email-list-size

While we’re getting the new coaches’ class ready to open up this week, we have another question for all you coaches out there. (Actually, this applies to everyone, so whether a coach or not, keep reading anyway.)

So! You have a list, are getting a list started, or sitting around thinking “Eeek! I really need to get a list going. And the thing you’re particularly wondering about is how many people you need to get on this list so you can make the money already.

The answer to that question is pretty simple, but it’s going to sound a little complicated. Let’s start from the beginning.

Before you know how big a list you need to have, you need to think about what you’re selling and who’s likely to buy it.

When you have stuff you want to sell, it’s not a stretch to say that not everyone on Earth is going to want it, or not everyone is going to want to buy it from you.

Some people are Starbucks people, some people are Dunkin Donuts people, and a lot of other people don’t like coffee at all.

If you have a big enough list – say, a billion people, you don’t have to worry about this fact. Send out your email, tell people to buy, and you’ll get all the money you need. You don’t need to think about your most likely buyers at all. Somewhere in those billion people, they’re hiding out.

So as ridiculous as it sounds, if you want an answer to this question but you don’t want to be bothered by thinking about who is on your list, then you’re going to need a list of a billion people.

Not having a list of a billion people, you’ve got to be a little more discerning.

Here’s what we mean by discerning: You’ve got to know what kind of person would have a higher-than-average likelihood of seriously thinking about buying the things you’re selling.

Once you know that – and know it in enough detail – you’ll have a better idea of how big a list you’ll need.

Here’s why this matters.

Let’s say you have a list of 10,000 people. That sounds good, right?

Maybe.

If you know that your most likely buyers are on that list – because something about your list filters them in some way – then you’re in very good standing.

But if you’re not doing any filtering (some people call it “pre-qualification”), you can’t ever know your chances that anyone on your list has any likelihood of buying in the first place.

So if your mailing list is built on the back of a signup box that says “Join my free newsletter,” your numbers are pretty much meaningless. 10,000 email addresses is better than 1,000, but we don’t have any grounds to say it’s ten times better. For all we know it may be 1% better.

So if you’re a coach who helps troubled relationships, and your signup box says “Join my newsletter”, your list size tells you nothing because you don’t know if they signed up because they want to fix their relationship or they signed up because they were intoxicated. (Yeah. Happens more often than you think.)

But if you are that relationship-fixing coach, and your signup box says “Join my newsletter for tips on how to stop fights from turning into break ups,” now you’ve got something. You’ve thought about your most likely buyer, who’s really afraid they’re going to break up or divorce if things don’t turn around speedy quick.

So people who are like “Ooh! I like warm and fuzzy relationship stuff” are less likely to sign up, and people who think “I need to get outside help on this” are more likely to sign up. Fewer of the unlikely buyers, and more of the likely buyers.

So make that one change, and you automatically need a smaller list. Keep it generic, and you’re going to need a bigger one.

Every filter you place on your list makes it easier to predict what kind of money you’ll make.

The money you get out of your list is directly linked to how and why people get on the list in the first place.

If they hand over their email address because your list hints at helping address the problems that they are willing to pay for, your chances of getting money out of them go way up.

Now, for those who have been waiting for some actual numbers …

If you want numbers, I can give you a few generalities.

It’s rare for a coach to have a full book with less than 1,000 people on a mailing list. I’ve never seen it in someone who had less than 500. (Caveats to follow.)

2,500 to 5,000 is good to shoot for to get a full book of clients. It’s not guaranteed by any stretch, but at least you’re in the range of “you have a solid chance.”

The Rule of Thumb exceptions:

If you have lots of offline contacts, or you network heavily on LinkedIn or forums or whatever, your clients are not coming from your list and this entire question is irrelevant for you.

If you gave something away for free on Facebook one time and saw a huge spike in subscribers but no commensurate spike in income, you’ve got bloat in your list and your target number needs to go up.

If you find you’re getting subscribers through well-targeted ads, or you get a lot of sharing of your emails, or you have a strong referral funnel from clients, your list is a little more pure and the target number can go down a bit.

Again, these are generalities, but it’s at least something to go on so you can manage your own expectations.

So how big does your list REALLY need to be?

Again, it all depends on these two things:

  • a) how likely a potential, true-to-God paying client would be to choose to get on your list in the first place, and
  • b) how much your filtering efforts make non-buyers not want to get on your list and muddy up the data.

Here are a few questions to help you figure out how big your list needs to be:

  • Does your list’s name or topic address the issues that paying customers want to know about (as opposed to interested-but-non-paying people)?
  • Do you regularly email your list with content that targets the issues worth paying to fix (as opposed to generic “on-topic” content that will appeal to non-buyers as well)?
  • Do you have a list incentive that covers some of the basic topics that a potential client would be talking to you about on an initial consultation?

