The Truth About Platform Size: Running the Numbers

taragentile
 

Coaches often come to me because they’re ready to turn their one-to-one coaching practice into something more leveraged. They’re itching to turn their ideas into a signature program or work with groups in retreats. Often, they’ve made an attempt on their own and, well, it’s not gone so well.

Their launch underperformed. Not enough people enrolled.

It’s not because the program wasn’t great, or because the copy didn’t convey the value of the program, most often, it’s because these coaches haven’t cultivated the audience that’s capable of supporting this type of launch. They’ve neglected their list.

A neglected list–or stagnant list growth–can set a business back years.

The biggest misstep I see in microbusiness is making email list building a secondary priority. There is nothing more crucial to the success of your business than a list of engaged, qualified, and interested prospects.

Unless you have a multimillion dollar advertising budget, you need to prioritize getting email addresses from great prospects.

Every coaching business needs a prospect list and the best (and most trustworthy) prospect list you have at your disposal is the list of people who have deigned to give you their email addresses.

List building is important because sales is a numbers game.

Let’s do the math:

I recently completed a launch of a high-end group coaching program. I offered it first to a group of 130 on an interest list and then opened it to my main list, which at the time was approximately 5600 subscribers strong.

We registered 3 from the original interest list. That’s a 2.3% conversion rate on the list. Pretty good.

The other 12 registrations came from the main list. That’s a .2% conversion rate. While it looks abysmal, it’s actually pretty good, too.

The interest list averaged over a 50% open rate on the promotional emails. That’s pretty par for the course when it comes to people who opt in to learn about something specific. Since the change in Gmail inboxes, I’ve been averaging approximately a 29% open rate for emails to my general list.

Think about that. On the best performing email to the interest list, 88 people learned the program was open and 62 people click through to the offer. An offer like this isn’t likely to get better than a 1% conversion rate. That means I could expect about .6 people to register based on the interest group alone!

For the main list, the main direct sales email had a 30% open rate and a 4.1% click thru rate. That means 232 people saw the offer that day. So I could expect another 2.3 registrations.

Great, I’m up to almost 3 whole people!

In the end, we had 15 registrations on this program. We generated about $40,000 in revenue. So, clearly, I had more than almost 3. But the point is simply: with a list of 5,600 prospects, an engaged readership, and solid conversion, I just filled this program. I’m incredibly pleased with the results and the position we’ll be in when the program launches again in February.

But it could have gone very differently.

For another example, when I launched The Art of Growth in January, my announcement email received just over a 40% open rate and a click rate of almost 11%. That means that, from my list, 537 people saw the offer that day. I sold 48 copies on the first day and 134 total over the next 3 weeks. That was a 2.6% conversion rate based on the list size. Though, that also included social media traffic.

You will likely find people who have rocked 100 conversions on a 1,000 person list. Or filled their client roster with a list of 200. And that’s fantastic. But if you’re looking for the ease & scalability of a solid launch, I think you need to count on a different numbers game.

You should figure on 40% open rate, a 10% click rate, and a 2% conversion rate on your offer for an engaged email list. Which means to get 20 sales, you need to drive 1,000 views of the offer, over the course of several emails from a list of several thousand. And, frankly, that’s optimistic.

For a lower priced, highly targeted offer, you might get a better conversion rate. For a higher priced offer, you’ll need more.
These are the kinds of numbers I use with clients to help them set sales goals. But it’s more important to set list-building goals before the sales cycle starts. If you really want to get 20 sales, how many people do you have to have on your list? 500? 1000? More?

I know, this all might be very depressing to those who are just starting out, those who feel like list-building is akin to dental work, and those who just feel like it should be working by now.

I get it. But please don’t be depressed–instead, take action. Re-prioritize. Set goals. And do it now. Don’t wait any longer or pretend you can half-ass this. Because you can’t.

Now, what I’m not saying is that everyone needs to build a 10,000 or 50,000 subscriber list. On the contrary, I believe you need to build a list that is appropriate to the type of business you run.

If you run a business focused on volume, where selling more means making more money and working less, you need to grow as big of a list as possible that is also focused, engaged, and ready to buy.

But if you run a business that is geared to 1:1 service, customized solutions, or commissioned work, you need to grow a list that supports one sale at a time, understanding that your kind of clients don’t necessarily jump when you “launch.” You’ll use your list to nurture leads and keep them warm until both of you are ready to work together.

Either way, a constant focus in any coaching business must be lead generation, ahem, list-building.

Now that you’ve got the numbers from my recent launches, examine your own list. Are you ready to move your business into leveraged income streams? Can you replace income from one-on-one coaching with programs or groups? Or do you need to spend some serious time & energy on growing your email list?

In my next post, I’ll outline 3 strategies (plus a bonus!) for reinvigorating a stalled list–or jump-starting one from the ground up. Stay tuned!

 

taragentile

Tara Gentile is a business strategist, the creator of the Customer Perspective Process, and the ambassador of the You Economy. Her work has been featured on Forbes, US News & World Report, and in the NY Times bestselling book, The $100 Startup. Get her FREE tool to know exactly what your customers are thinking: The Perspective Map.
Tara Gentile.com