Helping a Personal Stylist Scale Past $3M | Ep 829

0:00We want to decrease the friction here for qualified people. right so there's good friction bad friction so good friction is something that increases the overall quality of lead and gets out people who suck bad friction gets everyone out a slow page load time for example everyone leaves good people and bad people we want to get the type of friction that only bad people leave and good people stay and so if we have budget authority need timing we have the specific things relative to lead magnet then your follow-up if you want like hey if you can send me a picture be great if not I can just go off of your Facebook profile something like that then they show up to the call you have your one of 10 plates that you already figured out ahead of time that then sets up the sale this is ashley she has a personal styling business she does about 300 000 a year and we're gonna help her scale hi i'm ashley caps i'm founder of ac styles so we are a professional wardrobe and personal styling service that helps transform our clients confidence and save some time.

0:57So 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. A thousand clients? Yeah. How'd you get a thousand in four years? So that's over my whole career. So the business has been four, you've done a thousand 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.

1:37And 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 clients' 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 baseline with their current style. So low style. You look terrible. Like, look at the mirror. You look horrible. Pretty much. We establish baseline, and then we show them where they can go. So once we show them where they can go, that's when we go in.

2:11We gut the closet. We get rid of everything. and we get them into some new outfits, looking, feeling good. And then from there, that's when we determine, just based on their lifestyle, does it make sense to work together on a monthly level, on a quarterly level? And at that point, we have ongoing styling sessions. We put lookbooks together. Okay, cool. And we have an on-demand service as well that they can text us if like, oh, I got a hot date tonight. Fashion emergency, if you will. Pretty much. All right. So when you say you show them what the future looks like, is that just like, here's looks of other models or something like that or like?

2:44Yeah, so it's putting together a style mood board. And then we also, prior to that, we say, hey, just based on your complexion, here's the colors that are going to compliment you. Cool. And then based on your dimensions of your figure, here's like the silhouettes that are going to work best for you. Oh, cool. And then a big component of it is lifestyle. Like what are they doing on a day-to-day life? Yeah. And making sure that whatever they buy fits the life that they're living today and not just like, oh, that looks really cool on a mannequin. How do you make money? Important question. Yeah. So, onboarding package that I mentioned,$8 ,500.

3:17That's over the course of 60 days. Then it goes into either monthly at$2 ,000 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 tiers, 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.

3:53We'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 you don't know worries four are coming from affiliates I think about a third is coming from the other two and then a third is coming from so kind of like evenly split between referrals would you consider affiliates referrals or no um no I kind of segment those okay so referrals is one if it's another than paid ads between thumbtack and Google yeah okay cool okay so how many people do you sell a month right now we're looking at about 12 total leads, eight appointments, 100 % show for those appointments, total sales four.

4:43So close rates 50%, show rates 100%. 40 clients currently and one churned in the last year. Okay. So you still, so these 40 clients still pay you monthly? These are active? Yeah. Okay. 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. 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.

5:23Just like a totally different business. I know. Yeah. But have stylists in major metros. Okay. 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. I'm just messing with you. But fundamentally for this business, the goal is$5 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. No, that's cool. That makes sense. What's the problem? What's getting in your way?

5:57Leads. Okay. We need lead flow. We need more of them consistently. And we just, we need more at-bats. Yeah. So that's really what it is. And also, I haven't been able to be as consistent with content creation, and I think there's opportunity missed there. Okay. All right, so show me the numbers. So$309 in total revenue,$130 in profit, 42 % net margin, blended CAC of$600. LTV is$10K annually, so that gives us a 16 to 1 LTV to CAC ratio. $600 in marketing spend, show rates 100%, close rates 50. Okay, got it. There you go. Okay, so Google, we're looking at$3 ,400 for the year for 2024. Cost per click,$1.89.

6:41Total clicks,$1 ,800. Do you know what words you're bidding for? Yeah, so like personal stylist near me, Los Angeles personal stylist. Do you have prices on the site? When they click, where they click, does it show your prices or is it just like an opt-in page? I do not show prices. Okay, is it just like an opt-in page? It's just an opt-in page. Do you know how many leads you get from this source? I know you had eight sales, right? Oh, how many leads? Yeah, and I'll tell you why I'm asking. I'm asking because when I see 1 ,800 clicks, I'm like, that's a lot of clicks. So your cost per click is great.

7:12Yeah. And so I'd be like, okay. And especially with intent-based search rather than interruption-based marketing, like social media ads, it's like interruption-based, you're not looking for a stylist, you see an ad, then you click versus like, I am looking for a stylist. Right. So the intent-based click is usually much higher quality. I would be surprised if you were getting, I mean, unless there was a massive mismatch in terms of what you're asking people to opt in for. Between 1 ,800 clicks, I would guess you're getting somewhere in the neighborhood of at least 250 to 500 opt-ins that would come.

