Transcript of Managing an Expanding Business, With Your Mission Guiding the Way
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John Jantsch: You know the CrossFit brand is an amazing, powerful brand and if you were a gym owner and you started a CrossFit Box or gym, there was a lot of power in that. But, there was also some negative that eventually came with that. In this week’s episode of The Duct Tape Marketing Podcast, I visit with Matt Scanlon. He is the founder of one of those CrossFit gyms that is now expanded and grown into be something entirely different, into a really a healthcare or wellness mecca. Check it out.
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Hello and welcome to another episode of The Duct Tape Marketing Podcast. This is John Jantsch and my guest today is Matt Scanlon. He is the founder of The Hill KC, CrossFit Memorial Hill. It’s also referred to as, happens to be a local person. I rarely get to do a Kansas City show, so, even though we’re just across town, it doesn’t get much closer than this. So, Matt, thanks for joining me.
Matt Scanlon: Yeah, I appreciate it, John. Thanks for having me.
John Jantsch: So, I would kind of fumble around and say what The Hill is but I’m going to let you describe in the glorious terms that you now tell people when they say, “So, what do you do, Matt?”
Matt Scanlon: Yeah. The Hill has gone through a lot of different iterations. We are a health and wellness facility here in Kansas City. Under that umbrella, we do your standard group exercise classes, personal training and things like that. And that was sort of the bread butter of how we started out but since we’ve formed in 2012, we’ve kind of expanded to do some things on the corporate wellness front. We actually have some digital products that we now do remotely with some different offices around the Midwest. We have started a non profit organization under our umbrella that serves people with disabilities, cancer survivors and senior citizens on a fixed income and most recently, we have expanded that non profit organization to include some veteran services for veterans coming out of active duty service.
What basically started out as people working out has grown into a little bit more complex of an organization like it has.
John Jantsch: So, under the umbrella rather than just being a gym. I mean you’re calling it a wellness facility or wellness business, right?
Matt Scanlon: Mm-hmm (affirmative). Yeah.
John Jantsch: So, let’s go back to your beginnings. You were initially, at least my understanding and I have a little bit of history.
Matt Scanlon: Yeah.
John Jantsch: You were initially a CrossFit, I think you might even call it a Box at the time.
Matt Scanlon: That is correct. Yeah.
John Jantsch: Talk to me a little bit about that. CrossFit has, you know, I’m one of those people that, you know, CrossFit has had a lot of its negative, it’s had a lot of positive. I happen to think that it revolutionized this whole idea of the social aspect and group exercise aspect but as far as it being where it was 2010, 2012, it’s kind of come under, I don’t know even know the right term but it’s certainly not what it was maybe five years ago, was it?
Matt Scanlon: Yeah. 100% and actually I would even say, on a more fundamental level, John, I think it’s a crazy thought to think that the fitness industry as a whole probably was more predicated on people not going to the gym than people actually stepping foot into a gym. If you were to think about your typical, your typical, I won’t name any brands or anything like that but you pay-
John Jantsch: Nothing like 24 Hour Fitness or Gold’s Gym or I’m sorry, I’m naming them for you.
Matt Scanlon: No, you’re spot on. So, you had to think, you know, for 50 years of this industry, these businesses survived on low utilization rates. If less than 10 people that pay me actually use my business, I’m in good shape. So, I would say on a very fundamental level, CrossFit came on the scene and is like, “Guys, this is a joke. If people are going to have a gym membership. They should actually be getting in shape. They should actually be going.” And so because of that, it was a very disruptive voice in the fitness industry and along with that came certainly some negative attitudes.
John Jantsch: And I think that, it was probably was compounded by the fact that they started cropping up like mushrooms everywhere and so unfortunately, that meant there were some people that weren’t as committed to people’s safety as maybe they should have been and there weren’t necessarily people who ran businesses like real businesses and so you had a lot of fall out, I think from the industry as a whole didn’t you?
Matt Scanlon: Most certainly. Yeah, the roots of CrossFit were, it was an open source community that started on the internet, first and foremost. So, by nature it was wild west. You had people opening affiliates in their garage and really taking, it was kind of first time that, you know, we’re talking 2001, people are taking this information off of the internet and turning into these brick and mortar locations where people were working out. So, the best practices did not really become evident for probably five to ten years after that first organic wildfire took off.
And it’s something that we’re certainly, now it’s very evident what best practices and coaching and teaching and business are and that’s become more widely available to the affiliates and it’s matured a lot since then I would say.
John Jantsch: And, you still offer the CrossFit programming, right?
Matt Scanlon: Correct. Yeah. That’s the core of what we do. About 55% of our business is what you would consider to be your traditional CrossFit classes.
John Jantsch: So, have you, how have you or have you, I should say, kind of shaken the sort of what people’s perception of, people who didn’t know necessarily, their perception of CrossFit and maybe the fact that somebody who wanted to get into shape was sort of intimidated by CrossFit.
