Recruiting, Ops, and Churn: Real Business Fixes in Real Time | Ep 922

0:01If I said, hey, no one wants to come to Vegas who already has a huge amount of marketing knowledge because anyone who's really good at marketing can make more than well there's plenty of marketers who can make a million dollars a year in revenue and take home 200 you know 250 with all the headache it's like well i could pay you double that and you can just deal with high level business centers all day and for some people it's like that's a pretty good deal hey alex my name is mark we help live poker players win more money who are already winning we do about two million dollars we'll do two million this year and we'd like to be at 10 million the problem is we have two front end offers and both are converting like crazy to the back end.

0:40But we have one that's 7.5k for 28 days and one that is 2.8k for 7 days. We are demand constrained on the high one, the 7.5k. Do you upsell from the first to the second? We're not really converting because they overlap too much. Okay, so is it just a downsell? It's a downsell for players who aren't playing full time or guys who are more weakened warriors as opposed to... What percentage is each? We do 12 a month of the 7.5K and we do 16 to 32 a month of the 2.8K. It's a big range on the other one. Okay. So what's revenue split there? It said 12 times 8. So call it 100 on the high ticket side. And then the other one is...

1:2250 to 70 on the... Okay. So less on the other. Okay. You go on. So the question is, how do we differentiate these? Or do we just switch to a single offer that's more of an ascension and make the one that's maybe three days or five days and less expensive, and then we can upsell to the 28-day? Or do we just say, screw it, let's just do the 28-day and drop the thing on the front end? You said you're supply constrained on the seven-day thing? If we start doing a bunch of those, we need to hire more coaches. Okay. And how are you not supply constrained on the other one? Is it less coaches for the more expensive thing?

1:56Gethin, my business partner in the front row, he does... Is it fewer coaches on the lower thing? I'm in that one that I hit the net. So won't you very quickly be constrained on the top thing? We've done three in the month before. Okay. They're in there. Okay, three times a day. Got it. But, okay. So the problem, though, is that you need another person to sell more people into the front end thing. Well, because they're running some of pages, right? So if I'm 13, I'll get down that first. the same i think i have an ops issue so right now if i said could you sell more people if you had unlimited capacity like could you could you sell more if you had unlimited capacity we could sell more of the seven day thing because they go four times a month so it requires less on our part i feel like i feel like re-skinning the ops on that um but when i have two products that are really similar probably the higher guys and you sell them direct into that right yeah direct from from warm inbound whatever you're doing oh from warm inbound yeah oh god it hurt okay well if you cut off the low thing you have no real scalable demand done right now it's just you make content and then that just you get what you get and then you sell those people right and we're kind of capped on on the warm is growing but it's slow we wanted to start dipping our toes into paid yeah i mean that's going to be the thing that's going to unlock as much as i want to say hey cut this one or that one if you cut either of them right now you'll just lose money because you don't have an ability to get customers kind of on demand if i were to fix this i would think let's fix ops first, number one, like how can we reconfigure the delivery of the offer so that you can get three, five X, the operational capacity for you.

3:40And then all of a sudden that'll unlock it so that then when we then go run paid ads, we can then actually bring enough people in. And then at that point we could say, you know what, now we have enough of the 7 ,500s, which you might as well charge. Well, I'll just say you have enough of the 7 ,500s that then you can make the call and say, you know what, we have this much capacity overall. If I just cut this, I can then triple this one and then you just do that. Do you like the pricing on those two or you were hinting at raising? Honestly, this is where I would be like, we need to do our research behind the scenes so we could, because we do price analysis all the time.

4:12And sometimes we get lucky. Like we had a business that we acquired that we did a ton of pricing research. And we basically said, you are actually so underpriced that we will double the price. And it took me nine calls to the founder to get him to like sack up. Ladies, I apologize. Grab his gonads. Those are unisex. anyways grab those and then make the move and not only did we double the price conversion rate went up because it was so cheap people didn't believe it and so the thing is that sometimes we sell out of our own pocket but you actually sell to gamblers correct yes so you might you might actually find yourself in a situation where the more it is the more they'll believe it which is called a vebling good but we would do a pricing kind of like deep dive on that before i would make a pricing rack for that specific avatar but yeah that's the tldr i'd fix ops first then I turn paid on and then at that point we'll make the split call cool thank you appreciate it yeah hey Alex my name is Jared and um we sell body count contouring and body transformation to patients I heard I like that sounded so different from the onset sorry body what contouring okay body contouring so it's our primary service is like melting fat like we sell body counts I was like that's this does this does benefit body counts if you're aiming It's one leads to the other.

