Ready to get your serious nerd glasses on? Learn what numbers you should be across in your marketing activations to measure success.
This podcast episode will be giving your Excel and calculator a bit of a workout… and with right reason because knowing your numbers intimately on the marketing front will ensure you know what's working and what's not.
We cover 4 key metrics you NEED to be across in your sales funnel in order to grow your business…
AND better yet – the cheatsheet for this episode is epic because in it, we share the exact formulas you can start punching into your marketing tracker, right away.
Like this episode? Head to the ratings and reviews section in Apple Podcasts and share the love.
TUNE IN TO HEAR ABOUT
- Why you need to know your numbers intimately
- How knowing your numbers allows you to make sound business decisions
- How to calculate your current cost per new customer acquired
- What a customer’s lifetime value is and how to calculate it
- The anatomy of a sales funnel/li>
- What metric is an absolute necessity for every small business owner to be on top of
Flori Pyke: [00:00:38] Welcome to episode 15 of the Raising Her Game Podcast. We're Anna and Flori the queens of small business and we deliver female entrepreneurs both the business and mindset tools needed to start, grow and scale your small business for success.
Anna Jonak: [00:00:56] Hello hello. Oh my gosh we were just saying we can't believe how fast the podcast journey is flying and we're like it's episode 15.
Flori Pyke: [00:01:03] It's crazy.
Anna Jonak: [00:01:06] How is that possible. It's been three months. Over three months of podcasting already can you believe it.
Flori Pyke: [00:01:11] I know it's been a lot of fun. I really enjoyed it.
Anna Jonak: [00:01:13] Yeh no I love it. And like today we're actually hanging out on a Saturday doing the podcast thing and kicked the husband out the house, so nice and quiet and just hanging out on the weekend. Oh yes.
Flori Pyke: [00:01:24] It's really nice. So what's been going on for you.
Anna Jonak: [00:01:27] Hashtag winning moment. Get this. Get this. So you know we've obviously got the Telstra Small Business Awards coming up, well my mother-in-law and father-in-law have booked hubby and I into the hotel for the night for a special lovely night together so that we can enjoy the before and after, and are taking the kids for the whole day and night.
Flori Pyke: [00:01:48] Oh my gosh
Anna Jonak: [00:01:48] Yeh and Bo's taking two days off so we can enjoy like two days together. Like so much fun it's just like I'm loving it.
Flori Pyke: [00:01:55] I'm so jelly I don't even know if I booked a sitter yet [both laugh]. That is some serious like planning.
Anna Jonak: [00:02:03] I'm up for a bit of date night, celebration, having fun. Why not man.
Flori Pyke: [00:02:06] I know I can't wait. Well speaking of the Telstra Small Business Awards I have to say that my hashtag winning moment would be that I actually found a dress to wear. I know that you had that hashtag winning moment a while ago but I had to kind of save mine in the back pocket because I'm growing [Anna laughs] by the second. And I look like a baby manatee now.
Anna Jonak: [00:02:28] I actually saw you today and I was like WOW what is that - oh yea that's right your pregnant. [laughs].
Flori Pyke: [00:02:32] Everything is like swollen including my face. But anyway so that's pretty exciting because I've actually found something that fits me and and I feel good and it's all thanks to the ladies at Dress For A Night so I'm pretty pretty pumped.
Anna Jonak: [00:02:46] And you're going to be like you're rocking the authenticity at the Telstra Awards [Flori laughs] aren't you really by going 'hello I'm here with the baby. Business School for Mums' [laughs]
Flori Pyke: [00:02:53] I did think about that. It's a good little story isn't it.
Anna Jonak: [00:08:33] You planned it, you planned it.
Flori Pyke: [00:08:34] It's all on purpose. It's a big sacrifice but you know, it's worth it. [both laugh]
Anna Jonak: [00:08:34] Oh. Anyway onto the hashtag losing. Life's been pretty good I have to say. However the one thing that is getting my goat at the moment is my kids fricking fighting all the god damn time. Like oh my god. Can I just say though, there's was a Facebook post in our community recently, I can't remember the context but someone was asking about what drove them insane about their kids and everybody came back with the same thing - that their kids fight. It made me feel so normal. [Flori agrees] I swear like I'm just constantly in my house going 'stop fighting.'
