Should I Pivot or Just Fix What's Broken?

0:00Hey, my name is Jason. I'm the technical founder of Starter School. We do online courses for tech education for teenagers. >> Cool. >> And we run uh a bunch of webinars. Basically, we're 100% paid ads on Facebook. Uh we have a direct-to-cart model currently priced at 297 for a batch of like seven courses. Uh we do a couple order bumps uh and then we have a post-purchase upsell for 189, which is like you know, everything we have basically everything.

0:30>> Yeah. >> Um we did about 700,000 top line in May. >> Good for you, man. >> Profit on that was about two or 300,000, somewhere in there. But the only reason that was possible was because the ROAS that we were getting was like between a two and a three. >> Yeah. >> [snorts] >> But since then, the ROAS has dropped a lot closer to a one. And we've winded down to about 150k uh top line is what we're going to close this month as.

0:57>> Okay. >> So, we're on track to lose about 60 grand. We've got 180 grand in the bank. >> Right. >> And one of the things that we've learned from watching Jason Fladlien and your videos and all kinds of research is that we need a high-ticket offer. But the only thing we can come up with high-ticket is like this idea of hey, well, you know, we'll do like a a white-glove like coaching service and maybe actually really get some hands-on with these kids. >> Mhm. >> Um cuz we know that time spent with us is pretty valuable.

1:23>> Mhm. >> Um and so, my question to you is is that a different arrow? Cuz I know you tell so many people, "Hey, don't go off and do this totally different thing, right? Stick to your main business." Is that a different arrow or how would you think about this? Should we be offering something that can be automated as a higher ticket to fix our problem? Or should we be really considering this other manual arrow? >> Okay. So, first off, congrats. Second off, sorry about the current situation.

1:51Um couple different ways to approach this. So, one is like, if you went from 3x ROAS last month to 1x ROAS, I would bet that it's a creative issue, right? We just need to pump more good creative back out and you'll be back up. It's not like the in 30 days the algorithm changed, right? The other thing, and this is again technical, is that like we might have to look at the pixel event because uh you know, meta might be optimizing around something that's lower in the funnel or not getting the ideal customer. And so it found a new pocket of people that are less likely to purchase. Um and so the pixel's getting trained on the wrong the wrong audience. So like that those would be my like first two gut checks that I would do before changing the business model, right? Now, if I were to change the business model, it really reverse engineers from what the goal you have for the business is.

2:29Like there's nothing wrong with having a business that is had has almost entirely automated uh delivery. Um you can add a lot of leverage to delivery by just keeping a group and still selling high ticket. Where you will then uh encounter uh kind of like an operational bottleneck will be sales team, but it's still going to be pretty high leverage. So how many tickets are you selling I when I say tickets like how many um how many how many widgets are you selling uh per week?

2:57>> Uh it's probably at least between 10 and 50 a day depending on how well our ads are ripping. >> Okay, got it. So that's fine. So if I had like basically if you had call it three-ish sales guys that all they did was on the thank you page after they uh buy buy the the product, uh they get a complimentary call it onboarding call, right? You would be able to set them up for a call it $5 to $10,000 purchase um on the back end and that would materially change your metrics. The question is who's making the purchase?

3:29Is it teenagers? Is it is it parents? >> Yeah, that's I'm so glad you asked because I I was dying to ask you this question, too. So like parents we're advertising mostly to moms. That's our highest profit cohort. >> Perfect, yeah. >> Uh between like 32 to 55. >> Yeah. >> But when we sell to the moms, the moms then go talk to their kids and they're like, "Hey, I got this really cool thing. I think you're going to like it."

3:54And then the kids are like, "No, AI uses too much water. No, AI is this. AI is that." And so, there's like >> Is that what the kids are saying these days? >> Yeah. Yes, sir. >> Is it really, bro? I'm on status right now. >> Yes, sir. >> They're saying the water? Too much water? >> dude, you are going to be sucked into the world of AI whether you like it or not. Every service you use is going to be using it. You're going to participate unless you want to become Amish.

