Helping An Artist Scale His Business | Ep 835
This episode of The Game w/ Alex Hormozi dives into the business model and growth strategy of an artist seeking to scale his online art school. Covering topics like pricing tiers, lead generation tactics, sales processes, and data tracking, Hormozi provides the caller with insights on optimizing their offerings, marketing efforts, and sales conversions.
The discussion centers around leveraging existing channels like YouTube and email lists to drive paid subscriptions, offering free trials to nurture prospects, and implementing tracking systems to identify opportunities for improvement. By taking a data-driven approach to decision-making, Hormozi aims to help the artist achieve their revenue goals while expanding their audience reach.
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1-Page Summary
Business Model and Pricing Strategy
The caller outlines a three-tiered pricing model: a free community with tutorial videos, a $29/month art school with weekly classes, and a $5,000/year mentorship program with personalized support. The revenue goal is $100,000 per month, up from the current $13,000-$14,000 by scaling the paid offerings. Alex Hormozi and the caller discuss strategies to transition members between tiers and expand subscriptions, including marketing to a broader audience.
Marketing and Lead Generation
The caller attracts leads through YouTube, promoting a free painting blueprint opt-in. Hormozi offers tips to optimize YouTube elements like intros, thumbnails, and descriptions for better lead generation. The caller also leverages an email list of 9,000 subscribers, nurturing them into paid offerings while ensuring compliance.
Sales and Conversion Optimization
The caller's sales process involves qualifying leads for discovery calls to sell the $29/month or $5,000/year programs, closing 25% of calls. Hormozi suggests offering free trials to $29 subscribers to upsell them, engaging signups without calls through video sales letters, and optimizing discovery calls by integrating lead magnets.
Data-Driven Decision Making
The caller lacks visibility into conversion metrics from YouTube to opt-ins to sales. Hormozi emphasizes tracking data to identify growth opportunities, like improving discovery call conversions or monetizing the $29 group better. He advises implementing tracking systems to optimize marketing, sales, and product decisions based on data.
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Counterarguments
- The three-tiered pricing model may not cater to all potential customers, and there could be a gap in offerings that doesn't address the needs of some segments of the market.
- Aiming to increase revenue from $13,000-$14,000 to $100,000 per month is ambitious and may require more than just scaling the paid offerings; it could also necessitate a significant increase in marketing spend and operational capacity.
- Transitioning members between pricing tiers might not be straightforward and could lead to customer dissatisfaction if not managed carefully.
- Relying heavily on YouTube for lead generation could be risky if platform algorithms change or if there is a shift in user behavior away from the platform.
- An email list of 9,000 subscribers is a good asset, but the conversion rate to paid offerings might not scale linearly with the growth of the list.
- A 25% closing rate on discovery calls may indicate room for improvement in the qualification process or the value proposition being offered.
- Offering free trials to upsell customers can be effective, but it also risks attracting customers who are only interested in freebies and may not convert to paying customers.
- Video sales letters can engage signups without calls, but they may not be as effective as personalized interaction for higher-priced offerings like the $5,000/year mentorship program.
- Integrating lead magnets to optimize discovery calls assumes that the lead magnets are of high quality and relevant to the prospects' interests.
- A lack of visibility into conversion metrics could be due to a variety of factors, including technical limitations or a lack of expertise in analytics.
- While tracking data is crucial, collecting and analyzing data requires resources and skills that may not be readily available to the business.
- Implementing tracking systems is important, but it's also essential to ensure that the data collected is accurate, relevant, and actionable.
Actionables
- You can create a referral program where current subscribers can invite friends to join the community, offering them a discount or a free month as an incentive. By doing this, you tap into the power of word-of-mouth marketing, which can be more effective than traditional advertising. For example, if a subscriber refers a friend who joins the $29/month art school, they could get their next month at half price.
- Consider hosting a virtual showcase event where members of the free community can present their artwork, with special offers for attendees to upgrade to the paid tiers. This not only creates a sense of community and celebration but also provides a platform for members to see the value in the higher tiers. For instance, you could organize a monthly online gallery where free members submit their art, and at the event, offer a limited-time discount for the art school or mentorship program.