Flori Pyke: [00:08:49] I know. It's insane. It's funny that you say that because I often say like the whining I can deal with. I can just kind of seal them into another room and close the door, but it's the fighting.
Anna Jonak: [00:08:56] It's the screeching down the other end of the house
Flori Pyke: [00:08:57] It just kills me
Anna Jonak: [00:08:57] and you run down. Who's done what to whom then like do you just let them like fight it out and work out whose the strongest or do you pull them apart.
Flori Pyke: [00:09:02] Oh my God I've given up. But also mine are a little bit older than yours. Well the current ones anyway. [Anna agrees]. And so it's like you know if I had like Finn still really little you have to be careful, but my two I'm like unless there's blood drawn you guys work it out [Anna laughs]. I get so tired of breaking them up I'm like honestly one of them will come running to me and now I'm like you know what. You're on your own mate, just work it out.
Anna Jonak: [00:09:20] My daughter is the worst though. She's the one that instigates it all on all parts. If you hear her screech it's because she started something.
Flori Pyke: [00:09:22] The girls.
Anna Jonak: [00:09:22] In to it, anyway you could talk about it forever. But let's give you some podcast content. [both laugh]
Flori Pyke: [00:09:22] Oh wait my hashtag losing moment. This is a bit sad but also there's a silver lining to this story but I did crack my phone. Now if anyone knows me well they'll know that I am a serial phone screen cracker.
Anna Jonak: [00:09:32] It's true.
Flori Pyke: [00:09:32] Yeah. And so after the last time that I cracked my screen multiple times and had basically glass shards in my ear, I was like right, I'm getting insurance on the phone so that my silver lining is even though I cracked the phone, because of my insurance...
Anna Jonak: [00:09:45] Yeah but I bet you don't get anything done about it though.
Flori Pyke: [00:09:46] Shush [Anna laughing]
Anna Jonak: [00:09:47] It's the truth though.
Flori Pyke: [00:09:47] Maybe until the glass shards come in again. [Anna laughing] Anyway. Alright let's get into it.
Anna Jonak: [00:09:48] Yeah today, we've got a big one. Flori's realm. The nerd glasses well and truly go on. Get the geek on. [both laugh]
Flori Pyke: [00:09:49] Well yeah. You like a bit of numbers too. [Anna agrees]. I think we both got a little bit giddy on this one to be honest. Now a lot of our students and our tribe or audience basically have been asking us to dig just a little bit deeper into the sales funnel and what key metrics you should be across when it comes to better understanding whether your sales funnel is working or not. So one thing that's important to caveat is this is a little bit more advanced.
Anna Jonak: [00:10:10] Yeah I think you're going to see that across the podcast because of the requests we're having from and we've got different levels of our students, is that we really want to mix things up so we're going to bring in some of the starting and your basics but also kind of throw in some of the more advanced stuff so that you know where you want to be playing as you move down the track. This stuff is really exciting but it actually can have such a huge impact on your business when you start to track this stuff. So we're going to try and keep it simple for you and you'll see it as an epic cheatsheet which has a lot of to do's in it.
Flori Pyke: [00:10:33] Yeah definitely. So actually that's one thing that's important to caveat. So in the cheatsheet are the actual formulas around each of these key metrics. So we're actually not going to go through 'this is how you do it'.
Anna Jonak: [00:10:42] Because that's just boring.
Flori Pyke: [00:10:42] But really this is a cheatsheet. If you're going to download any cheatsheet let this be the one. [Anna agrees] Because it's going to give you the 'how to' on what key metrics to track and how to track them. Okay it's seriously good.
Anna Jonak: [00:10:54] It's gold it's gold.
Flori Pyke: [00:10:54] Now just a few key things to keep in mind and we've said this before you guys but honestly it's just...
Anna Jonak: [00:10:58] repetition is power
Flori Pyke: [00:10:59] ...100% seriously like it is just so important to understand why these metrics matter so much and we can't say it enough, we make no finger in the air decisions here. Every decision is literally fuelled by data and numbers. Data and numbers are literally power and knowledge. They drive smart decision making in your business. They enable you to see where the gaps are and what's working as well as equally as important I have to say, what is not working.
