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A Podcast for Coaches shines a light on one of the most elegant, underrated business models in the world: one-on-one coaching. Mark Butler hosts the show, and he's been a coach and advisor to every kind of online business you can think of, having helped businesses earning everything from $0 to $25,000,000+. Although Mark believes every online business model has merit, he worries one-on-one coaching is viewed as a stepping-stone business for people who aren't ready or able to scale. But it's not true, and A Podcast for Coaches sets out to show people--through clear teaching and rich, current stories of successful coaches who love their business--that one-on-one coaching is one of the most gratifying and lowest "hassle-per-dollar" businesses in the world.
Speaker: Hey, this is Mark Butler, and you
are listening to a podcast for coaches.
A friend of mine sent me an email,
and she linked to a sales page.
Because she thought that the
program on offer might be a good
fit for someone in my community,
which was very generous of her.
And, in spite of what you're about to hear
me say, I think the thing being offered
might be a good fit for some coaches.
So what follows today is not me
describing the offer as a bad offer.
I want to speak generally and using
some of the things on the sales
page as examples of principles.
But I don't think the thing is necessarily
a bad thing, and I think that's important
context for me to give at the beginning.
What I wanna talk about today is
the psychology of earnings claims,
and, I wanna talk about the specific
context of coaches who are offering
trainings and masterminds to other
coaches, and as part of that persuasive
process, making earnings claims in
the form of promises and testimonials
earnings claims are deployed in
almost every context as a shortcut to
trust or a shortcut to credibility.
That is true if you and I are having
lunch and I'm talking about this
other friend of ours, and I say
something like, "She is crushing it.
She made forty grand
in the last six weeks."
That is an earnings claim, and I'm
presenting it because I want you to be
surprised and impressed by the number
that I just threw out, and want it to
validate something I'm saying about
the character in that story or about
what they're doing, and I'm using
the number to reinforce my position.
That's true if we're talking over lunch.
That's true if it's on a sales page.
It's true if it's presented
in a social media post.
This is my definition of earnings claim.
Earnest claims typically
occupy a specific range.
And what I mean by that is the
number being presented has to be big
enough that it strikes the receiver,
the viewer, reader as exciting and
unusual, but it has to be small enough
that the person who's seeing it has
to view it as something within the
realm of their possible experience
So if I come to you and say, "I can
help you grow your coaching practice
to a billion dollars," there are very
few coaches who would even really
be interested in what I say next
except other than pure curiosity.
But I don't know that any of
us are walking around thinking,
"Oh, you could probably make
a billion dollars as a coach."
So it satisfies the surprising and
exciting criteria, but it does not
satisfy the believability criteria.
The most powerful earnings claims
are going to be those that are
both a little bit surprising
and a little bit believable.
So if I'm a coach who's generated no
money, then you telling me that I could
even make $1,000 a month or $2,000 a month
could be a very exciting earnings claim.
And then you're gonna get claims that
sound more like, "Oh, after I worked
with Jane Doe as my coach," or, "After
I was a participant in Jane Doe's
mastermind, I had my first $10,000 month."
Ah, okay.
$10,000 a month,- That's a phrase
that is probably in many of our minds.
It's probably in the same
neighborhood as six-figure year.
And then for people who have achieved
some of those things, the earnings claims
that are gonna be most inspirational
to them will be in the seven figures.
The person presenting the earnings
claim is trying to strike that balance
between exciting and believable.
The number's gotta be big enough that it
catches your attention and that it anchors
you to a new possibility in your mind.
In the specific example of the sales
page that I was sent, the earnings claims
were all being made in the testimonials.
So the person who wrote the sales
page was using stories from current
or past participants and saying
Jane Doe just had her first X
thousand dollar client, where
X is quite a large number.
John Doe just had his first Y hundred
thousand dollar year, where that number
is also very big relative to what most
people think is reasonable for a coachâ¦.
And both of those anchoring numbers
were somewhere between five and 20
times the price of the experience
So we're creating clear contrast between
the amount of money you're gonna pay
me and the amount of money I'm claiming
you can generate if you participate
That's the anchoring effect, and that's
the contrast that as the persuader I
need to create so that you can believe
the destination is both exciting and
possible, and the path to that exciting
and unusual result is through me.
I am the thing that makes the
exciting and improbable more probable.
