Ep67: Opportunity Cost- What Is It & How Much Money Are You Missing Out On

Morning, team. Hope everyone's having an epic day so far. So, Matt here from the PT Profit, Leverage and Lifestyle show. Forgive me if my voice sounds a little bit weird. I'm a little bit sick right now. But we're just pushing through and kicking goals. Kicking goals, as always. So, as promised, I'm going to give you a bit of an update on how my automation sequence is going and my bots. So as always, nothing ever goes to plan. So a little lesson for you guys as well. My bot's not working, but that's okay. In the middle of fixing that one up. And in terms of the automations, I only just. There was a few issues with Instagram and Facebook wouldn't actually allow the automations to start unless someone responded to a keyword. So the way that I had it set up was I had it set up through a lead form. When someone filled out the lead form, I tried to get the automation to start straight away. But Facebook and Instagram don't actually allow that to happen. So even though the automation was set up correctly, Facebook and Facebook and Instagram blocked it. So what we've had to do now is basically set up an engage what we call an engagement ad on meta and basically have the first initial message on meta itself. And then in the first message, they have to actually say the keyword to start the automation sequence and then it actually starts. So I'll keep you guys peeled, I'll keep you guys in the loop of how it goes over this next, next week. But, you know, welcome to the world of paid ads. You sort of test different things and see what works. You just never know what's going to work and what's not going to work. And nothing ever goes to plan. Which is why, you know, that's why I have a mentor, my client, hire me to help them because nothing ever goes to plan. So let's get stuck into today's episode. So, okay, we're gonna talk about opportunity cost for this one. So I was actually talking to a client yesterday about this and I think it would be a good topic to bring up in terms of the opportunity cost for not bringing on a team member or not doing a certain task or action. Like could, that could be, you know, calling leads, for example. So I'm going to give you the example that I gave him yesterday. And for context, for context, we're going to be talking about this. In particular client of mine, he doesn't like doing sales calls. It's not calling leads. He prefers to just book in automatically, which is Great. Hold on, let me just fix my lighting here. Here we go. Yeah, so he doesn't like doing the sales calls, which is fine, but you know, someone needs to do it type of thing. So we identified that we've got some automation set up and we're actually getting only one person every 50 leads come through to book in on their own. There's a big gap there, right? So there's 50, 49 people that aren't booking in for whatever reason. So for one we need to work on the automations because they're obviously not working. But two, when he's calling people, he's only calling like 10 people at a time. So the speed to lead ratio is really slow, which means people aren't going to book in. So I basically ran through some numbers with him yesterday and I'll just use some general numbers to give you guys some context. I won't use the specific numbers for this individual, but let's just say, for example, you're charging a hundred dollars, one hundred a week on average for new clients, whether it be one or two sessions a week, whatever, group classes or on online coaching. Let's just say it's a hundred bucks a week for a new client. Now right now this particular client is only getting like one new client per month and we already know the reason why there's only one booking out of 50 leads. Now in, in my experience, and it's proven that this is the case, if you call people at a good time, like a good, good time for when people are free, like not during the middle of the day or anything, you should get between 30 to 40% pickup rate. So if you're calling 50 leads, you should be able to get a hold of 20 people. Now if you're getting a hold of 20 people, you should like keyword should, you should be able to book in 80% of those people in for a consultation of some sort. So let's just recap. So 50 leads, you get a hold of 20 people. From 20 people, 80% of them should book in, which is 16 consultations. Okay. A month at the moment this particular person is getting one. Now here's the opportunity cost. Even if we were to convert at 50%, which is relatively low conservative, that's 8. Okay, let's do some better figures. So we cautious, 16 people book in. Let's just say you got an 80% shop rate. So you have 13 people show up. 13 people at a 50% conversion is 6.5. So let's just say 6, 6 new clients for the Month on the exact same amount of leads, but the difference is someone else is actually calling them. And by the way, it's all good to outsource this stuff, but you don't, you don't just want to be doing nothing with your time instead. Okay, so let's just work this out for a second. So six new clients, that's an extra $600 a week on average. So what's the opportunity cost? $600 a week. And let's just say that they work with you for 12 weeks. 600 a week for 12 weeks is $7,000. $7,200. And let's just say, for example, you know, for a year, $31,000 a year, you're leaving on the table by not doing sales calls or by doing calls with your leads. That's the opportunity cost right now. Now the opportunity cost to outsource this. And there's a few different ways you can do this. You can do this by commission only. You can do it as an hourly rate, or you can do it as per sale closed. So what that means you can pay the. Pay someone like 30 bucks an hour, 40 bucks an hour to do calls. It might take them one hour a week, two hours a week max. So it might cost you, you know, 400 bucks of, let's just say, 200 bucks for the month. 