If you want a refresher of the campaign basics then click here to watch the replay of ‘How to Determine the Value of Your Digital Marketing’ And get the Google Sheet spreadsheet template shared during the webinar.
Jeff Meziere is a CPA, as well as a Virtual CFO. Schedule a free 30-minute coaching call with Jeff to discuss your business.
Cory Miller 00:03
Everyone, welcome back to another business value Academy comm webinar. I’ve got my partner and good friend Jeff Nazir, virtual CFO. And we’re gonna be talking about the second part of our lead value exercise. Jeff, not for what how long? Is this been going on that we’ve been working on this? Oh, this is like two months, three months?
Jeff Meziere 00:22
Yeah. A couple months in the making for sure.
Cory Miller 00:24
Yeah. And so we’re pumped, we synched up this week to do part two, of course, Jeff’s done all the heavy lifting, not just good to come in and say, This is what I want to see. But this is really a deep dive into making sure like, what I love about virtual CFO service that Jeff offers, that I’ve done in the past with other people, is that it’s taking the hunch and the gut, you know, just the I have got this hunch I’m gonna go do this and spend this money and we’ve all spent a lot of money on things that didn’t work. Now, we’re drilling down with Jeff’s help, we’ve got this awesome fresh sheet we’re gonna walk through to really think through plan ahead for your digital marketing campaigns. evaluate them. I mean, this feels like Jeff, like, it’s, it’s I was playing triple, you know, Double, double a ball, baseball, and now I’m in the in the big leagues.
Jeff Meziere 01:14
Yeah, it’s been a lot of fun to drill down and kind of uncover peel back the onion, if you will, we kind of start at the tip of the iceberg. And I think we’re starting to really get deep into some value for people and thinking through the best practice of cadence, really, in the planning phase of digital marketing, and then coming back and actually comparing that to results. So the best way that I can phrase this, as we were talking yesterday, I think that this is just a really good way to kind of hold our marketing partners accountable. In had, I wouldn’t even say this, I hold them accountable, having good quality conversations with our marketing partners about what is driving our business value.
Cory Miller 01:58
Well, I think you know, like we’re talking last night, you don’t want to just throw a bunch of money at something and hope, wish, something’s good to get to happen. I love this is a granular approach to really one forecasting. And you and I learned a ton about this. I’ve been doing digital marketing for a very long time, but I’m still learning really good stuff. And this is, I mean, I ran a multimillion dollar company that was all online. And this is further than I’ve ever done with digital marketing efforts. And with just help and guidance and key questions, I think is what he’s really good at to, were able to really look at this now we’re going to be using this in all of our projects too
Jeff Meziere 02:37
Cory Miller 02:39
I’m turning my friend, my CPA, buddy, entrepreneur, buddy, virtual CFO, and I tell him, I said he needs to say virtual CMFO like a marketing financial officer. All right,
Jeff Meziere 02:53
I’ve got the screenshare up. And let’s just, let’s dig in. If you’re ready.
Cory Miller 02:58
Yeah, I’m gonna give you a link everybody in the chat to this spreadsheet, it’s what we done is if you were in part one, it’s the same spreadsheet. Now we’ve added a second tab for the post, but I’m gonna let Jeff take over and I’m gonna go find that link and put it in chat for them, Jeff,
Jeff Meziere 03:12
Okay, great, high end. Let’s just start here. You mentioned the first version of this. And I want to take a step back real quick, and kind of just real, real quickly, two minute recap of what we had done before. So the pre campaign digital marketing planning, that’s in our first tab here of this spreadsheet. And I think that it was, it was really eye opening. For all of us, as we were involved to kind of get the input of trying to understand what our lead value was, I think we really focused a lot on lead value and trying to understand what that was. And now we actually had a plan going into our marketing campaign. So today is all about the analysis. But I want to real quickly just recap and talk about the things that we spoke spoke on last time. And that is with just simply two pieces of information, you know, what is your sales, your average sales for a new customer, your lifetime value? And then what is your sales target. And we threw in a couple things in here on the assumptions, which was the goal conversion rates, as well as a marketing benchmark for our marketing budget. We’ll get into that a little bit later, even in our analysis here. But out of those two pieces of information, we were actually able to look at and see what is our lead value, right? The average sales price at a conversion rate, we know what the lead value is, and this is that, you know, if you’re looking at it just from a from an old school, kind of as the phone rings, that’s a lead that comes into your office, every time that phone rang. In our example, we basically netted $30, right. That was the amount of revenue that we were able to that we should be able to get with an average conversion rate and this goal conversion that we had a 5% at The average sales for a new customer. So we were able to look at lead value, we were able to, to identify a target spend per lead and the amount of money that we would be willing to spend for that lead. And that was, again, just our lead value at the marketing budget threshold, meaning if I got $30, in our example here, how much would I be willing to spend on all of my marketing efforts, and we threw out 35%. Okay, every business is different, but we said 35%, we’d be willing to spend, if that’s the case, then we can’t spend any more than $10 and 50 cents, right? Because that’s our that was our original budget. And then from there, we were able to look and see what we knew what our sales was, what our goal in this campaign was going to be. And we know the average sales per new customer. So we knew kind of what our target number of customers were. From there, we look at the lead target, well, if we know that we need 100 customers, and we know that our conversion rate was 5%. Well, we needed to, to work through an AR and look at a lead target of 2000. That’s how many people we needed to pick up the phone and call us was 2000 people, right. And this could be contact form on your website, an actual click on a link to your web page and gaining traffic there. Again, that’s the lead target. And then from there, we were looking at a campaign budget spend. So we had all of these things that we did in a pre event campaign marketing plan, right. So now, let’s jump over and we say, All right, now that we had a plan, let’s look at how we did. And this exercise is really just going to help you evaluate that performance, right and get you the ability and armed with the ability to be able to have questions with your marketing partner.