This is how the earnings claim plays
its role in the persuasive process
let's talk about why coaches who are
offering trainings and masterminds,
and even one-on-one coaching, feel
justified in making earnings claims
when they're offering support and
helping coaches grow their practices.
The short answer is confirmation bias.
The coaches selling these experiences
naturally gravitate toward those
participants who are doing the best
job of validating their advice , and
they will naturally gravitate
away from those participants who
are not validating the advice.
Now, the debate that will rage on
forever and ever in the coaching
world will be if a person is doing
what they're asked and not getting
the results, what does it mean?
Does it mean that they are
committing thought errors?
Does it mean that they are
being psychologically weak, that
they're not trying hard enough?
Or does it mean that success is not
a one-size-fits-all proposition, that
advice and strategies and tactics don't
fit every participant equally, that
there are factors beyond the specific
advice and the specific processes taught
in the training or in the mastermind
or in the coaching, that increase or
decrease the likelihood of success?
One of my biggest concerns with earnings
claims is they don't acknowledge that
there are plenty of people who engaged
wholeheartedly in the experience, followed
through on the advice to the best of their
ability or to a reasonable expression
of their ability, and got no results
at all, or at least not in anything
close to the time frames that maybe
they were led to believe were possible.
That's where this ethical
dilemma makes itself clear.
You have a seller who is
struggling with confirmation bias
and with a financial incentive.
I still don't consider any of these
people scammers or i-intentionally
dishonest or anything like that.
I just don't see it that
way, even if I'm naive.
What I think is more likely is they
have a financial incentive to believe
the thing they're presenting and the
price they're charging for it will
deliver a result to anyone who pays the
price of admission And then to maintain
that belief and their enthusiasm about
that claim, they have to knowingly or
unknowingly discount the experiences
of people who don't get those results.
That is an ethical dilemma one
of the solutions to this dilemma
is a reasonable refund policy.
But I'm planning a whole
episode about refund policies,
so we'll just pin that for now
The confirmation bias of sellers when
they cherry-pick the experiences of
current and past participants does
not require bad intent to do harm.
A well-intentioned seller who's
using incomplete data is still
presenting incomplete data.
And in doing that, they're holding
back information that might help
the buyer make a different decision
Also: the seller has an incentive
not to look hard at this asymmetry of
information, because if they looked
very hard, they might have to change how
they sell, and if they change how they
sell, they might risk making less money.
And so actually being clear-eyed
and more transparent goes against
their financial incentive, and
I do not exclude myself from the
fact that's a very hard thing to do
let's look at one example where incomplete
information might cause a person to
make a decision they end up regretting.
Imagine a testimonial that
sounds like this: , "consider
program participant Jane.
Jane used to be an executive
at a Fortune 100 company.
She spent her career leading teams and
organizations at this huge company.
Twenty-plus years she's been doing this.
She got burned out, she got tired,
she was sick of the corporate circus.
She knew she wanted to get into
coaching, so she got into coaching,
but then she struggled to find her
place within the coaching world.
But then she participated in my
training, and Jane just had her first
several hundred thousand dollar a year."
what sticks out to you from that story?
The anchoring effect will
be on the earnings claim.
Our rapid processing of Jane's experience
will be Jane is a coach, I am a coach.
Jane made X hundred thousand
dollars in a year, I want to make X
hundred thousand dollars in a year.
Jane connected herself to this
other coach in order to get there,
I can connect myself to this
other coach in order to get there.
All it costs me is the price,
and apparently, quote-unquote,
being all in and being willing
to accept no refund policy.
Now, again, we're gonna do a
whole episode on refund policies.
But the anchoring effect
is I'm totally committed.
I wanna make X hundred
thousand dollars per year.
It's even more powerful than that because
we might say, "I don't even wanna make
X hundred thousand dollars per year.
I would pay the program price to
even make a fifth of that I
believe you can make that money.
This whole conversation is
not about me doubting you.
It's about me being uncertain
about the timelines that are being
presented and the relationship
between the offer and the result
And the information that's getting
glossed over here in this particular
imaginary case study is Jane spent,
let's say, 25 years developing her
skills, her character, and her network
above all else in a Fortune 100 company.
Now, if I'm a coach and I have a big
network, and if I have the pedigree of
being a Fortune 100 executive, and then
I wanna grow my coaching practice, how am
I going to grow that coaching practice?