Anna Jonak: [00:11:21] You save money you make money. Pretty much. Bottom line. All important things.
Flori Pyke: [00:11:24] That's exactly right and you know we have a really elaborate marketing tracker that we use for every single marketing campaign or activation that we invest money behind.
Anna Jonak: [00:11:33] If you are scared of Excel you don't want to look at this sheet [both laugh]. It's epic.
Flori Pyke: [00:11:33] But it doesn't have to be that complex you know
Anna Jonak: [00:11:35] of course not
Flori Pyke: [00:11:35] and I think that's something you know I think you should talk a little bit more around that.
Anna Jonak: [00:11:40] If you're a student already then you'll know that you've got a tracker available to you which is a more basic one and which should enable you to do most of what we talk about today. But you do need to get into the habit really, like we said getting into excel and playing with your numbers like we said previously, episode 12, about actually forecasting your goals and setting goals for your business and understanding how things sit. So it's the same like you've got these equations.
Flori Pyke: [00:11:55] Exactly.
Anna Jonak: [00:11:55] You can pop them into a spreadsheet and you can start to play with your numbers and literally see the impact on your bottom line.
Flori Pyke: [00:12:01] That's exactly right. And I think you know the hardest part is getting those equations and formulas programmed into your sheet. But once they're in and you know which cells to fill then it's all done for you.
Anna Jonak: [00:12:11] It's pretty exciting right. When you pop a number in and you change the number or you change a conversion or something and all of a sudden you see everything profit.
Flori Pyke: [00:12:14] And so it is, I mean that's the hardest part but if you're a student with us you know that we've got one for you waiting in The Academy. But anyway let's get into it. So let's talk a little bit more around these four key metrics that you should be tracking when it comes to your sales funnel.
Metric #1: Cost per Acquisition (CPA)
All right so metric number one is what we call the cost per acquisition. And this is really important for you to understand. And it basically boils down to how much it costs you to generate a customer. So in other words it's saying okay well what's the cost per sale. And I think it's really important for you to understand this particularly when you know you're spending money on your marketing campaigns, you want to understand how much am I spending in order to acquire that customer. So for instance, whenever we do an activation like a challenge for instance, that is a key metric that is in that marketing tracker is what did it cost me to acquire that customer. And in the cheatsheet we have laid out the formula for you really simply so that you can plug it into your Excel spreadsheet tracker and start to generate this spreadsheet for yourself.
Anna Jonak: [00:13:17] So what can you do with that data like. So give us an example of once you have that data.
Flori Pyke: [00:13:21] Well I think you know for us for instance, with Facebook ads one of our main paid traffic channels, is we're constantly trying to minimise the cost per acquisition. Obviously. We talk a lot around cost per lead as well. Okay. And it's very similar to cost per acquisition. And those are two key metrics that we're constantly trying to bring down.
Anna Jonak: [00:13:40] So it costs less to acquire people.
Flori Pyke: [00:13:42] Exactly you know like at times that might cost us a few hundred dollars and maybe if we really nail it with our ads and our activation we have a great conversion rate it will cost us a lot less. So it's just understanding how much that customer cost you and I want everyone listening also to not be scared. I just said it might cost us a few hundred dollars. Don't forget we're probably in a very different space to you. Every industry is different.
Anna Jonak: [00:14:04] This is more about giving yourself a benchmark [Flori agrees] with which to work from. You know what it cost me a lot this time, next time you're obviously going to try and bring that cost down.
Flori Pyke: [00:14:10] That's exactly right. And you know I often get asked well what's the right cost per lead. Well that depends on your industry and you can do a quick google search and figure out what are the benchmarks per industry at the minute on certain particular key traffic channels and you can discover that information really easily.
Anna Jonak: [00:14:25] So you know where you're sitting.
Flori Pyke: [00:14:26] Exactly, so you should do that. If you're going to spend money on any ad traffic you should have an idea of benchmarks so that you can see whether you're doing a great job or not.
