Karl Foster (Sport Alliance Head of AI) on Running Your Gym on Autopilot with AI

Listen, Eric, you've had this class at twelve o'clock every day for the last four weeks and you've got twenty percent attendance. You need to remove this class. It just doesn't make sense, you know? We're even looking at these, you know, nuances of like, okay, but is it an anchor class? It's like, well, sometimes you have classes on that don't necessarily make sense on the face value, but you've got a specific group of members that only come to that class. If you remove that class, you're gonna lose those members.

I remember specifically I had a 9 a.m. on a Tuesday and Thursday, which most people are like, why would you ever do that? Like, well, it was the same five to six people that showed up every time. And like, if I pull the rug out on them, they're gone.

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All right, here we go. Carl Foster. Welcome back, man. It's good to be back. How are you going? Yeah. I'm doing great. And naturally black t-shirts looking sharp. Check. Right? Ready for recording. Yeah, man. I I really value our conversations. And you know, one of the people I think in this industry that are emerging at the AI front, um, because I know you've devoted your your career, your education to specifically this. And um and you know, I had I really enjoyed the presentation that you did at the Athletech event this year. It was packed with value. So I'm hopefully I'm gonna extract some of that out of you today uh for our audience here. And, you know, let's just I'll just start with a question. You know, in your vision, when we look at like how this industry is evolving, I think specifically from the member experience, that's where technology to me has the greatest promise, right? Because there's we'll talk about why it's so challenging and anybody who's operated a gym is gonna resonate with this really well. But when you look at like what a well-run, tech-enabled member experience looks like, what is that? What could you tell us about your vision for that, for operators?

Yeah, I guess I'll start by saying it's not really uh a one fit approach. Um, something that that that we're doing in our our strategy is is uh trying to build for the business type or the business model. So we've got these three archetypes that we're we're trying to focus on. And we we've kind of labeled these as the high value, low cost market. You know, if you imagine this is a period, the the big bucket at the bottom, we've got the mid-market, big box, and we've got the boutique operator. So all of the fitness industry, but completely different um business operations, right? So we're trying to look at those three segments and then try and answer that question. I guess for the high value, low cost, it's about doing things on scale, having that hyper personalization that you can't do because you know you have a thin operating model and you've got hundreds of thousands of members. For the big box, it's kind of bridging that gap between personalization, enabling your team, looking at program design, that kind of stuff. And for the boutique, this would probably resonate with you, you know, you've got that conundrum of you're a CEO, but you're probably also doing classes and you've got a really close, close connection with your members. And really there, it's kind of like how can we facilitate the CEO to do what they want to do and you know, be able to charge the prices that they do in those boutique markets. So it's kind of like a tailored approach to our three archetypes.

Yeah, beautiful. Well, let's let's break in into it a little bit. Like I I you and I are talking. I'm gonna look at this through the boutique lens, Rick, because that's what I know so well from my years as an operator. When you're operating a gym at that level and you have to focus on the things that are most critical, right? You have to. That's the, you know, getting the members in, the leads, the marketing, making sure that your staff is well educated and running, you know, the way that you want it, making sure that the the facilities is clean and up to snuff. And then, you know, all the administrative needs that go into it, making sure the lights stay on and the taxes are paid and all of that. That's a lot, right? And if you're building your staff sufficiently, but then other things come in, right? Like, you know, the toilet breaks, right? You know, there's uh a dispute about a parking spot with another tenant. There's, I don't know, you name it, someone's unfortunately sleeping with the wrong person in your in your gym. Like there's all kinds of things that come at you from the house, right? And you're gonna it happens. It happens, and dude, it happens. And, you know, the and the answer is always, well, let's pour more effort into the problem, right? Like I'll just work a little bit on a Saturday, right? I'll just stay an extra hour late, I'll get up a little bit earlier, right? And that's not a sustainable way to do it because those problems are always going to arise. And I think this is like, you know, maybe the problem isn't more effort, it's having a better infrastructure. And now we're living in this world where technology can really start to s to take away a lot of that energy and and you know, heartache that goes in with some of those components. So talk about us like as you are building out these experiences, maybe we should start with the boutique. Like, how is the technology that you guys are producing that you're seeing come to market changing those problems and making them more digestible and making ultimately the gym more profitable?

