May 21, 2024 • 16 mins
First, commit to running your business like a business even if it's just you.
Second, define what marketing is and what it is not.
Marketing is actively seeking qualified leads to sell your coaching packages or courses to.
Marketing is not...
- Redoing your website
- Rebranding
- Creating a new logo
- or anything that you can't directly attribute to a sale
You're going to spend time or money or both growing your business.
Be intentional. Be nimble. Be ok with less than perfect. You can get fancy later.
DO NOT spend "grocery money" on marketing.
How to allocate your revenue using a slightly modified version of Profit First by Mike Michalowicz
For most coaches or other businesses doing under $250,000 in revenue take the following percentages and separate them out each time you get a sale.
- Profit - 5%
- Taxes - 15% (adjust according to where you live)
- Owners Compensation - 50%
- Marketing - 10%
- Operating Expenses - 20% (this is what you have left over not what you pay first)
DO NOT pay your operating expenses first. If your operating expenses exceed 20% then you're going to have to cut something out. You don't cut any of the other ones.
If your revenue is over $250000 then you'll adjust down your owners comp and up your operating and/or marketing.
There are charts available based on revenue for suggested amount. Google is your friend here.
See you next episode.
If you're over 40 and late to the entrepreneurial game then subscribe to the Marketing With A Twang Newsletter. Simple, actionable ways to build your business without overwhelming you.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hey everybody, this is the Marketing with a Twang
podcast.
I'm your host, ben Blackman,and on this episode we're going
to talk about how to budget foryour marketing.
Here comes episode number two.
Alright, alright, alright, it'stime for Marketing with a Twang
.
You're down home no BS onlinemarketing show, so pull up a
(00:22):
chair and ease on in with yourhost, ben Blackman.
Okay, welcome everybody toepisode number two, and actually
I'm excited for this episodebecause I don't think we talk
about this enough and I thinkthat most of the things that
I've seen out there over theyears, when it comes in terms of
(00:42):
marketing, and specificallywhen it comes in terms of
running ads and things like that, is they're very vague.
They don't really give you anydefined numbers, and sometimes
it has to be vague, likesometimes there's a lot of stuff
you just don't know, especiallywhen you first start.
So the first thing I want tosay about this is you've got to
(01:03):
run your business like abusiness right now.
Stop waiting.
It's so funny that I wasrecording this.
I actually didn't know I wasgoing to record this today, but
I had just gotten done, justwriting out a few thoughts that
were going on in my head.
I titled it Acting Like aBusiness Owner.
The first thing that I put downwas talking about scheduling
(01:24):
your time, which I do, so Irealize this is a show about
budget, but it's along the samelines.
You'll understand in a minute.
And the next thing was put yourhead down and work, which I
think is hugely important.
I use a tool called Focusmate,where they kind of match you
with people all over the worldand you co-work for 25 or 50
(01:44):
minutes together and you justfocus on one task and the other
person focuses on their task andyou check in at the beginning
and the end.
So I use that a lot and havefor several years, or a few
years anyway.
But the next thing I put downwas keep your books, and what I
mean by that is that when itcomes to your finances and
(02:05):
budgeting and everything, it'sgreat to have a bookkeeper I
have a bookkeeper, I have anaccountant Fine, that's great
but it does not alleviate yourresponsibility from paying close
attention to it, okay, andespecially when it comes to
budgeting for your marketing.
So let's talk just a little bitabout what marketing is not.
(02:26):
Marketing is not redoing yourwebsite.
That's not a marketing budget.
That's a fun thing, because youwould be tough to find how many
sales.
It would be tough for you tofind how many sales came back to
your website.
That's where it originated.
That's what made the difference.
Now you could argue that whenpeople were researching you
(02:49):
before they purchased, that theydidn't like your website for
one reason or another.
But again, you're not going tobe able to quantify that for the
most part, and you're not goingto be so.
If you pay a lot of money toredo your website, you're not
going to be able to tell thedifference that it actually
helped you either.
That's, that's the whole thingwith that.
Now, I'm all about it lookingnice and being functional and
(03:12):
all that stuff.
Yes, ok, that that shoulddefinitely happen, but I don't
separate out money just for thatpurpose in my marketing budget.
Rebranding is the same way.
I have a client.
I love her, love her.
Actually, I love all my clients.
Frankly, I just do.
