Podcast Summary: The Game with Alex Hormozi – Helping a Personal Stylist Scale Past $3M | Ep 829

Host: Alex Hormozi
Guest: Ashley Capps, Founder of AC Styles
Release Date: January 24, 2025

1. Introduction

In Episode 829 of "The Game with Alex Hormozi," entrepreneur and business scaling expert Alex Hormozi sits down with Ashley Capps, the founder of AC Styles, a thriving personal styling business. Together, they delve into Ashley's journey from generating $300,000 annually to setting sights on scaling beyond $3 million. The conversation offers invaluable insights into customer acquisition, sales optimization, and strategic scaling tailored for service-based businesses.

2. Overview of AC Styles

Ashley Capps begins by introducing her business:

[00:44] B: "Hi, I'm Ashley Capps. I'm founder of AC Styles. So we are a professional wardrobe and personal styling service that helps transform our clients' confidence and saves them time."

• Revenue: Approximately $309,000 annually
• Profit: $130,000 (42% net margins)
• Years in Operation: 4 years
• Clients Served: Over 1,000

Ashley’s clientele primarily consists of men and women in their 40s to mid-60s, including stay-at-home moms, frequent travelers, and executives climbing the corporate ladder. These individuals value their time and seek expert styling to enhance their personal and professional lives.

3. Current Business Model

Services Offered

AC Styles operates through a two-phase model:

1. Onboarding Phase:

   • Style Assessment: Establishes the client's current style baseline.
   • Closet Gutting: Eliminates outdated items and curates new outfits tailored to the client's lifestyle.
   • Decision Point: Determines if the client benefits from ongoing monthly or quarterly styling sessions.

2. Ongoing Styling Sessions:

   • Monthly/Quarterly Appointments: Continual style updates and look books.
   • On-Demand Services: Clients can request specific outfit recommendations as needed.

[01:24] B: "So we transform our clients' fashion style and confidence and also help save them time."

Pricing Structure

• Onboarding Package: $8,500 over 60 days
• Ongoing Services:
  • $2,000 per month
  • $4,500 per quarter
• Commission Revenue: Approximately 10% from vendor partnerships

Initially, AC Styles offered multiple service tiers but has since concentrated on a luxury tier to maximize profitability and streamline operations.

Customer Acquisition Channels

Ashley outlines her marketing strategies:

• Google AdWords: $300/month
• Thumbtack: $300/month
• Affiliate Partnerships: Collaborations with luxury service providers like matchmakers
• Events and Referrals: Hosting exclusive events and leveraging client word-of-mouth

[03:50] B: "So right now we're doing AdWords. We're spending about $300 a month with Google..."

4. Challenges and Goals

Current Challenges

• Lead Generation: Insufficient and inconsistent lead flow.
• Content Creation: Inability to maintain a steady content output, leading to missed opportunities.

[05:57] B: "We need lead flow. We need more of them consistently."

Revenue Goals

Ashley aims to escalate her business to $5 million in revenue by enhancing current operations and expanding into new metropolitan areas. Long-term aspirations include developing a training program to educate and onboard additional stylists across major cities.

[05:12] B: "All right, so just the easy 5 million revenue. Why not?"

5. Strategies for Scaling

Alex Hormozi proposes a multi-faceted approach to overcome challenges and achieve scaling objectives:

A. Optimizing Paid Advertising Funnels

• Enhance Lead Magnets: Shift from a simple "book a call" approach to offering valuable, actionable content such as:
  • Color Palette Guides: Tailored to individual skin tones, hair colors, and eye colors.
  • Perfect Outfit Recommendations: Customized based on client attributes.

[16:29] A: "So the lead magnet component that I would do for these paid ads is..."

• Implement Qualification Questions: Incorporate criteria like income and readiness to ensure leads are high-quality and aligned with the luxury offering.

B. Scaling Affiliate Partnerships

• Increase Outreach: Ashley currently has six affiliate partners, contributing about a third of her revenue. Alex suggests scaling this by:
  • Sending More Emails: From 40 to 400 emails to potential affiliates, targeting industries like executive coaches, high-end fitness trainers, and divorce attorneys.
  • Automating Outreach: Streamlining the process to manage a higher volume of partnerships without sacrificing personalization.

[28:04] B: "...send out 40 emails. So I'd be like, okay, how do I send like..."

C. Enhancing Continuity and Increasing Lifetime Value (LTV)

• Maintain Low Churn: With a current churn rate of nearly zero, the focus remains on retaining clients through high-quality, ongoing services.
• Price Anchoring: Offering multiple pricing tiers (monthly and quarterly) serves as a price anchor, allowing clients to choose based on their budget and commitment level.

[35:14] B: "If it's in front of these people. Not the one time people. These people, they don't."

D. Strengthening Personal Branding and Content Creation

• Invest in Personal Brand: Transitioning from AC Styles to Ashley Capps as a personal brand can enhance credibility and attract a broader audience.
• Consistent Content Strategy: Allocating dedicated time for content creation to build a strong online presence, which complements other acquisition channels.

[39:37] A: "I was planning on investing. Like your Instagram and like all that stuff. Yeah, well, I see..."

6. Key Insights and Advice from Alex Hormozi

Alex offers actionable strategies to accelerate Ashley’s business growth:

1. Refine the Lead Funnel:

   • Incorporate engaging lead magnets that provide immediate value without requiring extensive effort from the client.
   • Implement qualification metrics to filter out unqualified leads early in the funnel.

2. Scale Affiliate Outreach:

   • Drastically increase the number of affiliate partners through efficient email campaigns.
   • Target aligned industries to ensure high-quality referrals.

3. Increase Ad Spend Strategically:

   • Once the funnel is optimized, incrementally increase monthly ad spend from $300 to $600-900 to amplify lead generation without compromising LTV/CAC ratios.

4. Leverage Personal Branding:

   • Develop a strong personal brand through consistent content creation on platforms like Instagram.
   • Use personal branding to enhance trust and recognition, indirectly boosting lead quality and conversion rates.

[38:46] B: "Yeah, I just want to make sure that you spent just basically..."

[40:59] A: "People have the first thing they're going to look at is your social media stuff..."

7. Conclusion

The dialogue between Alex Hormozi and Ashley Capps encapsulates a strategic blueprint for scaling a service-based business from $300K to over $3 million. By optimizing lead generation funnels, expanding affiliate partnerships, enhancing continuity, and investing in personal branding, AC Styles is poised for significant growth. Ashley’s proactive approach, coupled with Alex’s expert advice, underscores the importance of strategic planning and execution in achieving ambitious business goals.

Notable Quotes:

• Alex Hormozi:

  [00:03] A: "We want to decrease the friction here for qualified people."

• Ashley Capps:

  [01:24] B: "So we transform our clients' fashion style and confidence and also help save them time."

• Alex Hormozi:

  [16:29] A: "So it's like, Hey, you're here, you want to be here. Oh, you're missing all this stuff. Oh, we have..."

• Ashley Capps:

  [05:12] B: "All right, so just the easy 5 million revenue. Why not?"

• Alex Hormozi:

  [38:45] A: "But if we do nothing else, you could just do that."

This episode serves as a comprehensive guide for entrepreneurs looking to scale their businesses through refined marketing strategies, effective partnerships, and robust operational models.