7:39Does that sound – so 250, just for context, so divided by 12. So you'd be looking at – what is that? 20 a month-ish. Okay. Does that sound realistic or does it sound like less than that? Well, so right now – That's leads. Yeah. The funnel is just like book a call, and I think that that's – 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. It's just like, hey, buy right now. And you don't give them anything, right? There's no reason for them to opt in. We're going to make you so much money. It's a lot of fun.

8:16Yeah. Nice thing is like these... 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 that 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 a dire pain. And they don't and you don't know them because they're coming from ads. Right. Right. Right. Like if you're if you're in that situation, then like this may sound exciting for you, but like you could probably five to 10x the sales of the business just by fixing this.

8:48Like we do nothing else. You could just do that. Just we'll get into that in a second. But okay, the good news is that even with the massive amount of inefficiency that's there, your LTVD CAC is still really strong. So it's really good. And I think we're just losing it. We're just leaking a lot in this process. Okay, show me the Thumbtack one. Okay. Also, people that are in pain right now because they know that they're searching for it. Yeah. So 6K total spend. So we got leads here. Okay. 58 leads, 38 bucks a lead. Total sales, 8. CAC, 750, same LTV. Okay. Thing is, Thumbtack is like 90 to 95 % unqualified in terms of purchasing power.

9:26So we were able to rank higher for SEO through this page. Through your Thumbtack page that you then pay extra to promote on Thumbtack. Okay, cool. Got it. I mean,$38 a lead 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.

10:06So 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, you know, a man with a corporate job. Like, we have to just figure out what the fewest— Basic benchmarks. The fewest, yeah. And we'll cover that. So do you actually—do you 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 % or 1%.

10:43$8 ,500 plus, what is, like, it's about$25 ,000 all in for the service. The thing is they have to have money for the clothes as well. Yeah. So you're looking at about a$40 ,000,$50 ,000, let's just even say$25 ,000 year spend in clothes. Average Joe Schmo cannot do that. And then is there a specific, like, life event or something that happens that triggers people into, like, getting into this buying cycle? Yeah. So it is typically a transition moment. I had a baby. My body has changed. None of my clothes fit. That's for women. I got divorced, both men and women. Or I'm just, I'm getting, I want to start dating, period.

11:22My image doesn't match my status as a C-level person or even VP. Yeah. So those are the typical triggers. Okay. Yeah. I feel triggered. No, you're good. Okay. So that's the thumbback data. Is that the last slide? Oh, there's a bonus. Is it for later? numbers questions. Well, I have already a handful of ideas around what we can do. Tell me more about the affiliate side, the match, because I get both of these. I understand the referral side. I understand both of your payday 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.

12:06But I I think affiliates is kind of the last piece before we dive into like figuring out what we're going to do. Okay. So affiliates, that's what you're asking. Basically, 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 to customers on a regular basis? So combination of private social club and matchmakers, we have about six. Okay. How did you find them? Googling them and reaching out to them.

12:42But you reached out and did it that way? Mm-hmm. And what percentage did they send you? What's that? What percentage of your businesses do those six kind of affiliates send you? So as of this year, it's about a third. Ooh. Ooh. Yeah. Interesting. Okay, cool. It's because it's like very aligned audiences. They're literally already buying the types of services related to what you want. Yeah. That's great. 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. This is great. So you want to make$5 million, right? Yeah. And we're at$300.

13:22So 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. Because then going from a triple to a 5X from there is like a little bit, I think, because the thing is, is the business will usually change. There's something called the Chinese rule of three and 10, which fundamentally just means that systems break when they triple. And so I like to think in triples in terms of, unless there's some massive order of magnitude change that we can do. But the things that we have right now, a handful of these are triples independently.

13:52First thing I want to talk about is going to be the avatar is getting clarity on who you are going to serve. Because right now you serve a lot of people, not to say that it's a bad thing, but I think over time we are going to get narrower so that we can make our value proposition a little bit more compelling for them. The next is going to be paid ads funnel, which we're going to look at the pages and we're going to look at the offers so that we can say, okay, can we tweak something? We add a lead magnet here that would get the right people and ward off the bad ones. And is there kind of some process things that we can do that just will stop the leakage?

