Helping a Personal Stylist Scale Past $3M | Ep 811

We want to decrease the friction here for qualified people.

Right.

So there's good friction, bad friction. So good friction is something that increases the overall quality of lead and gets out people who suck. Bad friction gets everyone out. A slow page load time, for example.

Right.

Everyone leaves, good people and bad people. We want to get the type of friction that only bad people leave and good people stay. Okay. And so if we have budget authority, need, timing, we have the specific things relative to the lead magnet, then your follow-up, if you want, like, hey, if you can send me a picture, it'd be great. If not, I can just go off of your Facebook profile, something like that. Then they show up to the call, you have your one of templates that you already figured out ahead of time. That then sets up the sale. This is Ashley. She has a personal styling business. She does about $300,000 a year and we're going to help her scale.

Hi, I'm Ashley Capps. I'm founder of AC Styles. So we are a professional wardrobe and personal styling service that helps transform our clients' confidence and saves them time. So revenue, we make about $309,000 annually, $130,000 in profit. That gives us about 42% in net margins. So we've been in business for about 4 years, and so far we've served over 1,000 clients.

1,000 clients?

Yeah.

How'd you get 1,000 in 4 years?

So that's over my whole, uh, career.

So the business has been 4, you've done 1,000 yourself? Awesome, super cool. So who do you help specifically right now?

About 50/50 men and women, typically in their 40s all the way to their mid-60s. These are folks that are Stay-at-home moms, they could be frequent flyers, they could be going up in their career into the C-suite, um, and it's those that really value their time and really also value having expertise.

Okay, got it. Um, so what do you do? How do you help them?

All right, so we transform our clients' fashion style and confidence and also help save them time. So we have two different phases in the way that we do things. So onboarding phase, phase one. So we do a style assessment. So basically we establish baseline with their current style.

So low style, you look terrible. Like, look at the mirror, you look horrible.

Pretty much. Okay. We establish baseline and then we show them where they can go.

Okay.

So once we show them where they can go, that's when we go in, we gut the closet, we get rid of everything, and we get them into some new outfits, looking, feeling good. And then from there, that's when we determine, you know, just based on their lifestyle, does it make sense to work together on like a monthly level, on a quarterly level? And at that point, we have ongoing styling sessions, we put look books together.

Okay, cool.

And we have like an on-demand service as well. You can text us if like, oh, I got an update tonight.

If you will.

Pretty much.

All right. So when you say you show them what the future looks like, is that just like, here's a, like, like looks of like other models or something like that? Or like, yeah.

So it's putting together a style mood board. And then we also, prior to that, we say, hey, just based on your complexion, here's the colors that are going to complement you.

Cool.

And then based on your dimensions of your figure, here's like the silhouettes that are going to work best for you.

Oh, cool.

And then a big component of it is lifestyle. Like, what are they doing on a day-to-day life?

Yeah.

And making sure that whatever they buy fits the life that they're living today and not just like, oh, that looks really cool on a mannequin.

How do you make money?

Important question.

Yeah.

So onboarding package that I mentioned, $8,500. That's over the course of 60 days. Then it goes into either monthly at $2K a month or quarterly at $4,500 a quarter. And then right now we also make about 10% of our revenue from commission from clothes. We get about 10% margins from the vendors that we work with.

Okay.

And right now, we just actually focused on having just this luxury tier. In the past, we had two different tiers and we focused more on one time.

And you realize you make more money on the luxury tier, so you do more of that.

Yeah.

Love it. So how do you get the customers? Where do you find them?

So right now, we're doing AdWords. We're spending about $300 a month with Google, and then we're also spending about $300 a month with Thumbtack.

Okay. We also partner—

we have affiliates with other luxury-like services like matchmakers and things like that. We host events and then also, of course, client referrals.

Do you know what percentage of customers come from each of those roughly?

So yeah, about—

If you don't, no worries.

4 are coming from affiliates.

Okay.

I think about a third is coming from the other 2 and then a third is coming from referrals.

So kind of like evenly split between referrals. Would you consider affiliates referrals or no?

No, I kind of segment those out.

Okay. So referrals is one, affiliates is another, then paid ads between Thumbtack and Google.

Yeah.

Okay, cool. Um, okay. So how many people do you sell a month?

Right now we're looking at about 12 total leads, 8 appointments, 100% show for those appointments. Total sales, 4. So close rates, 50%, show rates, 100%. 40 clients currently and 1 churned in the last year.

Okay. So you still— so these 40 clients still pay you monthly? These are active?

Yeah.

Okay.

Okay. So they're coming in from different timelines. So some are monthly, some are quarterly, some are annually, just from different package testing.

Okay. So we're going to probably talk about that in a second. The full compliance thing, because I think you probably have a big revenue opportunity there. Okay. So what's the goal? What do you want to do?

All right. So, you know, just the easy $5 million revenue.

Why not?

And really, I think what we can do is because it's easy for me to get stylists to train them, is to build like an education component.

It's like a totally different business.

I know.

Yeah.

But have stylists in major metros.

Okay.

So, so have stylists in other metros, and then the long term is to be able to create a training program for them.

Like super long term, like super, super long term.

Super, super long term.