Yeah. I think I'd start by saying that there's a there's a simple equation depending on kind of where you fit in that market. We're trying to get the right amount of members in, paying the right cost for the the minimum effective cost, basically, to run to run your business. So that's a simple equation. Now, going to the boutique space, our utopia vision is that we could run your gym on autopilot. So all of our products that we do, we try and fit those needs, but it has to kind of move that needle on that equation. So, for example, if you're running, you know, a CrossFit box as a C a CEO, but you're also doing classes, one thing you probably might not have time to do is optimize your group exercise schedules. You know, looking back at the trends of which classes are full or which not full, you know, how can you optimize that? So we've built, we're building a product, Perfect AI and Magic AI GX, to be able to give you the insights to quickly take actions. You might want to, as a boutique owner, you might want to keep a lot of the personal interactions inside of the club, but you might not have time to address all of the emails and service tickets that are coming in. Someone's the freezer membership. So we built a couple of things there again to enable you to be more productive. One of them is obviously perfect AI chat. We talked about this now, this is already live, uh, that can handle all those member interactions. And the way you can configure it is to know when it that threshold kicks in to hand over to you. Um obviously another big project that we've we've launched uh Magic AI and Perfect AI Engage is being able to time those communications for specific moments in that life cycle. Now, in a boutique space, you're probably going to manage that first interaction quite heavy. You know, it's all about making sure they join correctly, having a great experience inside that first class. But where these products start to come in is you could get a notification saying that listen, someone came to their first class, they're still a member, but they haven't come back and it's been a week. So then it enables you to say, right, okay, actually, I need to go and contact that person without you having to go through Excel sheets and figure out who you need to contact. You know, in terms of different areas of the market, the mid the mid-market or the um high value, low cost, you could build a full automated journey for that, right? So we're trying to enable you to run your gym on autopilot, but in different degrees. So obviously the boutique want to have much more closer relationship with their user and we want to enable that. If you're big big box, it's kind of in the middle, high value, low cost, it's trying to run it completely on autopilot.

Yeah, well said. Talk to me about engaging because you guys, it's been out there for a while, or you've got a pilot going, right? And you're starting to get some actual numbers. Like, first of all, like what is it, right? What does it actually do? And then now that you've got some, I think you said 14,000 members through it, right? Like, what are some of the um signs that you're seeing at this point?

Yeah, we've um we've had a very successful pilot. So we've been running this now for close to a month with with some of our key accounts. We've had 14,000 members pass to engage so far. Um, phenomenal results. Um, one of the most notable. So we we haven't thrown all the triggers out, right? Because we're piloting. We just wanted to, you know, start with a few of the what we we consider low-hanging fruit. Um, so we've got the dormancy trigger. Obviously, if someone hasn't been to the gym for n number days, like 14 days, we're meet reaching out. Um, we've got the attendance drop trigger, which is seeing if you had a specific pattern which has changed, you know, for the last 11 weeks. You've been coming three times a week, and all of a sudden you've come once a week, something's changed there. Um, and we saw significant uplift in these, which was great. So the attendance drop trigger, we saw a a relative percent of like 25, 25 relative increase in the visit frequency. I think it was something like 3.5 to 4.4, something like that, which was fantastic. They came back more often. On the dormancy trigger, we saw a 25% relative increase in people coming back. I think it was like a 34% um people in the control group came back as opposed to the test group, 44%. Just to clarify for everyone, we're doing A-B um testing. So we're obviously spitting people into control and and test groups. And we had, yeah, I think it was about 70% got the message, 30% didn't get the message. So we're actually measuring the impact, and it was great to see because it kind of proved the value. We can actually bring people back to the gym, um, and we can bring them more frequently. Um, so that was really great to see.

Yeah. And as a as a product guy, that must make you smile, right? Because you're all big time. Yeah, you put it out there for the real world.

Yeah, it was a the proof in the pudding. Um, it was it was really great to see. And like it's just, you know, really inspired the team. We're looking at, you know, some really kind of innovative and outside the box ways to communicate, you know, because we've started with these, you know, seven moments in a member's lifecycle. You know, a lead comes in, a new joiner, you go dormant, you drift, the contract ends, you know, coming to the contract's coming to end. But now we're exploring all different types of things, you know, like upgrade propensity. We're trying to predict if someone's going to cancel the group exercise class and reach out to them first. We're looking at doing things like as soon as you scan into the club, we, you know, we could set a trigger at five minutes after, you know, message them, hey, by the way, you know, we've got these protein shakes. So like the team are now, you know, seeing the proof in the pudding, everyone's really kind of getting involved to seeing like what else can we find? What other, you know, bits of competitive advantage can we offer our clients with this system?

