Don't fantasize yourself out of business (Part 3 of 3)

Part 1 explored a common but misguided approach to growing a coaching business, and Part 2  explained why that approach doesn't work. In Part 3, we'll explore a more realistic (and ultimately more  successful) approach to growing your business.

OK, the fantasy has evaporated like morning dew on a hot summer day, and the inconvenient truths have been faced with courage. Now what?

Now it's time to explore what really works. First of all, there are three things that every successful business does well:

1. Get customers
2. Keep customers
3. Grow the lifetime value of customers

No matter what kind of industry you're in or who your customers are, and regardless of whether you sell widgets, roller coaster rides or a personal service like coaching, you must consistently accomplish all three in order to have a successful business.

There's an overwhelming amount of information on how to succeed in business; I know because it shows up everywhere I go -- in my office (stacks and stacks of books); on the internet; in bookstores; on TV; on the radio; in the newspaper; in classrooms. It's enough to make you want to get out of business before you even get into it!

So let's cut to the chase:

• To get customers, you have to stand out from the crowd, connect with qualified prospects, and offer them something that they want to buy;
• To keep customers, you have to know what your customers want more of and serve them in ways that leave them delighted;
• To grow the lifetime value of customers, you have to love them and grow with them and adapt your products and services to their evolving needs.

Notice that back in Part 1 of this series (remember the fantasy?), it was all about the coach and the coaching; now the attention is on the customer.

It's really all about relationship -- your relationship with your customer. Every level of your business, every product and every communication has the potential to enrich the relationship.

So how do you create a business that builds relationship every step of the way?

A Sales Funnel for Coaches

I promised you a more realistic and successful approach, and I think the best way to do that is by showing you in a diagram (click on the image to enlarge).

The concept of a sales funnel is not exactly new; virtually every marketing book references having a sales funnel.

The problem is that most funnels (especially those I've seen by/for coaching businesses) are too simplistic to be useful. They tend to focus only on the "What" (i.e., what to charge at each level of the funnel), while leaving out out the "Why" and the "How".

I'm a business strategist, so of course I'm a firm believer in having a reason -- a good reason -- for everything you do in business. So I decided to create a model that explains the primary objective and strategy for each level of the sales funnel, along with examples of typical marketing tactics.

Level 1 is about attracting attention and interest within a specific target market. A strategy for that is to show up as an "expert coach" who is well-connected and knowledgeable about the target market's area of interest. This is the foundation for niche marketing - finding a group of consumers that wants exactly what you've got.

Level 2 is about building a targeted list of qualified leads by offering a free sample in exchange for contact information. Essentially, you're asking for permission to begin sending more information and offers.

You'll build trust and credibility with your target market via the quality of information you provide and by consistently keeping in touch over time.

Level 3 is about proving that you can be trusted to deliver what you promise and converting leads to customers. At this level of the funnel, success is measured by the number of conversions and how quickly a person moves from prospect to customer.

A customer is someone who has made a purchase; in order to convert a lead to a customer, you need to offer an introductory product that has a low barrier to entry -- a high value/low cost product with an unconditional guarantee.

Level 4 is often overlooked by coaches, but it's actually the backbone of your whole business. The objective is to keep and grow the value of customers by offering products and programs that consistently produce great results for the customer.

You can extend your reach at this level by working "one to many" rather than "one to one", as with group coaching or a paid membership program; or you could create a home study program (create it once and sell it many times).

The products at this level tend to be more expensive and comprehensive than those at the previous level, and Level 4 tends to be the most profitable level (even more so than Level 5).

Level 5 is also about keeping and growing the value of customers. At this level, it's done through providing personal access to you via premium products and programs, such as one-on-one coaching and customized programs.

Your personal time, attention and expertise is the most valuable commodity you have to offer, and since there's a limit to the number of clients you can work with one-on-one, it makes sense to charge a premium for this level of access to you. (Even so, this may not be the most profitable level of your business, because of the amount of time, energy and attention that you have to invest in each client.)

Notice how relationship and connection with the customer grows with each level?

When all five levels of your sales funnel are linked up so that one flows into the next, you've got a complete marketing system for building quality relationships so that you can get, keep and grow the value of customers.

Take a look at the diagram and let me know what you think -- and feel free to ask questions (just click on "Comments" to post a question.)

Comments

[Lisa]

FANTASTIC coaching funnel. I am going to send a link to your site to a lot of fellow coaches. Didn't think there were many coaches blogging yet.

Lisa

[Kathy Mallary]

Thanks, Lisa!

If you're looking for coaches who blog, you might also want to check out:

Andrea J. Lee | Money, Meaning & Beyond
http://www.msoci.com/andrea/

Kammie Kobyleski | Passion Meets Purpose
http://www.passionmeetspurpose.com/blog/

Adam Kayce | Monk at Work
http://monkatwork.com/

Molly Gordon | Shaboom
http://www.shaboominc.com/blog/

Michele Corey | Knee Deep
http://advanced-approach.blogs.com/knee_deep/

[Michele Corey]

Kathy, Thank you for adding me to the list, but more importantly I want to say thank you for putting together such a useful and down to earth series.

I noticed my own marketer side kept saying...yes, that's it...and I love the coaching business funnel. It's a model any one can easily understand and use!

Keep it coming...I love both being reminded of where to focus and the twist and insight you add to foundational marketing aka build your business ideas.

[Kathy Mallary]

Michele -- You're welcome, and thank YOU for the great comment!

=^)