Like next lifetime. Oh, okay. I'm just messing with you. But fundamentally, for this business, the goal is $5 million doing what you currently do, or a scaled-up version of what you do. Yes. Is that correct? Okay. And in other metros.

Major metros.

Yeah, no, that's cool. That makes sense. What's the problem? What's getting in your way? Leads. Okay.

We need lead flow. We need more of them consistently and we just— we need more at-bats.

Yeah.

So that's, that's really what it is. And also I haven't been able to be as consistent with content creation and I think there's opportunity missed there.

Okay. All right. So show me the numbers.

So $309,000 in total revenue, $130,000 in profit, 42% net margin. Blended CAC of $600. LTV is $10K annually. So that gives us a 16:1 LTV to CAC ratio. $600 in marketing spend. Show rates 100%, close rates 50%.

Okay, got it. There you go.

Okay, so Google, we're looking at $3,400 for the year for 2024. Cost per click, $1.89. Total clicks, 1,800.

Do you know what words you're bidding for?

Yeah. So like personal stylist near me, Los Angeles personal stylist.

Do you have prices on the site?

What do you—

when they click, where they click, does it show your prices or is it just like an opt-in page?

I do not show prices.

Okay. Is it just like an opt-in page?

It's just an opt-in page.

Do you know how many leads you get from this source? I know you had 8 sales, right?

Oh, how many leads?

Yeah. And I'll tell you why I'm asking. I'm asking because when I see 1,800 clicks, I'm like, that's a lot of clicks. So your cost per click is great. Yeah. And so I'd be like, okay, and especially with intent-based search rather than interruption-based marketing, like social media ads is like interruption-based, you're not looking for a stylist, you see an ad, then you click, versus like, I am looking for a stylist.

Right.

Intent-based click is usually much higher quality. I would be surprised if you were getting, I mean, unless there was a massive mismatch in terms of what you're asking people to opt in for, between 1,800 clicks, I would guess you're getting somewhere in the neighborhood of at least, you know, 250 to 500 opt-ins. That would come. Does that sound— is it— so $250, just for context, so divided by 12, should be looking at— what is that, $20 a month-ish?

Okay.

Does that sound realistic or does it sound like less than that?

Well, so right now—

That's leads.

Yeah. The funnel is just like book a call. And I think that that's—

So straight to book a call is the opt-in. Yeah. Okay.

So I think that that's—

Is there a video?

That's being implemented right now.

Okay. Okay.

But I think that that's the big problem is it's just like, hey, And you don't give them anything, right?

There's no reason for them to opt in. We're gonna make you so much money, it's a lot of fun. Yeah, nice thing is like, yeah, it'll be fun. Okay, so despite like basically no incentive for someone to actually book a call, you're still making 8 sales. And so I think that what's happening right now is that like the show-up rate and the close rates you have are indicative, like you're just basically skimming the absolute people who are like, are in such dire pain. Dire pain. And you don't know them 'cause they're coming from ads, right?

Right.

Right, like if you're in that situation, then like, this may sound exciting for you, but like you could probably 5 to 10x the sales of the business just by fixing this. Like we could do nothing else and you could just do that.

Just the funnel.

So we'll get into that in a second, but okay. The good news is that even with the massive amount of inefficiency that's there, your LTV to CAC's still really strong. So it's really good, and I think we're just losing, we're just leaking a lot in this process. Okay, show me the Thumbtack one.

Okay. Also people that are in pain right now because they know that they're searching for it.

Yeah.

So $6K total spend on leads here.

Okay.

58 leads, $38 a lead, total sales $8K, $750, same LTV.

Okay.

Thing is, Thumbtack is like 90 to 95% unqualified in terms of purchasing power.

Mm.

So we were able to, you know, rank higher for SEO.

Okay.

Through this page.

Uh-huh. Through your Thumbtack page that you then pay extra to promote.

Yeah.

On Thumbtack. Okay, cool. Got it. I mean, $38 a lead's not bad, given the price point that you have. Right. But the issue is that they are unqualified, and so the nice thing here is that it might just be changing the headline of whatever the page that you're promoting is, and again, adding some qualifications to the lead form so that you can immediately see, So like underneath of this, as you get like, I'd say more advanced, there's total, there's total leads and then you'll have something called MQLs and SQLs. So MQLs will be marketing qualified leads and then sales qualified leads.

Okay.

And so an MQL is like, okay, in order for someone to be an MQL, they must meet these requirements. So it's like I got 158 opt-ins. Of the 158 opt-ins, 50 of them have an income above $100,000 a year or are, you know, a man with a corporate job. Like we have to just figure out what the fewest basic, the fewest basic. Yeah. And we'll, we'll We'll cover that. So do you actually— do you have a minimum income requirement?

So I would say for this new model, $1 million a year in income. Yeah.

Okay.

So yeah, so this is definitely a top 1% because 8,500 plus what is like it's about $25K all in for the service. The other thing is they have to have money for the clothes as well. Yeah. So you're looking at about a $40K, $50K Well, let's just even say $25K a year spent in clothes. Average Joe Schmo cannot do that.

Yeah. And then is there a specific like life event or something that happens that triggers people into like getting into this buying cycle?