Uh out of those 14,000 members you guys ran through the pilot, do you have data on like what type of gyms they were at? Were they at? Was it a mixture of boutique and HVLP and mid-size, or how how did you guys break that out? And was there any differences amongst the categories?

Yeah, definitely. So obviously the more uh the the the more members you have, the easier it is to see that impact. We had um mainly uh a I'd say a big um big box. We had one high value, low cost, and we've had two in the um boutique space. So we saw positive uh the dormancy like across board was um positive. We had positive results across board. The attendance drop we saw mainly positive across there. You know, we had to also build some stuff in to make sure we we get the right data, which was like, you know, making sure that it's not staff included into the impact analysis because some staff had normal memberships and stuff like that. But yeah, we've kind of done it across the market. And now the the the goal is to expand, you know, the tests across all the channels. We we started with email and push notification. Now we're gonna be doing WhatsApp and uh some more triggers, especially you know, one of the pilots, the pilots are great. You know, they're coming up with ideas. You know, one of them is like, look, we heavily rely on converting day passes. So we want to um have a specific content go out to a day pass a day after that they've been to the gym, see if they're interested in membership.

So yeah. You know, one of the this isn't just for operators, but I think this is just anyone who's you know human in this world. It's like there's a lot of messaging. Like I look at just what I do on a daily basis, right? Like at any given moment, and this is probably isn't healthy. I have like my, you know, Google messages open. I got my WhatsApp, I got my Slack, I got my email, I got my LinkedIn messaging, right? God knows what's I have don't check my Facebook or Instagram very often, but I'm sure there's messages coming in through there. Like that's like I've always wondered like, why don't we have a universal messaging app that takes everything? I know it's probably data and privacy and all that stuff. But like, why can't we just have one thing that does all of our communications for us? How sweet would that be? Um, you know, that's one problem I think that a lot of operators have is like there's just lost communications, right? So maybe give us an idea. Like when you I know that's something that you guys work on or with with Perfect AI or the platform you have. So how how are you just streamlining in practice like the the communications, the information that's being fed to the operator or the manager? Like give us more details about how this all comes out in real world.

Yeah, I guess there's two parts, right? There's the the consumer or the member, and then there's the the staff side of things. I think for the member, we take care, like, and we we've built these safeguards inside of the communication platform to not spam, right? I think you know, sometimes you can get carried away of like, you know, especially the creative types, they want to try a million different types of messages. And so we put a lot of safeguards in in there. So the the messages are not overwhelming and they they drive impact when they need to. So I think we did that. And uh one of the biggest kind of value ads for us is like we're natively built into our architecture. So, you know, it's a it's a universal experience when you get a message inside of the app and it's a push notification as opposed to you know you're getting a WhatsApp message with the with the gym branding on. Um, and because it's centralized, you can really understand who's getting what and what kind of volume. So I'd say that's kind of like how we've addressed the member challenge. The staff challenge, um, and especially with you know perfect perfect gym and um perfect AI and Magic Air and Magic Line, um, we've got a lot in our ERP and CRM. You can configure a lot, there's there's many modules, it's a very vast platform, even the APIs are really expansive. Um, so it can be a little bit challenging to kind of navigate and configure. So two of the products that we're also working on. One, we're actually releasing um an MCP server, um, which is a model context protocol. So being able to connect your ERP, basically perfect gym, to something like Claude Desktop, um, which is really exciting. Now, I know not everybody's gonna adopt this because it's a little bit, you know, kind of new and novel, but I'll give you some examples of how we see this potentially being used. So if you're a receptionist, you've you can have your Claude Desktop open and uh a member comes up to you and you can say the member says, Look, I want to freeze my contract. Rather than you having to find the member profile, find the membership, that membership associated to it, go to the membership, freeze a membership, set select the dates, you could just say to Claude, member John Doe's right in front of me, wants to freeze their membership, and the AI would go away and do that. We're also building a front desk application where we're also piloting this, which can simplify what the extensive membership management platform can do. So, same thing, you could talk to that front desk application and it has an AI to go and do that for you. So it kind of eases the complexity of like a receptionist or a member experience manager. Another thing we're doing for in the MCP is it can access the data warehouse. So, you know, if you're a manager, again, going back to your your case, you know, as the operator in a boutique, you could say, right, you could just ask it, how many check-ins did I have today, or you know, what was my sales yesterday compared to today? And it would be able to go and do that as like the AI agents can do that really well and get you that information. So we're trying to have, yes, a very cohesive um platform that can run your business, but also make the interface and user experience as easy and simple as possible as well. And I think that's the benefit of AI.

