Want to scale your business? Click here.Welcome to The Game w/ Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition Mentioned in this episode:Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap
Chapter 1: How can a personal stylist scale their business?
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 four years and so far we've served over a thousand clients.
1,000 clients? Yeah. How'd you get 1,000 in four years?
So that's over my whole career as a stylist.
So the business has been for, 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. And it's those that really value their time and really also value having expertise.
Okay, got it. So what do you do? How do you help them?
All right, so we transform our client's 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 a baseline with their current style.
So low style, you look terrible. Like look at the mirror, you look horrible.
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Chapter 2: What are the different lead sources for acquiring clients?
Yeah.
So onboarding package that I mentioned, 8,500 bucks. 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 close. 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. 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 four are coming from affiliates. I think about a third is coming from the other two, 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.
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Chapter 3: How do you improve customer engagement and retention?
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 40 clients 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 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.
Just like a totally different business.
I know.
Yeah.
But have stylists in major metros.
Okay.
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Chapter 4: What pricing strategies should be implemented for services?
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 five million doing what you currently do or a scaled up version of what you do.
Yes.
Is that correct? Okay.
And in other major metros.
Yeah, yeah. No, that's cool. That makes sense. What's the problem? What's getting in your way?
Leads.
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Chapter 5: What role do affiliate partnerships play in business growth?
Okay.
Does that sound realistic or does it sound like less than that?
Well, so that 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. 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, buy right now.
And you don't give them anything, right? Right. There's no reason for them to opt in. All right, we're gonna make you so much money. 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 eight sales.
And so I think that what's happening right now is like the show up rate and the close rates you have are like you're just basically skimming the absolute people who are like are in such dire pain. And you don't know them because they're coming from ads, right?
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Chapter 6: How do you define your target audience effectively?
Through your Thumbtack page that you then pay extra to promote.
Yeah.
On Thumbtack. Okay, cool. Got it. I mean, $38 at least is 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 leads and then you'll have something called MQLs and SQLs. So MQLs will be marketing qualified leads and then sales qualified leads. And so an MQL is like, okay, in order for somebody 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 a man with a corporate job. Like we have to just figure out what the fewest- Benchmarks. Yeah, and we'll cover that. So do you actually have a minimum income requirement?
So I would say for this new model, a million.
A year in income?
Yeah.
Okay. So, yeah. So, this is definitely a top 1%.
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Chapter 7: What strategies can enhance your marketing funnel?
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, that's me. Those are the typical triggers.
Okay, I feel triggered. No, you're good. Okay, so that's the thumbdack data. Is that the last slide? Oh, there's a bonus. Is it for later? Any other numbers, questions? Well, I have already a handful of ideas around... around what we can do.
Tell me more about the affiliate side, the match, because you've got, I get both of these, I understand the referral side, I understand both of your paid acquisition parts. I think the continuity is lacking, we can work on that. I think where 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 figuring out what we're gonna do.
Okay, so affiliates, that's what you're asking. Basically they, it's just like a lead pass through. So they make the introduction and we offer a complimentary style assessment to help them get their dating profiles ready. And it's really just a glorified sales call.
Okay.
Yeah.
And so you have these, how many matchmakers do you have who refer you customers on a regular basis?
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Chapter 8: What lead magnets can help attract more clients?
So as of this year, it's about a third.
Ooh. Hmm. Yeah. Interesting. Okay, cool.
It's because it's like very aligned audiences. Yeah, okay.
They're literally already buying the types of services related to what you want. That's great.
Yeah, pretty much.
Okay. Yeah, I feel like I'm pretty clear on what you said.
Okay, yeah. Probably very simple for you. No, no, it's good.
No, this is great. So you wanna make 5 million, right? And we're at 300. So that's a 17X from where you're currently at, right? If we were to just triple and get to a million this year, would you be okay with that?
Totally down. Cool.
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