Cory Miller 06:47
This is Jeff, can I can I can I just give a comment back on the pre campaign. If you were on part one of this, you heard all this, Jeff, just give you a great overview. If you scroll back up to the top real quick, Jeff, by the way, I put the link in the chat. And we said it wasn’t working. But others have said it is working the data input so on the PRI one. So before you get working your campaign, you know those two data inputs, the two blue boxes, that’s what you enter, we’ve made these assumptions on the green, but you can change those two. Now. I wanted points of nuts, because I learned this from you, Jeff is like the benchmark marketing budget was really interesting, because it was a way to say how much of the total value what I want to do. And I learned a lot from that it was really helpful. Because again, you know what? It feels obvious, Jeff, but you’re like, you don’t need to spend more money than you’re gonna make. And I was like, you know, it’s kind of a good point, I think you can lose track of that when you’re in a PPC campaign, or some kind of ad campaign. But that was a good way for me to adjust. Now, all of this part is the forecasting. Now we’re getting to this is what actually happened. So Jeff, I just want to mention a couple of those things in the link in chat.
Jeff Meziere 08:00
Yeah, certainly. And I think the marketing, the benchmark of the marketing budget, if you will, just to hit on that just real briefly, a lot of times, our marketing partners will look at and say you spent $3,000, but I got you $3,500 in sales, right. But we had to produce something we had to there was a cost of that production on that $3,500. So if you really think of it from a gross profit perspective, we’re not actually netting the $3,500. Right. So if it takes us some dollars in order to produce our product or service, then we actually made less money as far as cash goes. And yet, we still paid our marketing partner $3,000 in those ad spins. So again, we start thinking through how much are you willing to spend on your marketing budget, that’s where the 35% comes in. So we’ll get into that even a little bit more at the end of the analysis for today’s session. Okay, without further ado, here we go. data input. So we’re looking at performance here, right? And not only are we looking at the performance of a past campaign, now, this can be a single campaign. This can be a single an analysis of the single keyword search, if you will. And so we’re looking at the analysis and performance of that, but it’s also then going to help us start thinking through the next campaign and what we’re going to do with this information, anything that we’re ever going to review. So let me put my CFO hat on real quick, anything that we ever review. If we don’t have an actionable item, then we’re looking at the wrong things. Right. So we want to we want to dive into that a little bit today and talk through what does this mean for our next campaign? What questions do we have for our marketing partner? Okay, so let’s look at the facts. We are we are again today we giving you an example of just this is kind of what we estimated, right? Well, you would actually be able to come in here and input your own individual actual items. And that is How much did you spend on the campaign? Right? What was this? We’ll use the pay per click, how much money did you spend in a pay per click campaign? So we were willing to spend $5,000. And that was our budget. And that’s what we spent. Well, how many leads were generated from that campaign? In our example, we use 500. Right? So we got 500 leads, we spent $5,000, we had 500 of the actual click to our website, or a content of the of the contact on our website or something, right, whatever that however you define the lead, whatever that goal was, when you were talking with your marketing partner. So we got 500 leads, the number of customers specifically that were generated from those leads, this is really important. So you had people visit your site, but how many people actually bought from you? How many people did you convince that your product was right for them? And again, we use the number of 30. Then we come back and said, All right, what was the revenue, the sales that were generated from those customers from those 30 customers? What was the sales that were generated? So from there, let’s jump in and immediately look at the one thing that everybody wants to know, was my campaign profitable? Okay. In this example, we had this is the campaign profitability is the revenue or sales that are generated times the original marketing budget threshold is less the cost of the campaign. Okay. So in our example, we were using 35%. We got we have 17,500 as the revenue that came in, okay. So if we had 75 in revenue, and we had a 35% marketing budget, we should not have spent on this campaign any more than $6,125. Okay, that’s our 35% threshold. The cost of our campaign that we had was $5,000. And therefore, we actually had a profit, we made more money, because we spent less money to get the revenue that was anticipated. Okay. Before we get to any comments or questions there, does that make any sense?
Cory Miller 12:10
I mean, I like, starting with this, how much did you make? And again, we’re testing our, our forecasts from the previous one we’re getting, I think we talked about it this week, Jeff is like this, this section is now laser guided missiles, your marketing, like are we hitting down? And how’s it going? And the two tabs are linked, right, Jeff?
Jeff Meziere 12:35
Right. Yeah, oh, they’re absolutely linked, it’s linked to your original estimate and the pre campaign marketing planning worksheet there. So if you’re, if you’re for your business, if you’re using something other than 35%, this spreadsheet in tab number two would actually link over to your actual results, right, your actual estimations that you had. Now, how this is different than most people, again, notice that I’m not looking as a CFO, I’m not looking at those top line revenues, because I know there’s costs that go involved in delivering our product and service. So I’m actually looking at the gross profit of the campaign. Right? I’m down one level from just looking at hi hide the top line revenue numbers compared to cost of campaign. So I’m happy to answer any questions. And I feel like I’m probably not doing a very great job of that. So if there’s any probing questions into that, we can have those here at the end, or as you haven’t throughout the conversation today. So let’s let’s move on down the page to lead value. Remember, this was the this is the value of every time that that phone rings, what was our lead value? This is the revenue that was generated, and then divided by the number of leads. So matter of factly. In this case, we had $5,000. No I’m sorry, I’m sorry, where are we at here? So lead value is the revenue per the number of leads. So we actually have sales of the 17 five, right, divided by the number of leads, which was $500 or 500. leads, that is our actual lead value, okay. The original goal that we had was $30. So the goal value of $30 compared to the actual lead value of 10. That number is a little bit different, right? So again, we just come back to what was our actual lead value in the campaign. Okay. cost per lead. This is pretty important, right? This is the How much did it cost us to generate a lead, and in a pay per click campaign, these numbers might be $1 $50 75 up to you know, 10, 20 $30 per lead per click, that happens, but we want to look at Got the original cost per lead, and then we want to look at are the actual cost per lead, compared to what our original target spend, we had estimated. So in this case, we had an actual cost per lead of $10. That’s the $5,000 that we spent divided by the 500 leads that we got. And compare that to our original target spend, which was $10 and 50 cents. We said we didn’t really want to spend any more than 10.50 per lead at our marketing budget threshold. Therefore, are we positive or negative compared to that cost per lead? So these are this is where you really get into the was the individual phrases, the keyword searches, the pay per clicks that we’re spending? Are they profitable, at a cost per lead perspective, compared to what our original budget was?
