The Night Club Business Model (For Coaches)

The ideal strategy for digital mentors, coaches and trainers

I have been a digital marketing mentor and coach since 2016. I have observed the industry closely and gained much experience selling education myself. In this post, I will discuss the ideal strategy for building an education business based on a personal brand. Digital mentors, coaches, and trainers will find the strategies discussed here very useful. I call this model the Night Club model. I will explain why in this post.

If you have observed mentors & coaches and want to scale up your education business, you would’ve noticed that different mentors follow different paths.

But from my deep observation, all the strategies follow a similar pattern. A high-level strategy.

The outline of this strategy is:

• Entry Gate (Opt-in)

• Walled Garden (Trip-Wire)

• Night Club (Front-end Offer) - {This is the main business}

• After Party (Optional Back-end Mastermind)

I want you to imagine that you are running a nightclub. You charge very high for the nightclub and want highly qualified people to enter the club. You don’t want to keep it open for all the people. It has to be exclusive and premium.

Your nightclub is the main product. Your biggest revenue maker. Your most popular product. It’s what your brand is known for. But you cannot advertise this product directly and expect the right people to trust you and join you. So you add two filters on top of it. They are the entry gate and walled garden. They are needed to funnel people into the nightclub.

Throughout this post, I will also explain how I am going to implement this strategy for my own education funnel.

Zooming Out: Where Education Fits In?

As I am building my MicroStartup, I want to teach people how to build startups. I recommend people that they incorporate education, services, and software (Micro SaaS) in their strategy. As I teach people this, I will also be practicing what I am preaching.

For MicroStartup.com (my Micro Startup):

• The education will be under the brand: Digital Deepak

• Services under the brand: Deep Marketing

• Software brand: HighTraffic

• Platform brand: LearnToday

As I have mentioned before I will be focusing only on Education and Services to start with. I will be using the cash flow from these businesses to fund the development of my software.

Eventually, in the long term, I might roll over the profits from software into a multi-sided platform and that would be called LearnToday. All the brands will be under a single umbrella of MicroStartup.

How do I define a Micro Startup? A startup that is bootstrapped, profitable, and gives time and location to the founder. No fancy high revenue, low runway, loss-making, funded startup with paper valuations. The one we see in the media.

I have worked in a lot of such celebrated high-valuation startups and I observed that what meets the eye and what actually happens inside are two different things. Believe me, you don’t want investors, fame, and vanity revenue. You need freedom as a startup founder. 99% of funded startups fail. Let’s focus on a predictable path to build a profitable startup.

When you build education and community products first, you get a solid distribution and branding, which you can use to get clients for your services startup. I can reach out to any business in India and most businesses have at least heard about me. That’s because of my education products.

Doing services gives you a clear idea of B2B client needs which helps you build software with a good product-market fit. That’s how it rolls.

If you have not read my older blog post yet, please read it here:

MicroStartup's ₹20 Crore a Year Revenue Plan

Education will be an important part of MicroStartup’s revenue plan. There are going to be 2 niches inside education: Digital Marketing & Startups.

The Night Club Business Model

Now that we are clear about where Education fits into the overall strategy, let’s break down the strategy for education and coaching.

Every customer starts as an explorer of a specific topic. We have to make them stars. That’s the goal of this funnel.

Someone might be thinking of building a startup. I need to make them a believer, an achiever, and a star. How do we convert strangers on the internet into not just friends but successful people?

Let’s look at each component in this funnel and see how to take your customers through a journey.

1. Entry Gate (Opt-in)

If you have a product to sell, you need a warm audience to sell to. You cannot sell to a cold audience. Your target audience who might become raving customers is out there. They search on Google, watch videos on YouTube, scroll through Instagram, and follow other creators. You need them to enter your gate before you can sell them anything.

Some people might say that a YouTube subscriber or an Instagram follower has already entered the gate. But I would still consider them a cold audience. If you have 10,000 YouTube subscribers, it is not the same as 10,000 email subscribers. They are YouTube’s users.

When people sign up for a YouTube account or a Google account, they give their email ID and phone number. When they subscribe to your channel on YouTube, you have no way to contact them directly. YouTube doesn’t give you permission to download the list of subscribers with their email IDs.