Today’s homework:

Look at the coaching services or products you sell and ask yourself what would have to happen in someone’s life or business to drive them to take out their Visa card and pay for it. Not want it, not think it was a good thing, but seriously decide that they were going to buy it in the next 30 days.

Ask yourself what kind of people they are (as opposed to the people who don’t buy), and what kind of things they – as buyers, not readers – care about the most.

Then take a look at the questions above and see how many questions you can answer with “Yes.”

The fewer questions you can answer “yes” to, the larger your list needs to be.

 

Further reading:

About the author: Naomi Dunford started IttyBiz in 2006. In her free time, she likes to… ha! Free time. You’re adorable. Learn more about her here and catch up with her on Twitter or Facebook.

Which coaching model makes more money

As we get closer to the release of our upcoming just-for-coaches class, we have more questions in the proverbial mailbag to answer. (The two previous questions are here and here.)

Today’s question is the ever-common, “What will make me the most money as a coach?” question.

Mmm, money.

There are more than a few different business models out there for coaches, but it’s probably safe to say that they can be boiled down to four different ways of making money.

First, there’s the Big Group model.

In the Big Group Model, you’re looking to get as many butts in the seats as possible. Live butts, live seats. This typically happens by way of classes, teleseminars, or other things that could safely be categorized as “live programs that we want 100 or more people to buy.”

Sometimes these Big Group programs can be expensive, especially if they have some level of interactivity in them. (Think Q&A sessions, office hours, email support, or a certain number of coaching hours included.)

Sometimes they’re expensive, sometimes they’re not. If it’s over $1,000, though, it probably doesn’t fit in this category because most people can’t fill enough $1,000 seats to call it a big group. Usually with a lower price point comes lower (or no) interactivity, which everybody understands because it’s designed for the people who don’t want to pay for the bigger Platinum Mastermind Masterful Mastery program. You’ll generally get more people in this kind of program, because they can pay less.

If you can fill the seats – and that’s truly IF you can fill them – you can make this your only income stream, now and forever, and be just fine.

Then, there’s the Small Group model.

In the Small Group model, you’re looking to get fewer butts in the seats, mainly so there can be a much higher degree of interactivity. Coaches call this interactivity “intimacy”. A common range would be 5 to 25 people in a small group.

The advantages that come with a Small Group model is that you’ll probably be able to charge more per person than you would for Big Group, and it will be worth it to them because of the increased access they get to you.

In a Small Group, there’s a 100% chance that the coach will get to know the participants personally and, in some cases, tailor the program to fit their specific needs.

This is good for the participants for obvious reasons, and it’s good for the coach because the people who work with them in a Small Group setting are many times more likely to develop the kind of strong loyalty that leads to repeat business, private coaching, and a lot of referrals.

Small Group classes can also be easier to sell at times because you can niche it down to a specific audience and you only need to sell a few. If IttyBiz had a class called “How to run a coaching business while homeschooling a special needs kid,” it would probably be easier to find 25 buyers than it would to get more than 100. (Those 25 buyers would also pay more.)

What makes this model nice for coaches, other than the intimacy, is that you can target an underserved niche without getting as much competition – you’ll have cornered the market before too long, while everyone else will think that the “real” money is in Big Group classes or products.

Of course, there’s always the Products Model.

You can make a lot of money going the Products path, whether you’re selling physical products or downloadable ones.

Or, you can make no money at all.

It’s a common refrain that selling products is the path to easy money, and that trading hours for dollars is what stupid people do. But as The Dude in The Big Lebowski wisely said, “Yeah, well, you know, that’s just, like, your opinion, man.”

Yes, you can make a lot of money selling products. They are relatively easy to make. You can make them fast. With the right copy, they fly off the shelves, and you can sell them again and again while you sleep.

Which is exactly why it so easy for your competitors to do the exact same thing. Only they’re in Round Two, and can look at your products and make better ones.

Oh. Nobody seems to mention that part. But all is not lost! And we shall tell you why at the end of this post.

Finally, there’s the One-On-One Model.

Again, many people will tell you that trading hours for dollars is not what smart coaches do. Generally, they tell you this in $2,000 Big Group programs, so you’ve got to take that with a grain of salt.

If you are trying to go the Celebrity Million-Dollar Coach path, then yes, Big Group (mixed with high-priced products) is probably the way to go. But at that point you’re really a professional marketer who does coaching on the side, to one degree or another.