- Develop a content series that highlights success stories of members who have progressed through the different pricing tiers, sharing these via your email list and social media channels. This strategy uses social proof to demonstrate the benefits of upgrading. You could interview a member who started in the free community and is now thriving in the mentorship program, and share this content as a regular feature in your newsletters or as a video series on your platforms.
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Business Model and Pricing Strategy
An innovative business model and pricing strategy are outlined that aim to transform a painting tutorial service into a significant revenue generator.
Pricing Model: Free Community, $29/Month Art School, $5,000/Year Art Mentorship
The business structure includes three distinct communities. The free community offers an array of painting tutorial videos, which are more extensive than the complimentary content available on YouTube. For those looking to dive deeper into their craft, there's the $29 per month art school, offering live weekly classes and a more robust content library.
At the top tier, a high-ticket mentorship program, or art accelerator, is priced at $5,000 per year. This mentorship provides two weekly live painting classes and one-on-one support tailored to the client's needs, without a fixed limit on individual sessions.
Goal: Achieve $100,000 Monthly Revenue
The revenue target for the business is to hit $100,000 per month. The caller currently earns between $13,000 and $14,000 per month from the $29/month art school and the $5,000/year art mentorship combined, with about 300 subscribers to the former and roughly 20 to the latter.
Achieving the ambitious goal of $100,000 a month requires substantial scaling of the current subscription numbers. Alex Hormozi asks the caller about strategies to transition members from the free to the paid groups, while the caller sets a target of growing the $29/month membership to 10,000 subscribers.
Strategy: Expand ...
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Business Model and Pricing Strategy
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Clarifications
- Alex Hormozi is a business coach and entrepreneur known for helping businesses scale and increase revenue. In this context, he is advising the caller on strategies to grow their painting tutorial service's revenue. Hormozi's expertise lies in optimizing business models and pricing strategies to achieve financial goals. His role is to provide guidance on expanding membership, improving conversion rates, and reaching revenue targets.
- Conversion processes between tiers in a business context typically refer to the strategies and mechanisms used to move customers from one pricing tier or membership level to a higher one. This involves encouraging users to upgrade from a free or lower-priced offering to a more premium or expensive service. The goal is to increase revenue by enticing customers to access additional features, benefits, or services available at higher price points. Businesses often employ targeted marketing, personalized offers, and value propositions to facilitate this transition and enhance customer loyalty.
- To transition members from free to paid groups, strategies typically involve offering additional value or benefits in the paid tiers, such as exclusive content, live classes, personalized support, or advanced features. Engaging free members with teaser content, limited-time offers, or discounts can entice them to upgrade to a paid subscription. Building a sense of community and belonging within the paid groups can also encourage free members to convert by showcasing the unique advantages of being a paid member. Implementing targeted marketing campaigns, email sequences, or referral programs can effectively guide free members towards the paid options.
- Fine-tuning the conversion processes between tiers involves optimizing the methods used to encourage individuals in the free community to upgrade ...
Counterarguments
- The goal to grow the $29/month membership to 10,000 subscribers may be overly ambitious and could require significant marketing and operational resources that have not been accounted for.
- Relying on a high-ticket item like the $5,000/year art mentorship program to triple revenue might not be sustainable if the target market is limited or if the value proposition does not align with customer expectations.
- The strategy to convert free users to paid subscribers may not account for the potential resistance to pay for content that was previously free, which could lead to a drop in engagement or community size.
- The focus on rapid revenue growth could compromise the quality of the service provided, leading to customer dissatisfaction and churn.
- The business model may not be scalable if the personalized nature of the art mentorship program limits the number of clients that can be effectively managed at one time.
- The pricing strategy may not be inclusive, potentially alienating talented artists who cannot afford the higher-tier programs, which could lead to missed oppo ...
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Marketing and Lead Generation
The discussion focuses on how the caller utilizes different platforms to draw leads into their community and promote paid offerings, leveraging YouTube and a substantial email subscriber base.
Caller Leverages Youtube to Drive Traffic For Free Painting Blueprint Opt-ins
The caller effectively uses YouTube to direct potential customers to their free painting blueprint opt-in on their sales landing page.
