How to Grow a Coaching/Consulting Business 4 to 5 Times in a Bad Economy?
The hardest thing for most small business owners, even coaches and consultants, to understand is marketing, especially when times get tough.
- It’s simple, with the right bait, you can attract as many fish as you want even when the weather is bad. And if you throw more bait out in bad weather you’ll catch about as many as you did before.
- Same with your business.
Let’s start with some key measurements. Let’s say that in a good economy, your marketing typically gets about 10% response. But now that the economy shot craps you are getting 8% (20% less), or if it’s really bad you may be getting 5% response (50% less).
So what do you do?
A lot of business owners will go into panic mode, and starting cutting expenses. Wrong thing to do. Cutting expenses is like a football team playing defense the whole game. If you never pick up the ball and start running, you’ll never score let alone win at anything. When you play defense all you can do is hold your ground at times or slide backward, never move forward.
And that’s what happens when you start cutting expenses. Constant loss of ground. Defense was never meant to be a winning strategy, only a survival tactic until you can get your hands on the ball again. In business, business owner who feel the pain, go into a constant cut expenses and lose ground daily, feeling lots of pain. They’ll blame the economy, but they caused it by their inappropriate actions.
Picking up the ball is equivalent to a business owner who looks for the biggest Return on Investment (the play strategy), and implements it (picks up the ball and starts running toward the goal). Depending upon the ROI they chose will determine how far, how fast they go on each play. And just because we are up against a really powerful team (like a bad economy where we keep losing ground) doesn’t mean that we should play defense all the tme and avoid picking up the ball to run with it. The ONLY way to win is run with the ball, right?
Let’s take a look at that scenario I set up at the beginning. Before we were hit with a bad economy, our marketing gave us a regular 10% response. But when the economy started down the tubes, let’s say we got 50% this time, in other words if we keep playing the game like we always have, we’ll lose about half of our clients, or at least we gather 1/2 as many with each marketing effort.
So what should we do. We have to pick up the ball and run. But maybe we need to know that this time we’ll have to work harder and smarter. So if I usually market to 100 people to get 10 calls, and 5 clients, now that our marketing is producing 1/2 as much, shouldn’t we just double the number of people we reach out to? This time market to 200 people who are buying 1/2 as much as before, we get 5% response this time, or 10 calls, and 5 clients.
Notice something? Even if we are in a bad economy where 1/2 the people are buying, if we do what we always did, market to 100 we’ll see our business cut in half. But if we market to 2 times as many who are buying 1/2 as much, we still have exactly what we had before.
Yet, most coaches will be saying, “with my business dropping, I have to cut expenses, I can’t afford my marketing this month.”
Always DESIGN the results you want with your marketing. Never allow anything, economy, bad market, or marketing that doesn’t seem to work like we had hoped, to get in the way of designing to get the number of clients we want.
Of course, as the economy gets worse, and we have to market twice as much, it’ll cost us twice as much for the marketing. But that isn’t what should determine whether we spend the money on the marketing. What does matter is “the cost of acquiring a client.”
If before the economy shot craps it cost us $100 to acquire a $1,000 a month coaching client that stays with us for 12 months, that client was worth $12,000 to us for an investment of $100. But after the economy went down, it now costs us $200 to acquire that same client. And I hear coaches panic as they see their marketing expenses go up at a time when they are making less and less.
It’s simple, if the cost of acquiring a client is affordable, buy more of them with your marketing.
I’ve frequently asked clients “How much would you spend to acquire a client?” I’m challenging them to consider how much they actually can, or should spend to keep their business going. For a $12,000 client, would you spend $200, $500, or even $1,000 when all you’ll make is $1,000 out of the first payment?
Just keep in mind that if it costs $1,000 and you get paid $1,000 up front for the first month, that this client essentially cost you NOTHING! Think about that ROI! Now the ROI is zero in, and $11,000 out. But because most coaches think, OMG look what I’m spending on marketing, I’ve got to cut back on that, they are killing the golden goose.
We should be thinking, What does a client cost to acquire? If it’s reasonable, then go buy as many as you want. Marketing isn’t an expense it’s a multiplier of our business. Design your income, and what it takes to generate it, and then go buy that many clients and whatever you want to make, you’ll have as long as you invest in it.
Helping coaches, consultants, trainers reach another $100K to $1M within months and to stop paying in the kiddie pool when attracting new clients.
Author of upcoming book, “Secrets to a $100K+ Coaching Business.”
If you’d like to have more clients, feel free to give me a call to discuss how you could do it in the next few weeks.
Let me throw another concept your way.
Selling coaching or consulting is actually 100’s of times easier than trying to get a job. Take a look to see what companies are looking for employees, get a grasp on what they want, and then send them a series of letters explaining how they can get lots more results (something they want).
A company hiring an employee may be spending about 15% to 20% of that first year’s salary on a head hunter, plus they’ll spend about twice as much on the employee as is obvious from the salary due to benefits. So a $100K employee costs the company about $200K plus another $20K for the headhunter, the total cost is $220K for a $100K employee.
But here’s the trick. Figure out what they want, and monetize it. Let’s say that they want a $100K employee generating $200K to $300K in a year, let’s round that off to about $20K per month. So for that company to make their first $20K from that employee they will have committed about $300K. But if they hire you for 2 or 3 months at your regular fee, let’s say $1,000 a month, then you’ll deliver $20K/month for a $1,000 first month investment, 20:1. You are a LOT cheaper.
Of course you’ve got to position yourself that way, a 20:1 ROI, low risk, $1,000 for first month, and I’d bet that if you botch it totally you’d return his money, so NO RISK. Show them how different you are in comparison to an employee.
Give me a call if you want to FILL your coaching pipeline. I’ll show you how before it costs you a dime.