Website Closers® presents a leader in its market – Lead Generation and Performance Marketing for Children’s Activity Centers, including those that focus on gymnastics, dance, swimming, martial arts, and many other kids’ activities. They operate in the United States and Canada and do not have a lot of competition in their space, making customer acquisition cost and scale very attractive value propositions for this business. The company operates differently from alternative services because its job doesn’t stop once a lead is generated … they also offer 7 client packages to do the heavy lifting of reaching out to the interested parent through automated texting, email, and personal reps to handle questions and locate a class that works for them. Following that, the business schedules them into a trial for that class. They guarantee clients enrollments, not just names on a list. The business is result oriented, and its pitch is simple. Once they turn a lead into a demo, their closing rate is an astonishing 70%.
To attract clients, the business offers a trial week of service where they guarantee to get at least three new students scheduled for classes, or the client doesn’t pay. They have successfully achieved a 95%+ conversion rate through this process. The arrangement then moves to a month-to-month service, and they provide a minimum level of performance every month, or the service is free. This provides an incredibly high volume of potential clients saying yes on a very low churn rate – which is proof positive of their effectiveness.
Digital marketing is key, and the company focuses on Facebook and Instagram for ad distribution. They aim to stand out and, to do that, advertise differently from the norm. For example, rather than video and high-quality photography, they use cartoons. As a result, they can take a template-based approach to each client instead of needing digital assets specific to each client to build campaigns. It also allows the company to control the narrative. Masks, gender, race, and age are all elements they have control of to speak directly to the community they’re trying to reach. The company’s creative process of using cartoons to gain attention also allows them to have a templated product, meaning, for example, that the same ad created for a Florida gym is the same one used for a gym in California. This makes a campaign buildout fast, launch timelines predictable, and the onboarding process streamlined. In addition, it reduces the need to have a marketer, designer, or creative director on staff, consequently reducing payroll.
The company has approximately 50,000 moms on a list with full rights to their contact information. These are verified moms of young kids with names, email addresses, and phone numbers. It’s beneficial for promoting additional products or services or can be sold for a healthy sum. So, it offers significant value for the right individual.
Post-pandemic, the whole industry is in a rebuilding phase, so the opportunities for someone who can play the long game and be patient for full growth are immense. The industry is operating at about 70% capacity due to a hiring shortage for lower wage earners, among other factors. Not being able to hire low-wage earners in the kid’s activity space where most teaching staff reside directly affects a brand’s ability to maximize classes and size. As a result, there is a tremendous gap between where most clients were, pre-Covid, and the numbers they can handle now. As full employment comes back into focus, potential clients will desire and, in many cases, require their student numbers to scale and therefore be desperate for a service like this that does just that.
Notably, the company has been exploring and testing a new vertical that is related but untapped. That vertical pertains to educational preschools and alternative education models. Through the pandemic, education for most families drastically shifted, and there has been a massive realignment toward education that works better for the family unit. As the theory has been tested and the model for preschools and the like experimented with, not only have they found that the directors of the education facilities are hungry to drive more students, but also that advertising to the parents and getting them to respond and engage with these schools is highly leverageable. There is a significant opportunity here to add a new segment to the business that was previously unrecognized and bring in an entirely new revenue stream.
A likely eventuality is that TikTok ads will become a prominent new channel for client-side lead generation. TikTok has exploded since the pandemic and targeting moms on the platform is baked into their targeting algorithms. However, their location targeting isn’t granular enough yet. They will almost certainly continue refining and expanding their location options. Once it’s at the community level and not just the city, there is an incredible opportunity to take advantage of the platform.
The company experiences some seasonality, as is expected in the industry. The first peak is the stretch between August and October, as many clients are ramping enrollment in alignment with the new school year. The second peak is immediately following the holiday dip in January and February. Fortunately, the two peaks follow a dip, so it’s easy to manage cash flow through both. The primary seasonal drops happen around the Thanksgiving and New Year’s timeline, when most kids’ activities change as families turn inward during the holiday season. Typically, this business runs at about 30% less revenue for December. The second, less impactful seasonal dip comes in the summer, although this has shifted as Covid changed summer activities. Generally, clients adjust their class offerings over the summer and have a lower student requirement during that period. However, the savvy business owner in this space is running full steam through the summer, and more and more clients are taking an aggressive approach heading into their primary enrollment months.
The business runs smoothly without much input from the owner. A new owner who is up to speed on all systems and processes wouldn’t need to spend more than 10-15 hours a week on the business. Duties primarily include oversight, client escalation issues and decisions, and billing management. Additionally, the owner is the marketing mind behind the campaigns. So, he will brainstorm and establish a new creative direction if a new campaign needs to be created. This isn’t a significant role, though, as all current campaigns are templated and have been proven effective across all regions. A digital marketing firm can easily manage this if necessary.
Substantial Growth opportunities lie in new target markets, additional marketing channels, innovative marketing formats, and international expansion, to name just a few. A marketing and sales-minded operator will excel with this acquisition. Contact Website Closers to get educated on the business and its enormous scale opportunities.