I am going to grow it through my pedigree,
in other words, my resume, and my network.
So if I'm considering whether Jane's
a good example for me in my decision
whether to join this program, the
question I have to ask myself is not, do
I believe I could make X hundred thousand
dollars per year or a fifth of that?
The question I ask myself is Jane's
interaction with this coach the
most relevant information for me?
Or is Jane's network and career history
and resume what's most relevant?
Because if I don't have her
career history, her resume, and
her network then I'm not bringing
the same thing to this training
regardless of what's in the training.
I'm not bringing the same
thing to it that Jane did.
That earnings claim, once I dig in a
little bit, may have nothing whatsoever to
do with me and my experience, and should
not be evidence that joining that program
is a good or a bad decision for me.
It's irrelevant.
But because the number is big enough
to be exciting and small enough to
be believable, the anchoring effect
has happened, and my psychology
has been changed as a result
But there's at least one more dimension
to this asymmetry of information It
is the fact that the numbers presented
are usually what we would call
gross revenue or top-line revenue.
And what we mean by that is just the
amount of money that was received
directly from the sales of programs,
products, coaching, whatever.
So when we say she has a seven-figure
coaching practice, what we mean is
she sold one million dollars worth
of coaching in a 12-month period.
Which reminds me of a client I had
many years ago who didn't fudge
the amount of money she had made.
She fudged the amount of time in which
she had made that money so that when
she presented the earnings claim, it
looked better than it actually was
For those of you who know my
past clients, don't worry.
You don't know this one.
I'm not referring to any of the
clients that you might be thinking of.
She made a claim in a newsletter
or in a sales page that she had
a seven-figure coaching practice.
I was her bookkeeper at the time,
and I knew that she did not have $1
million in revenue in a 12-month period.
She was glossing over the fact that
her coaching practice had generated
a total of $1 million over its life.
Now, is that still impressive to me?
Absolutely it is.
But was it presented in a transparent way?
No, it wasn't.
Why?
Because we wanted the anchoring
effect to be as big as possible.
In order to make it as big as possible,
we held back important context,
and that happens all the time.
What about the scenarios where
I've seen a person who makes,
quote unquote, who makes over $1
million in their coaching practice?
But if we talk about the amount of
money they actually put in their
pocket, it is a tiny fraction of the
revenue, and it might even be negative.
In the coaching industry, there are
coaches who have generated more than $1
million or who are generating more than $1
million in revenue right now and funding
the business from their personal savings
Is the earnings claim still exciting?
No.
Although our brains are powerful, and
what we will do is we will say, "I
don't care if they're profitable or not.
I know I would be profitable.
I am special.
So if they can make a million dollars
and be not profitable, I will make a
million dollars and be very profitable."
So the anchoring effect of the earnings
claim is still there Isn't that funny?
Aren't we funny?
From that, you can see what a more
honest earnings claim would look like.
A more honest earnings claim
would include lots of context.
In fact, the standard that I would
use on a sales page, for example, or
any other persuasive context, would be
If I'm going to make an earnings claim,
I need to support it with so much context
that it actually stops being very exciting
Because I'm going to load in all of
the costs associated with that claim.
I'm going to load in the background
and the network and the skill set and
the timing of the coach who generated
that amount of revenue, and it
certainly wouldn't fit in one sentence.
It might fit in one page, but in my
opinion, the earnings claim gets back
onto very solid ethical footing when
it is given so much context that it
stops being exciting and starts being
useful in a clear-headed decision.
That is the standard we would
wanna meet with earnings claims.
We wouldn't show 10 testimonials on
a sales page unless we also said,
"These are the 10 testimonials
we have picked from hundreds of
participants, and we've done enough
research to find that these people's
experiences actually are quite unusual.
Here are the mean and median numbers-"
generated by our participants.
Here's what we know about
their effort, if anything.
Now, some people might say,
"That's prohibitively costly.
You can't get that quality of data."
because it's easier to cherry-pick
a line from a post in a community
Facebook group a single sentence
from a thank you email sent from
participant to presenter or to coach
and say, "That will be the testimonial
It's almost like I'm saying
that we shouldn't use earnings
claims in persuasive context, and
yeah, I do mostly feel that way.