People will enter your email list only when they have something to gain. The best way to ethically bribe them is to give away something of value. It can be an ebook, email course, or a mini-video course. This is the lead magnet.

Types of Lead Magnets that encourage people to enter (Opt-in with email ID):

• Free eBook

• Free Email Course

• Free Mini-Video Course Series

• Tools

• Templates

• Free Community

• Calculators

Going deep into all the types of lead magnets can be a separate blog post of its own. The interesting part is, that you don’t need a single entry gate. You can have multiple entry gates at the same time.

In my digital marketing funnel, the entry gate is the free digital marketing course at LearnDigitalMarketing.com.

For one of our clients Supriya Jain, who is a content writing coach, the entry gate is the free email course on how to become a highly-paid content writer.

In many cases, a video is not required on the landing page. To convince people to enter their contact details is not a very big ask.

Such lead magnet landing pages usually have a conversion rate ranging from 20% to 60%. In rare cases where the traffic is very targeted it can even go up to 90%.

To drive traffic to this landing page we can:

• Run Google Search Ad Campaigns (my favorite)

• Run Meta Ad Campaigns (Facebook and Instagram)

• Partner with other creators to promote this lead magnet to their list and pay them per confirmed subscriber

• Attract SEO traffic and convert the traffic into leads (Usually using a popup form similar to the landing page, a shorter version)

• Link from your websites to the landing page

• As social media followers to download the free lead magnet by linking to the landing page

• Email and social media outreach (usually not scalable but great for a b2b audience).

I prefer paid ad campaigns because it is fast and efficient. A lot of people complain that Google Search ads are costly but that’s only when you expect a sale immediately. If you are driving traffic to a landing page that is offering a free lead magnet and only asking people to opt-in, we calculate the lead cost (CPL - cost per lead) and it ranges from 20 to 200 depending on the niche.

Once people enter the gate (opt-in) we continue engaging them with email follow-ups and deliver value on email. If it’s a 30-day email course, the leads are engaged for 30 days. Post the 30 days, they can be engaged with email newsletters (like the one you are reading right now).

Your primary metric is cost per lead. When you run performance ads, it is easy to calculate the cost per lead. If you got 1,000 clicks at 3 rupees each, you have spent 30,000 rupees. If you get 200 leads, your cost per lead is 150.

Now all you need to do is make enough revenue from the leads you have generated to make up for your fixed costs and the rest is profit. As long as your revenue per lead is higher than the cost per lead, you can keep generating leads forever.

Ways to engage people who are on your email list:

• Free webinars or AMA (ask me anything) sessions with value where the creator shows up live for the audience. This can be done 2-4 times a month.

• Email newsletters (like this one).

• More free lead magnets. People can opt-in to multiple email sequences as well.

• Publish videos on YouTube and send the email list audience to your YouTube Channel. (I use my YouTube channel as a place to host my videos and expect some additional social media traction from the activity generated. If additional viewers come from YouTube recommendations, I want them to enter my gate again. I will link to my lead magnet pages in the description).

• You can also ask your leads to follow you on Instagram and connect on LinkedIn. The same strategy as above applies to any social media channel. I have 45k followers on LinkedIn, most of which came from my email list. My email list was not built from social media.

• You can also do offline meetups and meet people in person so that you get a better idea of who your audience is. The more you do this the better clarity you will have as to who you are writing to and speaking to (on videos). People will feel that you are making sense and feel like you are talking to them directly.

There is no rule on what you should do and how often you should do the engagement. Obviously, you cannot send two emails a day. Your audience will get irritated. However, you cannot mail once in a week and do webinars once in a month. Your audience will not have you at the top of their mind.

If you want to build a lifestyle business and don’t want to push yourself too much, you can just do enough to make enough revenue. If you want to make hay while the sun shines and scale your revenue as much as possible, then do what you can do without burning out. The intensity depends on the creator’s personal goals, capacity, and drive.

This is the “CAT” part of the Deep Marketing Funnel (CATT). Content, Attention, Trust, and Transaction. The next part is getting people into a walled garden.

You can also create multiple entries into the walled garden (multiple lead magnets for people to enter your funnel):

For my startup education funnel, the first entry gate will be a 30-day Email Course on How to Build a MicroStartup.