Yeah. So it is typically a transition moment. I had a baby. My body has changed. None of my clothes fit.

That's for women.

I got divorced. Both men and women. Or I'm just— I'm getting— I want to start dating, period. My image doesn't match my status as a C-level person or even VP.

Yeah.

So that— those are— me. Those are the typical triggers.

Okay.

Yeah.

I feel triggered. No, you're good. Okay, so that's the Thumbtack data. Is that the last slide? Oh, there's a bonus. Is it for later?

Numbers questions.

Well, I have already a handful of ideas around around what we, what we can do. Tell me more about the affiliate side, the metrics, because you've got— I get both of these. I understand the referral side. I understand both your paid acquisition parts. I think the continuity is lacking. We can work on that. I think there's inefficiency in the ad funnel. We'll talk about that. But I think affiliates is kind of the last piece before we dive into like figuring out what we're going to do.

Okay, so affiliates. Okay, you're asking basically, they— we— it's just like a lead pass-through.

Mm-hmm.

So they make the introduction and we offer a complimentary style assessment to help them get their dating profiles ready. It's really just a glorified sales call.

Okay. Yeah. And so you have these men— how many matchmakers do you have who refer you customers on a regular basis?

So combination of private social club and matchmakers, we have about 6.

Okay. How did you find them?

Googling them and reaching out.

But you reached out and did it that way?

Mm-hmm.

And what percentage do they send you?

What's that?

What percentage of your business is— do those 6 kind of affiliates send you?

So as of this year, it's about a third.

Ooh. Mm. Yeah. Interesting. Okay, cool.

It's because it's like very aligned audiences. Yeah.

They're literally already buying the types of services related to what you want. Yeah, that's great.

Pretty much.

Okay. Yeah, I'm— I feel like I'm pretty clear on what you said.

Okay. Yeah, probably very simple for you.

No, no, it's good. This is great. So you want to make $5 million, right? Yeah. And we're at $300,000. So that's a 17x from where you're currently at, right? If we were to just triple and get to $1 million this year, would you be okay with that?

Totally down.

Cool. Because then going from a triple to a 5x from there is like a little bit, I think, I think, because the thing is, is the business will usually change. There's something called the Chinese rule of 3 and 10, which fundamentally just means that systems break when they triple. And so I like to think in triples in terms of, unless there's some massive order of magnitude change that we can do, but the things that we have right now, a handful of these are triples independently. First thing I want to talk about is going to be the avatar, is getting clarity on who you are going to serve, because right now you serve a lot of people. Not to say that this is a bad thing, but I think over time we are going to get narrower. So that we can make our value proposition a little bit more compelling for them. Okay. The next is gonna be paid ads funnel, which we're gonna look at the pages and we're gonna look at the offers so that we can say, okay, can we tweak something? We add a lead magnet here that would get the right people and ward off the bad ones. And is there kind of some process things that we can do that just will stop the leakage? The third piece is still acquisitions. It'll be affiliates that I want to cover. And then the fourth, what I want to hit on is continuity. And so those are the big 4 that I want to hit on. We can talk about the corporate thing that you mentioned in between. My initial gut reaction is not yet, but because the thing is, is like if we can get to 1 million, probably we could probably, given the things that I think that we're going to uncover here, you could probably get to like 2-ish, 2 to 3, just from some of the things I'm going to show you in a second. Cool.

Okay.

Then maybe you get to there, you're at 3, you might be like, wow, what if I just kept doing this?

Yeah.

Rather than the other thing. Okay. Okay. So avatar clarity. Do you have any idea if there are some customers that are like way better than others or that you enjoy working with more? Like, what's your dream customer? Who are the people who spend the most money with you that you help the most?

Can I just like ramble off who they are? Okay, so stay-at-home mom.

Okay.

Frequent traveler. Kids with many social events.

Mom who has kids with many social events.

Yeah.

Okay.

Like, Mom, one daughter just got married.

Okay.

Son is having a baby, that kind of thing.

So usually mom. So it's mom, right? So there's kids, obviously, because it's mom. Okay, got it.

There's a few of these.

Women plus money. Got it.

And they just want to have new outfits for all of their socialites. Socialites.

Okay, got it.

But private, not public people.

Yeah, I understand. Okay, so mom socialites, is that the number one, your favorite avatar?

And then men CEOs.

Okay, by percentage of revenue, is it 50/50? Yeah, it is. Interesting. Okay, CEO, man. Huh. Do you ever get cross-sells? CEO man gets wife. Wife starts or husband starts?

Typically wife starts.

Interesting. Okay. Got it.

That's, that's split.

Okay. Okay. This is good. This is good for me to know for now. Okay. Now, paid ads funnel. First thing that we can do on this one is, and obviously this isn't, I mean, you could, okay, there's a lot of things here, but wherever you're driving your traffic to, so whether it's the homepage or it's this page, you should probably have some big lead magnet that people are going to want. I would imagine that— what's something that somebody like that would want a lot?

So that's been my thing after reading offers and thinking about a lead magnet. It's like, what appeals to these people? And they don't want to sit there and like get a checklist of how to go through their closet themselves. So the only thing I could think of, and this isn't very scalable, is the complimentary style assessment. But that's one-on-one with somebody.

