The Costly Mistake You're Making
There's a costly mistake that online coaches are making right now, and that is ignoring recurring revenue. My name is Karan Nijhawan, aka The Retreats Guy, and I'm on a mission to make business simple, profitable, and recurring. How we do that is through hosting retreats, small events with less than 15 people in the room, 15 of your target audience. We use this retreat environment, this retreat setting to help coaches generate over 100K revenue in a single weekend. Now let's get into today's video about recurring revenue. But before we talk about how to think about recurring revenue, there's three big mistakes coaches make when it comes to their pricing. Mistake number one, and I see this typically among coaches that are at the 10-15K a month mark, maybe you're at 5K. But the first big mistake I see is that coaches are simply underpricing their services. You think that by having a discounted rate or lower prices, you're actually going to attract more leads and more clients. What happens is the opposite. You're having to serve clients that you know are not ideal fits, they're not your ideal avatar. You're having to discount your services and you're overdelivering value and still underpricing your services.
Another Mistake...
Mistake number two that I see a lot of coaches making is that you only have one price. That's it. You have one offer with one price. Why not have tiered pricing? Tiered pricing simply means option one, option two, option three. You see this in movie theaters all the time. You can buy the general ticket, you could buy the VIP ticket, or you could buy the VIP plus ticket. It's the same product, you're watching the same movie, but there's different access levels to you. The second mistake I see is that coaches don't have tiered pricing. The third mistake, and all these mistakes are equally as important, is that you're not demonstrating, you're neglecting to showcase the value that you bring to the table. You're pricing your service, you're pricing your packages based on what you think is right or fair, but the prospect is buying in terms of the value back to them. Most entrepreneurs price themselves based on their self-worth, yet prospects buy based on the value that it is to them. That's mistake number three, is that you're pricing your services based on what you think is fair to you and basing it on your self-worth.
The good stuff...
All of this can be fixed when you introduce recurring revenue into your business. And recurring revenue simply means, think about this, think about it's the start of the month. You look at your payment processor or your merchant account and it says zero. You're like, Oh, my God! I got to start a brand new month now at zero dollars. I was in this trap for a long time. I was doing exceptionally well what I would consider in the coaching business. I had at that point brought my business up to maybe 20 or 30K a month. But every month started at zero dollars. Every month started at zero dollars. I would panic. No matter how hard I worked the month before, I would have to rework the same level of desires. I'd have to kill myself to make the same amount of money the next month. But when I added recurring revenue into my business, what that allowed me to do was go into a month that typically would have been zero with already 30, 35, 40, 50K of month already coming in from recurring revenue. We talked to you about different types of recurring revenue in this video.
But what recurring revenue allows you to do is not panic, not start every month at zero. Really what it does is it gives yourself peace of mind. It gives you peace of mind knowing that, hey, if I don't crush it this month, if I don't grind this month, I still have money coming in that's enough to take care of me, my family, my team, my employees, whatever it is for you. That's what recurring revenue can do for your business. Before I tell you about my favorite types of recurring revenue, that's one of also the biggest mistakes I see when people are hosting live events and retreats. They sell the event ticket, which is awesome. Sometimes they have tiered pricing, awesome. But the thing about that is it is one time revenue. Why not make it recurring? Why not take attendees from your event and have some a recurring membership model so that you're consistently making money, you're consistently adding value, your clients and your prospects keep winning? That's the power of recurring revenue business models, now, which I'm going to share with you now in this video, my favorite types of recurring revenue business models.
The Website Model
The first type of membership model that I really like is the membership to a website model. This is where your clients, your prospects, they pay you a monthly recurring fee, think of it like a subscription, for access to videos, training, content, things like that. Think about your business right now. Could you create, if you don't already have one, could you create some an online content library where you're recording videos like this and you're uploading them into modules? Module one, lesson one, module one, lesson two. You can have your different modules based on the key pillars of your signature framework. Let's say you had five modules in the way you teach business. Let's say you help people with their avatar, then niching, then pricing, then retreats, then recurring revenue. That's just five models or five different chapters, if you will, at the top of my head. Well, what I could do is I could create a website where I could film videos like this three to ten minutes long and have educational pieces in there and I could not have to sell my time or my coaching. I wouldn't have to sell one on one time. I could just have you pay a subscription fee to join this content library. That's not new. You've seen things like this before, but think about it with the lens of your business. What questions are you being asked all the time? The same questions over and over again. Why not just film a video, film a series of videos, and sell it based on a membership to a website model? That's model number one, something for you to really think about.