Oh, yeah, absolutely. I mean, the interface, right? I mean, that's where I think is the biggest thing that's going to evolve over the next few years is how we actually interface with the the AI technologies and the LLMs. And, you know, just from my personal experience too, and I think anybody who runs a business like mine will rose, like I we use I've been using Stripe for my billing for my consulting and agency work for for years, and it just integrated with Claude. And now because I hate this stuff, right? This is the type of thing that I hate doing. But like someone will come to me and a client will be like, hey, we need to we need to change the purchase order on this invoice. I used to just like I used to get to take a big sigh with that. And now I just copy the email, I'm like, no problem, right? And then I put it into Claude and then you know, opens up, I see it happening, it's so cool, right? It goes in a stripe and she makes all the changes, comes back to me like 10 minutes later, and says, Hey, just preview this and we can send it out. Like, done. Boom. Right. That is astonishing. Like two years ago, I never would have imagined that that would be possible. Now people may like, well, are you comfortable giving it, you know, access to your Stripe accounts? And all these, like, yes, I I am, right? I I I don't know. I am, I think I can be. Um, but who knows? I mean, you know, I could go with the whole thing, like the world already knows everything about me anyway. But so that's like that's similar to what you guys are doing, if I'm getting it right. Like you it has this opportunity to take over a ton of like busy work, right? Or analysis that you wouldn't even know how to get to. Like back in 2015, when we started looking, you know, paying attention to our attendance every week, it was a meeting on Fridays where we sat down for 30 minutes, went through our entire client roster of, you know, 150 to 300 people. We're like, hey, who haven't we seen in a while? Well, let's double check with the check-ins, but no one really checks in anyway. So, you know, it was like this very manual process or how to do group analysis, like, okay, well, what classes are actually worth keeping? Should we move times around? Like all this stuff just seems seemingly impossible back in the day. Yeah. But now it's all very, very possible and it's pretty wild. So yeah, anyway, I'm just ranting on, but that that's what gets me excited, right? What what do you what do you think about all that?

That's that that's that's the problem that we're trying to solve for. Um you know, it goes back to what you mentioned at the beginning. You know, you didn't have time as a boutique operator to do all this stuff, and you know, that costs you, right? That costs you as a business owner, costs you opportunity, and it will cost you if you get a gym open up next door to you that has the capacity to do that. Um, and with this technology, we can enable it, and that's what we're trying to do. You know, our North Star is to automate across all of the domains of of the operating space. And you know, we've broken this down into you know six categories. You've got sales, you've got marketing, you've got finance, you've got operations, you've got front of house, right? So we can break that down. So in terms of you know finance and commercial, can we help you with your pricing or product mix? Um, can we help you generate the reports that you need at the end of the month in the operations? Can we help you with your scheduling and HR needs and you know in the marketing space? Can we do the engagement, the communication for you in the sales piece? Can we sell or help you sell memberships in the front of house? Can we help? Do you have capacity of the front of house or member engagement? And if you do, how can we make their lives a lot easier as well? And really the whole idea is across these domains to free, especially in the boutique space, to free you up to do what really helps run your business or makes your business successful, which is the interactions, the program, the community. And it's the same thing with uh the other, you know, we we start with the archetypes, you know, in the middle box side of things or the big box guys, you know, how can you enable you to have your teams or the receptionists continue the conversation face to face rather than spending time in the back office creating tickets? And how can we enable your group exercise managers to run the most productive group exercise schedules and allow them to focus on the program design, not all of the admin stuff style of stuff? So it's really just trying to enable our operators to do what they do best and and use AI and this technology to do all the legwork for them.