14:19The third piece is still acquisitions. It'll be affiliates that I want to cover. And then the fourth, what I want to hit on is continuity. And so those are the big four that I want to hit on. We can talk about the corporate thing that you mentioned in between. My initial gut reaction is not yet. But because the thing is, if we can get to a million, we can probably, given the things that I think that we're going to uncover here, you can probably get to like two-ish, two to three, just from some of this thing I'm going to show you in a second. Cool? Okay. Then maybe you get to there, you're at three, you might be like, wow, what if I just kept doing this?

14:50Yeah. Rather than the other thing. Okay. Okay, so avatar clarity. Do you have any idea if there are some customers that are like, way better than others or that you enjoy working with more? Like, what's your dream customer? Who are the people who spend the most money with you that you help the most? Can I just, like, ramble off who they are? Okay, so stay-at-home mom. Okay. Frequent traveler. Kids with many social events. Mom who has kids with many social events. Yeah. Okay. Like one daughter just got married. Okay. Son is having a baby, that kind of thing. So usually mom, so it's mom, right? So there's kids, obviously, because it's mom.

15:24Okay, got it. There's a few of these women. Plus money. Got it. And they just want to have new outfits for all of their trips. So like socialites. Socialites. Okay. Got it. But private, not public people. Yeah. I understand. Okay. So mom socialites, is that the number one, your favorite avatar? And then men, CEOs. Okay. By percentage of revenue, is it 50-50? Yeah. It is. Interesting. Okay. CEO men. Huh. Do you ever get cross-sells? Yes. CEO men gets wife. Wife. starts or husband starts? Typically wife starts. Interesting. Okay. Got it. That's split. Okay. Okay. This is good. This is good for me to know for now.

16:08Okay. Now, paid ads funnel. First thing that we can do on this one is, and obviously this isn't, I mean, you could, okay, there's a lot of things here, but wherever you're driving your traffic to, so whether it's the homepage or it's this page, you should probably have some big lead magnet that people are going to want. I would imagine that what's something that somebody like that would want a lot? So that's been my thing after reading offers and thinking about a lead magnet. It's like, what appeals to these people? And they don't want to sit there and get a checklist of how to go through their closet themselves.

16:39So the only thing I could think of, and this isn't very scalable, is the complimentary style assessment. But that's one-on-one with somebody. And that's okay, though, because you're still getting more of them to opt in. But right now, is the assessment the thing that they're booking on the Google Ads page today? It's just a call. Okay. It's not being positioned as that. So the 1.0 version is style assessment is what you can basically promise them on the landing page. But I was thinking more something like really tactical, like the perfect outfit for you, like one perfect outfit or something to match their skin.

17:19Like your idea of colors. Like that would be a cool one. Because, like, that doesn't, you don't have to, like, put a whole thing together. It's just like, oh, this skin cone, you know, there's, like, 10 tones, and you just pick the one that's appropriate for them. Yeah. Okay. So. We were going to do that next. And also something else. We were going to do the one perfect outfit, but it's so nuanced. But then we were thinking, okay, what if we just share with them, hey, here's how, like, what are some of the steps that they do to prepare if they were to work with us? How are they invested? So we were thinking, like, taking their measurements, having them do some of these steps, like creating a mood board themselves.

17:56So we want them, so for a lead magnet to be really valuable, we want it to be risk-free, easy, and fast. And so those things require effort. And so we don't want the avatar to work to get the value. We want them to just click and get the value. And so I think what we think about is like, I think this is actually really interesting. This is just me personally, So maybe I'm a CEO man, but it's like, there are some, some skin tones that combination, basically it's like, you have a combination of hair and skin tone and eye color that is unique to you. And between all these different permutations, there's a hundred different variations people can have, and they have a different color palette that would be unique to them.

18:32Now you'll know behind the scenes that there's probably like eight different, you know, color styles or whatever. I think either doing color, cause that feels like the easiest one degree more nuanced than that would be a specific style being like, you know, streetwear, hip hop, like whatever, you know what I'm saying? Like, you know that better than me. Professional, casual. Yeah, exactly. And so I think that this is like, you could do this tomorrow. You don't have to change anything just by repositioning a lead magnet. But I think this one would be really attractive, especially if you, like when you push them there, I would experiment with the different headlines there.

19:01And then we need to measure the conversion rate of the page. I know that you've turned them down. The interesting thing here is like 1800 clicks. I think we could be able to get somewhere in the neighborhood of like, if we're doing this right, like 500 leads from that amount of spend. Oh. and just if literally we just need to nail this because on a google ad intent like high intent search like this you should be able to get like 30 percent of people opt in so from a benchmark perspective to this to something that is right for this audience so if someone's looking for personal stylist near me or personal stylist la then it's like what is the first piece and like i always think about like our offer is you've got all these steps that someone has to take can i peel off the first one, even though it's something that I normally charge for, what's my actual cost?

