WEBVTT

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Remember the Jim Secrets podcast where you talk about how to get more customers, how to make more

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per customer and how to keep them longer, and the many failures and lessons that we have

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learned along the way.

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I hope you enjoy and subscribe.

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I wanted to bring up something that's very important for marketing, all right, so Jim

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once has been focusing a lot on acquisition.

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We always have, but especially, I mean, 2020 that's our entire focus for our community.

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What I wanted to do is dispel some of the myths, dispel some of the myths, or I don't

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know, stuff that people talk about that really just isn't important for marketing.

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And so I see this stuff all the time you do too, so and so got a thousand leads in two

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days, right, or so and so got one dollar leads.

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And so the, where a lot of people will direct your attention is the cost per lead, right?

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And it's usually because it's the top part of the funnel.

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And it would, it would almost be as ridiculous as saying so and so it was getting one dollar

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clicks, right?

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So and so it was getting five dollar cost per impression, right, cost per eyeball.

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And so the further up you go in the funnel, and by funnel, I mean, from like click all

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the way to customer, the further away from the truth you really get, right?

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And so the only number that really marketing, sorry, that really matters in marketing

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from an acquisition standpoint is cost per acquisition.

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And now let's say a secondary number that matters or the two other numbers that there

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will be subsets of that will be upfront cash value and then lifetime value, all right?

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So those are kind of the three big ones that you're looking at from an act from from from

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marketing, right?

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Now here's one of the mistakes that a lot of people make and a lot of agencies know that

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life experience business owners will say these things or maybe the agencies don't know

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this, right?

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And so they'll say, hey, that I just literally got this example from someone in our community.

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They were getting solicited by a marketing agency and they're like, hey, we got, you

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know, so-and-so's lead cost from $30 lead to $20, right?

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And they were marketing that as a, you know, really great outcome, which, you know, is

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great, whatever, right?

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But the point is that the cost for the marketing services was $2,000 more.

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And when those marketing services were taken into account into the cost per lead, now I'm

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still not getting to the major stuff.

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I'm just saying, at least showing this, for the cost per lead, the cost per lead went

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up to $45 lead.

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And so if anything, for the customer that was literally their testimonial, they had actually

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made their situation worse, right?

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And so this is kind of where you start unpacking the data and thinking like, does this really

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matter and why is this important?

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And so I'm going to walk through each step real quick and then I'm going to tie to why

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the last number of matters, which is cost of acquisition, right?

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Is that first you have impressions, which is your cost per eyeballs, which depends on whatever

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media source you're using, whether it's Facebook, Instagram, whatever, you're getting

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charged for eyeballs, right?

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From there, you have clicks, right?

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And that's when people talk about CTR, click through it, especially unique click through

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it, because that's what matters.

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How many unique people are clicking on the link to get to your page, right?

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It's a bit of the next piece, all right?

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So now that you've got eyeballs, you've got a certain percentage of those eyeballs that

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click uniquely, because one person clicking five times doesn't really matter and that's

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why these data points can be deceptive.

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Oh, we're getting $1 clicks.

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It's like, well, what if people are just clicking all the time, and if you have bots that

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are clicking, right?

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Which is actually super common.

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And then for there, you have your opt-ins, right?

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Your leads, and you have conversion rate on the page, what percentage of the people are

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opting in.

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Thank God.

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And here we are.

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And we have a lead, right?

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Now, from that lead, you then have a schedule rate of some sort, if you're doing appointments,

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which most service-based businesses that are listening to this are doing appointments

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of some sort, right?

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You have your schedule rate, and then you have your show rate, right?

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And then after your show rate, you have your actual sale itself.

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So how many people of the people who are walking are actually enclosed?

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And then from that close, you have your upfront revenue, which cash is collected upon the

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first transaction, and then the lifetime value, which is what you're expecting to collect

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over the life of the customer, right?

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And so as a rule of thumb, just so you guys know, you want to have a three-to-one or higher

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LTP calculation, which means a lifetime value of the customer to the cost of acquisition.

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Now, that's what most businesses say is like, if you can't be above three, the business

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probably won't work.

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I like to be much, you know, much, much harder than that.

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Our gym's one average, you get five and have to one only front end, not even including

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the lifetime value.

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Now, the difference is that some businesses are higher, higher profit than others.

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And so the actual lifetime value is taking off of gross margin, okay?