Yeah. You know, um, you you brought up something in our last conversation that that I want to I want to go over again because not everyone will listen to that interview, but you know, one of the biggest things about as the tech rolls out and gets better and better, it's great, right? But staff adoption from you know, from the top down is can be tricky, right? Like uh yeah, you may sit down and train Bobby at the front desk, right, to to do all the stuff, but is he actually gonna do it an hour later when he's forgotten the training and or is he care or is he motivated? Does he see the value? Like these are real this is the real world application, right? Like the tech, the tech is beautiful. Like it's it works, right? It's only gonna get better. But you I know. You've you brought this up last time is like it's all worthless if you can't get the staff adoption, you can't get everyone to adopt it properly. So maybe give us some insights into you know, as an operator, whether at all these levels it doesn't really matter, you got to work with people, and people are always the most challenging part of any business. So, how do you get you know good examples of like how you strategically and tactically get your your staff to be on board with all this?

Yeah, it's uh a very deep topic. Um yeah, I mean like all of this stuff is really cool and it sounds amazing. Um, but as you said, ultimately this all comes down to implementation and execution, right? You can have the best software. And actually, you know, in today's age, the the technology part's really the easy part, um, especially with AI and engineering and stuff. So you have to, as an operator, and especially, you know, I'm talking about kind of more the mid-size and high value, low cost, this has to be a strategic priority. You have to have the C-level buy-in, and you guys have to say, right, we're gonna commit to this vision. We believe that, you know, implementing AI into our business is you know not a gimmick. It's gonna generate revenue, it's gonna generate added value, and it might be difficult to actually track that, which is a whole nother problem. And, you know, as we discussed, I wrote my dissertation on. So that strong commitment has to be there in the first place, and you have to have an understanding that this is a big change management program. So then you have to look at how are you gonna implement this. And again, I'm using the archetypes because it always makes sense in my head. Based on the archetype, what approach are you gonna take? Is this gonna be a top-down mandate? Is this gonna be something that you generally encourage? How are you gonna do the framing, right? What's the framing of this? It's really important. This stuff is really important. Can't stress this enough. I mean, me and you have got that on-the-ground experience and we know it. So, you know, coming in because this technology drives fear, uncertainty, doubt. You know, it's a change technology. It goes into the skill domain. It's, you know, starting to do what I do on a daily basis, right? That can be scary if someone doesn't know why that's being implemented. So I think this stuff shouldn't be uh negated. You should think about this stuff seriously. The framing of adding value, you know, this is not here to, you know, replace your job. This is here to make you, you know, X your output without having to lift the finger, and it's gonna make you a better employee, it's gonna help the business scale quicker and hire more people, um, you know, establishing why you're trying to do this and how you're gonna do it. Training is actually critical. It's not just training, it's also making sure you follow up on that. You know, one of these things I found in in my research is people did all that stuff, right? The C-level buy-in. You did the change management program, you did a training, then you forgot about it. And everyone was on board, but we're humans, right? So we go back to what we feel comfortable with. So people were regressing in this certain organization back to using Excel sheets and so on because you know it wasn't being followed up upon. So it's also a commitment from you as an operator. And what we're saying, you know, as Perfect Gym and Magic Line and Sport Alliance is like we will give you the platform to do it and we will help you, but also you have to make sure that you are driving this into your organization to get the most value out from it. And even if you're not that organization, you'll say, look, I just want to stick to how I'm doing things, well, that's fine. And the way I would describe it is we've got this ontology now, right? Not to get too abstract. We, you know, because we as perfect gym, we've got the full solution. We've got the, let's say, the system of finance, you know, we've got Finion Capital and Finion, so we can handle the payment side of things for you. You're collecting the money. We've got what we call the system of record, and we we believe we do that really well, and it's really open and can be, you know, quite complex, which is perfect gym. You've we've got on top of that layer the operator, which is you, right, running your business. And then we have on top of that the system of intelligence. And this is what we're talking about, you know, running the business on autopilot. You don't have to have the system of intelligence. You know, you can have the system of record and the system of finance with you running your business really well. If you want that competitive advantage in that full ontology, you're going to go for that system of intelligence and enable all of these cool things that we're building. To get the value out of the system of intelligence, you have to be prepared for change. And I think that's kind of what you're getting to. And um, yeah, it's something I'm very passionate about. And I've seen the impact of doing it or not doing it in many organizations and many industries.