And I mean she must come upwith a new branding scheme and
(03:34):
logo every month, few months,you know.
I guess she just gets tired ofit and that's her thing.
You know, that's her thing andthat's cool.
So what I'm going to suggest isnot worry about that, or at
least not use your marketingbudget for that.
Marketing isn't.
It's anything that you can'tdirectly attribute to a sale.
(03:56):
That's what it's not right.
If you can't tell that you gota, you're getting sales from it.
It's not really marketing in myestimation.
So this is why you've got tobudget for your marketing,
because you're going to do oneof two things You're going to
spend time or you're going tospend money.
So you've got to budget itcorrectly.
So the other thing is budgetingnow, before you might need it.
(04:17):
So if you're not running ads,let's say, and you think that
you're going to be at some point, go ahead and start budgeting
for it today, not later.
You don't want to wait untilyou need ads or until you're
trying to scale or be moreconsistent with your sales and
then start budgeting for it.
You want to start today andwe're going to talk about that.
(04:38):
So I just want to kind of runthrough this real quick, and
that might be harder toconceptualize right here on the
podcast, so I'm going to giveyou a download.
So if you go tomarketingwithatwangcom and sign
up for the newsletter, I'll makesure you get away to get that
check.
This is just a little checklistor a little sheet for this.
(04:59):
So the simplest way to do it isand I use the Profit First
modeling so if you've never readProfit First, please do.
It's a game changer.
It was for me.
I mean, I can't even tell youhow much more money I'm able to
not only make but keep becauseof that book, and in fact I
usually send it out to myclients, like when they sign up
(05:20):
with me as a client.
That's one of the things I sendto them.
But I do do a slight variation.
So I call it profit first plusmarketing, and so it'll make
sense, hopefully in just asecond.
So if you think about how muchmoney you're bringing in your
revenue, that's 100% right.
That's the total amount.
So it's $10, or whatever thenumber is, let's just say ten
(05:42):
thousand dollars.
What you want to do is allocate,have allocations for other
things that you're wanting to dowith your money.
So the first thing is profit.
You want to hold back somemoney for profit.
I'm not talking about payingyou, I'm not talking about your
salary or whatever.
However you're going to do that.
I'm talking about pure profitthat you can distribute later
(06:03):
however you see fit.
You can do that quarterly, youcan do it monthly, you can do it
yearly, whatever you want, butyou want to pull out some money
for that every time you get paid.
So and I reconcile this once aweek in my books, like I go
through and make sure that Iallocate the money once a week.
But profit's usually around 5%.
Depends on how much yourrevenue is.
(06:24):
But we're going to kind of keepit easy and you can adjust these
numbers up and down a littlebit, but it has to have
something.
It's not going to be zero.
So we'll say 5% profit.
So basically out of $10,000,that's 500 bucks.
Then you want to hold out anamount for taxes, because you're
going to pay taxes.
We don't want to get on thewrong side of that, we don't
want to get behind on that,because you never get caught up.
(06:45):
It's just a nightmare and I'vebeen down that road.
And so we say 15 percent.
Now you know you need to factorother things into that, right
where you are, and you know youknow whatever state you live in
or wherever you live.
So you just want to adjust thatup or down as necessary, but
just say 15%.
So that'd be $1,500 out of the10,000.
(07:08):
The next thing is owner'scompensation.
So that would be let's just sayit's 50%, so you're going to
keep 5,000 out of that.
So that's how much you're goingto pay yourself that month.
And then the next number ismarketing 10%.
Now you know, some people can'tdo 10%, right, they need to pay
themselves more owner'scompensation.
(07:29):
So they need to do 55% there.
And only, do you know, uh, uh,5% marketing.
That's fine, if that's the wayit has to work out.
That's the way it has to workout, but don't make it zero.
Okay, hold back money everymonth and it'll accumulate over
time.
If you're not spending it,it'll accumulate.
And then what that does is, ifyou do it exactly the way I
(07:49):
suggested, that leaves 20% leftover.
So what's that for?
That's for everything else,that's for all your operating
expenses.
So what you don't do when itcomes to marketing is you don't
pay out all your expenses,including your marketing, and
then whatever's left over, youpay yourself.
No, that's not running abusiness, that's letting a
business run to you.
(08:10):
You've got to allocate thisstuff out.