And that's okay though, because I mean, you're still getting them to— more of them to opt in. But right now, is the assessment the thing that they're booking on the Google Ads page today?

It's just a call. Okay, so it's not being positioned as—

yeah, so for like the, the 1.0 version, is, uh, style assessment is what you can, um, basically promise them, uh, on the landing page. But I was thinking more something like really tactical, like the perfect outfit for you, like one perfect outfit or something to match their skin tone, like, like your idea of colors. Like, that would be a cool one because like, that doesn't— you have to like put a whole thing together. It's just like, oh, this skin tone, you know, there's like 10 tones and you just pick the one that's appropriate for them.

Yeah.

Okay.

So we were going to— we were going to do that next. And also something else. We were going to do the one perfect outfit, but it's so nuanced. But then we were thinking, okay, what if we just share with them, hey, here's how— like, what are some of the steps that they do to prepare to— if they were to work with us, how are they invested? So we're thinking like taking their measurements, having them do some of these steps, like creating a mood board themselves.

So we want them— so for a lead magnet to be really valuable, we want it to be risk-free, easy, and fast. And so those things require effort.

Okay.

And so we don't want the avatar to work to get the value. We want them to just click and get the value.

Okay.

And so I think what we think about is like, I like— I think this is actually really interesting. This is just me, me personally. So maybe I'm a CEO man, but it's like there are some, some skin tones that combination— basically it's like you have a combination of hair and skin tone and eye color that is unique to you. And between all these different permutations, there's 100 different variations people can have and they have a different color palette. That would be unique to them. Now you'll know behind the scenes that there's probably like 8 different, you know, color styles or whatever. I think either doing color because that feels like the easiest, one degree more nuanced than that would be a specific style being like, you know, streetwear, hip-hop, like whatever, you know what I'm saying? Like, you know that better than me.

Professional, casual.

Yeah, exactly. And so I think that this is like you could do this tomorrow. You don't have to change anything just by repositioning lead magnet. But I think this one would be really attractive, especially if you like when you push them there. I would experiment with the different headlines there and then we need to measure the conversion version rate of the page. I know that you've turned them down. The interesting thing here is like 1,800 clicks, I think we could be able to get somewhere in the neighborhood of like, if we're doing this right, like 500 leads from that amount of spend.

Oh.

And just if literally we just need to nail this. Because on a Google ad intent, like high intent search like this, you should be able to get like 30% of people to opt in. So from a benchmark perspective.

To this?

To something that is right for this audience. So if someone's looking for personal stylist near me or personal stylist LA, then it's like, what is the first piece? And like, I always think about like our offer is you've got all these steps that someone has to take. Can I peel off the first one even though it's something that I normally charge for? What's my actual cost? It's gonna be time. Can I template some of these things out so that I can still provide a lot of value but not have it take too much of my personal time? And the cool thing with these like kind of like more costly or unscalable lead magnets is that you only have to give it to people who are qualified. So you are not obligated to, like you can choose to do this only if someone meets these qualifications and you just say that on the landing page.

Okay.

So it's like, hey, if you're a mom with kids and a socialite or you're a CEO guy and you're not getting what you want, then schedule one of our style assessments where we'll go through personally your skin tone, your hair color, your eye color, and find the things that will immediately make you look better just within your existing closet. Because that's like, again, they don't have to do anything and they'll immediately look better. That's like immediate value, not a lot of work.

Okay.

So I'd be like, okay, that's what we're going to offer. So now I can get more people to apply. Now they're going to fill out their stuff. And again, if they're not qualified, it's like, well, you didn't read the headline, so don't worry about it. So you don't feel like you're— and then for them, I would probably just send them some free things so they feel, you know, I still gave them something. But that would be like the thing that I would do to improve the funnel right off the bat without really even seeing the funnel. Is a clear headline around what they're going to get. Subheadline is either an image of like almost like a before and after of style or some sort of image that shows, you know, white skin, brown hair, don't do this.

Okay.

And then they're like, oh shoot, I do that. And so just like a simple thing that they're like, shoot, I do that. And then they're like, oh my God, I need help. And so all we're doing is increasing deprivation so that they take the next action. Okay.

Okay.

So that would be the lead magnet component that I would do for these paid ads. Now I think that you have the scheduler, so they apply, then they schedule. Then what's the follow-up sequence? Like, how do you— like, I—

because there are so few, I just manually say, hey, and I try to like—

do you reach out to them? But they self-schedule on the, on the page, right?

Well, that's if they apply for more information. If they schedule the call, then I send them, hey, here's our services. Yeah, looking forward to speaking with you.

Got it. So I know you're going to put the video together. Yeah, there's the video before the call that gets them to book. And then I would probably consider sending them a second video between booking and showing.

Okay.

And then that does a little bit of the presale for you. And I think about this in terms of like, what are those things that you repeat on a regular basis on the call? So there's usually like in every call, there's kind of like a little bit of a sales pitch that occurs where you're like, okay, so let me tell you what we do. I just try to put as much of that before the call so that I can spend the majority of the call on the person, the decision-making process, rather than basically have this like prerecorded script that I have to keep reading over because it tires out you, tires out your sales team eventually. That's how I would, I would try to do it. Okay. I think that if we can do the lead magnet, we can capture way more leads. I think if we add the video to the landing page.

