Where Revenue Leaks in a Coaching or Consulting Practice

Ask a practitioner why they are not earning more and you will usually get one of two answers: not enough leads, or people say it is too expensive.

Both are guesses. Neither survives contact with the actual path a person walks from noticing you to paying you, and that path has more stages in it than most people have ever counted.

Here is the whole thing. The point of drawing it is not the drawing. It is that you can only fix a stage you can see, and almost every practice is losing most of its money at a stage nobody is looking at.

The seven stages

One, they encounter you. A referral, a search, a post, an event, a mention. This is the only stage most marketing advice talks about.

Two, they understand what you do. Distinct from encountering you, and skipped constantly. A person can read your entire site and leave unable to explain your work to their colleague. If they cannot explain it, they cannot refer you and they cannot decide about you.

Three, they recognise themselves in it. Understanding is not enough. They have to conclude that it is for people like them, in their situation, now.

Four, they take a first step. Book, write, reply, register. The size of this step and how much uncertainty surrounds it decides how many take it.

Five, you respond. How long that takes, and what is in it.

Six, you have the conversation. The part every practitioner is good at and the part they assume is where the outcome is decided.

Seven, they commit. Which usually happens after the conversation ends, in a week you are not in.

Where the money actually goes

Stages two and three are the largest and least examined losses in almost every practice I have looked at. People arrive, do not quite understand, cannot place themselves in it, and leave without ever registering as anything. There is no record of them at all, which is precisely why the loss is invisible and why the practitioner concludes they have a traffic problem.

Stage five is the second. An audit of 2,241 US companies responding to a test inquiry found 37% replied within an hour, 24% took more than a day, and 23% never replied at all. That study is from 2011, it covers sales organizations rather than practices, and one of its authors ran a company selling lead-response software, which is a conflict worth saying out loud. But a practitioner has no sales team at all, so there is no reason to think the practice version is better, and every reason to think it is worse.

Stage seven is the third, and it is the one that feels least like a leak because the conversation went well. The person meant to come back. Then their week happened. Nothing existed to carry the interest across the next ten days, so the interest expired quietly and both parties experienced it as a decision that was never made.

Stage six, the conversation, is where practitioners spend nearly all of their attention and improvement effort. It is rarely the constraint. If you are good at your work you are almost certainly good in that room.

How to actually measure it

You cannot fix what you have not counted, and this does not require software.

Take the last twenty people who reached out. Not the ones who became clients. Everyone. For each one, write down the last stage they reached and the date. That is the whole exercise, it takes half an hour, and it is usually the most useful half hour a practice spends in a year.

Two rules make the result trustworthy. Count everyone including the ones you would rather forget, because the moment you start excluding the awkward cases you are measuring your self-image rather than your practice. And define each stage before you start rather than deciding as you go, or you will unconsciously sort people into whichever stage makes the number look reasonable.

I have made exactly that mistake in my own business. I once computed a reply rate from a table that only existed because people replied, and got a figure eight times better than the truth. The arithmetic was fine. The source was the problem.

What to do with what you find

Fix one stage. The largest one.

The temptation, once the picture is drawn, is to improve everything, which spreads the effort so thin that nothing changes measurably and you cannot tell what worked. One stage, one change, and leave the definition of the measurement alone while you do it, so the after is comparable to the before.

If the largest loss is at stage two, that is a writing problem and it is fixable in an afternoon. If it is at stage seven, no amount of writing helps, because what is missing is not words but a structure that continues a conversation without you remembering to.

Questions practitioners ask

How many people do I need before this is worth measuring?

Twenty is enough to see where the largest hole is. It is not enough to compare two versions of anything, so use it to locate the problem rather than to test a fix. A practitioner with forty inquiries a year still learns more from counting them than from guessing.

What if most people never make it past stage one?

Then the loss is in how the work is described rather than in how many people see it, and buying more traffic will make the loss bigger rather than smaller. Fix the explanation before you increase the audience, or you are paying to send more people past a page that does not land.

Is this just a sales funnel with different words?

The stages are similar and the intent is not. A funnel is usually built to optimize conversion at each step. This is built to find the single place where a practice is quietly losing people, so it can be fixed once. In a practice with a dozen active clients, incremental optimization of seven stages is a waste of a life.

Should I be tracking this in a CRM?

Eventually, and not to begin with. A spreadsheet of the last twenty inquiries with a stage and a date will tell you what you need to know this week. Buying software before you know which stage is broken usually results in a well-organized record of the same problem.