Metric #2: Customer Lifetime Value (CLV)
Anna Jonak: [00:14:35] All right well moving on from that, metric number two which is all about your customer lifetime value and we've definitely alluded to this and I think it's in podcast episode 12. And you're going to see we're going to do a whole session on this stuff. But basically this is all about you really understanding the total lifetime revenue that a single customer will or can generate for your business. Now when you're first starting out you may just be looking at getting bums on seats, sales through the door. But this is about thinking about a bigger picture of your business and really understanding that it's not just about having one person in and getting new customers all the time. It's about looking at how you can nurture and build a relationship with that customer. So they come back again and again. So if you've got a product it might be they buy once and then they kind of come back because they want to buy another product from your range or they're coming back and repeat buying what they bought for somebody else as a present. So on and so forth. So that customer doesn't just spend 30 dollars with you. Maybe across a few years they make 300 or 400.
Flori Pyke: [00:15:19] Yeah yeah definitely. So can you imagine based on our recent experience because we've recently changed our business model quite a bit. Can you share some insights here around if you're starting out you know how do you figure this out basically.
Anna Jonak: [00:15:29] I think this is just about for us, when we first started out we looked at the service that we were delivering. And when we got into it we started to see what new products and services we could develop over time for customer. So we started with our Small Business Success course. And originally it was all about recruiting for that but once we got into it we started to see there was a want and a need for advanced content. So we created another program so people could then upsell to that program. Over the journey now with where we're at as a business, we've gone from having these two single programs to actually creating a much more intensive and long term coaching program which really spans across a year, but gives you in-depth day in day out coaching. So now we're kind of completely changed our business model and the lifetime value of our customer because of the value that they get and the changes they'll see in their business is likely to be increasing five to 10 fold based on where we very first started. But you know these things will change for you as you grow. But it's definitely about thinking about cross-selling, upselling, developing new products, researching what they want and need and kind of creating those.
Flori Pyke: [00:16:20] Yeah I think also like based on how many people buy or cross-sell, how many people buy or upsell, how many people subscribe or unsubscribe. Putting some conservative estimates around that to understand what is that annual or just lifetime customer value.
Anna Jonak: [00:16:34] Or seeing who does repeat purchase. You may have a lot of single purchases that understanding the propensity or percentage of your customers that return to buy again and again.
Flori Pyke: [00:16:41] Yeah exactly. Now this is a little bit more of a complex formula to work out. And again this is one you're definitely going to want to tap into within the cheatsheet because it is really important to get this right so that when you are spending a dollar on your marketing campaign you understand that that dollar is not just generating you X amount in return as a one time purchase but that customer is worth Y amount over their lifetime.
Anna Jonak: [00:17:05] Yes certainly. I think it's definitely about seeing beyond the right now and looking into the future of what you're developing and having that in mind and I think that you guys are going to have an a-ha moment when we start taking you through a whole load of stuff on this in the coming weeks.
Metric #3: Conversion Rates
Flori Pyke: [00:17:17] Yeah absolutely awesome. Okay so metric number three is you know we've talked to you guys a little bit around the sales funnel in the past and if you're not au fait with it go check out those previous episodes we cover it in quite a bit of detail but essentially tracking the conversion rates of your sales funnel is so important. [Anna agrees]. And you know there's three really core stages to a sales funnel. So at the top of the funnel that's one core stage and that's really the awareness stage. And then there's the middle of the funnel which is where customers or prospects I should say, are really considering your offering. And then there's the bottom of the funnel okay. And this is where our prospects make a decision whether they're going to come with you or not. And look every single sales funnel unfortunately leaks which means that every single person that comes in at the top of your sales funnel is not
Anna Jonak: [00:18:00] going to end up in the bottom or become a customer.
Flori Pyke: [00:18:02] Yeh but it's your job to get them to come back into the sales funnel. Now that aside just so that gives you kind of a brief synopsis as to what the sales funnel is and how it works. But one of the things that you know as a listener we want you to be really mindful about, is once you have a sales funnel in place you need to look at the key conversion rate of that sales funnel. And you made a really good point when we were chatting about this you know what happens at the top of the funnel if that's not working.