I am working on this and I will soon create a landing page and a 30-day email sequence for this. You will hear from me when this is ready.

2. Walled Garden (Trip-wire Transaction)

Until people pay for something they are not your customers. They are your leads, your audience, your followers. They are yet to cross the barrier of having a transactional relationship with you.

If you remember the scene from Breaking Bad where Saul Goodman asks Jesse and Walt to put $1 in his pocket to have attorney-client privilege. The transaction means something. Once he takes that payment, he is representing Jesse and Walt and is bound by law to keep things a secret. [And if you haven’t watched Breaking Bad, what are you doing with your life?]

Something psychological happens when people pay you. They convince themselves that you are the right person to buy from. They pay attention and that attention allows you to build trust.

Enough trust to convince them to buy more from you. You might have also heard that it is 10 times easier to sell to an existing customer than a new customer. Once they pay you a small fee, they become a customer.

Some people sell an online 3-day event. Some people sell a weekend workshop. The pricing for such transactions ranges from Rs.99 to Rs.9999.

People who sell workshops for Rs.99 usually spend a lot more than 99 to get people to pay. People pay more attention when they have paid for something. A lot of mentors have tried doing free webinars but people do not value free webinars and they do not show up at all. However, when they pay a small transaction fee they show up for the webinar because they have paid for it, though the price might be little.

There is a transaction and a value delivery which helps you establish your brand as a trustworthy brand. Unless this exchange of money and value happens, you are not seeding your brand at a deeper level.

The biggest problem with paid workshops is that around 30% of people do not show up even after they pay for the webinars. It’s not because they are not interested. It’s because many people are busy with their lives and they can’t make time to attend the webinar at a specific time.

I have paid for workshops so many times and didn’t show up later. When I asked them if I could attend the workshop again, I didn’t pay because it was friction again.

The purpose of a trip-wire transaction is to engage people and build trust with them not to make significant revenue from the sales. So why sell a workshop or an online event?

People are busy and they might miss your value delivery. All you want to do is to engage them at a deeper level than just with free content given to people in your funnel. In such a scenario, it makes sense to sell a community membership (which I call the Walled Garden) that has multiple engagements until they upgrade to the profitable next-level product.

I have written about Siddharth Rajsekar’s funnel before. In his funnel, he does free webinars and sells membership for Rs.5000 (Silver Membership). Once people buy the silver membership, they get weekly calls, a course, and a community. They also participate in hackathons where he gets people to take action to see some early results. Sidz doesn’t make any profit with his silver membership. It hardly breaks even.

The purpose of an entry-level product is to have an opportunity to build trust at a deeper level and get them to pay more quality attention so that we can upgrade them to the next level. If that’s the main purpose, I would rather choose to sell something at a 999 price point than a 5000 price point because the product here is scalable. It’s community, webinars, and content. It’s better to have as many people at this level so that we can qualify them to join the next level.

Considering all the aspects above, this is what I feel would be the right fit for a walled garden:

• Charge a one-time fee of 999 to enter a community.

• Allow people to interact with each other inside a community.

• Engage them with exclusive email newsletters only for members (not published in public) and weekly live webinars (not meetings). Weekly live webinars create a lot of value and the best part is that it is scalable. It doesn’t matter if there are 500 people on the webinar or 5000 people. It’s broadcast. People get to see you live and that builds more trust.

• A lot of people in the walled garden will not attend all the calls live. So publish the recording of the call in a portal and send it to your walled garden customers.

• Create a newsletter that’s exclusive for people at this level. A lot of people will engage asynchronously via email only.

• If possible, bundle a book along with this membership and ship it to them. You might spend Rs.400 to Rs.500 to ship a book, but it’s worth it. You are not here to make profits, you are here to engage them on a deeper level.

If you are a digital mentor, coach, or trainer, do not give structured course content here. Recorded courses are best given at the next level. Offering recorded courses here will cannibalize your sales for the next level. Because a lot of people will not take action on the content that you give. Because they didn’t pay high enough, their accountability will be low. And they will never upgrade to the next level.

On the walled garden level, you are just inspiring people while giving good enough value so that they can feel that it is possible to achieve their goals. It’s buyer enablement. And that is of some value even if the end result is not achieved.