5:27It's a daisy chain. Got it. Yeah, yeah, yeah. Heard. So you get the contiring to increase your count. 1.2 in revenue. Yeah. We're on track due to this year. In-person med spa? In-person med spa. And what's stopping me and my question is, to start over from the top, is we now sell a$6 ,000 package for a year. The med spas to help them scale using our pillars. Okay. So two businesses. Two businesses. Heard. And right now, trying to figure out - First one, right? First one. And then this is this one. Keep going. So business one, we did start another location two years ago. So three. Yeah, heard. Okay.

6:06But the nice thing is we only did one service for like two and a half years. Which I do like. I do love the Raising Canes of just like we make chicken tenders, toast, coleslaw, and yeah. And then the cash is so good in the consulting that right now I'm like, do I set up the exit, move to consulting? So do you want to sell the med spas? Not for nothing. Well, no, I mean, yeah. But like, what do you want to have happen? I would like to be coaching. It lights me up. So you like doing that better. You realize there will be no exit there. So within the coaching, this is why they've stayed together, is we get all these clients and then we're able to pick the key ones for the spa group exit of like a 50 spa group, 100 spa group exit.

6:44Okay. So I've got one that we take - So you want to do a roll up of med spas. Of med spas. I think that's smart. But they kind of go together. It feels like. Okay. Heard. How outsourced? This is such a loaded question because everyone says they're totally outsourced. How many times have you gone to the med spa in the last six months? Some weeks, zero. Some weeks, once or twice. Okay. I see where you're going. I think putting a roll-up together, very easy to say, harder to do in practice. And then also the deal structure in that can be like just a couple of ways of restructuring can make it, A, more tax efficient for you, and also you capture more upside in a way that when you pitch it to them, makes it seem like they're getting a better deal.

7:20So there's nuance to that, but beyond this scope. I do think that I want to get you out of the day-to-day of those because that's not the opportunity at all. Because if you can do the roll-up, basically nothing else matters. So I'd be willing to eat margin on the two to put somebody who's intelligent in IQ per square foot so that I use my cell phone talk. Have you guys heard my cell phone talk? Here, here's the cell phone talk. So you get intelligent person and say, hey, intelligent person, I'm going to pay you, you know, 100 grand a year and 5 % or 10 % of the profit of the business invested for four years.