A long time ago, I did a podcast episode
on this podcast about how to read a sales
page, and one of the things I think I said
to do on there is if you wanted to make
the best possible decision about something
that's being offered to you, take all the
text of the sales page, get rid of the
images, get rid of the pretty design, get
rid of any earnings claims, and now you're
evaluating the experience on the features,
the benefits, and the experience and
trust you have with that coach, 'cause of
course I v- value that, and you're setting
aside all the anchoring numbers,â¦
You're left with knowing myself
the way I do, knowing this coach
the way I think I know them
And setting aside any claims
about how much I'm going to earn
Let me decide whether or not to do this
When you evaluate programs and you're
looking at earnings claims, the
question is not whether it has worked
for someone, because it will almost
always have, "worked for someone."
The question is whether the amount of
money you're going to spend and the
amount of time and energy you will
invest in support of the experience
after spending the money, 'cause the hard
part is not spending the money, the hard
part is the work that comes afterward.
The question is whether that's your
best move given the information you have
while setting aside all earnings claims
And you might say, "If I didn't have any
earnings claims to consider, why would
I ever join one of these programs?"
And my answer would be,
"Precisely, you might not."
But if you did, you would
be looking at it and saying,
I have to decide whether this is the
best way to use this money without any
thinly veiled promises about how much
money I'm gonna earn back or by when
If you're able to make that purchase
without the earnings claim, I
have much more confidence in the
experience you're gonna have.
The irony of this episode is that coaches
who are making these earnings claims on
their sales pages should be thanking me.
Because if someone survives this gauntlet
and they still sign up for your program,
I can pretty much bet that they're not
gonna ask for a refund, because they
will have set aside the manipulations
that you offered The manipulations that
usually end up creating disgruntled
Participants who demand refunds and
or initiate chargebacks, and what you
will be left with is people who say,
"I set aside all the earnings claims.
I discounted all the testimonials.
I evaluated the experience on its
own merit as I understood it based
on features, benefits, and the trust
I have with the with the person
offering it, and I signed up anyway."
It's gonna be a better participant
I wish the coaches who are presenting
these earnings claims would say
something like this "I don't have to
give you an earnings claim because I
think that achieving any given result
is going to be the very boring, very
natural consequence of you taking
right action over a period of time, and
that right action is already apparent.
It's already in front of you.
Go ahead.
Just take it.
Now, if you wanna participate in this
program, which will be a supportive
environment, which will put you in a
room with people who are also taking
the right action over an extended
period of time, by all means, join us.
But you don't need us."
I think this matters in an
industry that gets a reputation for
making promises it doesn't keep.
I don't think it would be fair for me
to call many of these coach trainings
and masterminds get rich quick schemes.
But I do think they make use
of get rich quick psychology.
They dress it up, they make it fancy,
they make it seem more reasonable,
but the message that comes through
these earnings claims is, you can do
something that not very many people
do, and you can do it with less effort
and in less time than is ordinary.
And that is just right next door
to get rich quick, and it has a
little bit of a film on it, and we
can all kinda see it and feel it.
It doesn't feel good.
There's no shortcut to developing
the skills and the mindset, necessary
to earn at any level as a coach,
let alone a very high level.
The only way around all the difficulty
in a coaching practice is through it.
The only way around is through.
And if you wanna spend ten or 20 or 50
or $2,000 to try to make that experience
less painful, by all means, but it
will not buy you out of the fundamental
difficulty of doing something that
other people are not willing to do.
It may make it less
painful, but it may not.
And the earnings claims that you see on
its sales page, really have nothing to do
with whether it will or will not reduce
your pain and shorten your timelines
Earnings claims have an anchoring
effect that have an emotional effect.
They anchor you to possibility
and they get you into a more
aspirational and optimistic state.
They help you generate a lot of
emotion, and that emotion helps
you say yes to these offers.
My position is, if you need to generate
a lot of emotion to make the decision,
it's probably not a good decision
Set aside these claims.
Consider them as patiently
and carefully as you can.
Ask yourself whether you would say yes to
the thing without the claims being made.
Let it be a little bit boring If the
decision can survive boring, unemotional
analysis, then by all means have at it.
And if not
let it go by.
Because contrary to what that
last sales email said, the doors
are not closing, and the offer
they're making will be back soon.
And with that, I'll talk to you next time