00,020
Exactly. Yeah, there's only. There's only a finite amount of hotels that are

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00:25:00,020 --> 00:25:03,660
seeking some. Some guests. All right. Awesome. All right,

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J.D. good to meet you, man. Thanks, Kevin. Look forward to it. All the best.

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Guys,

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00:25:13,670 --> 00:25:17,390
This is Pete Moore on Halo Talks. Your captain speaking. I am

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00:25:17,390 --> 00:25:21,070
the founder and managing partner at Integrity Square. We've been around

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00:25:21,070 --> 00:25:24,870
now for 15 and 1/2 years. We have been helping

418
00:25:24,870 --> 00:25:28,270
people like yourselves get capital, do mergers and

419
00:25:28,270 --> 00:25:31,920
acquisitions, consulting, strategic advice in the health,

420
00:25:31,920 --> 00:25:35,680
active lifestyle and outdoor Halo sector. Trying to

421
00:25:35,680 --> 00:25:38,960
help as many entrepreneurs as possible get to the next level.

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00:25:39,520 --> 00:25:42,960
Take that inflection point to be the force behind your growth.

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00:25:43,520 --> 00:25:47,160
We are helping companies that have at least $3 million of

424
00:25:47,160 --> 00:25:50,640
EBITDA, around $10 million of revenue, and

425
00:25:50,720 --> 00:25:54,080
we are positioned to help get institutional growth capital

426
00:25:54,800 --> 00:25:58,610
or to negotiate deals with strategic partners. If

427
00:25:58,610 --> 00:26:02,370
you go to integritysq.com isq

428
00:26:02,370 --> 00:26:05,970
you can see our capabilities. Deck, happy to set up a consultation at any

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00:26:05,970 --> 00:26:09,490
time that is free of charge. And we look forward to

430
00:26:09,490 --> 00:26:13,210
helping solve obesity, loneliness, and diabetes.

431
00:26:13,370 --> 00:26:14,250
Go Halo.

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00:26:21,300 --> 00:26:45,670
Sam,