Transform Your Passion Into Profit
Transform Your Passion Into Profit
How does a business account for client acquisition costs in their price points?
For simple metrics, it usually costs me about $300 to acquire a client and the upfront offer for the average client would be $900 for a six-week trial. If it costs us $300 to acquire a client and we're collecting $900 in cash up front, I'm making three to one of my money immediately.
If that client converts into a recurring membership down the line, that's just icing on the cake. We could just stack that up forever. Obviously not every six-week trial client converts. In general, I'd say probably 75% of our six-week trials convert into recurring membership, so people fall off. But it's not really a big deal because one of the four clients who didn't convert into a recurring membership, I could just take that $900 to acquire a new lead in the future and get another customer.
How could raising prices lead to better client engagement and retention?
We recently rebranded the business to Physical Culture and one of the big things was raising our prices pretty significantly. We want to serve everyone we can. You can give free content out over social media or come out with free courses. There are plenty of ways to help people out and whenever I encounter a lead who doesn't have enough money to work with us, I always tell them YouTube is free. There's plenty of information out there. You're paying us not for the knowledge, you're paying us for the execution, right?
So, I have actually found that when you raise the prices, you get a better client. They're more bought in, they care more about what you're doing, they value it more, and they're more likely to stay for a longer period of time. And they, by extension, also know other wealthy people. It's just a self-fulfilling prophecy and it does help the business quite a bit, but the reality is you just can't help everyone, unfortunately.
*This interview has been edited and condensed for clarity.*