Anna Jonak: [00:18:29] Yeah. So say you've got a good lead magnet, an opt in for something, a discount or a discount voucher or maybe it's a cheatsheet or something. And you've got that on your site and you've only got a 5 percent conversion rate. You could have thousands and thousands of people coming to your website and only 5% are converting. If you don't know that number you can't make improvements because just imagine the difference if you know what's happening down the rest you'll funnel when you're actually kind of getting customers in once they get that cheatsheet of that discount, if you can improve the conversion rate you know where it should be taking it too, I don't know what's a good conversion rate on a lead magnet.
Flori Pyke: [00:18:53] About 50 percent on a squeeze page.
Anna Jonak: [00:18:53] That 50 percent. Imagine the difference of 5 percent to 50 percent if you actually had the right language or the right offer the number of people then coming down through to the next stage you've just like opened up the floodgates.
Flori Pyke: [00:19:03] Yes exactly right. And so for instance like when we're doing a key marketing activation we look at every single conversion rate of that key activation file. So exactly like you said. We'll look at the squeeze page conversion percentage. So that next time we do and activation we can understand this worked or this didn't work or let's repurpose this page if this one killed it, it did 60 percent for instance. Then we also look at our e-mails, our click throughs, which emails performed based on open rates. And then we repurpose those e-mails that performed. You know we might look at views or how many people sign up to a webinar and how many people converted from that webinar. How long did they stay like we literally look at every single piece of data to understand what worked and what didn't work. So that next time we do it
Anna Jonak: [00:19:42] we can do better. And like I do want to caveat that this kind of does sound a bit freaky from the outside. [both laugh]. Like I said when you see the master spreadsheet and everything else but when it's something that you've got set up in your business and it just becomes habit to literally go through a spreadsheet and update the numbers and number views and bits and pieces, you have got so much powerful knowledge at your fingertips that you can then literally turn on and increase your bottom line by just making small tweaks to things and that's what it's all about tweaking and improving.
Flori Pyke: [00:20:05] Yeah. Absolutely right. Love it.
Metric #4: Return On Investment (ROI)
Anna Jonak: [00:20:07] And then down to metric number four which is all about your return on investment. Okay so this is about really understanding what return your dollar generates for you. It's as you say, it's a key success for our Facebook ads the campaign, seeing what our return on investment is for how many dollars we spend versus what we get out. And I mean this changes as well. [Flori agrees]. We've seen this change over the last 18 months we had some fantastic ROIs when we were first starting out and really low cost per lead. But you know there's so much competition on Facebook now and in the space that you cost per lead increases and your return on investment decreases. I mean you still get a great return when you look at it in the context of
Flori Pyke: [00:20:39] and when you look at the customer lifetime value.
Anna Jonak: [00:20:41] Absolutely. And that's the thing that's why it's so important to look beyond one sell and start seeing that if your return on investment was 100 percent or 200 percent that actually when you put that into context of the fact that that person is going to buy again and again and again anything in your lifetime cycle. Yes completely different view on it.
Flori Pyke: [00:20:55] Yeah that's exactly right. It really skews and makes that return on investment completely different. So this is a really big one and absolutely right. I mean this is this is when Anna and I are chatting about any marketing activation we do, this is probably the metric that we talk about the most. What was the return on investment on that campaign. Of all of metrics this is the daddy. [Anna agrees]. You really want to know this. And it's really easy to calculate so go check it out in the cheatsheet.
Anna Jonak: [00:21:15] Well I'm sure you've talked about ROIs before in terms of making you, I can't remember the way you said it along the lines of, as long as you make your money back.
Flori Pyke: [00:21:20] Yeah I mean I always look at it as if you can make your money back from what you spend I mean obviously ideally you want to make money but if you can at least make your money back it's like free advertising. That's how I see it. And free branding. So you can't complain. If you make your money back you can't sit there and say it didn't work. It just means onwards and upwards from here.
Anna Jonak: [00:21:39] There's more to try, more tweaks to be made. Probably in the processes and things like that.
Flori Pyke: [00:21:41] Exactly right. And looking again at those conversion stages of the funnel maybe there's something wrong with the page directing people to, maybe there's something wrong with your messaging, your ad copy, etc, but your goal in the very beginning - just make your money don't put too much pressure on yourself because if you can do that that's free marketing right.