For example, taking you from non-believer to achiever might be difficult. However, I can take you from non-believer to believer to achiever. And I can charge for converting you from a non-believer to a believer. People need to feel that they can achieve something before they embark on a longer journey to achieve something. It takes time and effort and that cannot be invested without belief.

You need to sell them the idea that they can succeed before you sell them the tools to help them succeed. The walled garden does the job of selling the dream. The nightclub is where we sell the path to the dream.

For my startup education funnel, the walled garden will be MicroStartup Inner Circle.

In the MicroStartup Inner Circle, we will offer:

• Membership to the exclusive aspirational startup founders community

• Weekly broadcast webinars by Digital Deepak about startup-related topics (recordings will be published only for the members of Inner Circle).

• A printed book: MicroStartup Playbook shipped to their home address (along with a flyer for the next program).

• 100 case studies of founders who have successfully built their MicroStartups.

The community will help people get inspiration from others in the community and help them believe that success is possible.

3. Night Club (Your Main Product)

We want people to join the nightclub. This makes the most revenue, and profit and brings results for your coaching clients or students. We build an entry gate and a walled garden to get people into the nightclub.

Why do I position the main product as a membership instead of a training program? Because all effective training programs are in the format of a community. If you do an MBA from an Ivy League college such as IIM Bangalore or Stanford Institute, the main value that you derive from the program is not just the content. It’s the filtered community and relationships that form during the course that add the maximum value in life.

When people are part of a community while they are learning something new, the learning is effective. You need to compare notes and when you see other’s progress along with yours, it is very motivating. Some students in your community will inspire you and you will inspire others.

The pricing of a Night Club product should be 1 Lakh minimum. It can be also 5 lakhs, but I feel something around the price range of 2 to 2.5 lakhs will be the ideal fit. The pricing is just about right to give enough sales commissions for someone selling the program through 121 sales calls. There is enough margin for the founder. There is enough buffer for increasing CAC (Cost of customer acquisition).

The above list shows what needs to be included in the “Night Club” product for an ideal learning experience.

Our product will be AlphaClub and we will be including the following features in it:

• A Startup Launchpad Course - 12 Weeks program to help people get started with their new venture.

• Additional in-depth courses on Branding, Hiring, Campaign Management, Funding, and Product Building (Courses, SaaS Products, and Agency Services).

• A dedicated account manager who will help the client progress and grow

• Weekly coaching calls on different topics - taken by industry experts

• Two offline events in a year to meet other members in person

• Bundled SaaS tools to help them grow their business

• Access to the premium community of serious entrepreneurs

If people are not able to pay 2.5 Lakhs for a year of membership, we might down-sell them into just the 12-week Startup Launchpad course at a slightly lower price. Once they have got results from the program, they can join the membership. However, the full purchase of AlphaClub will give them the best value.

I won’t be positioning the Startup Launchpad Course as a separate level because if people are booking a sales call - we might as well sell them our best product that is most likely to get them results. A separate lower-priced product might cannibalize the main product. On top of it, the course videos alone might not be enough to help them get the desired results.

4. The After Party

As a coach, if you can enroll more than 100 people into a high-ticket mastermind, you can expect 10% of them to join a closed group ultra-high-ticket mastermind.

This step is optional and not for most people.

• Siddharth Rajsekar’s Mastermind is INR 10 Lakhs a year.

• UAbility’s X Mastermind is INR 18 Lakhs a year (We were members of it for 2 years)

• Sam Oven’s Mastermind was $36,000 a year. (I was a member of this for 1 year in 2021)

• Cole Gordon’s Mastermind is $80,000 a year.

• Russel Brunson’s Mastermind is $250,000 a year.

• Tony Robbins's mastermind is around $400,000 a year.

When I have more than 100 members in the new AlphaClub V2.0 which will be launched in 2025, I might create a mastermind called “Master’s Guild” which will be an after-party to the nightclub.

I will publish a separate post on the strategies for After Party. This post has already become too long. I will also be converting this into an ebook and will use it as a lead magnet.

Sorry if I overwhelmed you with too much information. But how else do you build a strong business? Reply and let me know what you think. Do you like such detailed strategy posts?