Caller's Youtube Videos Thriving
Alex Hormozi acknowledges that the caller's YouTube videos are getting good views, indicating successful traffic driving. The caller has been actively working on video elements such as titles and thumbnails with help from Haru and Kai. Hormozi suggests focusing on benefits in the thumbnails and advises A-B testing to determine the most effective ones. When viewers click on these engaging thumbnails and reach the caller’s YouTube channel, they are greeted with CTAs integrated within the videos.
Optimizing Youtube Intros, Thumbnails, and Descriptions for Lead Generation
Hormozi offers advice on optimizing various aspects of the caller's YouTube presence to boost lead generation. For video intros, Hormozi emphasizes starting with a promise and a quick hook, mentioning expertise and key points within the first 15 seconds, and briefly introducing the caller on screen to build brand recognition. The intros should avoid long-windedness and instead present relevant proofs, such as mentioning particular painting styles or sales success.
For thumbnails, Hormozi proposes experimenting with plain painting, a combination of plain painting with minimal text, and images of the caller with painting equipment. He stresses the importance of checking thumbnails on mobile devices to ensure they are effective in a smaller format.
In video descriptions, Hormozi recommends confirming there’s a clear CTA, which they notice is incorporated with the offer of a free landscape painting blueprint. Hormozi suggests improving YouTube CTAs to appear natural and suggests physically displaying the offered blueprint in the video to prompt more opt-ins. Additionally, Hormozi talks about using AI tools for crafting effective titles, hooks, and descriptions, and highlights pinned comments as a strategic place for the CTA, allowing for mass updates without affecting the direct c ...
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Marketing and Lead Generation
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Actionables
- You can enhance your YouTube video engagement by creating interactive polls in your videos to gather viewer preferences and feedback. This not only increases viewer interaction but also provides you with valuable insights into your audience's interests, which can inform future content and lead generation strategies. For example, if you're a fitness coach, ask your viewers to vote on what type of workout they want to see next.
- Develop a referral program for your email subscribers to incentivize them to share your content and opt-in offers with their networks. Offer rewards such as exclusive content, discounts, or early access to new products for subscribers who bring in new leads. This can be as simple as providing a unique referral link that tracks the number of new subscribers each existing subscriber brings in.
- Create a series of short, va ...
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Sales and Conversion Optimization
Optimizing sales and conversion rates is crucial for businesses to maximize revenue. There are actionable strategies that can help improve the sales process and increase the percentage of successful conversions.
Caller's Sales Process: Leads Set For Caller to Close
The caller currently operates a sales process that involves gathering leads through direct messages, which are handled by a team member. The aim is to qualify these leads and set up a discovery call where they are presented with either a $29/month art school subscription or the option to join a $5,000/year art mentorship program called the Painter's Mastermind, based on their qualifications and financial capability.
Caller Closing Only 25% of Discovery Calls
The caller reveals they close about 25% of their discovery calls. There was one exceptional week where the caller managed to close 100% of sales calls, which included one high-ticket sale and one annual membership.
Caller Not Following Up or Selling To 7 Weekly Sign-Ups For $29/Month Offering Without a Call
In the past week, the caller received eight signups for the paid community. Seven of these were for the monthly subscription and occurred organically without a sales call, while one was for the annual plan.
The Caller Can Improve Sales and Conversion By:
Upsell From $29/Month to $5,000/Year Program With Potential Free Trial
Alex Hormozi suggests giving an onboarding call to the seven weekly sign-ups who join without speaking to the caller, paving the way to upsell them. He advises offering these $29/month subscribers a one-month trial of the more expensive program where they receive full benefits.
Convert $29/Month Signups Without Calls Better
Hormozi stresses the importance of engaging with customers who sign up for the $29/month program without a call. He recommends pushing through a video sales letter (VSL) to these community members which narrates an origin story, thereby building a connection and increasing their likelihood of upgra ...
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Sales and Conversion Optimization
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Counterarguments
- The assumption that upselling $29/month subscribers to a $5,000/year program will be straightforward may not consider the significant price difference and the subscribers' varying financial situations.
- A one-size-fits-all approach to using a video sales letter (VSL) might not resonate with all customers, as different individuals may have different preferences for communication and engagement.
- The strategy of offering a free trial of the more expensive program assumes that experiencing the program will be enough to convince subscribers to upgrade, which may not always be the case.
