This is my personal story. But the formula works for any business financial service.
I ghostwrite books for b2b professionals looking to garner high-end clients. I want to write 200 more books and then quit. I’ll have enough money in the bank to never work again. My goal is to open a horse riding school with my son. I’ll need a few million more to get it done.
My two big questions are
How quickly can I get 200 new customers with a lifetime value of $12,000 each into my business? In the ghostwriting business, my lifetime value is lower than financial services.
How much will I have to invest in advertising to find the 200?
I already know from being in business for a few years that the cost to find and sell one financial advisor ANYTHING is around $1,000. So I know up front it will cost me $200,000 over the next several years. I want to spend that money as fast as my business can deliver.
Now I don’t have $200,000 to spend on advertising today, but I’ll be able to pay for it as I make sales. The good news is that some clients are ready to buy before they ever hear from us. Those are called low-hanging fruit. We’re thankful because they keep us in business and feed our advertising kitty until the company takes off.
So here is my formula (by the way, it is the same formula for any financial service business)
I know from making sales calls that 20% of the financial advisors in America would like to write a book. However, I also know that only one out of ten are willing to pay someone like me to get it done. So my market is 2% of the aggressive and successful firms in the USA. My problem is I don’t know who the 2% are. Hell, most of the buyers don’t know they are going to write a book until I talk to them.
So here is the simple formula to get off my computer and on horseback.
If I divide the target number of clients (200) by the number of people willing to pay for a ghostwriter so they can get their book done, I have 200/ 2% = 10,000. That means I must become a known expert among 10,000 potential customers – to sell 200 books.
I must get 10,000 people into my database who read my emails or view my social media post. Over the next two or three years of constantly reminding them that I am the authority on books for business building, I will get 2% to call and buy. The number is the same for all financial services.
I expect to spend an average of $20 to get each person in the hopper, and it takes 50 people to get one customer. That is how I came up with my cost per sale of $1,000.
So here is what I focus on – targeting my advertising to people capable of paying for a book and getting them into my database. Then I send them copies of my own book, post to social media and try to get in front of those people when they attend conventions or conferences.
On average, I add 15 people a day to my list, and we remove five because they go six months without reading an email or clicking on some offer we make. That means it will take me under three years to get 10,000 real prospects. That’s longer than I want, but once I reach 200 more customers, I’ve done enough for this lifetime. I’m out. (I’m a big believer in establishing your OUT number as soon as possible.)
Surprisingly, these are the exact ratios for accountants, tax pros and most other financial services.
If you would like to chat about writing your own book, my calendar is https://calendly.com/kc--79/30min
Thank You
KC Truby retired accountant and ghostwriter