7:53And if we sell, you'll get 10 % of just the contribution of these in EBITDA to the overall. Cool. All right. But here's the trade. This doesn't ring. Let's role play it. Customer comes in. They're super upset because they had some weird reaction to contouring. What do you do? Any answer that is not call me is the right answer. Okay. You have a whole full stack and then the ceiling starts leaking in the middle of the day. What do you do? Anything that's not call me is the right answer and so and so i i do this to make the point when you have that conversation because you're like i'm giving you this ownership position i'm going to put your picture on the wall we're going to call it your facility not mine so that you own these and then you can go and hunt cool and if you have questions with the deal stuff we're having help sweet thank you hey alex my name is josh we sell to athletes and fitness enthusiasts like yourself with mobility and injury prevention so we help them overcome muscle tightness joint stiffness recurring injuries we're at 33 million in revenue we want to be 100 um we've been scaling very fast now we're at a point where our cacta ltv has like squashed down to 2.1 so we don't have the breathing room coaching or info sorry coaching in for products info okay got it yeah coaching low ticket to high ticket ascension okay got it yeah so our cacta ltv is now two to one we just don't have the cushion to like continue scaling the sales team too much we need to double the sales team we just need more cushion yeah so what i was referencing earlier about ltv to cac at each of those kind of intervals of manual labor that resonate with you a little bit yes yeah so you need to increase ltv so are you all direct response is it all paid or do you have organic we have a big organic following but it's mainly like 70 of the clients are coming from paid we run a lot of paid yeah so i've got good news and bad news if right now you're at two to one i would imagine the profit margins are compressing right so sales are high but yeah margins are lower yeah the issue is that believe it or not if we were to pull out the 30 that's coming from organic the business would probably not be profitable yeah it might be less than i'd have to check exactly what that is well what are your margins 20 right 20 is coming from the free traffic and then the other 80 do you know what i'm saying yeah yeah so a part of it as well like our closed percentage as a company is 20 the reason for that is like we've gone from four sales reps to 40 sales reps in like three months so a lot of our sales reps are still in ramp it's like it should be like 30 35 percent which would give us a bit of breathing room but it's still yeah like anything else we can do to yeah more on the front end and i think this is actually pure ops so it's it's going to be the sales motion and dialing that in and probably adding some elements of education prior to the close in addition to what you're currently doing to make it easier for the sales guys to do their job with less ramp and then getting i mean i'm sure you're proficient in doing sales because you're in fitness and obviously have a you know a hardcore sales well i'm guessing if it's 40 phone sales guys selling info like it's pretty hardcore in terms of the the selling perspective who runs the sales team uh so we've got 40 reps there's then four pod leaders managers and then there's one uh director of sales got it who developed the sales training myself like it's kind of come from myself it's evolved a little bit over time from our like top sales reps but there's many me and the sales director to solve this business it's going to be a recruiting and training thing like in terms of sales reps better reps yeah yeah so like we look at the whole business it's like we have to solve that now could we also probably look at the ad side like are there things on the creative that might be able to give you a lift probably conversion rate throughout the funnel sure any incremental return is going to be positive but i would bet right now that it's going to be how do we get the best guys to 40 45 and then have the meat you know the median be you know 30 35 yeah our best guys are close to 40 okay but right now were you saying the team averages team is 20 yeah because there's so many still around so part of it yeah so recruiting and training is going to be the business that you're in from a selling perspective and so you have a sale you have a sales business fundamentally you have a sales business with a direct response media on the front end and so there's so much that goes into sales training i just rewrote the acq sales closer handbook and all of our onboarding process there's so much like nuance that goes into it.

11:54And a lot of it is just there's so much wasted effort that happens and untraining that occurs on the job when it's done the wrong way that most sales or I'd say 95 % of sales organizations, their primary method for basically scaling the sales team is hire as many people as possible, let the bad guys die out, which is scaling through selection rather than scaling through training. And when you scale through training, you can scale with higher margins because you don't have to pay the mercenaries their king's ransom because you can take anybody off the street and they can immediately sell and so that's where your alpha is going to come in compared to people on like in your space who have to just take the mercenaries who will jump from offer to offer to offer because you can pay them less and you'll be able to ramp them higher and you'll be able to get more of them and so fundamentally like that is the motion that's going to be the competitive advantage of the business outside of the obvious like you need to still be able to run really good ads yeah so the 80 20 for us then is like to increase LTV is like better sales team yes you're not going to increase LTV you're going to increase dollars per lead yeah okay got it and what is a healthy character LTV for our business model at this scale I mean honestly you want it to be bigger yeah no yeah I definitely want to be bigger but someone said yesterday 10 to 1 and I don't see how that we could do that I think that you could it's a 5 to 1 as a good target and that would probably get like getting the sales function where it should be would get you to three and a half maybe four-ish and then I would say the other kind of 20-25 percent lift that would happen there it's going to happen front end conversion rate optimization stuff, media.

13:20And then we'd have to look at what's the renewal rate on the backend. How many people renew long-term? Because like the two most profitable pieces of business for you are the customers that are coming in for free, which is basically the entirety of your margin right now. And then customers that renew that you don't have to pay CAC for, right? There's the things that are dropping to the bottom line. Everything in the middle is literally just to facilitate these two things. Yeah, exactly. Right. And so we just need to like, how do we double down on these two? Because these are the most profitable things and then lift this so that we can unlock more to get to a hundred.

13:44mm-hmm yeah okay if you get to four or five then you can get to 100 so i mean although this like this will be ops heavy this will be work but you also get paid 70 extra million a year so yeah okay all right cool thank you man yeah so my name's chandler i sell cowboy hats and custom hats sweet we do around 2 million in revenue right now awesome i'd like to be at five okay what's stopping me is so everything is mostly through social media cool we've got about 780 000 organic followers cool we are doing some paid ads getting a 12 to 18 row as on the ads right and the issue is is i've got this big red shiny button on my desk and at any moment i can just slam it and just double the content like you say i can double the paid ads sure but i can't make the hats and it takes but it takes years to take somebody and make them into a master hat maker and the issue is is as much as we could say it's a recruiting problem sure hat making is not like an inherent skill so it's you it's you could bring in a person that does artistry you could bring in a person that does anything like that and all of a sudden if they don't have the vision for it they can't shape a hat and so you need the hat making combined with the customer service in order to be able to talk to the clients so what's the price of the hat right now anywhere from 800 to 1200 okay got it so there's a super high-end kind of like artisanal for sure you know hats they're all custom etc and we do like end to end, like full virtual.