19:45It's going to be time. Can I template some of these things out so that I can still provide a lot of value, but not have it take too much of my personal time. And the cool thing with these, like kind of like more costly or unscalable lead magnets is that you only have to give it to people who are qualified. So you are not obligated to, like, you can choose to do this only if someone meets these qualifications. And you just say that in the landing page. So it's like, hey, if you're a mom with kids and a socialite or you're a CEO guy and you're not getting what you want, then let's get to one of our style assessments where we'll go through personally, your skin tone, your hair color, your eye color, and find the things that will immediately make you look better just within your existing closet.

20:23Because that's like, again, they don't have to do anything and they'll immediately look better. That's like immediate value, not a lot of work. So I'd be like, okay, that's what we're going to offer. So now I can get more people to apply. Now they're going to fill out their stuff. And again, if they're not qualified, then it's like, well, you didn't read the headline, so don't worry about it. So you don't feel like you're, and then for them, I would probably just send them some free things so they feel, you know, they still give them something. But that would be like the thing that I would do to improve the funnel right off the bat without really even seeing the funnel is a clear headline around what they're going to get.

20:53Sub headline is either an image of like, almost like a before and after of style or some sort of image that shows, you know, white skin, brown hair, don't do this. Okay. And then they're like, oh shoot, I do that. And so just like a simple thing that they're like, shoot, I do that. And then they're like, oh, my God, I need help. And so all we're doing is increasing deprivation so that they take the next action. Okay. So that would be the lead component that I would do for these paid ads. Now, I think that you have the scheduler. So they apply it. Then they schedule. Then what's the follow-up sequence?

21:27Like how do you like? Because there are so few, I just manually say, hey, and I try to like. Do you reach out to them? Yeah. But they self-schedule on the page, right? Well, that's if they apply for more information. If they schedule the call, then I send them, hey, here's our services. Looking forward to speaking with you. Got it. So I know you're going to put the video together. Yeah. There's the video before the call that gets them to book. And then I would probably consider sending them a second video between booking and showing. Okay. And then that does a little bit of the pre-sale for you.

22:01and I think about this in terms of like what are those things that you repeat on a regular basis on the call so there's usually like in every call there's kind of like a little bit of a sales pitch that occurs where you're like okay so let me tell you what we do I just try to put as much of that before the call so that I can spend the majority of the call on the person the decision making process rather than basically have this like pre-recorded script that I have to keep reading because it tires out you tires out your sales team eventually that's how I would I would try to do it okay i think that if we can do the lead magnet we can capture way more leads i think if we add the video to the to the landing page so do you think it makes sense to put the pricing no on the page no no i don't think so i think that if we ask for qualifications and we describe the services um that'll give us 80 and then basically you just want to find because the thing is like you don't want to just because there's some people who will be in who have a smaller income but really want this yeah and so it's finding kind of that sweet spot which is like if someone then says like i I want to start immediately, I'm super open, and their budget's like medium, then you probably take the call, right?

22:59If they're like, my budget's zero, then like, okay, well, it doesn't matter how much you want it, it's not gonna work, right? I think that on your qualification question, which you'll have on your scheduler, we just ask for the fewest amount of questions that are required for us to make the decision of whether or not they should stay or not. What would you, so the way I would think through this is that I'm gonna have like 10 templates that I know that are color palettes that work for these 10, you know, characteristic people. And if I have asked their skin, hair, whatever upfront, then I know when I'm going into the call, which template I'm going to be using when I talk to them.

23:27So it's like, hey, oh, you're blah, blah, blah, blah. Actually, you know what? I would describe you more as olive than white, and I think this might actually be a better thing for you. Cool, okay. And then you go into your normal sales process, which obviously works. I don't even want to talk about sales killer closing 50%. Okay. Does that make sense? Well, I just want to make sure that they... Because right now it's like book a call, a sales call basically, and that's obvious what I'm speaking about. But then this feels like, oh, just have a call about skin tone. Well, this is sales. Yeah, and then it's not an issue because they're already qualified.

24:01You're only taking the calls with people who have the income. Right. That make sense? Yeah. So you're going to take more calls. You're also going to hear more no's, but you're going to make more money. Hey, guys, real quick. This podcast only grows from word of mouth, quite literally. There's no other way to grow a podcast than word of mouth. If there's some element of this that you think somebody else should hear or would be relevant to them, it would mean the world to me if you shared this via text, via Instagram, via DM, via whatever way you like to share stuff with the people you love. Thank you.