cc-logos-forweb-white01

Advisory Business Models: 6 Real-Life Examples of Scaling Services Profit

About This Talk

This talk is by Mark Butler and was recorded on October 6, 2020. You can learn more about Mark by:

Timestamps

00:00 Intro
03:00 About Mark
05:35 The Basic Framework for Advisory Business Models That Scale
09:31 Examples of Advisory Business Models
14:01 Membership Certification Model
39:00 In-Person Experience Model
40:00 Large Group Coaching
46:16 Takeaways
52:21 Q+A

The Basic Framework for Advisory Business Models That Scale

Scaling an advisory business requires putting a business model that scales along with the added complexity of more clients and the added need to grow. This applies to businesses selling expertise, not done-for-you services. Those businesses can be scaled too, but using different means than are laid out here. 

Mark’s basic framework has two components for advisory business models that scale:

  1. Acquisition Engine: a combination of free and low-priced content and products whose job is to provide leads for the profit center at a sustainable cost. The big idea is that the acquisition engine isn’t meant to put dollars in the owner’s pocket. Typically the acquisition engine product is priced at 10-20% of the profit center price. 
  2. Profit Center: a higher-priced product/program/experience with a very low cost per acquisition and low cost of delivery. The profit center should also be inexpensive to deliver – ideally having a 90% gross margin. 

Examples of Scaling Online Advisory Services

Mark has the unique experience of seeing the intimate details of dozens of online, scaled advisory businesses. Sure, he sees how they market themselves and how they claim to be making money, but he also sees the hard numbers on financial stories that sometimes tell a different story.

The following six examples will illustrate different options for you to piece together your own acquisition and profit centers. The first three come from Mark, and the next three come from Liston. 

Please note that neither Mark nor me (Liston) have personally seen an advisory business scale without a strong content marketing program playing a significant role in the acquisition engine. This isn’t to say it’s impossible, but it is incredibly uncommon and I can’t think of a single example. 

Example 1: Membership Certification

The first example comes from a $30M coaching and certification business. This business has been around for over a decade and has compounded growth to reach maturity in its lifestyle. 

  • Acquisition Engine: Facebook Ads + popular podcast + $300 monthly membership
  • Profit Center: $18,000 certification program

This brings us to Butler’s Law, coined for this ClientCon talk: 

“All coaching businesses end up offering certification and a mastermind.”

Example 2: In-Person Experience

The second example comes from a seven-figure coaching business that uses in-person experiences as the profit engine. An in-person experience could be a number of things: seminars, workshops, conferences, small group get-togethers like retreats, and many more. Typically in-person experiences are characterized by exclusivity and/or tribal identity. 

Here are the particulars of the model in this example:

  • Acquisition Engine: Facebook Ads + Popular Podcast + Monthly Membership (which is fundamentally a marketing experience in this case and many others)
  • Profit Center: in-person experience and certification, most of the money that it brings is pure profit as expenses are covered by the acquisition engine

Example 3: Large Group Coaching

The third example uses large group coaching as the profit center, which comes with different delivery considerations and constraints. One thing to note about this particular business model is that the business runs both the acquisition engine and profit center with the same type of service. 

This is the only model in the set that uses group coaching at both levels. The names of the group coaching programs are different, and there are some differences between the two programs – most of all the price! – but they’re more similar than different. 

Here’s an overview of the basic model in this example:

  • Acquisition Engine: large group coaching experience for $5k over 6 months; Facebook Ads + Popular Podcast
  • Profit Center: more large-group coaching and…certification (back to Butler’s Law!)

Example 4: High-End Productized Service

This example is a departure from online and remote delivery, and instead uses a high-end productized advisory service offering as the profit center. Think of high-end management consulting engagements that are backed by tried-and-true (or at least highly marketable) frameworks that can be applied easily to new clients. 

Here’s how the model works in this case:

  • Acquisition Engine: Books + Webinars + Email List + Popular Podcast
  • Profit Center: high-end productized service 

Example 5: Small Group Coaching

This example still focuses on remote delivery through small group coaching, but part of the coaching is scaled out through additional, on-staff coaches. In this case, the acquisition engine itself is profitable. 

Here’s the model:

  • Acquisition Engine: Email List + Popular Podcast + In-Person and Remote Seminars
  • Profit Center: Small Group Coaching Programs

 

Example 6: Online Courses

This model is flipped, whereby the majority of the revenue comes from the acquisition model. This business is newer than all others in the examples used here, with just 2 years of track record. Perhaps profit will increase from the Profit Center eventually, but for now course revenue is the driver. 

Here’s how the model works:

  • Acquisition Engine: Youtube Channel + Educational Webinars + Course

 

  • Profit Center: Course + Productized Services

 

What These Advisory Business Models Have In Common

There are a few repeating themes you may have noticed in Mark’s talk, and in the notes captured here. I’ll recap them quickly for you to consider:

  • You don’t need a huge audience to run a scalable, profitable advisory business, and you probably need a smaller audience than you think. 
  • All of these examples include at least one scalable organic channel, and podcasts come up very frequently. 
  • Many of these scalable businesses got lucky in terms of timing a particular content channel. 
  • Many of these business models rely on paid advertising, particularly Facebook ads, to increase reach and repetition within their target market. 
  • The system is modular and you can mix and match based on what makes sense for your business and how you like to spend your time. 

Get all 30 ClientCon talks now.

Get free talks to help you attract, win, and deliver to better clients in your service business.

Talks are live every weekday, September 21 through October 30 and 10am – attend live or catch the replay.