15:08So every single person normally when they buy a hat goes into a hat store. And the issue is, is that hat stores are all locally based and it's a dying trade. And so what I did is I harnessed the power of the social media and then we do all the video calls and everything virtually with people. So people feel like they're watching the video that they love on social media, but it's made just for them. Yeah. So it's totally recruiting issue. Totally. Yeah. And I mean, fundamentally, if you're like, I have unlimited demand for this stuff virtually, right? You can just slam the button and just get double the sales, but you can't deliver on it.

15:41It's a also kind of like the sales thing different in terms of the delivery, but it's going to be a recruiting and training issue. The thing that I think is underutilized right now is the fact that it's a dying trade. That to me is where the really exciting alpha is. Because if you tell me, okay, there's all these people who are dying on the vine who can barely make ends meet. And then I'm over here printing money with the exact same skillset they have. I'll bet you, you can probably pay them better if they're making thousand dollar hats. But I'm in Kentucky. Yeah. No one wants to be in Kentucky besides us.

16:08No one wants to be in Kentucky for what you pay them now. That's true. So compensation is, you can be overcompensated or you can be undercompensated. So if you are supply constrained and you are making money hand over fist, you are underpricing your talent. Okay. So it's like, how much more would I need to pay somebody in order to get them to be, one, willing to move to Kentucky and to be able to go through the training for it? If I can get them to do that, do I still have a good margin? If so, great. And it's like, okay, well, if I paid them 30 % more, we'd be good to go. Okay, well, what does 30 % look like in terms of if we change nothing about price?

16:41What does 30 % look like if we pass through the price to the customer? Does it change anything about our acquisition? If so, then jack the price, jack the talent, and then you're good to go. Real quick, guys, I have a special, special gift for you for being loyal listeners of the podcast. Layla and I spent probably an entire quarter putting together our Scaling Roadmap. It's breaking scaling into 10 stages and across all eight functions of the business. So you've got marketing, you've got sales, you've got product, you've got customer success, you've got IT, you've got recruiting, you've got HR, you've got finance.

17:15We show the problems that emerge at every level of scale and how to graduate to the next level. It's all free and you can get it personalized to you. So it's about 30-ish pages for each of the stages. Once you answer the questions, it will tell you exactly where you're at and what you need to do to grow. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part that's relevant to you, which will probably be about 90 minutes. And so if that's at all interesting, you can go to acquisition.com forward slash roadmap. R-O-A-D map. Roadmap. How would you jack the talent?

17:47Like just, I mean, because I don't feel like recruiters can find hat makers. Maybe I'm wrong. I don't know. I think they can totally find hat makers. You think so? I mean, I would just Google hat maker and then I would call the business owners. I'm just being like, this is how I would do it. Yeah. Like they're business owners. And so if they have the opportunity to, because the thing is they're probably not making anything. Yeah. And so many of them are artists. They don't have business sense. And so if they can make the money they want to make and do the thing they want to do, that's a dream life.

18:12It's a pretty good offer. But then they have to work for me and then the ego thing gets in the way. Yeah. But not for all of them. You need what? Three more? Five more? Ten more? I would say like two to three more to get to five to seven. I'll make a point. This is important. So you guys met my team today. Does it now make sense that they don't make$100 ,000 a year? Yes. Like the people that you talk to make between, you know, 200, well, two, no, probably higher. So probably 300-ish on the low end, all the way to 750 plus, right? The people that you spoke with. and so if I said hey no one wants to come to Vegas who already has like a huge amount of you know marketing knowledge because anyone who's really good at marketing can make more than well there's plenty of marketers who can make a million dollars a year in revenue and take home 200 you know 250 with all the headache it's like well I could pay you double that and you can just deal with high level business owners all day and for some people it's like that's a pretty good deal okay this would be horrible if I was just trying to be like how do I pay kind of as little as I can and then be surprised that no one wants to come here.