200 bucks for the month. And let's just say, for example, they get those metrics that I just talked about. So six new clients, you're going to be making an extra 600 bucks a week. So an extra 2500amonth, and it's going to cost you 200. That's a huge, huge return on investment. But also by allowing you to outsource this, you're going to be much more happier with being in the business. Meaning you're probably going to serve your clients better. You're probably going to be available to take on more consultations as an example. This is exactly why I outsource my social media side of things and also lead generation on social media. I've got two VAs that do 20 hours each on this stuff. So what that allows me to do is spend more time on sales and marketing where those, those guys are doing lead generation for me. I can focus on getting more advertising up and researching ads. And I've got more time through sales calls now. I've also got sales team as well. I've got Jace part of my team now that can do sales calls as well. Yeah, yes, we actually do a commission on sales, but he's got some more times available as well, which again frees me up to focus more on marketing and like selling by DM for example. So overall and like if you're hiring a sales team, my suggestion is just commission only. Like yes, you're obviously going to lose anywhere between 5 to 15% of the sale. But that also enables you to scale, for example, the ads. That's the opportunity cost right there. So like right now I'm spending like 700 bucks a week on ads. Previously I was only spending maybe 100, 200. And you know, we're getting like, know on probably on average between five to 10 new clients a month. I think so far we've got four this month and it's got just over a week, week to go. So we usually get about 5 between 5 and 10. But if I didn't have someone doing my social media for me, as in the content creation, someone doing my lead generation for me organically, then that wouldn't allow me to be able to spend so much on ads because I'm having to call these people as well. That's the opportunity cost for me. Right. So I just want to give you context, like what's the opportunity cost that you're missing out on right now? Could be hiring a trainer to help you. Let's say you're doing 40 sessions a week. Let's work this one out. 40 sessions a week. Let's just say you're charging 70 a session, so you're making 2800 a week right now I should do easy figures. Let's just say you're making 2000 a week, so you're doing 28. 28 sessions at 70 per session. So 28 sessions. Let's say you hired a trainer to take, I don't know, 10 of those sessions to start with, with eventually taking 15. So let's just do long term goal 15 sessions. Now let's just say and g' day doggy, doggy just came in the shot there. Let's just say for example you're going to charge, so you're going to pay your trainer 40 an hour. So they're going to get. And let's, let's just assume, I'm just going to assume they're 30 minute sessions, so that's easy math. So I get paid $20 per session and you're charging 70. So basically any, every session they're getting the client is paying 70 and you're losing 20. So you're profiting $50 per session. Pure profit, like passive income. So if you were doing 70 sessions, sorry, 28 sessions at 70 a week, that's basically 2K 2K a week. If the other trainer was to do 15 sessions, you'd have to pay them $300 a week. But you're going to get back, you know, seven, eight hours a week of your time. So what can you be spending your time doing? Perhaps it's generating more social media content to generate more leads, perhaps it's taking on more consultations. Obviously this other trainer probably wants to do make more than $300 a week. So maybe they want to make 500 or $800 a week. So maybe you could spend more time booking them up. And then guess what, all the extra sessions that they're doing, you're passively making an extra $50 a session. Let's do the maths on 40 sessions a week. This is what I do as a, as a trainer when I hired trainers to work for me, 40 sessions times 70, so extra revenue, 2800 week and you're going to pay them 40 sessions times 2800. So you're going to pay them 800 and your revenue is 2,800. So you're profiting $2,000 a week. Imagine that. An extra 100k a year for you doing nothing in terms of, on the tools you, you would be doing, you know, the sales, you'd probably be doing some programming for the client as well. But you know, that's the opportunity cost right there. So I just wanted to give you guys some context. There is, you know, what are you kind of missing out on right now about whether it's hiring a team or it's outsourcing with a virtual assistant, you know, whether it's getting an appointment set or a sales team, whatever it is, you know, for me, like for the first 12 months of me doing my mentoring stuff, I do everything myself, which is fine, but I can only do so much stuff myself. I don't, I've only got the, a certain skill set. So outsource social media first. Then I outsource lead generation on social media. Now I've got Jace doing appointment setting and sales, which I still do as well, but he's helping me out with that. So I've got a lot of, I got a lot more free time to spend on sales marketing, which is the biggest mover in the business. So hope that gives you some context. I know it was a big eye opener for me when I was deciding whether to get some team members because obviously it costs more money, of course, but you know, what's the opportunity with hiring that extra team member or outsourcing certain things or, you know, using AI to save you time? That's another conversation. Cool. Well, a CRM software might be 150 bucks a month, for example, but, you know, are these automations giving you more bookings? Are they nurturing people to eventually buy and making more money in the long run? So again, what's the opportunity cost that you're missing out on right now? I'll leave it with you. Have an awesome day, team. I'll chat to you next week.