Anna Jonak: [00:21:56] Well you see some fantastic, I mean you've been working with a lot of our students on their Facebook ad campaigns and you've seen some great ROIs for people. Haven't you.
Flori Pyke: [00:22:00] Yeah it's been really exciting actually like the addition of our forum has really enabled me from a marketing standpoint to really get my hands dirty on our students paid traffic campaigns and what they're doing. And I have, I edit now their ad copy, I look at their ad imagery and I critique everything. And we really work together to set the ads up in a way that are going to work optimally for them. And some people have gone from saying I'll never do this. It never works for me to Oh my God this has turned my business around.
Anna Jonak: [00:22:24] Oh Rachel, Rachel is a great example. [Flori agrees]. Curious Kids Science with these amazing science kits she had and she was talking about previously she's having one, two, three sales a week. Now she's getting three or four a day in fact probably more than that now. But I mean how great is that.
Flori Pyke: [00:22:33] Yeah. And all thanks to the proper sales funnel and proper paid traffic marketing and tracking everything.
Anna Jonak: [00:22:39] Pays to know what you're doing. It so does. So look we know that this is potentially a bit heavy but you've got the cheatsheet and we definitely recommend you listen through this at least a couple of times because there is a lot of information in here you. This is definitely for you as you're starting to advance in your business. And for those of you that are at that stage we also really recommend you come and check out our Mastermind. Because this is for women who are a bit further along in their business and making a minimum of 100,000 dollars already and really want to dig deep into the numbers like this so we can help increase their profit exponentially essentially. So you can go to theelevatory.com/mastermind and come learn more about that. If you're at that stage in your business. Now do you just want to do a quick wrap up of all the action tips.
Flori Pyke: [00:23:25] Yes so action tips that you can implement in terms of what you should focus on when it comes to your key metrics. Metric number one we talked about the cost per acquisition of a customer. You want to know what that is. The second thing we talked about was your customer lifetime value and understanding how to work that out and how important that is throughout any marketing activations that you do and when you're spending money on your marketing. The third metric we talked about was what are the different conversion rates of the different stages in your funnel and understanding how to track those. And then finally the return on investment on any marketing campaign you do and again go back to that cheatsheet download it and figure out because it'll show you exactly how to figure out all this stuff. So go check it out.
Anna Jonak: [00:24:12] Yes and come and share some more with us. On instagram.
Flori Pyke: [00:24:18] Yeah yeah I did want a bit of an Insta shout out.
Anna Jonak: [00:24:20] She wants some nerd glasses please - can you send me some nerd glasses for Flori.
Flori Pyke: [00:24:26] I love it when you guys give me some love on the podcasts on Instagram and tell me what resonated with you and your key takeaways so come and share with me I want to hear about it.
Anna Jonak: [00:24:36] I want to see some mind blown icons as well.
Flori Pyke: [00:24:38] Emojis
Anna Jonak: [00:24:38] Emojis I'm so not cool enough [Flori laughs] Holy crapoly. Right anyway you know where to find the show notes theelevatory.com/podcast. And if you're loving what we're putting down, we'd absolutely love for you to leave us a little review. We'd really appreciate it. We really want to share this stuff far and wide so we can see you guys galloping ahead in your business. All right parting thought for today is if you torture the data long enough it will confess to anything by Ronald Coase.
Flori Pyke: [00:25:13] I love that.
Anna Jonak: [00:25:13] I like torture. I mean it's true.
Flori Pyke: [00:25:15] It's true.
Anna Jonak: [00:25:16] So much gold in that.
Flori Pyke: [00:25:17] Yeah totally. All right. And remember be brave in your business.
HOW TO CONNECT WITH ANNA AND FLORI
Business School: www.theelevatory.com
Phone: 1300 634 230
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We're incredibly excited to be able to share our business insights via the Raising Her Game Podcast. We aim to provide you the very best content each week to help you elevate your business game so you can take your life and business to the next level. We'll tackle the topics that will get you increasing your productivity, mastering your mindset and strategising like a marketer. If you're enjoying the show, you can help spread the love and pay it forward by leaving a review. It will make it easier for other female entrepreneurs in business like you, to find us and kick their own goals.