19:14But you have the margin and you have the pricing power. So use it. So one last question. Can I hit the big red button and then that way... No, supply first. Supply first. Get the people first. Well, you have margin, right? Like 40 to 45 percent? Yeah, you got margin. Okay. Because I'm just wondering, if I hit the big red button, then I have more money and then I can afford the power. Well, how much capacity do you have right now? Are you fully tapped out? Right now, currently when someone buys a hat from us, the soonest they'll be getting their hat is like October and November. So you would just be pushing out delivery when you do that?

19:42I could push out delivery technically. Nah. The industry does delivery at six months to a year for a custom app. We're still technically two months under. I know, it's fucking crazy. I hate using latency, but I do think that there's no difference between six and eight months. Okay. It's just forever. Okay. Well, it is, and that's like, at about the three to four month, like, you have to essentially just slowly grab everyone off the ledge. Yeah, yeah, yeah. No, I mean, if you want to slam your red button just so you can just jam some cash in, that doesn't really bug me. Pushing from six to eight is going to change absolutely nothing about the conversion process.

20:12Okay. Recruiting problem. Thanks. Rock and roll. My name is Max. Nice to meet you, Max. So I sell cannabis hemp dispensaries cross country. Cool. Do 22 million a year. Grower? Goal is - Are you a grower? No, distributor. A distributor. Got it. Okay. So we buy it from California farms, then distribute it out to - Okay. Goal is 50 million. And what's holding me back right now is regulatory changes in the hemp industry. Uh-huh. So that fear of something changing, a few states are changing right now that are key markets, and it's kind of holding us back from reinvesting and expanding the team. So basically the uncertainty that the market is going to be there is what's holding you back from getting more locations on board to distribute to?

20:56Pretty much. I mean, from basically expanding the sales team and... What's the alternative? I guess kind of stagnant and really. So what are you afraid of? I guess what I was more wondering is like, should we change product categories? Because there is other products like in the cannabis space that we could distribute to our current customer base rather than just flour. Like that's been our full focus right now. Yeah, I would probably think about it like this, which is regulatory is like the number one concern in your space. Also, sometimes in health care as well. So that's kind of sometimes an issue because they're heavily regulated.

21:32That being said, most regulation, everyone's fear is that it's going to end tomorrow. But typically, one, you'll have heads up because bills are on the line. On top of that, they have to get voted for. Once they get voted for, there's going to be a time they're effective. By the time they're effective, they usually have a phase in because they typically don't want to disrupt business. And so you usually have way more time than you think you do. and so I kind of operate from the like we will operate this way until we know because otherwise you just get stuck in this uncertainty of just like what do I do with my life and you can stay there forever Ray Dalio has been saying I love Ray Dalio to be clear but like Ray Dalio has been saying that like the world's going to end for like 14 years and so and he's like almost there right he's like almost right but he's been almost right for like 14 years and when it finally happens I'll be like I told you right and the thing is is that if you had like held gold this whole time, you would have missed out on one of the best growth periods in US history in terms of stock market appreciation.

22:21And so I say all this to say, capitalize on the opportunity while it's there. When it's not there, or when you have a heads up that it's not there, then you can very aggressively start selling the other products into your distribution base. And I'm sure I would imagine that getting the other products is not that difficult. And training the guys to sell is probably also not going to be that difficult. So I would just go business as usual, still aggressively expand. And then if that happens, you'll make the pivot. Trying to guess the future is tough yeah and so i would rather just deal with the you know the information we have now and when that information changes we'll change our behavior yeah thank you my name is peter uh we sell sports memorabilia autographed cool sports memorabilia by athletes in the uk sweet uh we currently do three million i would like to be at 6.5 in a couple of years very precise okay yeah i'm english yeah i've been stuck at three million the last couple of years the swamp as you say i think i need an a player also i'm not sure i think i've been focused on the wrong things as well so yeah just want some advice on that and what else it could be what's limiting your ability to grow leads i'd say leads and then converting leads leads as in getting people to buy the products or getting the products getting people onto the site and then our conversion rates one percent so i think that's quite low for e-commerce yeah yes or the targeting is off from your traffic could be one or the other okay because i would say like if anything some of you guys is probably like obsessing about your CRO, but the issue is actually the list.