Jeff Meziere 15:51
Anything else say on cost per lead, Cory?
Cory Miller 15:55
You know, the thing that kind of sticks out is probably like lead value is 10. And cost per lead is 10.
Jeff Meziere 16:01
Yeah, except to be honest with you, I have to make an adjustment here, this is wrong. So we might as well just do this real time. I like it, sorry. So the actual lead value, in our case, as I was having the conversation, I recognize my formula was wrong. So sometimes your CFO can give you bad formulas. But the sales was 17, five, and the number of leads generated was 500. So therefore, our lead value was actually $35 in lead value, compared to our original goal, which was 30. So sorry, for that error, I’ll correct the spreadsheet there.
Cory Miller 16:44
That’s, that’s good, that still walk into how these are calculated to I think, is really valuable for us. And so, you know, back to the original benchmark, just kind of the term you used with me is because I kept saying, Tell me my lead value, and you’re like, well, how much of your sell overall sell? Do you want to spend on marketing? I was like, No, no, tell me my lead value. But he don’t want to spend the entire cost. I think this is to get clarification there.
Jeff Meziere 17:13
Okay. conversion rate, this is all the operational side. So how good is your messaging, when you get someone to visit your website, right? visit your site, hit you up on a form, call your office, join a mailing list, all these different things that you can actually drill down into, but we really care about the individual conversion rates for all of those avenues, all of those channels. So our conversion rate was actually 6%. We had up top again, I’m going to take a quick peek here, we actually had 500 leads, and we were able to convert 30 of those to customers. That’s the real big number that we care about, right? We care about how much money are we making want to increase sales? Well, our job is to find out and maybe even perform some AV testing in here to figure out how do we tweak? How do we get a higher conversion rate, our number right now, when we were able to convert 30 customers to paying out of the 500 leads that were generated, tells me that my number of conversion rate is actually 6%. Now remember, originally, we said I think we’d probably be able to convert maybe 5%, right? Our industry average is 5%. Or historically, we’ve been 5%. So this campaign right now, whatever it was that we’re looking at, is actually doing better, it’s actually 20% better, and an entire percentage point above where we thought we were going to be from a conversion perspective. So again, this campaign was extremely successful in the eyes of the conversion rate number. So now that we know all that those are the things that we know, we know lead value, we know cost per lead. We know whether our campaign on its surface was profitable or not. And we know that we were successful in converting more leads than we actually anticipated being able to convert. So now what? Well, let’s look at the next campaign. Right. So as we move forward, what are we going to do differently? And in here, we have a couple things. Again, we talked about sales target. Originally, we said we wanted $60,000 in sales, we weren’t really anywhere close to that, right? We only got 17, five out of the campaign. So if that campaign is only generated 75, what’s our new, what’s our new sales target? Right? So we’ve adjusted that and reduce that down to say, $30,000. The average sales per customer is the exact same that hasn’t changed for us. So that number remains the same unless we have information that has changed along the time, right? Maybe the average customer doesn’t spend as much with us, or maybe they’re spending more right. So again, we’re asking these two things here, sales goals, and average sale per new per new customer. With that, we’re going to get all the exact same information that we got last time. We now have an actual conversion rate. Is this the same? Do I think that I can continue that? Or do I need to go ahead and back that down and make the conservative assumption and reduce that back down to the 5%, which it was last time, okay. But we know that we were able to convert on 6%. So I would hope that we can maintain that momentum and continue to convert at 6%. Again, the information that we get out of it is we can look at the target spend per lead. This is our lead value times the marketing budget threshold, what was our lead value, and we’re willing to again, spend 35% of that number. As far as a target spin, that’s how we come up with the $12 and 2025 cents in our example. So our actual lead value here is what our lead value is $35 $35. At the again, 35% that I’m willing to spend on marketing budget gets me to a target span that I shouldn’t spend any more than $12 and 25 cents per lead. Okay.
Cory Miller 21:02
Hey, Jeff, Emily came a little late and asked about the marketing benchmark. And after that, I want to make a comment too. But could you explain the benchmark marketing person is to
Jeff Meziere 21:14
Yeah, I know, we can. This can, this can be a little bit complicated, but I believe it’s, it’s extremely valuable. We’re not always looking at top line revenue. In your income statement, if you go to your p&l, right now, you’ll see gross revenue, cost of sales, getting you down to gross profit, and then you have all those expenses that it takes to actually run your business, one of those line items being the marketing budget, okay? The marketing budget shouldn’t be more than X number of percent, whatever that is, right. But we have to keep our doors open, we have to pay our staff, we have to deliver the product and the cost of either product or service. There’s a lot of costs involved in there. So when I get $1, in, when I get $1, in sales that comes in the door, there’s a percentage that I would be able to attribute that I should mentally attribute to the amount that I’d be willing to spend on my marketing line item of my financial statement. And I’m just suggesting here in saying that number can’t be any more than 35%. That leaves you 65% to deliver your product and have some profit at the bottom line.