So do you think it makes sense to put the pricing?

No.

On the page?

No, no, I don't think so. I think that if we ask for qualifications and we describe the services, that'll give us 80%. And then basically you just want to find, 'cause the thing is, is like, you don't want to disqualify, 'cause there's some people who will be in, who have smaller income, but really want this. And so it's finding kind of that sweet spot, which is like, if someone then says like, I want to start immediately, I'm super open, and their budget's like medium, then you probably take the call, right? If they're like, my budget's zero, then like, okay, well it doesn't matter how bad you want it, it's not gonna work, right? I think that on your qualification question, which you'll have on your scheduler, we just ask for the fewest amount of questions that are required for us to make the decision of whether or not they should stay or not. What would you— so the way I would think through this is that I'm gonna have like 10 templates that I know that are color palettes that work for these 10, you know, characteristic people. And if I have asked their skin, hair, whatever upfront, then I know when I'm going into the call which template I'm gonna be using when I talk to them. So it's like, hey, oh, you're blah blah blah blah, actually, you know what, I would describe you more as olive than white, and I think this might actually be a better thing for you. Cool, okay, and then you go into your normal sales process, which obviously works. I don't even wanna talk about sales 'cause you're closing 50%.

Okay.

Does that make sense? I want to make sure.

Well, I just want to make sure that like they— because right now it's like book a call, a sales call basically. And that's like obvious what I'm speaking about. But then this feels like, oh, just have a call about skin tone.

This is sales.

Yeah. And then it's not an issue because they're already qualified.

You're only taking the calls with people who have income, right? That makes sense.

Yeah.

So you're going to take more calls. You're also going to hear more nos, but you're going to make more money. Hey guys, real quick. This podcast only grows from word of mouth. Quite literally. There's no other way to grow a podcast than word of mouth. If there's some element of this that you think somebody else should hear or would be relevant to them, it would mean the world to me if you shared this via text, via Instagram, via DM, via whatever way you like to share stuff with the people you love. Thank you. Like, fundamentally, I could, I could just say, like, I could run an ad that just said, hey, I have this really expensive thing. Book here if you want it, and this is the price. And the people who hop on those calls will be incredibly qualified. But if I just said, I have this really free, amazing thing that'll help you with the first problem, let me help you with that. And then people are like, oh, but do you do any of— ah, you know what, I do do that stuff, it's so funny you ask. And I get 10 times the calls. And so if I close 30% of a 10x number, I still close 3 times the deals.

Okay.

Does that make sense?

Yeah.

And so there's a little bit— now part of it is because you're selling out of your own wallet in terms of time.

Yeah.

And so it's because you're like, I have my time and I understand that. But all we have to do is just tweak these things. If you have somebody who you have the information about them, you have the income.

I mean, I can really just train somebody to just do it live.

As many things as possible you can do. Like we want to decrease the friction here for qualified people, right? So there's good friction, bad friction. So good friction is something that increases the overall quality of lead and gets out people who suck. Bad friction gets everyone out. A slow page load time, for example, right? Everyone leaves. Good people and bad people. We want to get the type of friction that only bad people leave and good people stay. Okay. And so if we have budget authority, need timing, we have the specific things relative to the lead magnet, then your follow-up, if you want, like, hey, if you can send me a picture, be great. If not, I can just go off of your Facebook profile or something like that. Then they show up to the call. You have your one of templates that you already figured out ahead of time.

Yep.

That then sets up the sale, which is for you. It's like, oh, you don't have this, this, this, and this. All we're doing is expanding the gap of like, you're here, you want to be here. Oh, you're missing all this stuff? Oh, you know what? So funny, I think you'd be a perfect fit for what we have. Can I tell you about it? And then you're in.

Got it.

Does that make sense?

Yeah.

Okay, so this is what I would do to change the paid ads funnel, and I think this will probably apply for both Thumbtack and— Can you spend more on this?

Yeah.

Well, I'm like, dude, if you— if I had a machine in front of me where you— and this is without you doing any of this. That's the crazy thing. That's without you doing any of this.

Right.

So if I said, okay, instead of paying $3,400 a year, what if we paid like $3,400 a month? Yeah, well, that would 12x your business. That'd be chill, right? Yeah. I mean, it beats the S&P 500 where you put a dollar in and get $23 back within the next week. It's not bad, right? So the next thing that I want to go over is the affiliates, because I think that's really important.

You would not touch Facebook ads.

Well, you already have an acquisition channel that's working and super profitable, so I'm less likely to want to do that now.

Okay.

So because you can spend more if you wanted to. All right, let's talk about affiliates. So matchmakers.

Yes.

Okay. So you have 6 matchmakers right now.

4 matchmakers, 2 private clubs.

Okay. So I'll go—

I mean, whatever. It doesn't matter.

Yeah, you're good. Okay. So you got 6 affiliates. How much time did it take you to get each of these affiliates?

Not much time.

Okay. And each of these sends you people on a consistent basis?