I mean, you’ve changed the name, you in your intro didn’t mention CrossFit so, you’ve clearly are positioning your gym, even though that’s the programming, you’re positioning it for maybe somebody else?
Matt Scanlon: It’s an interesting thing, John, that I would say even today, I am still struggling with how do I interact with that brand. On one hand, you as a marketing expert, you understand that for somebody to have that instantaneous brand recognition and almost that like. “Choose a side.” Really you can’t pay enough money for that kind of brand recognition. So, on one hand, I’m struggling with that, like the general public knows what that means, whether they like it or hate it, there’s still recognition there and that to me is, an important factor.
But, then there’s this other side of the coin to where I realize we started to have people coming into the gym who were stroke survivors and I remember talking, I mean, in our gym, it is not uncommon to see people walk for the first time after an accident and these are people doing CrossFit and learning to walk and learning to stand up and learning to training [inaudible] wheelchairs and they identify as CrossFitters. But then, I would turn around and maybe reach out to their physical therapist or maybe they’re on colleges and I would say, “Hey, listen, I’d like to get a confidentiality signed so we could integrate this treatment protocol a little bit.”
And I realize if I was emailing them from firstname.lastname@example.org, I’m never getting a response. Now, if I’m emailing them email@example.com, oh, I’m immediately getting a response from these physicians. So, I’m stuck between these two very different worlds where the thing that’s occurring inside of our four walls versus the perception of what’s occurring are two pretty desperate experiences. So, I’ll tell you what, this is definitely something I’m wrestling with at this very moment to be honest.
John Jantsch: And I suspect that it will continue to mature and who knows where the brand will be in five years but my guess is the reality of CrossFit is quite than the perception particularly the perception from five years ago.
Matt Scanlon: You know, I had this moment where, we were, as we’re transition, we’re in the middle of expanding our space and really kind of bringing all these businesses under the same umbrella and so we’ve been having this conversation of branding a lot lately and I realize that, I started to ask some of our members, take them out for coffee and ask them about their experiences and I realize that all of these people, whether they came in for CrossFit or not, once they were in the door, they began to identify themselves as CrossFitters.
And, I realize that they weren’t, they don’t identify as a CrossFitter because of the methodology or because there’s this perception of it being dangerous or hard. They’ve created that identity because they did something that they were maybe afraid of doing. And maybe like this idea, this CrossFit was such a massive mountain that they could never climb and then all of a sudden they did it and so there’s a part of me that I don’t want to necessarily take that away from them. Maybe I don’t want to remove the fear or the hesitation that they have because once they conquer, that feeling of accomplishment is amazing, right?
Nobody identifies as a, nobody has a Pilates bumper sticker. Nobody feels that doing a Pilates class was the biggest fear of their life that they conquered and so I’m kind of, that’s not something I want to take away from my members, you know?
John Jantsch: And I think, I mean, I think the key and you’ve certainly headed down this path is education, education, education.
Matt Scanlon: Yes. Certainly. Yeah. And it’s one of those things where it’s, we’re trying to tell a story of it’s quality coaching, it’s good programming and relationships and whether you’re a personal trainer at Gold’s, got a internet certification and they could be an amazing coach, they could be a terrible coach. It really just comes down to those relationships.
John Jantsch: Wouldn’t it be great, if in your business, all you had to do was the stuff you love? The reason you started the business and not all that administrative stuff like payroll and benefits. That stuff’s hard especially when you’re a small business. Now, I’ve been delegating my payroll for years to one of those big corporate companies and I always felt like a little tiny fish but now there is a much better way. I’ve switched over to Gusto and it is making payroll and benefits and HR easy for the modern small business.
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So, let’s talk a little bit about where you’re trying to take The Hill KC. You alluded to some expansion and not just expansion of physical space but of programming in general.
Matt Scanlon: Yeah. The idea, we’re trying to bring more people under the umbrella of what we’re doing and we’re actually bringing in a lot of healthcare providers into the mix. So, my background prior to owning and operating the gym was in healthcare management and I realized very early on in managing some different healthcare facilities and state programs that there’s a big chasm in what the general population needs for their preventative health and the infrastructure that traditional healthcare has. And so the goal is to begin to bridge that gap.
Now, we’re having conversations with physicians and chiropractors and dieticians and acupuncturists. I mean really everything is on the table because our ultimate mission is to solve preventative health issues and that’s what we do. That’s the core of exercise and nutrition so we’re realizing, okay how much can we bridge the gap between traditional healthcare model and preventative and so this expansion is bringing as many people that actually care about solving that problem to the table as possible.
John Jantsch: So, my question is, I think a lot of people are headed this direction and I think ultimately, I don’t know, seems like it should have happened already but in 10 years, this will be healthcare I think but at what point do, you know, it’s still looked at as alternative in many circles. At what point do we cross over to where actually this is traditional healthcare?
