Building A Coaching Business - How Many Customers Do You Want To Buy This Month?
How much does it take to acquire a client?
If you don’t know, then you are probably casting your marketing net out there and just waiting to see what falls in it instead of designing the end result and then making it happen.
One story I hear from coaches all of the time is, “I work from Word of Mouth, it’s cheaper,” or “I network to get clients, it’s the cheapest approach.” Do either of those sound like how you are managing your coaching business?
I can go with that….under one condition…it’s delivering as many clients a month as you need or want, it’s not costing your more in your time than other methods, and you are managing the results you get to leverage the most income you can possibly make.
Let’s say that you go “networking” once a week. I assume that means about 2 hours at the event, 45 minutes drive time each way. That’s already 3.5 hours per networking event per week and it doesn’t include the follow-up time. We’ll get to that later.
Let’s assume you charge $250/hour for your coaching time. So, that means that we just spent 3.5 hours x $250/hour = $875. I’m hearing a rumbling from you out there about this. Yes, every hour that you aren’t coaching is taking that much out of your pocket. If you did something else that brought clients to you that didn’t take time, then you’d have 40+ hours a week to coach. So, just consider that every hour you spend is costing you that.
My next question is, “How many hours of networking does it take, on the average, to get a client?” Most coaches can’t answer that question. That means that they aren’t measuring nor managing that activity. When forced to come up with their “best guess” most say that they’ve been networking for months and haven’t gotten a client. Let’s say that, at best, you get one customer a month from networking, and that’s probably optimistic for most. At $875/week (the cost we determined above for networking), for 4 weeks, that means that that client cost you $3,500. Whether you can afford that or not, depends on how much you charge, and what you’d really like to make. If you charge $3,000…that certainly won’t work. If you charge $5,000, you are only getting $1,500 gross profit (assuming no other costs involved).
So, is the choice to find another way to generate more customers than networking? Or is it to make networking more efficient?
Let’s say that you move to direct mail marketing. That’s one of the tactics I use in step 1 of my marketing. It goes like this,
- 1,000 postcards out - (cost $330 for printing and mailing, and about 1 hour of my time to produce the postcard)
- 50-100 phone calls (5% to 10% response)
- 25-50 people setting in a low cost seminar seat (give ‘em a sample of your services)
- 12-25 taking the next step (give them a bigger sample)
- 1-5 people in coaching
So, if only one coaching customer comes from that his cost was $330 plus one hour of my time, total cost $580. If the result is 5 customers, then each one cost $116. Depending on what you charge and the type and size of customer you draw in, the ROI would be anywhere from 6 to 25 times. And, yet, I have coaches tell me “they can’t afford to market” their services. So, they blindly take the “cheaper” way out that, in reality is costing them their business.
My questions to most coaches who are avoiding spending money on marketing are:
- What does a customer cost you to acquire?
- How much can you afford to spend to acquire a customer?
If what it currently costs you to acquire a customer is within the “how much it costs” then the next logical question is:
- How many customers do you want to buy this month?
You see, most coaches are so in the mode of “avoiding spending money” on almost anything, and especially on marketing, they don’t see the opportunities that are there.
What happens if the cost of acquiring that client is more than you can afford to spend?
Then you HAVE to fix it, or close your business. Those are the ONLY logical choices you have.
Do you want to learn more about how to increase your coaching business?
We’ll talk about tons of ways to generate more business, different marketing approaches, and different ways of making your marketing results go up 5-10 times.
I have just completed my brand new guide to coaching marketing success. You’ll also get a free invitation to join a mastermind group of other coaches as they build their business. Hear what works and doesn’t work.
Get your “How to Build a Super Star Coaching Business” for free
Alan Boyer coach’s coaches, who want more business than they can handle, or at least more than they imagined…before this…..The reports have been “5-10 times more clients in just a few weeks, and still growing.
http://www.leaders-perspective.com/Super-Star-Coaching-Business.htm
Tags: coach
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Friday, April 18th, 2008 at 12:50 am under