Cory Miller 22:21
So Emily to the nuance here is like saying your product is the lifetime value of the product. So say $100, of what you’re trying to use a campaign to promote. And you just go it’s kind of a shortcut way for all that Jeff was talking about to go. If my lifetime value for that product is $100. I’m willing to spend up to 35% of that. So this number in my campaign to get a new customer. So we’re making assumptions here, but you can change that, of course, but it’s not in clarification for your question. It’s not that it’s 35% of your total marketing budget, it’s okay product is worth $500 to you, I would spend it’s like an eyeball method to I think I’d spend 20% on marketing this, you know, $200? Or what would that be $100 for a $500 product, does that, you know, kind of eyeball worth it to me to spend on the product. So we did this through some of our software products I’ve done in the past, even our membership at business value Academy, by the way. And this was Jeff’s method of saying like, hey, Cory, you gotta have some benchmark in here for how much you’re willing to spend to get a customer. Yeah.
Jeff Meziere 23:40
Let me just piggyback on that real quick. So again, I’m going to drive this home, because I need you to drill down to get to actual campaign profitability. All too often people are saying, I gave you and generated and brought to your door $10,000 in revenue, new sales, and you only spent $8,000 in cost. So therefore this campaign was profitable. My point in saying that is if I’m using the exact same example here, you got $10,000 in sales, but your gross profit is not $10,000 it costs you something to deliver your product and service. So we really only want to spend 35% of our sales dollars to go towards our marketing budget or marketing line item. So in my example the $10,000 I really don’t want to spend any more than 30 $500 to do that. That gives me 60 $500 to pay my people and for the cost of the product and service delivery and overhead running my business everything else. So again, I’m just drilling down when I say this marketing budget threshold
Cory Miller 24:46
And, I just want to make come as we get to this now what So in the first tab, you’ll see pre campaign that’s the forecasting, look into your magic ball and trying to get the best like taking as much of hunch out of it and making data decision. Decisions, data based decisions. This tab is the first part is how that campaign go against our forecast. Now, what I love about this, Jeff is the second part of this tab is going Okay, so let’s say first part, you’re like, I want to run Google PPC. Okay, then I go run my campaign with that data. And now the now what is, can I take some of those assumptions? And do even better for my next campaign? Or what if I apply that now to Facebook, you know, like, now I want to, or another option. An example of using this is saying, like, I can’t remember his name, Jeff, but our friend, new member that helped us with our first like, he was live giving us numbers and stuff, so good that we use in this. But you know, he had a big goal, I think it was $60,000. And we even had this roleplay we did between us to go, okay, maybe I don’t want to spend 20 grand, but now I’m laser got it. I’m getting closer, I’m really using this as an experiment and trying to use data to kind of fire and to go, Oh, man. And this is where we talk about big leagues and stuff. But now I can apply this same campaign and forecasting stuff to my next campaign to a different channel. I can try to drill down, I want to get this on lockdown. You know, Jeff, you were even mentioned like, in Google, all the ads are auctions, essentially. And like, what’s my tolerance for, you know, how much am I willing to spend for something, and you get this on lockdown. And it’s just this system you built really. And I guarantee you most small businesses, medium sized businesses are not even doing anything close to this. But Jeff and I ran multimillion dollar companies in the past and grew multiple companies and didn’t get at this level. Right. Thanks, Jeff.
Jeff Meziere 26:51
Cory, even if as you had that conversation about Pay Per Click right look at our in our example here, look at our target spend, you can directly go and look at keyword searches. And in your auction bidding and find out how much you actually paying for those clicks, right? those clicks are coming to your website. And we know right now that our lead value is the $35. And we no matter of fact that if we’re only going to spend 35% of that we know exactly what our pay per click auction. Maximum threshold is? Yeah, if you go $13, you’ve spent more than 35% of your revenue in marketing budget, right? It’s just arming you with the information to be able to make that decision.
Cory Miller 27:40
Okay, and we talked about this earlier, I want to give one more minutes, and then I’ll shut up. But there’s a way to use all this. If you’re understanding where we’re going with all this, then you can reverse engineer. So over the weekend, I was telling Jeff, I went for a project. And I was snooping on competitors paid media campaigns. And I was looking at I wasn’t even looking at volume, I was looking at how much they’re spinning bidding on those keywords. And using this spreadsheet going, Man, that’s been a lead is worth $30 to them, that I can go back to their product page, by the way. So like using a tool like sem rush, by the way, sem rush calm and I’ve got a link, by the way, for a free trial. I’ll put that in the chat when I get a second. But you can snoop on your competitor’s ads, and see, especially if they’re a much bigger company. So the one example for me was psychology today. And I’m like, this is a big company. They’re doing specific ad spins for very low volume keywords, but they’re spending like $9 a key I click? Well, if you look at Jeff’s spreadsheet, here, you can go back and go Hmm, this is probably what they’re they’re saying their leads are worth lifetime value of a customer. That’s something we should poke in on. For like Step three, maybe Jeff is like how you can use this to reverse engineer a competitor’s lead value, especially if you’re going against a big powerhouse, I think of our our our friends that Do you know, cleaning, commercial cleaning and restoration and things I go? That’s interesting. We can Snoop in and see what they’re doing. So there’s even a competitive analysis to this. And I promise you, a lot of people aren’t doing this. So okay, sorry.