The Consumable Model
Model number two will not apply to every Coach, but I have seen it used strategically with some other coaches. This is what I call the consumables model. So you think about me, I've got a beard right now. Well, it's like my five o'clock shadow. Well, the consumable model ships out every single month a set of consumables, meaning things that I'm going to utilize or they will go bad over time, and I don't even notice it. So consumable models, this company called $Shave Club, years ago, that you would pay $10, $11, $15 a month, and every month they would send you new lasers so that you always had a fresh shave. Think about consumable products that beauty companies use. Every month you get a subscription, you get a box of beauty products or supplements or protein, things like that. Now that's more for consumer based package goods, CPG products when you're actually getting consumables. But how can you use that in your coaching business? Well, I know one coach who every month as part of his coaching program. It's a consumable model, but every month he sends out a new journal for the month with a book of the month. So every month all of his clients get two shipments from him. One is, again, the book of the month that they're all focusing on with a journal, with a branded journal with his business name. I thought that was pretty cool. I remember the first time I received it, I thought, Wow, this is interesting. I'm getting a journal with this guy's branding. This feels cool. But that was an ongoing consumable model where every month I was getting something tangible in the mailbox, immediately increasing the value of his product, the value of his coaching program because he's shipping me something every single month. The moment you can touch, taste, feel, smell something, your coaching program actually becomes more tangible. Think about what could you create in your business that you could ship out once a month or once a quarter to your clients something that they could consume in a 30, 60 or 90 day window. Or maybe it's a piece of clothing with your name on it. Maybe a month; the quarter one, you send out a hoodie; quarter two, you send out socks with your branding; quarter three, you send out pants with your, I don't know what it is for you, but that's the consumable model.
The Private Club Model
Next is the private club model. This is what I call the elevated inner circle, if you will. This is really good for coaching programs, for Mastermind communities. This is where people pay a very substantial, a couple of thousand dollars a month recurring revenue subscription fee, tongue twister, to online coaching, to a Mastermind, to exclusive events, to exclusive information. This is what I would call more like the VIP inner circle. Think about your coaching program. Let me talk to you about one of my coaching programs, Peak Profits. Peak Profits is a monthly program that coaches, consultants can opt in and they can opt out whenever they desire.
I don't believe in 12-month contracts necessarily. Peak Profits, they get five calls a month. We have calls every Tuesday. We have a call one Friday a month, which is more of a bonus call. But then they also get access to exclusive events that are not marketed to the public. Some of these events are virtual. Some of these are in person. Some of the in-person events that the public does have access to, my clients just get for free or at a very reduced fee. This inner circle has been created. What that allows me to do is host retreats, host events, bring in clients to the event, bring in prospects to the event, but then also use my event as an opportunity to turn more prospects into clients. Really what I want to do is enroll them into peak profits. I want to enroll them into my world, into my community. But I use retreats as that what I would call a sample before you buy model. A retreat is only two days. If you can sample me and my work for two days and if you fall in love with what you see, awesome, come join my model of recurring revenue, aka peak profits, which again is that inner circle VIP exclusive club.
Or if you don't like me after two days, well, you're going to know and I'm going to know that we're not a good fit and that's okay. In two days you got your money's worth, I provided a ton of value and we'll just part way.
The Network Model
Another model you could consider for recurring revenue in your business is the network model. This is where you're connecting two different types of people together. Think of you having a product or a platform or maybe you have a really strong network and you could connect sellers with buyers. This is called the network model. You're the hub of the information. You have the contacts, you have the email list, you have the data, you have the companies that know, like and trust you. You know a bunch of sellers that want to get their product out there. You also know a bunch of buyers because your network is huge. Maybe you're very active on Facebook or LinkedIn or Instagram or YouTube and you've built a really nice network of people. Well, now what you can do is act as the intermediary between a seller and a buyer and start connecting the dots for people.