23:45It's the traffic that's getting sent to the site. The easiest way to improve your conversion is get better people. I mean, being super real. Like that's, it's one of the most underlooked way because the whole time you're banging your head against the wall and it's like, yeah, well, no shit. These people are in Africa. They're not buying this, right? To your issue though, do you know how to buy media really well or what's your core skill set? I don't know. I need to figure that out. Probably just managing the whole thing. Okay. Well, the core elements of the business are being able to source the products.

24:08Okay. Are you good at that? Yeah. it's like seeing a piece of memorabilia being like right i could buy that for 200 sell it for 2000 so i'd say buying so that's how you source you just buy sell okay so you're a little man got it so you're fine at finding the stuff that you know is going to sell at a higher price point you're good there okay so we don't have to worry about that i mean it sounds like i mean there's not much else into the business if you already have supply side down for e-commerce it's just media buying for the most part and then building the brand but for you you do get some kind of brand halo because of the nature of the memorabilia that you have which is kind of unique to your business but the fact that you didn't immediately say yeah i'm really good at e-commerce and really good at you know media buying i'm gonna guess that's what you're missing and that's probably the person that you need and the thing is is you could go from three to six in like 60 days if you have the right person you go from three to 10 12 it's e-commerce like it scales very easily that's why a lot of people like it the issue that then comes up is cash flow which we can deal with later but like if as long as you have so you're at three ish million what are margins 400 000 on 3 million.

25:05Okay. So like 12 ish percent somewhere in there. This is why it's the swamp. So you either have to learn media buying yourself or bring in somebody who's a star or stud, and you might have to give up a few points of equity to get somebody who's really good without giving the entire margin away. Cause like you've got cash and you've got stock, you've got different levers that you can use to try and compensate somebody. It's just, it's like the really good media buyers make multiple hundreds of thousand dollars a year. And so most people who own e-commerce businesses are either very product brand focused or they're media hardcore media buyers.

25:39That's like, I would say those are kind of the two genres of e-commerce owners that I encounter on a regular basis. You kind of sit in the middle of like kind of neither. And I don't say that as a slight, I'm just, just so you know where your deficiencies are. The nice thing is that your eye for product, you have a really good sense of the market where you can do the arbitrage on the 200 to 2000, which is great. But I'm going to guess this is the skillset that you need right now, which is getting that going. Once you have the media person, then your skill that you'll have to learn is how do I brand this thing so that I can long-term become kind of like a household name of sports memorabilia.

26:08But for now, let's get more sales, drive revenue up, and then brand would be the next thing. Thank you. Cheers. My name's Nick. We sell sales coaching and lead gen to financial advisors. We're at 6.6 million. We'd like to be at 20 plus. Outbound paid ads, events how do you sell paid ads okay yeah straight to vsl the phone team correct cool yeah yeah biggest thing is churn as well pretty much all agencies we've basically transitioned from lead gen company to sales coaching company because we know that advisors can't close no offense to any advisors in here we're doing a lot of sales coaching now so we have like the big head long tail where we can sell the lead gen on the back end yeah the main question is have you seen other agencies successfully pivot from lead gen to sales coaching or you know in like very non-sales or industries where founders or business owners are sales deficient have you seen companies successfully train their clients on sales yeah sure so like a gym launch how did you guys successfully do that across thousands of gyms we had something called boiler room we trained their trainers and front desk people every morning and drilled them role played and separate them in the groups the same way with our own teams but we just did it every morning for them and it was just an add-on just group group role play basically just like you'd have a sales manager meeting where you'd role play whatever particular part of the script they were all struggling with we break sales training from the team side not on the one-on-one side into five parts we've got intro we've got disco we've got offer and then we've got you know objections and looping and then fifth day is basically whatever is kind of the hot topic of what's the thing that we think is going to benefit the team the most and so that's kind of how we rotate through we have to keep each part of the script crisp otherwise they'll fuck up something and so that keeps the sword sharp and that's what we did you know across the team we still we do that for our teams too basically you need to provide more value or you need to lower the price and so if you want to tackle churn it has to be like there are for sure businesses that work in the space that you're at i think big head long tail is a great model like charge the up front and then just make the continuity much much smaller so it's a no-brainer like they almost pay that just to be kind of in the network it's like i try to answer the question so that it affects as many people as possible in this room but the problem with information and kind of quote coaching or education type businesses is that people try to make continuity out of the front end value that you're providing.