Yeah.

What was the process that you did to integrate with them?

I met with the owner and—

So you did outreach to get them?

Manual outreach.

Okay. Is it like phone calls, text, email, DM?

Email.

Okay.

Manual outreach. Explained that we can offer a complimentary service to their new clients.

Oh, cool.

And, you know, that we would— we could close them.

Love this. Almost like it's directly out of the affiliate section. In the book.

And that's it. And then they would—

what percentage do you close the people that you talk to?

That's been the hard part is like talking, getting them.

Okay. Do you know how many outreach attempts you did to get to the 6?

Probably about 40.

Okay. And I want to paint something for you because I think it's going to be interesting.

Okay.

So you sent 40 emails and you were able to close 6, right?

Yeah.

Okay. Now, how much money do those 6— so it's a third of your revenue, right? So it's $100,000 a year, roughly. Okay, so think about this. So every one of these emails made you $2,500. That feels like pretty good return.

Yeah.

For sending emails, probably copy and paste.

Right.

Mm, mm. Do more of them. I have a wild idea. What if we sent 400 emails? Yeah. I don't even want to mess with the affiliate process that you have right now.

Yeah.

You reaching out manually is obviously effective. You sent out 40 emails, so I'd be like, okay, how do I send, Like, and that, like, if you did that for 4 hours every day, right, that, I mean, you'd probably be able to send, even if you did them completely personalized, completely manual, the way that you probably did, you don't have to buy any software, like, you can just send the emails, you'd be able to do that in like a week or 2 weeks if you want to spread it out. It's like not a lot. So 14 days, what's 400 divided by 14? You know, we'll give you, we'll give you that, we'll give you the weekends off. So we'll go, so it's 40 emails a day.

40 emails.

I'll give it to you in a month. How about that? So we'll do 20 emails a day. That feels like— that's— that feels reasonable.

Yeah.

Okay, cool. Let's do that.

Best place to like pull data? Good question, because I think it's, it's the matchmakers, but it's also could be executive coaches, could be high-end fitness trainers, people going through a transformation, weight loss.

Yep, they need— they need— yeah. For sure. I would think about— I think you have these in segments, right? And so you've got high-end trainers, high-end PTs, you've got exec coach, you've got the dating people, you've got— I'll give you one— divorce attorneys. So that's 4 lists. Now the thing is, is that you can actually find all of these. These ones you can find probably from Google. Um, this you can find also from search and Instagram. And there's also like list brokers. So you just like Google list broker, whatever city, and then you can— usually they'll have this massive national list and then you can whittle down to a localized area. Can you do any remote services? Mm-hmm.

Yeah, we definitely, I'd say 50% up, like especially during COVID we only work virtually, but I prefer in person.

That's fine. That's cool. Okay, so this obviously makes money and doesn't require any financial risk.

Yeah.

And is also a compounding way of acquiring customers because you did this work. Think about this. You sent 40 emails one time and then you got 6 people to send you business for good. Not bad. Now, what do you do to continue to reactivate them?

Host events.

Okay, so you do, you do events. Okay, so for the affiliates.

Yeah.

Okay, cool.

I mean, like, especially for like the matchmakers, they're happy because their clients are getting to know each other, they get better pictures, therefore they get better matches.

Uh-huh. So I love that.

Yeah.

Really good. So I think, do you do that like regularly, like it's on a calendar or it's just like, okay, good. Because that's obviously that's why part of why it's working. So normally one of the things that falls off with affiliates is that they don't stay activated, they don't keep referring you. Yeah. And so you have to like work them like customers, like it's another set of relationships. Yeah. But if you can put them all together in an event on a regular cadence where like all of the dating coaches bring all of their people and they all look good and they all get to meet each other, like that's value for everybody.

It hasn't quite turned out like that.

Okay.

But just like more one-off.

Okay.

Like hosting events with just one individual company.

Okay, well, so that works. Yeah. Yeah. And I think if you do like 1 or 2 of those a year or 3 of those a year, I think that's like more than enough to keep the right— and I would, I would try and figure out a way to put them in the same room just because I think it'd be like I would be pitching on collaboration rather than competition, which is just like, hey, you have single people, so do they.

Maybe that's true, actually.

Yeah, they're all single. Yeah, they're all single and obviously looking to mingle and trying to live their best life. Like It'd also be desperation city. But anyways, so that's, so that's the affiliate piece. Okay. And so in terms of lists, I would go list brokers and then I would sort, I would sort social media and Google first. That'd be like my first thing. And then I would look at list brokers once I ran out of those.

Okay.

But between like these 4 sources, you need to send 400 emails. It's not that bad. And then what's crazy is like if you send it and then they don't respond, you can send it again. Next one's continuity. So let's talk about that. Okay. So this is about increasing LTV. So you already have pretty good LTV, but I have this feeling like there's something that we can do better. Okay. So right now LTV is $10,000, right? So walk me through. So someone comes in, so I come in, I'm CEO, $8,500. I pay you for my whole lookbook, etc.

Transformation.

Yeah. Okay. And so the delivery of that transformation is like a lookbook primarily. And then like, what? Yeah, walk me through it a little more.