Yeah, it's everything you say is so what like you you nailed it, because there is a certain amount of fear, right? And there's also a certain amount of like, depending on how well you hire or the quality of people you hire, how motivated they are, there's also the, well, do they give a shit factor, right? Like, you know, are they just doing this for a summer job? And like, well, I'm gone in six months, you know, it's there, there's a lot, but that's just running a business, right? That's just the challenges of running any kind of business like this. One thing I was thinking about the other day, and maybe you've thought about this too, is when you look at like the the type of the mix of staff that you have at a at a particular club, right? You know, you have a certain amount of sales, you have a certain amount of administrative, you have a certain amount of coaches and trainers, and then you have the leadership team. Like, do you think that's fundamentally gonna shift in a significant way? Like, do you think we'll need less administrative and maybe we can pour more resources into sales and coaching and training? Or do you think like the coaches and trainers, the best will be able to serve more people and then therefore we can put more into sales and admin? Like, do you see any kind of mixture over the next five years shifting, or do you think it's gonna stay the same?

I don't think anything fundamental will shift. I think that the output will shift significantly, both in volume and quality. And I think the difference, you know, is that old saying, people use AI will take your job, not the AI kind of thing. But of course, um the difference in people who understand how to use this and adopt this, I think will grow. And I I we talked about this last time, and I think that gap will grow significantly. Now it depends on these archetypes. I think, you know, in the boutique case, it's going to allow you to do what you like to do more and what you don't like to do less. That's the idea. So I think your role would change more into program, creative thinking, connecting the dots and getting the AR to do legwork. And then high value, low cost, obviously there's a big element to you know productivity per square foot, optimizing the sales and marketing process, but you're still going to have that individual or group of individuals at the gym. It's just what they're doing at the gym would change, and you'll notice and see it and understand it a little bit differently. And I think the level, what will change is the level of understanding of the business. I think there's always been in operators' spaces, and depending on the organization, kind of gray zones of lack of understanding, you know, maybe like the group exercise. You don't really know if it's running that well. It kind of just runs, or commercial aspect, or the marketing aspect. I think, you know, the understanding of these things and the intelligence behind these things will also increase. So then you're also looking for more creative minds of you know how to capitalize on that. And that could be even sales, right? You have really great sales intelligence and it's doing all the legwork for you, like it's doing all the calling for you, it's booking all the free trials, but how well can you now close as a sales agent as opposed to how well can you do everything? Right. So the specialization now, I think, will really kind of shine through. But that's just that's just kind of my interpretation of how things will will span.

Yeah. Oh, that's great. And so you were telling me a little bit about perfect AI GX. So the group exercise specific, we touched on it earlier. What are you guys doing there? Because I mean, group classes are in most gyms, whether some of it's like the core offering or you know, a lot of health clubs have, you know, their spin or their whatever, right? But I think for most, unless that's like just strictly personal training or small group training, you're gonna have some kind of group characteristic to your offerings. So yeah, what are you guys do up to there? How is that how is that helping the operator?

Yeah, so this one was really close to heart because, you know, like you, I've been I've been in operator space, I've been in three of those archetypes, or I've been in, you know, many gyms, big, large, um, medium, small. So the group exercise, you know, it's always a challenging business because there's so many factors at play. You also have a finite amount of space. You generally have different instructors come in, it might be full-time, freelance. There's many moving parts, and trying to understand how to optimize a group exercise schedule and optimize the program for your constraints to generate the most value for your organization, it's actually kind of complex and it's it's not that easy to run. So we wanted to enable operators A to get the best intelligence using, again, one of the most important things for us is the amount of information and and context we have as Perfect Gym, right? We've got, you know, over 12,000 clubs in our operation or in our using our software. So we can help you with, you know, all of these sophisticated technologies to optimize that schedule or to understand. Again, we use that example of maybe a member's come to their first group exercise class and they never came back. Or, you know, is it right that you're running this class at this specific time when you've got three of them already running at similar times and similar, similar days? So it's all about giving you that deeper level of insight, helping you optimize that and run it on autopilot. So there's things in there like even helping you generate your invoices for your group exercise instructors, or you know, another thing that's quite challenging is understanding the profitability of group exercise, right? So allocating, you know, revenue distributions between, you know, people who do group exercise and don't, or like how many, you know, for example, you might do two classes and just come to the gym twice. And, you know, being able to understand how profitable a class is, how profitable an instructor is, how good a retention is for a specific instructor, how good retention is for a specific program or class. So really trying to give our clients a full arsenal to have the best possible group exercise business they can.