28:24And then the value drops once you have the skill. And so you have to separate out the consumables from the one-time things. The one-time things also have significantly more value than the consumables do. Now, sometimes they don't have the money to pay for the one-time thing because they don't have the skill the one-time thing would give them, right? That's kind of the issue. So in order to separate it, it's like you just have to think, what are the things that they get on an ongoing basis? And if we only sold that, what would the price point be? Likely significantly lower. And if we got from that skill, it would be significantly more.

28:53But once they have the skill, assume they have the skill on the ongoing basis. What would they still pay for? Now you have the lead gen thing, how to sell using our process. They stay. Okay. So the biggest thing is just making sure they actually consume the coaching. So it's like, it's activation as well. So like getting them to come in and actually engage. Yeah. Because most advisors... Is it all remote? It's all remote. And they don't, they also don't like sales. Like the word sales, like they like cringe inside when they hear it. So we've literally like banned the word sales. Like we, we just say consulting.

29:24We don't call them sales calls. We call them consults. So like, you know, like that. So it sounds like you just have to get better at training them. Yeah. Yeah. So, so what did your team structure look like as well? So I was, I was curious, like, is it possible at scale to do that? And then what sort What a team did you have on the sales training or coaching side? It is possible, but the answer to my question isn't the answer. So the answer to your question isn't the answer to your question. Me answering with what our team structure looked like will not help you. Because we're a different business.

29:50And so for us, the fundamental arbitrage that existed by and large was two main things. So one was the network in the community. That was a big component of it. You know, being a gym owner is very lonely. It sucks. The other component of it was lead generation, but not in the way that most agencies kind of do it. We were not an agency. so the one skill that I taught gym owners how to do was how to run ads in a local market and then the thing they would need on a regular basis was the creative and so I licensed the creative every single month because they needed that every month but they already had the skill so I didn't have to have a hundred fucking account reps to do with it because they knew how to run their own ads and running ads in a local market is very easy drop a pin female go you know I mean as long as the creative's good and they were running it to our pages that we already tested and so all we had to do is feed the black box with the creative and then after that they just run our process.

30:35Got it. Your issue though, is that if someone gets activated, they stick for sure. For sure. Well, then all of the, all of the effort we have is how do we get them activated, like better, faster, which is going to be a function of two things. One is going to be, are there some avatars that are better than others? Right. So we only sell those avatars and we split that into three buckets. You've got demographics. What do they look like? Right. You've got the quantifiables, which is like size business that they have, whatever. Those two will at least get you on a head start in terms of segmenting the traffic.

31:04So you can be like, this is who the avatar is. These ones have a significantly higher likelihood of converting. And what will happen when you do that is your cap will go up, but then your stick problem will get fixed. Okay. So like, for example, if I sold everybody who identified as a fitness person, then Gym Launch would never have been able to exist because I would have had too many shitty customers who are personal trainers, who've got 10 clients, whatever, and they can never pay and it doesn't matter what I do. And so for me to deploy the resources is required to actually get them up to snuff, I have to have somebody who at their onset can pay more so that I can actually help them.

31:37Okay. Because below a certain extent, it just needs to be DIY, which is a different business, not the business I wanted to be in. So there's probably some advisors that are better that you need to basically scan out and say, all these people we're not going to service because they have a low likelihood of actually working. And maybe you need to adjust price to only accommodate those people and that newer avatar that's better. So this is probably an avatar issue. And then obviously the ops on the back end in terms of activation is. What do, oh yeah, that's the third bucket, the behaviors. So what are the people who have the right demographics and the right quantifiables, what behaviors did they do that caused them to activate and stick?

32:10And what did the other people who look like them not do? And then that becomes the activation process we reverse engineer. Makes sense. Quick last question. How did you optimize for time to value Adroom Launch? And how can we potentially do something similar? Because for us, deal cycles are pretty long. Yeah, we'd email their list, they'd make a sale in the first seven days. Okay, so just reactivation. Okay, sweet. Appreciate you. My name is Roddy. I'm an orthopedic surgeon with emphasis in orthobiologics and regenerative medicine. We do about$2.1 million. And that was with a shift in the last year for more of an insurance-based practice to more of cash-based services.