4:19So, like how do we get that across to the kids, you know? >> Got it. Um I would say this, is that the much simpler fix to the Okay, so if I wanted to have the simplest fix without creating a whole another monster of a back end, right? In terms of delivery and sales team and whatnot, which to be fair, I I'm very good at that, which is what I built a lot of businesses around. So, like I can talk to it at length, but if you've never done it before, it probably wouldn't be my first solution set. So, my first solution set would be the the following three things. So, number one is I would make sure the creative is speaking to the most high-quality avatar, number one. Number two, look at um I don't know if you have this level of attribution, but um you should be able to see uh which ads specifically are generating the highest LTV cohort. So, the people who are taking the upsell at 189.

5:07I would want my pixel event not just to be on the purchase, but ideally on the purchase post upsell, cuz then we can train the pixel on the best quality audience. And I um think that your upsell is likely mispriced, that 189. Um I think you could probably get away with something that's like $1,500. Because even if a small percent Yeah, even if a small percentage of people take it, it's going to make a much bigger difference, right? Cuz like what's your take rate on the 189 right now?

5:31>> It's pretty good, like 30, 40%. >> Yeah. Let's say it's Let's say it's a third. So, it's like you get 70 on top of your what? Two 297? So, that's 370-ish average cart? >> Yeah, the average order value is around four three to $400. >> Yeah. Like, if you have like a $1,500 upsell, even you get a 5% conversion on it, right? Well, 5% would be equivalent, but if you had a 10% conversion on it, you get 150. It would be something that I would look at.

6:03Um and I would just do it as a group cohort. Like, if I like you could probably just test all my other courses for 1,500 and see what happens um as option one. Option two is you do all my other courses plus, you know, a 12-week accelerated boot camp on the back that's just purely one-to-many, you know, one call a week in a community. That's very light on the delivery side. Um and that wouldn't require you to build a sales team.

6:27Uh and so, I said in sequence, number one, more and better creative, ideally targeted around the customers that have the highest LTV. Number two, put the pixel behind the optic rate so that it still takes 14 days for the pixel reset, but that's like I would I would look at that. Um the third test I would run or the third thing I would do is that I would run uh a high-ticket uh OTO as my as my immediate thing cuz that way we don't have to build anything else. And if one, two, and three do not solve the problem, then I would consider increasing lifetime gross profit by adding kind of the heavy stuff, which is let's add a sales team, let's call all the customers, let's sell them a five or $10,000 thing on the back.

7:07>> Thank you so much, man. Appreciate your insight. >> No, appreciate you, dude. Congratulations on the business. Uh I think you had a bad month, man, and I think that if you just like fix the [ __ ] and actually make Like instead of going like I'm going to make a pure AI ads, here's a little ask for you. Here's bonus number five. Make five ads from scratch manually yourself that you think are [ __ ] bangers. And then do all the other [ __ ] as AI.

7:32But I think there's this been this big loss of like the art of marketing that's happened because everyone's AI-ing [ __ ] and it's just the the quality's is not there. >> Yeah, cuz I'm like I'm the technical founder, so I have another founder. He's doing all the videos and actual content that actually turns into the ads. But, you know, on my end, I'm like, all right, I got to nail attribution. So, I built my own pixel. I'm like predicting refunds and upsells and reporting that back to Facebook. Like, I'm doing all the things and I'm pulling out everything I got to make attribution good.

8:08>> Yeah. >> So, >> So, I would I would encourage you to not just throw a bunch of [ __ ] on the wall and see what sticks, but make a handful that you actually like, I really think these will work. And run those, too. Because I'll bet you if you go for broke on the ads, on the creative, it'll make a significant difference for your next webinar. >> All right. Thank you so much. >> Appreciate you, brother. If you like this video and you're a business owner who wants to break through your current revenue ceiling, I just did every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling roadmap that I've used to go from zero to one, zero to 10, and zero to 100 plus. And so, you can click here and you can check it out. Again, absolutely free. And since you're a business owner, I appreciate you and enjoy.