That doesn’t mean it’s wrong, it just means know what you’re getting into and decide if you’d rather spend the majority of your time marketing rather than coaching.

Here’s the thing about One-on-One coaching. You generally make less money per hour starting out and more money per hour as you get better at what you do and you get more established. (You also book more hours.)

You stay very close to the pulse of your clients and the market, which means you have an inside advantage for staying competitive, discovering emerging market trends and speaking in the language of your clients.

You also get a lot more experience, which means you are more prepared to create products (and Big Group classes, and Small Group classes) that stand above the competition. Your stuff tends get the reputation of being better than everyone else’s because, well, you talk to humans on a daily basis.

You also create an expanding base of strong referrals – and by “strong” we mean that people don’t tell their friends that you’re dreamy and they should read your blog – they tell people about the actual problems you solved for them. So as time goes on, you can spend less time on marketing.

Basically, you get a whole lot out of walking your talk. And while some people say you’re trading hours for dollars, you’re trading that time for a whole lot more than just your hourly rate.

So which coaching model makes the most money?

It depends. Anyone who gives you a blanket answer on this isn’t thinking about it for more than five seconds.

Here’s what I can tell you.

If you have a big list and you are better than average at marketing, you’re probably going to make the most money in Big Group. But you have to be very, very good at selling to people who will never know you personally and have probably seen your competition up close.

If you are better than average at solving a very specialized problem, and you can market competently, you probably stand to make the most money in the Small Group model. Pick an underserved market or target a relatively specific, underserved problem, and you’ll be able to command higher-than-average rates because what you’re doing is specialty.

(This assumes you’re solving a problem that people have the capability and willingness to pay for. That’s important)

You can also make a fair bit of money selling higher-than-average-priced products because your market is aware that no one else is creating products that serve their need. We’re not talking price-gouging here. In the real world, “How to Pick Tech Stocks in 2013” is going to be more expensive than “Stocks for Dummies.”

If you are very good at making products both rapidly and better than your competition, and you are better than average at marketing, you probably stand to make the most money in the Products model.

Essentially, this is like being an author and a marketer rather than a typical coach. For those who have schedule constraints that make having a regular practice hard to pull off, the right coach can make the most money with this model.

If you are better than average at coaching people one-on-one, and you can market competently, there’s a good possibility you will make the most money – over time – in the One-On-One Model.

Continue to get better at what you’re doing until your referral system gets you to the point where you don’t have to do as much marketing, and you’ll be in a strong position to command satisfying rates. You’ll also eventually be in a better space to run classes and make products, too. It’s a less sexy path, but it can open up more opportunities long-term than the other models.

Of course, that’s just my opinion. Your situation and goals are different, so your mileage may vary.

One caveat!

The list.

We will discuss this over the next couple of posts.

Your homework for today:

Think about this.

You’ve heard a lot of things from a lot of people about the best way to make the “real money.”

Each of these options comes with upsides and downsides that are determined by your experience, your capacity, your marketing skills and, most importantly, what the hell you want to do with your life.

Just for today, forget about what everyone has told you in the past.

And think about which path seems right for you.

Further reading:

About the author: Naomi Dunford started IttyBiz in 2006. In her free time, she likes to… ha! Free time. You’re adorable. Learn more about her here and catch up with her on Twitter or Facebook.

Ideal coaching client

If you didn’t read yesterday’s post (Getting More Clients: What’s Your Real Goal?), take a moment to check it out. We’ll still be here when you’re done.

Today we have a new question for you.

A fair number of marketing coaches out there instruct you to do a little exercise called “Defining Your Ideal Client.”

The premise of this exercise is basically “Figure out who you really want to work with so you don’t end up with clients who aren’t the right fit for you.”

I’m all for ideal clients. It’s nice work when you can get them. But it can be a very fine line between Defining Your Ideal Client and Defining the Flawless Human Being.

Here’s what I tend to hear when people do this exercise.

When people give me their definitions of their ideal clients, they include a level of detail that looks impossible to find in the wild, because they’ve been taught to only focus on their “ideal.”

You may ask, what does the perfect human being coaching client tend to look like?

On paper, it tends to be a list of fairly innocuous positive traits:

Clients who are passionate about [the thing]. Clients who are self-starters and willing to take direction without being dragged. Clients who stay on track and don’t rush the process. Clients who are open-minded, optimistic, and willing to invest in whatever it is they’re getting coaching about. Clients who Take This Stuff Seriously.

All good on the surface, no?

But when you read between the lines, here’s what it really boils down to:

They can’t live without you, but they’re not needy. They should be willing to pay a lot, but they can’t expect the world from you. They should be flexible, but they shouldn’t reschedule a lot if things come up. They have plenty of money, but not enough to hire someone better than you. They should be broken enough to need your help, but not… you know … broken. Eew.