- Implementing an onboarding call strategy could increase operational costs and time investment, which may not necessarily lead to a proportional increase in sales.
- Offering a free coaching call as an incentive for annual subscribers assumes that the value of the coaching call is perceived as high by all potential customers.
- Adding a VSL and lead magnet to increase conversion rates on discovery calls assumes tha ...
Actionables
- You can enhance customer retention by creating a personalized progress tracker for your art school subscribers, which gamifies their learning experience and encourages them to upgrade to the mentorship program. For example, after completing certain milestones in the $29/month subscription, they receive badges or certificates, and a progress report that highlights the benefits of personal mentorship, nudging them towards the $5,000/year program.
- Consider developing a referral program that rewards your $29/month subscribers for bringing in new members, with incentives like a free month or exclusive content. This strategy not only increases your subscriber base but also creates a community of advocates who are more likely to consider the higher-tier mentorship program after experiencing the value of the community and the content.
- Introduce a 'Subscriber ...
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Data-Driven Decision Making
Caller Lacks Insight Into Data Metrics For Decision Making
During a conversation, the caller admits to lacking visibility into conversion rates from Youtube to opt-ins to sales, which is crucial for understanding and tailoring business strategies effectively.
Caller Lacks Visibility Into Conversion Rates From Youtube to Opt-ins to Sales
The caller is unsure about the percentage of visitors transitioning from clicks to their landing page to the free community, or from the community into their paid group. Although they can see how many emails are opened with a 65% open rate and a 44% click-through rate, they lack deeper insights into conversion metrics.
Tracking Metrics Identifies Improvement Opportunities and Informs Strategic Decisions
Alex Hormozi emphasizes the importance of collecting tracking data to comprehend how many clicks originate from YouTube leading to their landing page and what the opt-in rate is for people taking the PDF. Similarly, Hormozi underlines the necessity for the caller to be aware of the conversion rate from the thank you page, which presents significant opportunities for strategic improvements.
Enable Caller Tracking and Reporting
Hormozi advises tracking specific metrics in order to identify growth opportunities and optimize marketing, sales, and product decisions.
Identify Growth Opportunities Like Enhancing Discovery Call Conversion or Optimizing Monetization of the $29/Month Group
The caller expresses a desire to emulate the success of days with multiple discovery calls. Hormozi suggests that identifying the number of appointments set each day could reveal areas for growth. For example, increasing conversions from 4 out of the 150 people to around 20 could be achieved by focusing on the $29 to $5k ascension and engaging with the seven individuals paying the $29 fee every week who aren't currently being addressed.
Hormozi also recommends establishing a separat ...
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Data-Driven Decision Making
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Counterarguments
- While tracking metrics is essential, it can lead to analysis paralysis if not done judiciously, where the caller might become too focused on the numbers and not enough on the qualitative aspects of customer engagement and feedback.
- Overemphasis on data can sometimes overshadow the importance of creativity and innovation in marketing and product development.
- The assumption that increasing discovery call conversions or optimizing the $29/month group will lead to growth may not account for market saturation or the quality of the offering.
- The focus on tracking and optimizing may inadvertently lead to short-term thinking, potentially sacrificing long-term brand building and customer relationships for immediate conversions.
- The advice provided assumes that the caller has the resources and skills necessary to implement sophisticated tracking and data analysis, which may not be the case for all businesses, especially smaller ones.
- There is a ...
Actionables
- You can create a simple spreadsheet to track your YouTube video performance and subsequent user actions. Start by noting down the views, likes, and comments for each video. Then, track how many viewers click on the link in your video description (you can use UTM parameters for more precise tracking). Finally, record how many of these clicks lead to opt-ins and sales. This will give you a clear picture of where your funnel might be leaking and where you're excelling.
- Experiment with A/B testing on your YouTube call-to-action (CTA) phrases to see which ones lead to more opt-ins. For instance, in one video, use "Sign up now for exclusive content," and in another, try "Join our community for free tips and tricks." Compare the opt-in rates for each CTA to determine which is more effective. This hands-on approach can reveal the most compelling language to engage your audience.
- Enhance your $29/month group offering by soliciting feedback from current member ...
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