I promise that in this blog post I am going to show you the how to apply the 80/20 rule to your coaching business growth.
I am going to breakdown the 5 KPI that you need to focus on to dramatically increase your revenue and profits.
Marketing Overwhelm Is Stunting Your Growth
One of the major and persistent problems facing coaches is attracting prospective clients.
All business owners want more leads but few of them know how to successfully attract coaching clients to their business.
Even if it is difficult to admit it, many coaches feel lost, frustrated and overwhelmed by the constant stream of marketing tactics that are available:
- Facebook Business Page
- Facebook Ads
- Meetup groups
- Social Media
- Google Adwords
- Email Marketing
- Youtube Channels
- LinkedIn Connections
This is “present day” marketing and one or all of these options will definitely help you grow your business.
But there is an unhealthy focus on these marketing tactics and not enough focus on marketing strategy.
This focus on tactics creates the confusion and overwhelm because decisions are guided by marketing trends and not a predefined marketing strategy.
To be on par and ahead of your competitive landscape in 2018, having a sound digital marketing strategy will be imperative.
The 5 KPI You Need For Growing Your Coaching Business
Let’s remove that marketing overwhelm once and for all and take a look at the Key Performance Indicators that you need to focus on from today onwards.
Key performance indicators (KPI) are a set of quantifiable measures that a company uses to gauge its performance over time. These metrics are used to determine a company’s progress in achieving its strategic and operational goals, and also to compare a company’s finances and performance against other businesses within its industry.
There are 5 KPI will help you generate more clients, increased revenue and higher profits:
- Average Sales Value
Let’s breakdown these KPI and get to know them better:
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How to Use The 5 KPI to Double Your Coaching Profits
…you can’t manage what you can’t measure…
The vast majority of business owner would like more clients and customers but beyond the tactics we discussed earlier, they lack strategic knowledge and experience about how to increase their revenue and profits.
Now you know the 5 essential growth KPI that we need to focus on if you want to grow your coaching business let’s take a look at a specific example with some guesstimate numbers.
We will use these numbers to set a “Baseline”: a starting point. Just like if you wanted to lose a few pounds. You would start by first noting how much you weigh today, so that you can measure your progress.
Let’s imagine that you are receiving about 40 leads per month. Therefore, in a 12 month period, 480 people show interest in your services and products.
2. Conversion Rate
You convince 1 in every 4 people that you speak with to work with you. This means you have a 25% conversion rate.
This would mean that you would have a total of 120 paying clients.
Each of those 120 people purchases from you 2 times throughout the year…
4. Average Sales Value
…and your average sales value is $250.
So, you have 120 clients spending an average of $250 on your services and products, twice a year.
This would result in an annual revenue of $60,000.
That is 5K per month. Not too bad but not so fast!
You still need to pay taxes and expenses. *sad face*
5. Profit Margin
Profit margins are expressed as a percentage and, in effect, measure how much out of every dollar of sales a company actually keeps in earnings. A 20% profit margin, then, means the company has a net income of $0.20 for each dollar of total revenue earned.
Read more: Profit Margin
Let’s imagine that you have a 25% profit margin, meaning you have $15,000 in profits.
More Leads, More Clients, More Profits
15K is not too shabby at all but this is what happens when you increase the 5 KPI by a minimal 10%.
Based on estimate baseline figures, a 50% increase of the 5 KPI would generate a little over $100K.
Do you see why I said that you need to focus on these 5 KPI if you are serious about growing your coaching business?
More importantly, a 50% increase is very, very achievable.
The Business Growth Calculator
The images of the KPI calculations shown above are taken from our Business Growth Calculator.
I use this calculator to during my client consultations to demonstrate the results that are possible when we make minor adjustments to our marketing efforts.
Click below to [thrive_2step id=’11202′]get access to the Business Growth Calculator[/thrive_2step] and see for yourself the kind of results that could be possible in your business once you begin to focus on the 5 business growth KPI.