Warum Coaching-Anbieter ständig neue Angebote brauchen

0:00I sell coaching to Christians who want to be authors, speakers, and coaches. We're at 4 million. >> Sweet. We'd like to be at 12 million. >> Sweet. What's stopping me is kind of two things. One is we've been making this pivot to offering a degree program, getting it wanting to kind of category shift from the coaching space to the higher education space. >> So you're going to get accredited? We have a partner that's accredited. So we are able to offer a accredited two-year degree program. And we've got a pretty good setup with them money-wise.

0:28So you know, we're we're having a problem with making that category shift selling a new product at the same time of like our old product would have been like an $8,000 a year coaching program. LTV to CAC on that used to be 10x, now it's closer to 2x. So we just you know, our our whole funnel is not working like it used to. Okay. So it sounds like two problems. So with that? >> That sounds like two issues. Yeah, exactly. So I'm kind of in between like do I double down on you know, the coaching model and how we've sold coaching and just you know, apply the internet marketing stuff at a you know, greater velocity or do I go all in on this education model because I think it's a better upside.

1:11>> [sighs] >> Do you own the other entity? So you said you have a partner. How does that work? Yeah, yeah, yeah. So we have a a master services agreement with them. So we're providing a whole list of services, marketing To sell their product basically. Yes, yeah, we So this is like a JV like You market and sell it, they deliver it and you get a split on the revenue. Yes. Is it a new entity? No, they've been around for

1:35>> So it's just a Oh no, so like your existing codes can stay the same. There isn't a third code that get created that like half you each own half of. >> Correct. So it's the first one. The first one. So just two separate codes. Okay, got it. So basically it's a yeah, master service. So basically it's like a master affiliate agreement. Yeah, yeah. It's just just a partnership agreement. Two different entities. Well, have you done have you done any marketing and sales for that thing before? >> Yeah, we've we've sold it. We've been selling it all year. What's the LTV to CAC on that?

2:00What's the what? What's the LTV to CAC on that? CAC is around 3 to 4,000 and LTVs 10 to 12,000. Okay. And then what's your split on the 12? 80%. We get Okay, so you make the majority of it. Okay. So you have your old model your old product has a two to one LTV to CAC and your new one has a three to one LTV to CAC. Yeah, we've been selling it really in like the same exact way. We've just kind of repackaged like a coaching program into a degree program. So we're selling it the same way to the same people. I feel like just the problem is that we've gone from a 10 to one LTV to CAC to now a like two to four LTV to CAC. Just cuz the the marketing funnel's not working the same. Yeah. Well, there's there's two components. So this is like a very classic problem. So I'm sure like more than just you is dealing with this in the room.

2:51And so um So basically it's like there's an order of magnitude problem on the back which is the cost to acquire customers is going up. And so the only apparent solution is to decrease cost per customer or sell something different, right? But most of the time it's like you just have to solve the big hairy problem that's in front of you which is like I need to fix this. All right, like fundamentally like are there people who want the education that you have? Yeah, okay. And the market's probably bigger than $4 million a year.

3:18Right. And so it's like okay, so we have we have a marketing problem on the front end which is probably a creative issue and whatever the word of mouth is about the product. And so typically if your cost to acquire a customer raises faster than CPMs do then it means that you are basically you have you're you're trying to outpace negative or neutral word of mouth. And so that's that that's obviously a big compounding problem. Just like you can have viral word of mouth in a good way, no one seems to think that you can have viral word of mouth in a bad way except the the ratio of bad word of mouth to good word of mouth is like 15 to one and no one wants to talk about having bad word of mouth go viral.

3:54And it's much more sensitive. And so this by the way is the reason why many people in the coaching This isn't me decrying you, but this is why many people in the coaching space basically have to keep launching new offers is because their never their first thing was never that good. And so they have to keep coming up with the new things over and over again. Like this time it's different. And so okay, so if I'm you basically you can you can you can spend the amount that you're spending right now to get customers cuz three or four thousand dollars is actually fairly like benchmark in terms of CAC. If you had 1/5 that price before and you were acquiring customers at like $800 I would say that you had probably a moment where a media was mispriced or whatever arbitrage opportunity you had some new method of acquiring customers. I'm guessing it's the Yeah, that's that resonates.

4:41Yeah, like 2020 to 2022. Yeah, we got $800 CAC for sure. Now it's the same thing but $4,000 CAC. Right. And so the market kept like basically the market caught up. The method that you had isn't as novel as it once was in terms of acquiring customers. And so the arms race of business is LTV, not CAC. And I think this is what most people mess up. It's like CAC across industries typically is fairly comparable. Like I look at so many different businesses in the same space and it's like like you saying three or four thousand like that sounds about right. That's that's not really off. The issue is LTV's off. Like LTV needs to be closer to like 20 or 30k and then all of this works just fine. So then the question is okay, you sell this thing that's $12,000. How can we get 50% of those people to buy a $30,000 thing?

5:25And then that 15 rolls into the 12 and now you're at 27 and it all works. And so this is why I say like I tend to fix businesses back to front rather than front to back. It's very difficult to have a business rely exclusively on having arbitrarily low CAC relative to market. It's much easier to have a very sustainable business because by building a better mousetrap so that you can always outspend your competition independent of how new the media platform that you're advertising on is.

5:51And then when something new happens up, you just print money and then once it stabilizes because all the the small dogs who didn't have a back end and didn't have higher LTV, they get priced out. >> of the issue that you're dealing with right now cuz people are still selling to your market, right? There are other businesses that sell to your market. >> Yeah, yeah, a ton. Right. So it's like the fact that they can still breathe right now should bother you. And so it's like okay, well how can they breathe and I can't? So either they're better advertising or they have bigger LTV. It's one of the two. It might be a combination. But I think if I were you, I'd solve back to front in terms of how do I get Now you probably have more control over your own product than the other person's.

6:24The JV thing they were talking about. >> got a we've got a lot of control in the >> more control there. Yeah, we got a ton of control. And so the second version you had was like you're getting two and a half to one or three to one and your current one's doing two to one. So I would give up a three to one where I don't have the control to have two to one where I do because you can instantly double that triple that just because you can add a back end. And so I would probably go back to front, build the back end and then I would look at what the other people in the space right now are doing in terms of what methods they're using cuz that stuff changes all the time. What methods they're using to get lower costs? So prioritize getting doubling LTV rather than cutting CAC in half.

6:57Yeah. Okay. The LTV is the sustainable competitive advantage. CAC is ephemeral. Okay. Cool. Yeah. Thank you. >> Yeah, a lot of Cool. Yeah. If you are a business owner and you are not growing as fast as you'd like, I'd like to give you a free gift. So my team and I put together the $100 million scaling roadmap which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly where they got stuck and how they got past it. And so we broke it into these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources, and finance. And so no matter what you're struggling with, someone else has already struggled with it and solved it. And so I'd like to give you this thing absolutely free. You can go to acquisition.com/roadmap, plug in your business information, and if you want us to actually help you deconstruct the business and you're trying to scale, we'd love to help you out. On the thank you page, you can book a call with my team and we will look at the business see if we can help.

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