Matt Scanlon: That’s a great question. This is the stuff that gets me going, John. So, it’s at the point that it becomes, it’s at the point that the current model becomes cost prohibited and we’re at a pretty close tipping point. I mean, I am in my mid 30s, super healthy. I don’t know that I’ve been to the doctor in two years and I’m paying health insurance premiums that are absolutely ridiculous. It’s almost $500 a month in catastrophic health insurance premiums and as people bring more creative solutions to the marketplace, the cost of care as it exists now bloats so much, I think it will hit a tipping point towards no longer considered alternative.
And I hope, like really my hope and what we’re trying to solve here is that this model of healthcare isn’t reserved for a privileged few but that there can be a proof of concept I guess to kind of show how to deliver good preventative health services to people.
John Jantsch: And I think it’s like everything. I mean, you’ve got generations on both ends of the spectrum, right now. I have aging parents and so I spend some time in the traditional system that is ill equipped to do anything but give out drugs and beds and it pains me to see but I think we’re, I think because these things don’t, you don’t like stroke a pen and it’s changed. I mean, I think we’re a generation away from what ultimately is obvious.
Matt Scanlon: You nailed it. My mother in law recently had a very extensive emergency surgery that most people her age really don’t recover from. I mean, it results in significant interruption of life and you go in her garage, she’s got a barbell in her garage, she’s swinging kettlebells. She’s up at five in the morning, like getting after it everyday. When you see things like that and you see, oh because of her daily preparation and caring about her nutrition and working out, all these things that you should be doing, her quality of life now and her ability to still work and travel and do the things that she wants, it’s still there.
She’s able to do these things with 40 minutes a day of just preventative maintenance. It’s a great value proposition when you see it occur in that way.
John Jantsch: Absolutely. So, a lot of businesses, I mean your business has evolved dramatically as we’ve just talked about it. A lot of businesses come up with a real challenge when they attempt to do that and you had some of those original people that wanted to hang out in the Box, right? That were some of the folks that were originally attracted to you. How has and maybe it hasn’t changed at all but how has your client today changed and how have you kind of managed growing into something that you weren’t originally, when it came to obviously keeping your existing clients happy?
Matt Scanlon: Yeah. Oh great question. It’s had more, honestly it’s had more to do with me figuring out what I want out of this thing than it has had to do with my clients themselves. And, it’s sort of me kind of finding. I mean, you know this, John. You build a business and it takes everything from you especially in the first five years. You are sacrificing pretty much everything for this business and there were plenty of moments where I had to ask myself, “Is this sacrifice worth exercise? Do I truly enjoy exercise to the extent that I’m willing to make this sacrifice?”
And the answer that I came to is like, “No. I don’t actually enjoy the fitness industry. I don’t necessarily, I’m not that passionate about exercise.” So, I had to figure out, well what is the thing that I’m trying to do here. What initially drew me to this thing? And it really was, it was the health and the mental fortitude like getting better, trying new things and overcoming difficulty. Like, these are the things that I personally got out of bed for. And, so then I kind of realized that our clientele either they were the same people that sort of followed suit and got fired up about that or maybe they left and they were replaced by new people that got fired up at the prospect of this holistic betterment of oneself and their community.
John Jantsch: So, one of the things that, particularly a lot of what I would call traditional brick and mortar businesses suffer from is you can only attract clients for whom your geographic location works for them and their life and so in some ways your market’s a little restricted to that but you have taken what I think is a very wise step for almost any business today and that is to start creating digital projects, products, to start actually creating products for the industry. I think you have something called 321GoProject that is just that.
What’s been your thinking in terms of trying to expand in that manner?
Matt Scanlon: Just what you said. There’s the geographical issues. There’s also this element of scalability and relationships, realizing that the secret sauce of what we have is the fact that, you know, I’ll walk outside my office right now and I’ll see some members. I’ll know all their first names, I’ll know what their kids are up to, I’ll know where they went to college and know what they did over the weekend and there are very real limits on the amount of people that you can have a relationship like that with and so realizing that if I wanted to scale this thing up and provide additional career opportunities to other people under this umbrella, that we would have to figure out ways to do that without sacrificing our core competency which is relationships.
So then, we kind of moved into creating a ton of digital assets and content, pulling a lot of stuff online, working with companies remotely and really thankfully, we live in a day and age where that’s not terrible difficult to do and at the time that we opened the, I mean, 2011 and 12, there’s no way that that would have even been on my mind.
John Jantsch: So, Matt, I’m running to the end of our time, here. So tell people where they can find out more about what you’re up to, whether they’re in Kansas City or not.
Matt Scanlon: Yeah. So, thehillKC.com. It’s got everything there. It’s got all of our programs there. There’s a cool little feature called Coaches Corner that people can go to. That’s were a lot of our digital assets live and then for the work that I do on the industry side of things, I’m a part of a company called 321GoProject where we take best practices, we’ve recently developed a really cool software on behavior change in businesses like ours so, yeah, 321GoProject.com and thehillKC.com is where I’m at.
John Jantsch: Awesome. Well, thanks for joining us, Matt and I have no excuse not to stop by and see you.
Matt Scanlon: All right. Thanks, John.