Our demands list for a client becomes longer than that for a spouse, and somehow we expect to find 30 of them a year.

There is a big difference between a qualitative definition and a quantitative definition. You can get your hands on the latter a lot more easily than the former.

(My grandfather’s definition of the ideal client, incidentally, was “one who paid upfront”.)

“I want clients who are willing to invest in what’s important” is not the same as “I want clients who think paying my rates is a completely reasonable thing to do.”

(Parenthetical aside: If someone isn’t willing to “invest”, then they can’t, by definition, be a client – ideal or otherwise. Clients pay, which is another word for “invest”. If they don’t pay, they’re not clients. I notice that when a coach uses the word “invest” in their head, they often subconsciously feel “I know I’m probably charging more than I should be.” Not always, but often enough to be statistically significant.)

“I want clients who are self-starters” is not the same as “I want clients who consistently take action on the things we cover each session.”

You can tell when you have the latter. (And, you can communicate that clearly to clients as well.) You can measure it every single session. Not so much with the former.

This is exactly the same principle that we talked about in yesterday’s homework.

“I just want good clients” sounds reasonable when you’re desperate, broke, or both. It sounds like a perfectly unassailable statement. But if you take a step back, and you just hear those words by themselves, it sounds ridiculous.

Understandable, yes. Ridiculous, also yes.

Imagine a 15-year-old girl’s diary entry.

It says, “Oh, God, I just want a good boyfriend. That’s all I want. A good boyfriend.”

If a grown-up were to say, “You might want to be a little more specific about your demands of the universe,” they would get a frenzied and furious, “You just don’t get it!” in response.

And of course the adult realizes, “No, honey. You don’t get it.”

If you walk out just looking for a “good boyfriend,” you’re either a) not going to find one because of your psycho desperate frenzy, or b) you’re going to get a person who can’t possibly meet the criteria of “good boyfriend” because you haven’t even defined what that meant.

On the other hand, if the same girl’s diary read, “I want a boyfriend who is between one and two years older than me, tans easily but isn’t too dark, plays football but isn’t a jock, gets great grades but doesn’t think he’s smarter than me, pays attention to his schoolwork, has a good job so we can go on awesome dates, but above all, he has lots and lots of time to spend with me”?

This girl lives in La La Land.

It’s like that with clients, too.

The thing is, when you start defining something in detail you can intuitively tell whether you’re asking too much of the world (aka, “looking for the Flawless Human Being”).

Defining your desired clients in detail can also get you to see things that are mutually exclusive to a coaching relationship. (aka, “If they have that much money and are that much of a self-starter, then they probably don’t need a coach.”)

As you build your coaching practice, you are bound to have a certain number of clients who, through no effort of your own, are what you would consider to be your ideal clients. When that happens, yay for you.

What’s more likely is that you will have a larger number of clients who are Perfectly Good Enough.

Some will be self-starters but they have to reschedule appointments a lot. Some will send you too many questions via email, but they do everything you suggest and think you are an angel sent from God. Some you have to drag kicking and screaming towards their goals, but they ultimately follow your direction and they buy six months at a time in one lump sum.

Like a spouse, you wouldn’t call them perfect by any stretch. But they’re fine. They’re just fine.

The purpose of the Defining Your Ideal Client exercise is not to magically set a force in motion to guarantee only the perfect people come to you.

The real purpose is to get you very clear on what kinds of clients you truly don’t want, and what makes a client Good Enough To Work With. It also helps you decide what to communicate to potential clients so you are able to say what kind of coaching experience they can expect from you.

Done right, it’s how you start filling your book as you grow your coaching practice. When it’s overdone, you’re being Miss Princess Diva Pants Hand Me My Tiara And Peel Me A Grape.

Your homework for today:

Think about your Ideal Client. Go ahead and write it down in as much detail as you can.

Next, look at that definition and ask how many humans on Earth would fit that description. Edit it and tone it down where it makes sense to do so. Make anything that’s vague (self-starter) more specific (takes action on what we cover each week).

Finally, look at it again and ask yourself if it reflects what you’d really accept in a client. You may have defined a perfect 10, but you may still be very, very satisfied working with 7s or higher. Figure out what 7 means for you.

Because your ideal client is really the Satisfying Enough Client who decides to hire YOU.

It would probably be a good idea to make that as wide a pool as you can.

About the author: Naomi Dunford started IttyBiz in 2006. In her free time, she likes to… ha! Free time. You’re adorable. Learn more about her here and catch up with her on Twitter or Facebook.