Helping a Personal Stylist Scale Past $3M | Ep 829
In this episode of The Game w/ Alex Hormozi, the host examines AC Styles, a professional wardrobe and personal styling service founded by Ashley Capps. The summary provides insights into Capps' business model, customer profile, lead generation strategies, and sales process. Hormozi and Capps analyze the company's current operations, financials, and customer retention tactics.
The episode also explores strategies for scaling AC Styles' operations, including expanding into major metro areas, developing a stylist training program, and optimizing marketing funnels. Hormozi offers recommendations to drive consistent lead flow, increase ad spend, build a stylist network, expand affiliate partnerships, and transition clients to higher-priced subscriptions to reach a $5 million revenue target.
This is a preview of the Shortform summary of the Jan 24, 2025 episode of the The Game w/ Alex Hormozi
Sign up for Shortform to access the whole episode summary along with additional materials like counterarguments and context.
1-Page Summary
Business Model and Customer Profile
Ashley Capps, the founder of AC Styles, offers a professional wardrobe and personal styling service aimed at boosting client confidence while saving time. Her clientele consists of nearly equal male and female professionals, aged mid-40s to mid-60s, valuing time and expertise. The service includes a style assessment, closet overhaul, and ongoing styling sessions for a personalized wardrobe. Capps reports impressive financials with $309,000 in revenue, $130,000 in profit, and a 42% net margin, having served over 1,000 clients in 4 years.
Lead Generation and Customer Acquisition
Capps utilizes Google Ads, Thumbtack, and affiliate partnerships to drive leads. Her Google Ads campaign costs $3,400 yearly, yielding 1,800 clicks at $1.89 per click. Thumbtack produces 58 unqualified leads annually at $38 each. Affiliates, including matchmakers and luxury services, account for one-third of new customers. To improve lead generation, Alex Hormozi suggests creating an effective lead magnet, optimizing the ad funnel, and expanding affiliate partnerships.
Sales Process and Customer Retention
Clients undergo a style assessment, closet organization, and personalized wardrobe creation. They then choose between a $2,000 monthly or $4,500 quarterly styling subscription, based on lifestyle. Capps reports 12 total leads, 8 appointments, 100% show rate, 1 sale/month from 16 calls, and low client churn with 40 steady clients. Hormozi recommends using pre-recorded videos to streamline sales and hosting events for affiliates to maintain customer loyalty.
Strategies For Scaling the Business
To reach a $5 million revenue target, Capps and Hormozi plan to expand to major metros and potentially build a stylist education program. Short-term strategies include driving consistent lead flow through optimized marketing funnels, increasing ad spend on profitable channels like Thumbtack, developing a stylist network and training program, expanding the affiliate program systematically, and transitioning clients to higher-priced recurring subscriptions.
1-Page Summary
Additional Materials
Clarifications
- Net margin is a profitability metric calculated by dividing net profit by total revenue, expressed as a percentage. It shows how much of each dollar earned as revenue translates to profit after all expenses are deducted. A higher net margin indicates better cost management and efficiency in generating profit. It is a key indicator of a company's financial health and operational effectiveness.
- Lead generation methods like Google Ads, Thumbtack, and affiliate partnerships are common strategies used by businesses to attract potential customers. Google Ads is an online advertising platform where businesses pay to display ads to users searching for specific products or services. Thumbtack is a service that connects customers with local professionals for various services. Affiliate partnerships involve collaborating with other businesses or individuals to promote products or services in exchange for a commission or referral fee.
- Sales process metrics like show rate, client churn, and total leads are key indicators of a business's performance. The show rate represents the percentage of leads that convert into appointments or sales. Client churn measures the rate at which customers stop using a service or product. Total leads indicate the number of potential customers or prospects generated through marketing efforts.