Jeff Meziere 29:24
Yes, that goes right here on just the target spend is a big one for me, as I think through the next campaign, because it opens up the opportunity to have some conversations with your marketing partner. Right. So what are we spending right now on any of those clicks? So it gives you a good threshold and ability to be able to have a conversation. So again, we already know, with our sales goal that we have our new goal, we’ve now re-established a new goal for the next campaign. And we know what our average sales per customer is. And if that hasn’t changed, then we leave it alone. And if that’s the case, then we know exactly How many customers we have? And again, I’m just moving back into, again, this is the cadence, I evaluate monitor, and then I come back and pre plan for the next campaign. So again, how many customers do I need? And the answer in this case is 50. Right? So if I need 50 customers, and my conversion rate right now is 6%. Boom, I reverse engineer and get back into how many leads? Do I need to come in the door? So I need 833 clicks, or I need 833 phone calls or whatever it is that you do, the phone calls are easy for me, because you know, you hear it ringing. I was thinking that mental cash register, like, Oh, I love hearing the phone ring. Because I know that I just made what was my lead value $35, that phone rang, and I just made $35, right on average. So it’s a cool thing to kind of think about that mental register, if you will. But again, here’s the lead target. I’ve got 50 customers that I need. So I know at 6%, I need 833. Now let’s look at the real big one. If I want this the $30,000. Again, I’m going to come pick up here real quick. We said sales goal was 30,000. If I want 30,000. And I know this lead target of 833. Then I know what my total marketing budget, the campaign budget would need to be right. Does that make sense? compared that to the estimated campaign budget, right. So this is the estimated campaign budget right here that I would need a cost per click, because you told me what your cost per click was up here, we already know. It’s exactly $10. So the $10 to get the 833 targets is going to cost me 833. For my budget, the target marketing budget is actually 10,000. And that’s my lead target times the target spin but I’m willing to spend for my campaign at the 35% marketing budget. I hope that I’m not getting too in the weeds, or I hope I’m explaining that properly.
Cory Miller 32:13
Now, I mean, again, so you go, Hey, for this quarter, most of us go Okay, into the year, we want to try to increase our top line revenue so much. Now we come to here and say, Okay, this is what we need to get there. I love breaking big numbers. And this is what it does. For me, Jeff is I like taking a big number and going, if I just look at the big number that looks like overwhelming to me. But if I can break it down, like you’ve done here, okay, I need 833 lead targets to get to my campaign. This is how much I should be willing to spend, then you can make some data informed decisions about that. But the principal like breaking it down going, is this doable? You know, is this does this feel right to then you can get into instinctual and hunch. But you’re richer, more looking at the numbers. I think I’ve told the story before about, you know, when we first hired our CFO for virtual CFO back almost eight years ago, is we had all this hunch and emotions in things. And we had all these products. And we started doing cost center analysis on them, how much does it really cost? And are we making any money. And some of those ones we hold on dearly to became, oh, we’re losing money on these. And you can start to take emotion out and going in, probably feels worse actually to lose money on something, you know. And I just love that we’re walking through these types of spreadsheets and have a more informed way of, of getting there. All right, everybody. If you have a question for Jeff, please post those in the chat or the q&a button. We’re here for you want this to be highly actionable and practical. If you’ve hope you’ve got the link to the spreadsheet, so you can start using it. But if you have questions or want to even offer a product or service you’re trying to consider on their marketing campaign. Let’s do that we’re here for you. And Cory, why are you posting this? Let me just go ahead.
Jeff Meziere 34:07
I think that what we’re trying to do here is to arm you with information to be a savvy entrepreneur. Right. And, and I think that most times that I’ve seen is that clients are reluctant to have conversations, even with their own marketing partners in a way that the marketing partner drives the conversation and tells you how successful their campaign was. Right? I’ve seen this time and time and time again. Everyone always comes in and says this is what you spent. This is what you made. Congratulations, pay me my money again next month. And I’m going to flip that script a little bit. If I go through this effort. Instead, I get to really drill down and say, Hey, marketing partner, how do I get 833 leads this month? That’s a completely different conversation to lean on them for their expertise, but ask the question, How do I get 833 leads this month?
Cory Miller 35:03
And I’d also say savvy marketer, you know, for those of you that work in marketing in your organization, being able to have data to go back to people being able to justify an ad spend, being able to break down bigger numbers into goals, it’s great. Simon asked for the amended spreadsheet, actually, Jeff edited that live. So the link, I put it into the spreadsheet, that will be included on the replay of this video. In the notes of this video, you’ll have that link. And it’s all together. So you have one spreadsheet with two tabs. And I advise people Jeff, like, so you’re considering wading into Instagram marketing, right? PPC stuff goes through the forecast the pre planning, measure it on the post plan and give it let’s say two weeks, 30 days, something like that, a measure that, you know, you can actually get some real good sample size data plugged into the spreadsheet. Now go, okay. So, you know, make a copy of this spreadsheet today. Name your tabs. So instead, it could be Instagram, you know, 923 20 campaign forecast, and then you have another tab that says Instagram, you know, same project and all that kind of stuff. And then when you’re ready to go to another channel, Facebook did the same thing. But now you’ve got better numbers to do. And then you’re evaluating multiple potential channels and saying, Man Instagrams where it’s at, or, you know, Facebook performed better than Google AdWords or my content that I’ve got going in that too. All right. So if you have any questions for Jeff, please post this. We don’t want to belabor the webinar and just kind of riff. But while you’re posting your questions for Jeff, I do want to mention at the top of the spreadsheet, you’ll see a link to the book, a session with a consultation session. with Jeff, I highly suggest you do that if you’re an organization, if you’re a marketer in the organization, mentioned this to your leadership, too. You can see how like I get the benefit, because just my partner to do this kind of stuff. Like Jeff, I want my marketing campaigns that do even on projects he’s not involved with, and this kind of words showcases the value of a CFO for her specifically one that understands online digital marketing. You’re a rare bird, Jeff, and I know you keep pushing down this. You didn’t go to school to be a marketer. But now you’re talking and all this language, I’m like, it’s pretty cool to have a CFO that also understands digital strategy.
