In Times Like This It Is EASY to Get High Paying Clients
I’d bet that most coaches feel that getting higher paying clients becomes a LOT harder when economic times get tougher, like they are becoming right now.
Actually, it is EASIER to getcoaching clients, and especially higher paying clients, and more of them, now than in better times.
Hard to believe isn’t it? Here’s how!
Let’s take a look at the marketing formula to better understand why.
The number of new leads and clients you get is dependent upon the marketing funnel.
So, let’s say that you send out 100 marketing messages a month, and that your response rate is 10% (believe me, if it isn’t it should be. I’ll show you how to do that in other posts.).
So that means that 100×10%=10 people should actually be calling you every month, and if you close 1/2 of them, you have 5 new clients a month. Of course, the higher the revenue of your target, the higher you should be charging.
But now let’s look at what happens, comparing average economic times to tough economic times. The only thing different between average or good times and bad times is that your marketing response rate typically drops in half, so the 10% response drops to 5%. The reason is that many target clients find it hard to spend money when times are tough. So that means that about 1/2 as many respond in bad times.
You will also discover that the higher the revenue of your target market, the more likely that they will spend money. So when you are targeting the higher revenue clients, you probably won’t see as big of a drop, or none at all.
But let’s assume the worst, that your response rates drop by 1/2 from 10% to 5%. Now let’s use the formula to make sure that we ALWAYS have the same number of clients in good times and in bad. So what has to happen in order to do that?
Well, if the response rate drops by 1/2, if we increase the number of marketing messages we send out to 2 times, guess what? We still have the same number of clients at any time, good or bad. It looks like this.
200×5%=10 lead, 10 people calling you, just like when times were good.
Far too many business owners make a huge mistake in bad times. When things feel tough, they usually cut back on everything, expenses, marketing, etc. Yet, that is when you should be increasing your marketing to compensate for the lower response rate from your market.
Does it cost more? Of course it does. You’ll be spending twice as much on your marketing as before since you are doing 2 times as much of it. But always consider, what does it cost to acquire a client, and as long as it is profitable, get out there and do it. Always KNOW what you will spend at maximum to acquire a client and be prepared to do it.
For instance, let’s say that you are doing direct mail marketing, and the cost is about $1 for printing and mailing. So when you were sending 100 mailers, it cost you $100 that delivered 10 leads, and 5 clients. So the actual cost to acquire a client was $100/5=$20. Not bad at all. Of course the real cost depends on both your marketing response rate and your sales close rate, so keep those under control. I’ll show you how.
But if you now send 200 letters, it now costs $200 to acquire 2.5 clients, and the cost to acquire $200/2.5=$80 to acquire each client. I’d say that is more than adequate.
So, how much would you be willing to spend to acquire a client? If you charge $1,000 a month, that is $12,000 a year, assuming you keep them for up to a year. But for now, how much would you be willing to spend to make $1,000? $100, $500, or even $1,000?
Imagine this, let’s use a much higher than normal cost, let’s say $500, and that results in $1,000 at least one time. You just made 2:1 times your investment. Know any investment that ever returns that much? And if you get more than one month it becomes even better.
Normally, I shoot for cost of a client at 15% of the monthly cost, or around $150 for every $1,000 I make, that is 660% return on investment.
And you can do this in good times and bad.
Answer these questions:
- What is your response rate for your marketing?
- How many marketing message do you get out monthly?
- And how many new leads, and clients do you get from that?
- And what does it cost to acquire a client the way you are doing it?
- If that is a profitable Return on Investment, get out there and BUY clients at that rate.