- Using pre-recorded videos to streamline sales involves creating videos that cover key information about the product or service, which can be shared with potential customers to guide them through the sales process. These videos can help standardize the sales pitch, ensure consistent messaging, and save time by allowing the sales team to focus on more personalized interactions. By leveraging pre-recorded videos, businesses can reach a wider audience, provide detailed explanations about their offerings, and address common questions or concerns efficiently. This approach can enhance the overall sales process by engaging customers visually and audibly, leading to increased understanding and potentially higher conversion rates.
- Developing a stylist network and training program involves creating a group of skilled stylists who can provide services under the brand's umbrella. This network can help expand the business's reach by offering services in multiple locations. The training program ensures consistency in service quality and style across all stylists, maintaining the brand's reputation. It also allows for scalability as the business grows and needs more stylists to meet demand.
Counterarguments
- The focus on professionals aged mid-40s to mid-60s may limit market reach and exclude potential younger clients who are also interested in professional styling services.
- Relying heavily on Google Ads and Thumbtack might not be sustainable if the cost per lead increases or if these platforms' algorithms change, affecting visibility.
- The high cost of the styling subscriptions ($2,000 monthly or $4,500 quarterly) could be prohibitive for some potential clients, limiting the service to a high-income bracket.
- The reported low client churn with 40 steady clients might indicate a strong core customer base, but it also suggests limited growth in the client base over four years.
- The strategy of expanding to major metros could face challenges from established competitors and differing regional style preferences.
- The plan to potentially build a stylist education program assumes there is sufficient demand for such a program and that it would be profitable.
- Increasing ad spend on profitable channels like Thumbtack assumes that the return on investment will remain consistent as spending increases, which may not be the case.
- The recommendation to use pre-recorded videos to streamline sales assumes that clients will engage with this format as effectively as personal interactions.
- Hosting events for affiliates to maintain customer loyalty assumes that the cost of these events will be offset by the value of the loyalty they engender.
- Transitioning clients to higher-priced recurring subscriptions could risk alienating existing clients who are comfortable with their current pricing model.
Get access to the context and additional materials
Business Model and Customer Profile
Ashley Capps is the founder of AC Styles, offering a professional wardrobe and personal styling service that not only transforms client confidence but also saves valuable time.
Ashley Capps Offers a Wardrobe Service That Boosts Confidence and Saves Time
Ashley Capps delivers a comprehensive styling service beginning with a style mood board to help clients choose the right colors and silhouettes based on their complexion, figure, and lifestyle. The aim is to craft a wardrobe that fits seamlessly into the client's daily activities.
The Business Serves Equal Male and Female Clients, Aged 40s To Mid-60s, Valuing Time and Expertise
The clientele is an almost even split of men and women, typically aged between their mid-40s to mid-60s, that includes stay-at-home moms, frequent business travelers, and those climbing the corporate ladder into C-suite roles. These clients greatly value the time-saving benefits and the expertise that Ashley Capps brings to the table. Specifically, among her customers are male CEOs and often, their wives who may be the initial clients leading to the servicing of their husbands.
Service Includes Style Assessment, Closet Overhaul, and Ongoing Sessions for a Personalized Wardrobe and Look
Ashley Capps' service starts with a style assessment to understand the client's current style presence. Included in her service is a closet overhaul to reinvigorate the client's existing wardrobe and the provision of ongoing styling sessions for continuous personalization of the look, supplemented with on-demand assistance for immediate styling needs.
$309,000 Revenue, $130,000 Profit, 42% Net Margin
Notably, Ashley Capps discloses an impressive annual income with a revenue of $309,000, profits tallying at $130,000, and an attr ...
Here’s what you’ll find in our full summary
Business Model and Customer Profile
Additional Materials
Clarifications
- Ashley Capps' AC Styles offers a comprehensive styling service that includes a style assessment to understand the client's current style, a closet overhaul to refresh the existing wardrobe, and ongoing styling sessions for continuous personalization. Additionally, clients receive on-demand assistance for immediate styling needs, ensuring a tailored and seamless wardrobe experience.