Jeff Meziere 37:31
Yeah, let me just add one thing here, this spreadsheet these two tabs within this spreadsheet, this can be used for not just a specific campaign for like a one time, you know, one month period of time, you can use this as cumulative numbers, you can look at an individual and break it down by the again, as I say, the individual keyword searches or the individual clicks or any of the individual campaigns that you’re running, right. So when you go and you’re looking at digital marketing, you have individual campaigns within that, which ones of those are actually profitable, and not just the totality of the entire project, right? Have the entire campaign that you do or the entire campaigns, plural that you do with your marketing partner, and lean on them and press on them and ask these kinds of questions. Which one of my marketing campaigns are the most profitable? Do we know that we can easily get there right with something like this to help us out?
Cory Miller 38:30
So thanks, Emily, she said this has been very valuable. Thanks, Corrine, Jeff, thanks, Emily for coming on and, and others that are here and spread the word, I just put a link to the where you can book Jeff for 30 minute free consultation, can talk to some great stuff here. We’ll be sharing these things again in different projects. But I love Emily comes from a great company called go WP comm they’ve got an outstanding Facebook group that’s very, very active. And we’re gonna be having her on the webinar for other venues here shortly. Real quick.
Jeff Meziere 39:08
Anybody can you can use this time right now as well. If anybody has a question that might not necessarily be related to the spreadsheet or campaign analysis. If there’s a question then let’s talk about it. Let’s openly talk about any other questions you might have around how could you measure or what would you need as far as an end? Give me some feedback. Is this spreadsheet valuable? Or is it missing something? What does that look like?
Cory Miller 39:34
Get your get your consultation right now. Absolutely. Simon says Greg drill down thinking. Thanks, guys. Thanks so much for being here. I know it’s late for you to over overseas in Europe. So thanks for being on today. Can you go back to the top there. So if you look on the spreadsheet Also, you can also say I want everybody to know The go to the very top place, you can click on that versus book a virtual CFO, you can go straight to the link to book, Jeff. So if you’re listening recording, go to the link in this page where you’re seeing the video. business value academy.com. By the way, business value. academy.com is where we talk about how this is one facet of what we talked about business value Academy, about increasing the value of your business is a thing is the best strategic way to grow a business, by the way, because you’re thinking about the person that could value not just the products you have in your company, but your company as a whole. So we invite you to do that. We’ve got annual and monthly subscriptions, you can do that.
Jeff Meziere 40:50
If you’re going to say it, you’re going to talk about the Business Academy, you got to give me the mantra, right? My business is my product. A potential buyer in the future is my ultimate customer. And building for value is the ultimate way to do strategy. I love it. I live it. I wholeheartedly believe that statement.
Cory Miller 41:21
Yeah, indeed, Simon asked, Can you make this bigger for project budgets? Can you give us a little bit? what you’re thinking there? What do you mean by that? Can you make this bigger for project budgets? Unless you if you understand the question, I’ll ask for some clarification. As I’m in there,
Jeff Meziere 41:41
bigger for projects, budgets… and scale, the only thing that I can think of is, you know, you can easily drill down the individual and turned into a spreadsheet that now that we understand these concepts, you could get all of these calculations and be able to drill it down, you know, project by project or line by line. So I think we have one that I just saw recently that had, you know, two or three individual campaigns within a Google Analytics, pay per click campaign. So they had two or three campaigns running. And you could, in totality, look at the individual performance of each of those. I’m not sure if that’s what we’re talking about. But we could definitely turn that into a spreadsheet. In version what is now three, right?
Cory Miller 42:30
Jeff Meziere 42:36
I’m just always, you know, I’m always looking for value. All right, I want to add value back to my clients as well. And just looking for what is it that’s important to you what’s missing from something like this in a spreadsheet, when you say I don’t know, or I don’t understand, or I’m driving to, you know, lead value, cost per lead, and then some sort of understanding of lead target. That’s what I’m looking for is establishing a budget and not just being so reactionary into it almost feel like it’s your tail wagging the dog when I’m having conversations sometimes. So I want to try to get the best value back to my client and answering questions. Right. So it all starts with a question of what does that mean? Well, what questions do we have? And we’re here to answer those today.
Cory Miller 43:25
So Emily, I shall talk about CPC campaigns, but imagine the same worksheet applies for any sort of marketing campaigns? Absolutely. In fact, Simon just says, thinking about direct mail. Absolutely.
Jeff Meziere 43:38
No, it’s easy, right? The only thing is you have to be able to track it. So if I’m doing a direct mail campaign, I sure hope by now that we have dedicated phone number or something where we know that this is where that referral was coming from right. They picked up and they dial the number that we could track or we could actually get the specific result for a direct mail campaign right an email campaign whatever the case may be, we know what it costs to send that out. We have a link and we know how many clicks we got right? We don’t have any phone calls we got out of a direct mail campaign. Yes, this can be used for any of those channels or mediums.
Cory Miller 44:18
We keep using CPC because you know the web’s the best advertising you know, communication channel ever invented and you can drill down really granularly but the next thing where we really originally started this was I wanted to know the content marketing, ROI so I create a blog post the common example i get i gave is in like 2008 I wrote an article on our theme site called what is FTP and it has to do with some of the blocks and challenges that time with WordPress and you know, around our product right or company and products. That one post over 10 years. Continue to get into Traffic, continue to get email signups continued to get purchases. And we originally started the conversation with, how can I quantify that that’ll be our next step with what we’re doing with this that I want to talk to Jeff about is we want to drill down, we’re open to ideas do I’m pretty sure that’s really interesting. How to kind of measure the activities, you do more in the eye because I come from the organic digital marketing side, mostly. And, but really, I want to get to, okay, we have a blog post. So my question for Jeff, next will be as my virtual CFO, Jeff, I want to figure out the return on investment for our organic digital marketing efforts, specifically, our blog post writing, that’ll be my question to Jeff. Now, Jeff, what would let’s just roleplay for a second, this is where our virtual CFO works.
