Von 30 auf 100 Millionen Jahresumsatz

0:00Unternehmer/Gast We sell to athletes and fitness enthusiasts like yourself with mobility and injury prevention. So, we help them overcome muscle tightness, joint stiffness, recurring injuries. We're at 33 million in revenue. We want to be at 100. >> Amazing. Um we've been scaling very fast. Now, we're at a point where our CAC to LTV is like squashed down to 2.1. So, we don't have the breathing >> coaching or info? Sorry, coaching, info, or products? Info. Okay, got it. >> Yeah, coaching. Low ticket to high ticket engine. Okay, got it. Yeah, so our CAC to LTV is now two to one. We just don't have the cushion to like continue scaling the sales team. We Do you want us to double the sales team? We need more cushion.

0:32Alex Yeah. So, what I was referencing earlier about LTV to CAC at each of those kind of intervals of manual labor that resonate with you a little bit? Yes. Yeah. Um so, you need to increase LTV. So, are you all direct response? Is it all paid or do you have organic? >> have a big organic following, but it's mainly like 70% of the clients are coming from paid. Mhm. We run a lot of paid. Yeah, yeah. So, I've got good news and bad news.

0:57Alex Um if right now you're at two to one, I would imagine the profit margins are compressing, right? Yeah. >> So, sales are high, but yeah, margins are lower. Yeah. The issue is that, believe it or not, if we were to pull out the 30% that's coming from organic, the business would probably not be profitable. Yeah, it might be less than two I'd have to check exactly what that is. Well, what are your margins? 20%. Right.

1:2320% coming from the free traffic, and then the other 80%. Do you know what I'm saying? >> Yeah, yeah. So, a part of it as well, like our close percentage as a company is 20%. The reason for that is like we've gone from four sales reps to 40 sales reps in like 3 months. So, a lot of our sales reps are still in ramp. So, like it should be like 30 35%, which would give us a bit of breathing room, but it's still yeah, like anything else we can do to build out more on the front end and >> Yeah.

1:47I think this is actually pure ops. So, it's it's going to be the sales motion and dialing that in and probably adding some elements of education prior to the close in addition to what you're currently doing to make it easier for the sales guys to do their job with less ramp. And then getting I mean, I'm sure you're proficient at doing sales cuz you're in fitness and obviously have a you know, a hardcore sales uh I'm guessing if it's 40 phone sales guys selling info like it's pretty hardcore in terms of the the the selling perspective. Um who runs the sales team? Uh so, we've got 40 reps. There's then four pod leaders, managers, and then there's one uh director of sales. Got it. Who developed the sales training? Uh myself.

2:28Like it it's kind of come from myself. It's evolved a little bit over time um from our like top sales reps, but it's mainly me and the sales director. It's going to be like to solve this business, it's going to be a recruiting and training thing. Like in terms of sales reps, better reps. Yeah. >> So, like if we look at the whole business, it's like we have to solve that. Now, could we also probably look at the ad side? Like are there things on the creative that might be able to give you a lift? Probably.

2:54Alex Um conversion rate through the funnel? Sure, any incremental return is going to be positive, but I would bet right now that it's going to be how do we get how do we get the best guys to 40 45 and then have the me you know, the median be you know, 30 35. Yeah, our best guys are close to 40. Okay. But right now, you're saying the team average is less than that. >> yeah, cuz there's so many still in ramp. So, part of it yeah. So, recruiting and training is going to be the business that you're in from a selling perspective. And so, you have a sale you have a sales business fundamentally. You have a sales business with direct response media on the front end. And so, there's so much that goes into sales training. I just rewrote um the ACQ sales closer handbook um and all of our onboarding process.

3:36Um there's so much like nuance that goes into it, and a lot of it is just there's so much wasted effort that happens and untraining that occurs on the job when it's done the wrong way that most sales or like I'll say 95% of sales organizations, their primary method for basically scaling the sales team is hire as many people as possible, let the bad guys die out, which is which is scaling through selection rather than scaling through training. And when you scale through training, you can scale with higher margins cuz you don't have to pay the mercenaries their king's ransom because you can take anybody off the street and they can immediately sell.

4:08Alex Yeah. And so, that's where your alpha is going to come in compared to people on like in your space who have to just take the mercenaries who will jump from offer to offer to offer um because you can pay them less and you'll be able to ramp them higher and you'll be able to get more of them. Mhm. And so, fundamentally like that is the that is the that is the motion that's going to be the competitive advantage of the business outside of the obvious like you need to still be able to run really good ads. Yeah, so the 80/20 for us then is like for doing increase LTV is like better sales team. Yes.

4:37Alex You're not going to increase LTV, you're going to increase dollars per lead. Yeah. Okay, got it. And what is a healthy CAC to LTV for our business model at this scale? I mean, honestly, you want it to be bigger. Yeah, I definitely want it to be bigger, but someone said yesterday 10 to one, and I don't see how that uh we could do that. Um I think that you could you could get to five to one Mhm. as a good target. Um and that would probably get like getting the sales function where it should be would get you to three and a half, maybe four-ish, and then I would say the other kind of 20 25% lift that would happen there is going to happen front end conversion rate optimization stuff. Um media, and then we'd have to look at what's the renewal rate on the back end.

5:15Um how many people renew long term? Yeah. Cuz like the two most profitable pieces of business for you are the customers that are coming in for free, which is basically the entirety of your margin right now, and then customers that renew that you don't have to pay CAC for. Right? Those are the things that are dropping to the bottom line. Everything in the middle is literally just to facilitate these two things. Yeah, exactly. >> Right? And so, we just need to like how do we double down on these two cuz these are the most profitable things, and then lift this so that we can unlock more to get to 100. Mhm. Yeah, I got if you get to four or five, then you can get to 100.

5:42Yeah. So, I mean, although this like this will be ops heavy. This will be work. But you also get paid 70 extra million a year, so. Yeah, okay. All right, cool. Thank you, man. Yeah. If you're 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 dollar scaling road map, 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 in 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, and if we can, we'll invite you out to Vegas, and we'll do this in person live.