No. So this assessment, figure out where we're going to go with your style, your look, then going through your current closet, right? Getting rid of all the old stuff.

So you actually go to their house.

Yes.

Okay.

Get rid of all the old stuff.

Okay.

Reorganize the closet so that it makes— it works for their life.

Okay. So closet tear down.

Yep. And then we document, we do an inventory of everything in their closet so that way when they text us or they say, hey, I'm going to Turks and Caicos. Hey, great. Pull this, pull this, pull this. And we can give it to their housekeeper or whatever. Here's your packing list.

Okay.

Then we get new outfits, new clothes. Right now our promise is about 5 to 10 new outfits.

Okay.

You don't want to get the whole new wardrobe, right? But, you know, enough to like, okay, I'm excited, I feel good.

Mm-hmm.

And then that's when we make the determination. Okay, does this make sense given your lifestyle? You travel all the time on a monthly level or a quarterly level?

Yeah. Yeah. In terms of the continuity, I mean, well, do you have churn on the continuity? Do a lot of people— so people stay and they keep paying?

If it's in front of these people, not the one-time people, these people, they don't.

What was the one-time thing?

So it was priced at $3,500.

And you just did this but then didn't have anything else.

Yeah.

Okay.

And it was— it could be all virtually.

Okay.

Or it could just be like a one-day shop.

Way better to do in person. It's a different relationship. Yeah. No, I like that. I'm a fan. Okay. So and then the ongoing price point is what on the back end?

$2K per month.

Per month. Right. $2,500. So LT, so $8,500 and then $2,000 per month. So, so we should be at— now I'm guessing that you have a lot of grandfathered people of those 40 customers that are paying less than that.

Yeah.

Okay. What are they paying?

$1,500 per month. Yep.

Per week or per month? Month. Okay. So it's like, wow. Okay.

Some are on like $1,500 quarterly.

Okay. Got it. Got it. I'm guessing the majority of them are $1,500 quarterly.

Yeah.

Okay. Got it. Because then it's $500 a month because this just all transitioned in September. Got it.

We only have like 2 people currently on the new system.

Okay, so most people are at $1,500. So if you have, call it, 38 customers who are at, I'm just going to say in general, right, $500 per month because it's $1,500 per quarter. I'm just looking at revenue.

Yeah.

Okay. Because this now makes sense with the revenue that you're doing. Okay.

Right.

Cool. So the vast majority of the money is actually in a recurring revenue base.

Mm-hmm.

That's not bad. That's good. Yeah, that's really good. And the churn's low. So all that stuff's good. I actually don't really want to mess with this that much because you have low churn. What's the percentage of people go from here to here?

Now that I've just said, hey, we're only working with you on a recurring basis, it's, it's good, right? The thing is, I'm almost wondering if I say that, I'm almost wondering if we kill this and just do the quarterly because this seems to be hard. Not most people. Okay. Do you think that it's better to simplify things or just still keep it?

No, I think you can have it. What happens is serves as a price anchor.

Okay.

So even if only 10% of people take it, it increases the people who take that one. Okay, so I don't think it's actually a mistake that it's there. Okay. Because if you're like— because they have the reaction I did, I'm like, $6,000 a quarter? My Jesus. Or just do $1,500. Like, oh no, that works. I'll do the $1,500.

No, no, no. It's $2K a month or $4,500 a quarter with this one. Yes.

Okay. So you're saying at the new price point?

Yes.

It's at this. Okay. But this is brand new. And here you have all the retention that you have. Yeah. Okay. But you haven't had any issue with sending people into that, into the $4,500 a quarter either?

I mean, the few that we've had now, but it's the same take rate. Yeah.

Okay. Yeah. So I'm fine with quarterly billing. Okay. So if you have monthly and quarterly, that's fine.

Okay.

I'm good with that. Yeah. So if it's now $2K a month slash $4,500 per quarter.

But even if like 90% opt into this versus this, that's fine. Still totally fine.

Totally fine. That's great. No big deal. I feel comfortable with that, but I always let the market tell me. So like, I just keep edging up the price until people stop saying yes, and then I'm like, okay, that's about right. And then you kind of back down a little bit, you're like, that's my price. Now I know that for these, for these types of people, that's the number that they're willing to pay unless we change the avatar or the marketing or the messaging that's going to attract these people, and they're willing to say yes at that price. Okay. Okay. So from a continuity perspective, I don't think we change that because then we just changed it. So that stays the way it is. I think the $8,500— I know Elsie used $10,000, but $8,500 for the teardown and then you have the quarterly. And so this LTV that you have here is probably gonna go up. It'll just keep going up over time.

Right.

Okay, great. So I mean, honestly, the actual business is strong, okay? So you have good-ish margins, 42%. Conduit has almost no churn. That's great. LTV CAC strong. And so the real leverage with this business is that we just need to do more. Now you stopped spending money on ads, why?

Because we were adding the video and we were adding in the lead magnet.

You're fixing that stuff first. Yeah. Okay, cool. So this is what we're going to do. Video sales letter plus lead magnet plus the qualification. So Budget Authority, you need timing. So that's number one. So once we fix that, that's a, that's a conversion mechanism. So then what I want you to do is increase your ad spend. And so currently you're spending $600— was it $300 a month?