Jeff Meziere 45:55
Yeah, I mean, the first thing is just simply the ability to be able to track that, right. So you’ve got an amount that you’re paying for a budget to someone to help you with that. Content Marketing development, right. So a lot of times there’s a monthly fee or something like that. And there’s a couple blogs that are being done per month, and general awareness at the top of search pages and things of that nature, right. That’s kind of what that content marketing is all about. And so you’re paying that fee that that fee, every time is racking up into additional monthly costs. But let’s say that that number is, I don’t know, throw a number out, say 1500 a month? Well, at the end of the year, you’re gonna have $18,000 in costs. Now, how do we come back and actually track the number of clicks within that, within that content at various any of the individual types of content that we’ve put out, right? And the direct sales related to people who entered our cart, and actually completed a transaction, so we can get those numbers, we can track that. And again, then that cost sits out there. So what did it cost you, Cory, to actually develop that, that one blog post that you’re talking about?
Cory Miller 47:11
Yeah, so we could I use my prior business experience, we could have we paid a freelancer, I want to say $75 an hour. So a blog post would probably cost us about, you know, four hours for five hours, maybe for 1500 word blog post, I’m estimating off a memory. So level of effort for a blog post will probably be around, you know, I’m gonna guess like five 600 bucks, maybe all told, plus, then we’ve edited kind of some back and forth, publishing all that kind of stuff.
Jeff Meziere 47:47
Okay, so you’ve got $600 in costs. And you’re able to even today, as you mentioned, like, Oh, hey, back in 2008, I think is what you said. So 2008 was your cost that was expended. But you still have ongoing revenue from that campaign. It didn’t just end the day that you hit post, right. It didn’t end an expired. That’s the beauty of the internet, right? It didn’t just expire 30 days after you published it. Correct?
Cory Miller 48:13
Right, exactly. It’s set there. That’s the beauty of organic digital marketing.
Jeff Meziere 48:16
And you are able, and you’re able to track the sales that came from that correct. Like, you know, how many clicks on there?
Cory Miller 48:24
so using Google Analytics goals?
Jeff Meziere 48:26
Yeah, those things right there is a cumulative number where the cost associated with this is still the $600. And the revenue is continuously is exponential, which drives down the, quote, cost of the lead, right every time you get an additional lead, right?
Cory Miller 48:44
it kind of gets that’s the beauty of organic, he gets amortized over the life of that as long as you know, you can join with search rankings. But if you get Google unless you’re right, if you get Google Analytics goals and event tracking, connected you can ongoings beauty of it. Hey, Simon has a question too. This is a great one. How do you work out the lifetime value of a customer-generated from a blog post or direct mail gift? For instance?
Jeff Meziere 49:09
And I’m seeing a second question there too, which is, that’s an interesting question. should get a lifetime value be dependent on the source of acquisition? The answer is no lifetime value of a customer has nothing to do with where it came from lifetime value as a matter of fact. So lifetime value is the average time that my client would be with me if I am in a one time sale transaction, and I never see a customer ever again and they buy one thing for me for $100. my lifetime value of that customer is 100 bucks, period. Now, as I then get into well is this customer a monthly subscription, right in a SaaS model or something? If I’m a monthly subscription, that $100 is $100 times the average lifespan of a customer being willing Me. And again, if this is the only product, so if I’m in a subscription model, hundred bucks a month, is the lifetime value 1200? No, not if they continue to renew. So I have to use my data from the history of my company and find out how long is a typical client with me? Right? If I don’t know that, then I’m only looking at that first month sale. But I might be willing to spend a lot more, if I know that my average lifespan of a customer is say three years, right? So again, let’s just use the same example. One transaction is $100. But in a monthly subscription model, it’s $100 a month, times 12 months is 1200. And let’s say the average customer is with us for 36 months, right three years before they actually drop off on average. So I’m at 30 $600, in total cost. So how much am I now willing to spend knowing that I can retain that customer in my business practice for 36? months?
Cory Miller 50:58
So in only what’s awesome about your business, is you’ve got recurring revenue. And you probably because your business has been around for a while, know what your renewal rates are probably most likely and Jeff, correct me on all this, okay. But to get to that is, you know, how long does the average customer stick around, get the number and you say, Oh, it’s it’s two years, you know, two years times, whatever your annual or monthly is? And then say, okay, does that bench test is that kind of for real, like, if we get one customer, they’re likely going to stay with us for two years. And you can just, you know, see what those that customer lifetime is. Now, this brings up some stuff we’ve been talking about, by the way, Mr. Our churn and all that and battling those type of levers. But now you’ve kind of got narrowed in on customer lifetime value. And I’m asking Simon specifically, because he asked what they sell to. So like, you know, let’s take business value Academy, for instance. So we sell a monthly and an annual product. So we were very early in this. So we’ve only got a couple months of data. But we can start to kind of track that. In another project, I work on his digital marketing kitchen. So we’ve got a little bit more time history to start to see when turn heads when new renewals and all that kind of stuff hits. By the way, the holy grail of business is recurring revenue, subscription revenue mailbox, many people call it. So now Jeff, and I kind of like either butchered customer lifetime value, or what’s your thoughts on that?
Jeff Meziere 52:34
No, you’re absolutely spot on. I mean, that’s that is lifetime value, it is the customer, an average customer. And the more data you have, the bigger sample that you have, the easier it is for you to calculate what a quote, lifetime value is, right? So, I look at that thing to just think through it, just think through this model with me $100 a month, but bear with me for three years, okay, that’s 30 $600 in cash, and I’d be willing to spend at 30%, or 35% number that we just we were talking about earlier, I would only be willing to spend $35, if I just right had blinders on. And then the hundred dollars, I’d only be willing to spend 35 of that to get a new customer. But to be honest with you, I know that they’re going to be with me for three years. So it might cost me more money up front. But in the long run the lifetime value of that customer, I could actually spend 1000 bucks. And I have to come up with the cash today I get it. But long term of a company perspective, I’m eventually going to get that 30 $500. Now if you go ask somebody like Warren Buffett, right? Would you spend $1,000 to get 3500 over the next three years, he will do that? 100 times 1000 times, right. That’s how they scale businesses. That’s how guys savvy business owners, I say guys and women, right, but my point is business owners. That’s how you scale a business, right is to think through that kind of thing right there.