- The revenue mentioned ($309,000) represents the total income generated by the business. The profit ($130,000) is the amount left after deducting all expenses from the revenue. The net margin (42%) is the percentage of revenue that translates into profit after accounting for all costs. These figures indicate the financial health and efficiency of the business.
- The target clientele of AC Styles, affluent individuals in major transitions, typically includes people who are undergoing significant life changes such as career advancements, lifestyle shifts, or personal milestones. These indivi ...
Counterarguments
- While the service claims to boost confidence, the impact on confidence can be subjective and may not be equally effective for all clients.
- The age range of 40s to mid-60s may suggest a lack of appeal or accessibility to younger or older demographics.
- The equal service to male and female clients does not address non-binary or transgender individuals who may also benefit from personalized styling services.
- A high net margin of 42% could be perceived as excessive by some, raising questions about pricing fairness.
- Serving over 1,000 clients in 4 years might indicate a high volume business model, which could compromise the quality and personalization of the service.
- Targeting affluent individuals exclusively may limit the business's ...
Related Shortform Content
Get access to the context and additional materials
Lead Generation and Customer Acquisition
Ashley Capps discusses how she leverages different platforms and strategies to acquire customers for her business, highlighting the effectiveness of Google Ads, Thumbtack, and affiliate partnerships.
Business Drives Leads With Google Ads, Thumbtack, and Affiliates
Ashley Capps spends $300 a month each on Google Ads and Thumbtack for her business and relies on affiliations with luxury services and events, alongside client referrals, to drive leads.
Google Ads Yields 1,800 Clicks/Year At $1.89 per Click
Ashley Capps' Google Ads campaign cost $3,400 for the year 2024, resulting in 1,800 clicks at a cost of $1.89 per click. The ads were targeted at those searching for terms like "personal stylists near me" and "Los Angeles personal stylists," although they were temporarily stopped for adjustments to add a video and lead back.
Thumbtack Campaign Produces 58 Unqualified Leads Annually At $38 Each
Thumbtack produced 58 leads at a cost of $38 per lead. However, Ashley notes that 90 to 95% of these leads are unqualified in terms of purchasing power, which Alex Hormozi flags as an issue given the price point.
Affiliate Partnerships With Matchmakers and Luxury Services Bring One-third of New Customers
Affiliates, which include private social clubs and matchmakers, make up about a third of the business's new clients per year. Six affiliates were secured through manual outreach, with matchmakers sending clients regularly. The matchmakers appreciate the service because their clients get better pictures, leading to better matches.
To Improve Lead Generation, the Business Should:
Alex Hormozi suggests various strategies for Ashley Capps to consider to enhance her lead generation efforts and customer acquisition.
Create an Effective Lead Magnet to Attract and Qualify Customers
To attract more qualified leads, Hormozi recommends creating an appealing lead magnet, such as offering a style assessment that evaluates personal attributes like skin tone, hair color, and eye color. This service should be effortless for the ...
Here’s what you’ll find in our full summary
Lead Generation and Customer Acquisition
Additional Materials
Clarifications
- Ashley Capps allocated $300 monthly to both Google Ads and Thumbtack, with Google Ads costing $3,400 in 2024 for 1,800 clicks at $1.89 per click. Thumbtack generated 58 leads annually at $38 per lead, but most were deemed unqualified. Affiliate partnerships with luxury services and matchmakers brought in about one-third of new customers for the business.
- A lead magnet is a valuable offer provided to potential customers in exchange for their contact information. It serves to attract leads by offering something of interest or value to them. Lead magnets help qualify leads by filtering out those who are genuinely interested in the business's offerings. They are typically used at the top of the sales funnel to initiate customer engagement.
- To optimize ad funnels for increasing leads and conversions, businesses refine the process that potential customers go through from seeing an ad to making a purchase. This involves tweaking elements like ad messaging, landing pages, and call-to-action buttons to improve the likelihood of conversion. By analyzing data and testing different strategies, businesses can identify what works best in attracting and converting leads. The goal is to streamline the customer journey and make it as seamless and compelling as possible to drive more conversions and maximize the return on advertising investment.