Yeah. That's so like I I couldn't even imagine how to do that. You know, you can kind of like, you know, you could use a spreadsheet. I'm sure there's equations like how profitable is this class? Um, you know, who's my, you know, who's my best trainer? And then you can kind of cross-reference that by like, you know, are they getting, is it because they're getting the best times slots for their classes, or are they truly bringing people in? And what's the mix of people they have in their class and how many people repeat if they move. You know, there's just so much cool stuff you could do with it. That would just be so time intensive if you were trying to do it manually.

Yeah, and it's difficult. It's even difficult to do, like you said, right? So um, you know, and that's the benefits of AI now, right? It's intelligence, and we're trying to capitalize that and, you know, give it to our customers on the plate. Um, so we think there's massive opportunity there. Um, we're very excited about it. It's very complex, you know, this this application. So it's also, again, going back to that original question of like how can we make sure that the user interface and experience and, you know, it's kind of like a little bit intimidating. You see all these numbers and charts and graphs, and like, how do I interpret interpret this as well? So another thing we did in this platform, and including with all of our other AI systems engage in chat, is we try to give you recommendations, right? So we've got like tier one recommendations, tier two recommendations, tier three. So it's like, you know, tier one might be listen, Eric, you've had this class at 12 o'clock every day for the last four weeks, and you've got 20% attendance. You need to remove this class, right? Yeah. This is it just doesn't make sense, you know. And we're even looking at these, you know, nuances of like, okay, but is it an anchor class? And what do we mean by that, right? Because we found this in the data. It's like, well, sometimes you have classes on that don't necessarily make sense on the face value, but you've got a specific group of members that only come to that class and no other class. If you remove that class, you're gonna lose those members. So there's like all these little nuances that we have to kind of factor into the data. Luckily, we've got a lot of smart people in the company. So we've come up with something that we're really excited about. And um, yeah, we hope it's uh gonna move the needle.

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Yeah. Yeah, that anchor class is really interesting because I remember specifically I had a 9 a.m. on a Tuesday and Thursday, which most people are like, why would you ever do that? I'm like, well, it was five to eight people, but it was the same five to six people that showed up every time. I'm like, if I feel like if I pull the rug out on them, they're gone. Like they'll go for it. Or just even like if someone from a marketing perspective, if someone's looking at the class schedule, they're like, okay, I'm glad they have that standard offering at that time. I may never go to noon class, but it's good to know that it's there. Like they're gonna want to see a certain amount of variety there. And particularly I like about it is that it makes it objective, right? It's not an emotional decision anymore.

Yeah. Big thing.

It's data backed. And that's a big deal. Like, even, you know, when you like, I remember when wearable data started to come out and you had actual data that you can sit down and talk to your client about. It wasn't, it was, it was a different conversation. It wasn't like you sit in there and be like, you need to do this, you need to be more disciplined, you need to watch your food. Like, well, no, like we can see now from your data, like your sleep kind of sucks. Let's have a conversation about that. It's more of an objective starting point, right? Which now you can go to your staff or you can go to whoever your business partner and be like, hey, okay, we we've done some analysis, we're gonna move things around. Here's why. And people want to know the why, otherwise it becomes personal, right? So I think that's that's critical.

Yeah, and and like, you know, on that point, we've tried our best to say, you know, on some of these recommendations, I might say, you know, Eric, a Thursday at 5 p.m. and 6 p.m., you don't have anything. But we we've seen in the trends in your data over the last two years that you've got a potential of exit, right? So which are also trying to show the value of these changes. And another thing, you know, sometimes in the big box and high value space, you've got so much real estate um, you know, and so many group exercise classes over so many locations. Sometimes inevitably you get schedules that are built over preferences rather than data, you know. So we wanted to also highlight that in, you know, specific peak hours or you know, which classes are um the most popular, but also you have to then factor things like variability and you know uh how many different types of classes you have for that. And, you know, we're also looking at things that, you know, the nuances of of that gym. Because, you know, if you're looking at real estate of a hundred locations, I'm talking about the enterprise guys now here, it's hard for you to kind of understand that on a portfolio level. So, how can we abstract that back up? And you see like the the details of like, you know, gym X has a penetration of like 4% or 6%, where Jim Y has a penetration of 22%. What's the reasons that that's so low? Is it because of poor performance or is it because you just don't have much space for group exercise and that's the operating model? So also trying to add a lot more of that kind of business context to the decisions too.