Cory Miller 54:06
So Emily said, right, we have a good idea that our lifetime value Rukh Khan, but I never had thought of looking at it from the angle of customers coming for our ebook average lifetime value of x while our referral customers average lifetime value of x. This is great. Okay, so like, what we would do here,
Jeff Meziere 54:23
hold on, first off, I love it. Right, because you’re already starting to ask the next question, right? Yeah, just because I look at something in totality. And I say my business is doing great, right? Yep. Cory, I know you for a fact, Tom. I hope I’m not throwing you under the bus. I know you for a fact, when you first started with your CFO for hire that you did years ago, that was one of the questions that you came up and you actually ended up doing some cost center analysis. Do you remember this conversation we had? And you said oh my gosh, I had no idea that one of my products was actually losing money. Right? Yeah, even buries everything offline. Like the conglomerate. We got so much money in the bank. We’re doing so well, we got a multi million dollar company, don’t even worry about that one product that sits over there that Hey guys, did you know that we’re actually losing money in this product? We need to think differently about how we either sell it or scrap it.
Cory Miller 55:13
Yep. What I like about your thought here, Emily’s you’re thinking about the channels or the avenues for in value. So this and to give you some context for this whole conversation with Jeff was, I have a client that’s a treatment center. And the CEO told me when people hit our contact form, it’s like 6% conversion rate, and I go, I told her I go, I said, That’s web wise, that’s pretty good. And they’re selling a $30,000 product, right? In addiction treatment. But she goes, Yeah, but when people call, we’ve got a 32. No, it’s like 40 to 50% conversion rate. I said, Okay, now that’s different. Now you got actionable data as a marketer, like you are Emily to be able to share with team and go, Hey, if it fits, who’s answering the phones? How are we? You told me about a friend you have that like they were complaining that the people operating? The phones are doing terrible, right? Well, if you’re measuring conversion rates, you might go fun, doesn’t do terrible, but that shouldn’t be if somebody picks up the phone and calls like, you should be able to kind of close that. Right. So you now you have a way to go back and start to tweak the dials of your system and say, oh, man, so the conversation I had with addiction treatment, the CEO, I was telling Jeff about was like that reorients our marketing, how do we get more and better phone calls? tweak the system? Now stream? Can we increase that conversion rate even more? How do we better weed out some of the contact form, you know, inquiries and suss out the better ones? And then get those in the phone calls? You know, for instance, like your site, I think you all have a book a calendar thing and be curious to see like, how does your ebook convert to a customer? Or is that the primary mechanism? And then they book a call afterwards? You know, you can go down that rabbit hole forever. But I just think about that’s pretty exciting for you to even be like really thinking out of this, thinking through those things. Because it’s it this is the good data that we get,
Jeff Meziere 57:21
because let me even challenge that a little bit further. Let me say this. And let me just add some value back here. Emily, I think you and I Cory have talked a lot about the map messaging audience and product, right? So your product
Cory Miller 57:30
… and Systems…
Jeff Meziere 57:30
…it sounds like your product is the same. But you have somebody who is sending them as a referral, versus somebody who comes in and goes from the eBook angle, right? The challenge here is how do you bridge that gap? And what is being told to the types of customers that are coming from referral, versus the ones are just going the eBook route? How do we communicate to them and bridge the gap from what they’re getting to buy the eBook into what else it is that we do so that we increase that lifetime value? There’s, there’s a gap there somewhere and I can’t fix that for you, I don’t know what it is. But the messaging is not the same, what is being told to a person who’s coming to you from a referral. And again, that’s loyalty. You know, that’s, that’s all of the goodwill that you have and brand recognition and all the wonderful things maybe that’s testimonials, whatever the case may be, but again, I think there’s the challenge in the end the opportunity is to try to bridge that gap.
Cory Miller 58:36
I wanted to point out Simon mentioned he’s selling English exams and I think Lisa has a digital product as well there’s a lot of us that have digital products and I hope you all come back for the next webinars we’re going to be having on these subjects because I geek out on marketing where I really talk about that unless I’m pulling my buddy Jeff my own freeze virtual CFO is saying let’s let’s drive down metrics and good decision making but I do all my marketing stuff Simon knows this because he’s a members digital marketing kitchen calm but I’m excited to do more of this we’re going to actually have Jeff over on the kitchen very same to do all this again for our marketing crowd specifically over there. Emily says love it y’all are getting really getting the gears turning I’d love for you to hear back I know we’re connected and you can on post that as Emily you can share your results because I’ll we’ll drive those back with Jeff and we’ll keep this turning. I’ve turned that Jeff into like I think it’s a full full obsession now in the digital market and I can’t wait to continue to share this all our takeaways with you all right, well, hey, we’ve hit the top of the hour Hey, Thanks Jeff. This is awesome. I hope you got the link. Come visit business value Academy comm if you’re an entrepreneur founder or you know someone share that because what we Drill down every month, twice a month, we have a QA for an office hours where we just talk about business value. Keep that on first and foremost. And then we have a topical conversation, or we talked about one of the 1110 or 11 key value key levers. I’ve got to get better at this. Jeff. You’re gonna zing me afterwards. You’re like Cory, it’s 10 number, but like, are the key levers that drive business value. That’s the conversation we’re actually having tomorrow. We have these twice a month. It’s really great. We got a slack community that’s pretty active. So hope everyone will join us there and thanks again, Jeff Meziere, for a great presentation today.
Jeff Meziere 1:00:35
You bet. Thanks for having me, partner.