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And so that means the cost, so like, let me give you an easy example.

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So with meals, right?

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If we're selling a meal, I'm just going to use easy numbers here.

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So let's say we sell a hundred dollars with meals.

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And let's say the cost of those meals, hard costs of just food, labor, et cetera, right?

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For those meals, let's say is $60, okay?

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So $60 of that is just hard costs, right?

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And then now we have $40 left over, which is our gross margin.

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And so if we know someone's going to make four of those hundred dollar purchases, the

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lifetime value is not $400, but four times the $40 that's left over, which is going

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to be $160.

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And that's what we do our ratio of three to one off of.

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And so when you're looking at your gym and you know what your gross margin is, which

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should be, you know, if you're spreading out your, spreading out your rent between all

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your classes and your cost per trainer for all the, you know, for all the classes, then

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you're going to get your gross margin for fulfilling the service, right?

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And so whatever that gross margin is.

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And then from that, that's what you're going to multiply out in order to determine whether

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it's profitable for you to acquire customers or make sense for this market keeping, right?

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Now, back to the original premise.

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The only marketing number that matters is cost of acquisition, right?

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Now, the reason I had the two other numbers, which is upfront cash and lifetime values,

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because let me give you a counter example.

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Let's say it costs me $10, right, to acquire customer that is worth, I don't know, let's

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say $40, right?

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Just for simple math, all right?

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Now, let's say I get zero of that money, and I'm going to get that $40 over the next

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year.

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I have to have a lot of money up front, I don't have a capital in my pocket, maybe outside

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funding, et cetera, to be able to spend $10 to make that sale.

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Now, let's counter that with a different promotion.

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So right, we're trying to attract a different type of customer, let's say it's a personal

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training customer, right?

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And let's say it costs us, I don't know, $500 to acquire this customer, but we immediately

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get $1,000 or $2,000, and we know that this person is going to be worth $10 on average,

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right?

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And so even though it might cost us more required these customers, we're actually making

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more money overall, and we have immediate cash value.

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And so this is where it gets really interesting, and to like the different shades of marketing

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why one number might not tell all, right?

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So back to the original thing.

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Most of the nation real quick, if you are a business owner that has a big, old business

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and wants to get to a much bigger business, going to $50, $100,000 plus, we would love

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to talk to you, and if you like that, and would like to hear more about it, go to acquisition.com

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and you can plan anywhere on the page and talk to one of our team and see if we can help

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you get there.

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Would you look at a marketing agency, oh, we're getting $20,000, $10,000, $10,000, $10,000,

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yeah, probably not.

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We're getting $1 clicks for what, for what promotion?

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How do we know they're unique?

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Are they, like, what are people clicking on, right, as a picture of hot chick, or as a

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picture of you just explaining your program, well, probably the, you coming to the, explaining

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your program to be more qualified click, there might be fewer of them, but the likelihood

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that that click becomes a customer as much higher, right?

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And so then once you have your leads and then you have a certain percentage of that schedule,

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okay, well, which is my cost for schedule, all right, this is getting a little bit closer

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to home, this is becoming a little more interesting, a little bit more valuable, right?

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And then even further along, what's my cost per show, right?

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And so for me, I think, if I'm thinking and breaking this down for, like, if I'm talking

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to a gym, which most of you guys are, or we're breaking more service, whatever, I'm going

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to be looking for marketing at cost per show, right?

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Now big picture, you have to know what promotions you're learning, right?

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If you're running, you know, a 14-day free trial, compared to a 12-week ultimate transformation,

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you're probably going to get a different cost per show on those, but you might close

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on higher percentage of the people who are coming in for 12-week, and you might close

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on a higher average ticket.

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And so that's where the ratio is of how much of costs, compared to how much cash up front,

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compared to life to value, comes into play, and that's how you can really make analysis

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of whether or not your marketing is working for your business, right?

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And so when you take all this stuff into consideration, like, the only objective I had for

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this entire piece of content is just think a little bit more beyond the headline when

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someone says, I'm getting $1 elites, well, how many of them are scheduling, of the people

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that are scheduling, how many of them are showing, of the people who are showing what

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percentage of those are buying and what package is, right?

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And so then it gives you far more truth into what's going on, and those are the types of

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questions that you want to ask someone if they're telling you or they're spouting out

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individual stats that aren't within the larger context of an entire campaign or really

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even an entire business model.

