For most businesses, the first time an advertising campaign “clicks”, it is an incredible moment! But when reality sinks in, what you end up focusing on is thinking about how to actually keep up with the demand and how do you manage for scaling your business. Once you actually have a method to grow your business with advertising, new challenges naturally come up.
I wanted to share something that’s going on in our business with one of our clients.
Right now, we’re very fortunate that we have a campaign where we’re spending a dollar and the client is getting back eight to twelve dollars the same week and that’s a great position to be in. But what ends up happening is there are naturally new problems. Now that we figured out how to actually spend money and make more of it back in the same week, what we’re noticing is that we have new problems.
If you’re in a coaching business right now, these are the same problems that you are going to have as you scale your business.
These are the three problems that we’re seeing right now.
Number one is that there’s a limit of how many people we can actually close because most of them go through an application process. So the sales process is like this:
- A prospect sees an ad
- They listen to or watch a webinar
- They complete an application to the program
- Then they jump on the phone with a salesperson
- Then they buy
The challenge is if the campaign is profitable and that salesperson can only handle so many applications per week, to grow the business, you will need more salespeople.
This organization has never hired salespeople at scale before and right now we’re not looking to bring on like 10 or 20 salespeople. We want three full-time, high performing salespeople instead of one, (and the numbers stay relatively the same), it has huge implications on the growth of the company.
Now, what we are focusing on is what is our process for actually recruiting, hiring, training, and managing new salespeople. It’s so much different when you have three salespeople versus just one.
Once we are figure out and solve the sales problem, the next logical challenge that we are going to have is: can the business handle 50 new students per month?
A year ago, this client was onboarding about 50 students per year and now we’re growing at a pretty good pace where the goal is now to bring on about 50 students per month. The challenge here is that the academic/fulfillment side of the coaching can’t handle 50 students at this point.
The reason is because so much of it as tailored to one-on-one and it’s just not scalable at this point. What we have done is we’ve started the transition to a hybrid program where there’s group coaching plus the one-on-ones.
This hybrid doesn’t make people feel that they were sold something that now the client isn’t going to deliver Instead, there are still the one-on-one calls available , but we’re moving it over so now, there are daily group classes and people can get any kind of training that they want based off the module they’re in or based off of where they are in that program.
From a coaching and fulfillment standpoint, now we’re changing the fulfillment so that the coaching scales to 50 students per month. imagine if you’re going from 50 students a year to 50 students a month, you are going break stuff. When that happens and there’s going to be new processes that are required, new systems and new implementations that are going to allow you to scale to 50+ students per month.
Then lastly, when this happens, especially when you have payment programs handling 50 transactions per year versus 50 per month, things break there too (especially from a cash flow management standpoint). There are more employees, there are more salespeople, there are more transactions in total.naturally, there’s going to be people who don’t pay, who are going to delay payment, who might still have access to the program, but haven’t paid following payments.
There are just new challenges that come up at scale (in this context)
So instead of 50 new students per year, now there are 600 and with those 600 people in the program, there are new issues dealing with more students. So if a payment program is optimized and we actually get all the payments instead of just some of them, the difference is multiple thousands of dollars being received versus not being received (from an account’s receivable standpoint).
So what we’re seeing is that cash flow management from the finance department is becoming increasingly important because if we don’t manage it correctly, it’s just not going to allow us to scale at the level that we want and it’s definitely not going to be as profitable as we want either.
Again, just a review what we’re dealing with is when you’re scaling your advertising versus scaling your business. The advertising is working right now, but the focus right now is the recruiting of salespeople and managing them, the academic side for fulfilling students and fulfilling the program that we’re selling, dealing with going from 50 students to 600 per year, how to manage cash flow,
Notice that the focus is growth, but I didn’t mention CTR, CPL, cost per application or anything Facebook advertising related. At this point, if improving click-through rate, improving cost per lead, improving cost per application isn’t really gonna do much, there are real limits in the business.
When it comes to growing businesses, most people focus on money in and money out. But in order to make the Facebook side so much more profitable, you need to work on your business fundamentals and that’s what we’re learning and that’s what our client is learning here as well.
This situation is pushing their own limits and demanding them to grow a lot more personal because you can’t keep doing what you were doing when you had 50 students or just a smaller business. Being in this position, you need to grow as an entrepreneur, you need to grow as a business owner and when things are working like they are, it kind of forces you to grow a lot faster because you have no choice.
Finally, if you’re in that situation right now, I hope this is helpful in isolating some of the problems and then figuring those problems out to turn them into opportunities to grow your own business. So if you’re in this situation as well looking forward to hearing from you and if anything has helped you grow where advertising is working and you’re focusing on back-end systems and processes would love to hear from you.