- When expanding the affiliate channel, businesses typically reach ou ...
Counterarguments
- The cost-effectiveness of Google Ads might be questioned if the conversion rate from clicks to actual customers is low.
- Spending $38 per lead on Thumbtack for mostly unqualified leads may not be a sustainable or efficient use of the marketing budget.
- Relying heavily on affiliate partnerships could be risky if those relationships change or if the affiliates' client base diminishes.
- Creating a lead magnet is a good strategy, but it may not guarantee an increase in qualified leads without proper targeting and follow-up processes.
- Optimizing the ad funnel could improve conversions, but it may also require additional resources and expertise to implement effectively.
- Expanding the affiliate chann ...
Related Shortform Content
Get access to the context and additional materials
Sales Process and Customer Retention
Ashley Capps' boutique offers an exceptional sales process leading to high client retention and lifetime value, with recommended strategies for further improving these metrics.
Sales Process: Style Assessment, Closet Organization, Personalized Wardrobe
Clients start with a style assessment to establish a baseline. After they are presented with a vision of their potential future look, Ashley Capps heads to their houses for a closet overhaul, getting rid of old items and reorganizing what remains. They document the existing wardrobe to help clients pack for trips effectively. Following the organization, they introduce five to ten new outfits to enhance the client's personal style. Clients then decide on a monthly or quarterly styling subscription based on how often they travel or attend events.
Clients Choose a Monthly ($2,000) or Quarterly Styling Subscription ($4,500)
After the onboarding package and wardrobe update, clients choose between a monthly styling subscription at $2,000 or a quarterly subscription at $4,500. The decision for the subscription level is tailored to fit the client's lifestyle and travel habits. Ashley Capps reports about 12 total leads, eight appointments, a 100% show rate for those, making about one sale per month from 16 calls with a 50% close rate, and remarkably low client churn, with a steady client base of 40 and only one churn in the last year.
To Improve Customer Retention and Lifetime Value:
In order to streamline the sales process and save time, Alex Hormozi recommends using pre-recorded videos. A video is to be s ...
Here’s what you’ll find in our full summary
Sales Process and Customer Retention
Additional Materials
Clarifications
- The sales process in Ashley Capps' boutique involves a style assessment, closet organization, and introducing new outfits to enhance the client's personal style. Clients can choose between a monthly or quarterly styling subscription based on their lifestyle and preferences. The boutique reports a high show rate for appointments and a low client churn rate, indicating strong customer satisfaction and retention. Strategies like using pre-recorded videos and transitioning clients to a recurring model are suggested to further improve customer retention and lifetime value.
- The pricing structure for the styling subscriptions offered by Ashley Capps' boutique includes a monthly subscription priced at $2,000 and a quarterly subscription priced at $4,500. Clients can choose between these two options based on their lifestyle and preferences, with the monthly subscription costing $2,000 and the quarterly subscription costing $4,500.
- Ashley Capps reported 12 total leads, eight appointments, a 100% show rate, one sale per month from 16 calls with a 50% close rate, and a client base of 40 with only one churn in the last year. These metrics indicate the effectiveness of her sales process and customer retention strategies. The high show rate and close rate suggest strong client engagement and conversion rates. The low client churn rate and steady client base demonstrate successful customer retention efforts.
- Using pre-recorded videos in the sales process is a strategy to streamline communication and save time. These videos can be utilized to deliver key information consistently to potential clients before and during sales calls. By presenting essential details beforehand, salespeople can focus on addressing individual needs and concerns during the actual conversation. This approach aims to enhance efficiency, reduce repetitive tasks, and improve the overall effectiveness of the sales interactions.
- Transitioning clients to a recurring basis model means shifting the way clients engage with the business from one-time transactions to ongoing, regular interactions. This change aims to establish long-term relationships with customers, encouraging them to make repeat purchases or use se ...