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The reason that I'm so obsessed with this stuff is because I continually try and I'm trying

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to, obviously, improve our business, but also the businesses of all the gyms that we work

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with, et cetera, is that, as I've driven, I think that's the word, right?

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I've done super deep dives into the data on the out one side of the shop, which is all

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the software that we have that automates lead nurture, so that means we get leads to

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show without any human interaction.

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And it's been an incredibly long and incredibly, incredibly deep learning process for me,

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because there's so many more variables than I initially thought.

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And that's because in a small data set, you can see all the variables when you see

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across large data sets, you have a lot more that come up, right?

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The different markets, like people in New York, compared to people in the Midwest tend

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to show up less for appointments, right?

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There's nothing you can do about it.

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You shouldn't really worry about it, but it's just something that is a data, it's a

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variable, right?

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Now, other interesting stats and the things that affect this a lot, believe it or not,

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are actually counterintuitive or maybe they are intuitive.

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But a lot of times, our community, for example, and this is something that I even espoused,

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and this is why I'm publicly rescinding that, it's like we started running ads with food,

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right?

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Because we're getting shit loads of clicks, right?

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And we were pushing them over short squeeze pages, short opt-in pages, so just like

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maybe on our email, really no description, right?

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The thing is, is that short opt-in pages tend to outperform longer opt-in pages, in general,

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not always, there's always examples that are different, but in general they tend to outperform.

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Now, here's where it gets interesting.

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The lead quality, as measured by throughput, from the point of turning into a lead to turning

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into a show, and sometimes the three to five X higher, based on what they saw before

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they opted in.

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And this is the stuff that I'm learning because like Alan starts at the point of opt-in.

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Once you get the name from right, that's when Alan starts working them to get them,

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schedule them to get them to show, right?

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But I'm seeing these massive differences between two gyms, even in similar markets, even

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running similar promotions, right?

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Two of them are running, let's say a 28-day transformation, or a month, whatever, right?

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Now one gym, let's say is running food picks or picks of a hot chick, right?

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And then they're going to a short squeeze cage.

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If that's what's happening, that person might get much cheaper leads, but they might not

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get more people in the door.

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And that's what you have to be measuring off of when you're looking at it.

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And then gym number two might have a picture, you know, might have a picture of people

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working out, or might have a video of people working out with an explanation at the end.

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You might have a decent amount of clicks from that, but then going to a page that has

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more explanation of the program, the benefits, et cetera, outlets into the pain that someone

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might experience.

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Now people are more aware, and the offer becomes more relevant.

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And some people might think, I would argue wrongfully, well, I just want to get as many

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leads as I can.

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The thing is, if you tell someone more about your program, and then they choose not to

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opt in, that's a good thing.

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They're segmenting themselves out and saying that like they weren't actually interested.

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And so that way, you don't waste your time and effort on them, right?

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And so if you have a higher proof, like the people who are opting in, even if you have,

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let's say half as many that opt in, but of those half, they are three times more likely

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to show now you have a marketing campaign that is working better than kind of what a traditional

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clickbait looking campaign might be, all right?

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And so when you're making your marketing, measure what matters, measure and look as close

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as possible to the actual sale itself, and how much revenue you're able to generate

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per show, because that's going to take into account your closing rate.

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So if all of a sudden people coming in from one promotion are closing in a much higher

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percentage than people coming in from a different promotion, then that's definitely going

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to affect whether you think that promotion is good or not, right?

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And so you have to measure as close to the sales possible, because that way you're going

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to have a revenue per show, and then that way you can back it all the way to your campaigns,

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and then you'll be able to see whether these campaigns are actually better or not.

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And if you are getting talked to by, or someone's trying to talk to you about marketing,

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and they spout off like, oh, we've got an 80% conversion on our opt-of-page.

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What's the offer and what's the traffic, right?

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We're getting, you know, whatever, you know, we're getting $2 cool, but like, what's the

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offer, what's the traffic, you know, like, what's, give me the, give me context, right?

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And so that is all I would implore you to do.

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So if you're thinking about marketing, make sure you're measuring as close to the sales

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from the possible.

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Taking into account the three big metrics, one is cost of acquisition, which is always

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going to be king.

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And then the two submetrics, which is going to be immediate cash value and lifetime value

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of the customer, which you want, that's to be at least three to one for your gross margin,

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not from your total revenue collective, big key point.