Then you can work out commission deals, affiliate links, and so forth. I know coaches and consultants that are making five figures a month, just recurring revenue. Five figures a month of recurring revenue just from the network model. All they're doing is referring out and referring in. Once a month they get a check in the mail, they call it mailbox money. That's just what they call it. But every month using the network model, all they're doing is they're connecting sellers and buyers together or two types of people together who really need one another. So think about your coaching program. Think about your business. What audience do you already have and what audience do you already speak to? And what audience do you think they might need, if not now, in the future? And start connecting those relationships and ask the sellers for an affiliate deal. Ask them for a commission, ask them what their agreements are. If you're doing affiliate deals in the network model with companies that sell services or products for $10,000 or $100,000 or $500,000 depending on the deal size, of course, well, then even a small percentage of commission, even a 5 or 10 % commission on a $100,000 deal is pretty good money.
You're talking about five or ten grand coming in a month from one deal based on the lifetime value of that client being $100,000 over the course of a year, that gives you so much capital. That's five or ten grand just recurring coming into your pocket. And most coaches are still stuck below 10K a month and you're making that just on affiliate deals? Think about that for your business. That is called the network model.
The Coaching Model
The last model that I really like personally is the coaching model. I'm a big fan of this. I've got a few one on one coaching clients. I know that one on one ultimately is not scalable. That's why I have my recurring revenue model with peak profits. But I do have a handful of one on one coaching clients who want direct support hosting their retreat, their event from start to finish. They want to pick my brand, they want to strategize. They don't necessarily want to watch my videos and my content. They just want access to me and my time. That's what I call the coaching model. This is where they get one on one coaching access to me. And most coaches right now, again, like I said earlier, a mistake you're making is you're probably over delivering and undercharging your services based on your own self-worth or maybe it's imposter syndrome.
Maybe you think the market doesn't have the money or maybe just whatever stories we tell ourselves around money. But the coaching model is really interesting because you can go deep with a handful of people every single year that pay five, six figures annually to be a part of your network. They want to be part of you. Essentially, they want you on speed dial. So if you're okay trading time for really good money, well, the coaching model makes total sense for your business. So not all of your clients, in my opinion, can get one on one time with you because it can only get you to so much scale. It can only get you so much revenue. Before you cap out, you burn out, you're working on 15, 20 different things at a time. I've been there, I've done that, and I thought it was great when it was happening, but six months into it, you realize it's just not sustainable. What happens with recurring revenue and really the theme of this video is what can be sustainable for a coach, for a consultant like you? That's why recurring revenue is so important. Before we wrap this video, again, the three mistakes coaches typically make is that they underprice, they don't have pricing tiers, and they fail to neglect value.
If you're making any one of those three mistakes right now, just one of those mistakes and you'll make an extra five to six figures in the next 90 days based on your products, based on your pricing. Those are the big mistakes that coaches are making right now. The models that we talked about, I'm not saying pick all five models and implement them into your business right now, but pick the one recurring revenue model that I just described. Pick the one that really stood out to you and implemented into your business this week. The quickest way to do that is go to your existing clients and mention to them one of these coaching models that really speaks to you and see if you can get it rolled out. That way you can buy back your time, you can turn your business into a money machine every single month that keeps growing and keeps growing and keeps growing. What's really cool about recurring revenue is that your revenue can increase month over month and your workload doesn't necessarily increase the same amount. Because if you have a group coaching program like I do, I can enroll four, five, six people today and my level of work goes up incrementally, maybe for their onboarding.
But once they're rolling in my system, then I'm just going to see them every Tuesday like I do with all my other clients. That's why I like recurring revenue. And if you need some direct help with installing recurring revenue into your business and you want to host retreats as a vehicle to launch recurring revenue models, just comment, reach me below. Reach me and reach out to me. Comment reach me below and I'll actually reach out to you personally. Or if you just want the workbook or the worksheet associated with this video about recurring revenue models, comment, revenue below, and I'll get you a sample of that worksheet. Appreciate you watching. This video, comment. Let me know you got value and I'll see you in the next one.