Yeah.

So why don't we just go to $600? How much— actually, let me ask the question. How many can you handle? Like, how many more leads could you handle? Than you currently are?

More like how many more like that convert into new clients?

Yeah, well, like how many calls? Basically it's a call thing. So many calls you take. You're currently taking 12, right?

Yeah, easily could double or triple that.

Okay, so let's go with 600 to 900 per month because sometimes the lead cost might go up a little bit and that's okay. Just like so basically you might get a little bit less efficient, but that's fine because you're still really strong on TDP CAC, so it's not a big deal.

All right.

Number 3 is we need to send the 20 emails per day to affiliates. So this is the big 3. And then I don't want to mess with the continuity. So we got 8 sales this year, so it's like one, like a little bit less than one a month, right? So I just wish I knew how many leads were coming from Google. I just really wish I knew that number. And those 8 sales, were those just like phone calls and closes? So 16 calls created 8 sales kind of thing? Okay.

And they weren't from the ads. They were from search.

Got it. But then they clicked on your ad. All right, so you'll fix the funnel.

Yeah.

You get the attribution tracking in place. I think the funnel lift could very well— like, this is going to sound wild. This could somewhere in the neighborhood of like 2 to 5x the lead flow you have just doing this, especially with a good lead magnet. Okay. Now the next piece is that each of your affiliates were a third of your revenue. And if we were to 10x that, then we would 10x 1/3, which would be a triple. And so the result of a— call it a 2x, a 2x and a 3x would be a 12x, which would take us from $300K per year to $3.6 million.

So yeah.

Okay. Questions?

Yes. One thing we didn't talk about is your team brand. Okay. Well, content creation.

Okay.

So I have like I only bring this up because Ed was mentioning like I should consider transitioning the page from AC Styles to Ashley Capps.

Okay.

And going more of the personal brand route.

Okay.

As for like the big top.

I'm not against that.

Or do you think that doesn't matter? I mean, it's not doing anything right now because I haven't invested into it, but I was planning on investing.

Well, like your Instagram and like all that stuff?

Yeah.

Well, I see your Instagram because yours is such a visual craft in terms of what you do. That it makes sense to post. Thing is, like, these things just like will all immediately make you money. I think that that's absolutely a long-term plan. Think about this is like, this is like your paycheck, this stuff like you do this, you'll immediately make more money. That is more like a 401k, like an investment plan. So it's like, I'm gonna put this money into this and it's gonna take time to snowball. But over time it'll eventually become so big that like it'll be bigger than all this stuff, but you'll have to measure that in like a couple years more than a couple of months. So I'm all for it though, to be clear, because what, what a lot of people don't know is that like when you, when you spend this money, when you do these emails, the first thing they're going to look at is your social media stuff. And so I see that as like more lead nurture. And so like, right, some of it's like the invisible hand that all of a sudden like more people respond to your emails. Like one of the things I didn't realize, like when I— because we do outbound for our own stuff too, for like looking at deals and whatnot. Me having a personal brand just increased the response rate. People are like, oh, I've seen your stuff. Or they take a look and like, oh, I've never heard of you, but this stuff looks really interesting. Yeah, I'll hop on a call, whatever. And so that's kind of like, it's a rising tide that lifts everything in terms of how brand works. But yeah, I think it's totally fine to do that. I just want you to get obsessed with it. I want you to just make sure that you spend, just basically block, I'd call it half a day a week, that you're like, I'm just gonna do content this morning, plan out my week, get the pieces that I want out, and then like the rest of the week you gotta run the business.

Focus on this. Now, the only reason why I was like nervous to transition it from Ashley focusing on personal brand versus business brand is because, you know, I was running into issue in the beginning of like, oh, well, you're— I'm not going to be working with you. I'm working with somebody else. So that's the only reason why.

I mean, that's not a big deal. That's like a one-liner. So like if you go to Wells Fargo, you're not expecting Wells Fargo or JPMorgan. You're not expecting JPMorgan. You go to Bain, McKinsey, BCG— like, well, BCG is Boston Consulting, but like Many professional firms, look at every law firm, Kurtz, Kurtz Wild or whatever, like they, it's not uncommon for a business to be named after its founder and have many people underneath of it.

Okay.

So like, I wouldn't like, you know, Dyson, like there's just like so many brands are built off of the name of the founder and it doesn't necessarily mean that you have to work with them. If anything, all it does is just allows you to have a premium on yours.

Right.

If you want to, so it's more like you can, price here. And then if someone's like, well, I want to work with Juice, like, oh, I'm premium, I only have a few private clients that I take on, and the people who have super money will just pay whatever, and then you can just add a zero to your price tag and make that yours. Okay, that makes sense.

Yeah.

But yeah, I think if you go AC versus Ashley Kaps, I'm not—

you don't feel—

I'm okay either way. I'm okay either way. I mean, AC, people already probably know if it's Ashley Kaps, that's probably what it stands for.

Yeah.

You probably have the same issue now with AC, then you, then you like, I don't think the name change is going to change anything. Okay. Yeah. But I do think branding personally is a good idea. Okay.