Counterarguments
- The high price point of the subscriptions may not be accessible to a broader market, potentially limiting the client base to a niche demographic.
- The personal touch of the initial style assessment and closet organization might not translate well to a pre-recorded video format, potentially reducing the perceived value of the service.
- While the low churn rate is impressive, it's important to consider whether the boutique is reaching its full market potential or if the sales process could be adjusted to attract more leads.
- The effectiveness of transitioning to a recurring basis model depends on the clients' satisfaction and perceived value, which may vary greatly among individuals.
- Hosting events for affiliates like matchmakers could be beneficial, but it may not appeal to all clients and could divert focus from the core styling service.
- The sales process is heavily reliant on Ashley Capps' personal involvement, which may not be scalable if the business grows beyond her capacity to serve all clients personally.
- The reported metrics are positive, but without industry benchmarks, it's difficu ...
Get access to the context and additional materials
Strategies For Scaling the Business
To achieve significant revenue growth, Ashley Capps, alongside business strategist Alex Hormozi, discusses various strategies for scaling her business with the target of reaching $5 million in revenue.
$5 Million Revenue Target Through Market Expansion and Stylist Education Program
Ashley Capps and Alex Hormozi plan to reach a $5 million revenue target by expanding the business to major metros and potentially building an education component for training stylists. Hormozi lays out the strategy for short-term growth with hopes of tripling revenue in the near future, followed by a 5x growth target.
To Grow, Drive Consistent Lead Flow Through an Optimized Marketing Funnel
The business must focus on driving consistent lead flow through an optimized marketing funnel. Hormozi underscores the importance of increasing the ad spend on profitable acquisition channels, suggesting a ramp-up to $3,400 a month, from the current $3,400 a year, on a platform like Thumbtack before exploring other channels like Facebook ads.
Scaling Requires a Stylist Network and Training Program
The strategy for scaling involves not just lead flow but also the development of a robust stylist network and a comprehensive training program.
Focus On Improving the Core Business By:
Increasing Ad Spend, Optimizing Lead Generation Funnel
Hormozi suggests a focus on the existing profitable acquisition channel, recommending that Ashley increase her advertising spend incrementally from $300 to $600 or $900 a month. He also advises fixing the lead generation funnel with a ...
Here’s what you’ll find in our full summary
Strategies For Scaling the Business
Additional Materials
Counterarguments
- Market expansion and stylist education may not be sufficient to reach the $5 million revenue target if market demand or competitive dynamics are not adequately assessed.
- Tripling revenue in the short term and targeting a 5x growth could be overly ambitious and may not account for potential market saturation or operational challenges.
- Increasing ad spend significantly might not yield proportional returns if the target audience is not well-defined or if the marketing messages do not resonate with potential customers.
- An optimized marketing funnel is crucial, but it should be complemented with a strong customer retention strategy to ensure long-term business sustainability.
- Developing a robust stylist network and training program requires significant investment and resources, which might strain the business's finances if not managed carefully.
- While increasing ad spend can be beneficial, it is also important to ensure that the ad content and targeting are optimized to prevent wastage of resources.
- Expanding the affiliate marketing program systematically is a good strategy, bu ...
Actionables
- You can analyze your current subscriptions and services to identify which ones could be transitioned to higher-value options without compromising your budget. For instance, if you're using a basic software package for work or personal projects, research the benefits of upgrading to a premium version. The additional features might increase your productivity or offer tools that save time, which can be a worthwhile investment.
- Develop a personal growth plan by identifying key cities or areas you want to expand your influence or network into, similar to how businesses target major metros for expansion. Start by researching networking events, online communities, or educational opportunities in those areas. Then, set specific goals for making connections or gaining visibility in those places over the next year.
- Create a ...
Get access to the context and additional materials
Create Summaries for anything on the web
Download the Shortform Chrome extension for your browser