And then if you're like well,20% is not covering my operating
expenses, great, then you'regoing to have to cut some stuff
out, right, I mean, that's allthat there is.
So you're going to have toreally take a hard look at what
you're doing and how you caneither generate more revenue or
cut out expenses.
(08:31):
But you're not going to cut outwhat you're getting paid, what
you're paying in taxes, whatyour profit is and what your
marketing is.
So it's got to be somethingother than that, all right.
So that's just kind of high,high level budgeting for the
business itself, ok, and how youget a marketing budget.
(08:51):
So then it comes to how do youallocate that budget once you
have it.
So let's just say that nowyou've, you know you've been
doing this for a few months andnow you've got five thousand
dollars to spend.
Before you know it, you knowyou've got five thousand dollars
that you can spend on marketing.
Great, that's great.
How do you budget it?
So it depends on what you'regoing to do.
If you're going to run ads, thenthe way that you budget that is
(09:12):
based on which ad platformyou're going to go with, and
it's likely for most people atleast, as of this recording,
going to be Facebook.
That's the most likely one, andmainly because the entry point
is easy and you can change fastand there's just a huge amount
of information out there on it.
(09:34):
So you know you're not going tobe fumbling around trying to
figure out Rumble ads orsomewhere else you know where
you know, which is, just youknow, probably not going to be a
good place.
So now you do want to make surethat you're matching it to your
market, though, right?
So if your market, for somereason, isn't on Facebook and,
frankly, everybody is but if youfeel like they're not, they
(09:54):
truly aren't Then you have to goto a different platform.
You're likely not going tostart on LinkedIn, not because
your market's not there.
It's because the barrier toentry is so high.
It's hard to make that workunless you have a super high
tech product or service and youhave enough money to spend on it
to get those sales.
(10:15):
So you're going to allocate aportion of this money, this
$5,000 or whatever it is, toFacebook, and then you're going
to say, okay, now what?
What am I going to do with,like what?
What's my intention here?
Well, maybe your intention isto have a lead magnet.
Okay, so you want to have alead magnet and you want to get
people into your funnel, andonce they get into your funnel,
(10:35):
then maybe you get them to booka call and then once you book a
call, you close a sale with them.
Great Fine, sounds good.
So the lead magnet you want tokind of clearly articulate I
don't know why I said it thatway.
You want to just put down howmuch you're willing to pay per
lead, and you may not know, youmight be like I don't know what
(10:58):
I should be paying per lead.
Susie's paying a dollar andJohn's paying $25.
I don't know what I should do.
And that's really good, likeeverybody starts there.
And when I was talking onepisode one about comparing to
your neighbors, that's kind of.
My point is that you don't knowwhat other people are doing and
it's not really how much peopleare paying for leads.
(11:18):
I used to see that all the timePeople were just boasting about
how low their lead costs are,but they really didn't talk
about their sales as much.
You know, they're just talkingabout how many leads they were
getting, you know.
And then then, if they did talkabout leads, they were talking
about their warm market, notcold traffic, or you know,
there's always something I'm notsaying people are trying to
deceive people.
(11:38):
I just mean that that we don'talways get the whole story, and
so you have to just be verycautious when you hear stuff
like that.
So if you don't know, right, ifyou're just like I, have no
idea, then just pull a numberout.
Let's just say it's $10 a leadOkay, it's an easy number $10 a
lead.
Okay, 100 leads $1,000.
That's what it's going to be.
(12:00):
Know that you're going to spend$1,000 out of that $5,000.
Okay, you got 100 leads in.
Now what?
Well, how many can I get tobook a call?
Let's just say it's 5% Okay, soyou're going to be able to get
five to book a call.
Great, five book a call.
So you just spent $1,000 andyou had five book a call.
That means it's $200 a call andthat's what it costs.
(12:23):
Then $200 a call, and that'swhat it costs.
Then you close one, okay, oneout of that, and so it costs you
$1,000 to get one sale.
Now, if you're selling a lowticket item, that's not going to
work, is it?
There's just no way you'regoing to make that work.
If you're selling a high ticketitem let's just say you're
selling a group coaching at$3,000 and you paid $1,000 to
(12:43):
get the sale does that work?
I don't know.
I don't have the answer,because only you know what you
have to make Now for most highticket coaching.
That does work, that's good.
You're talking about three toone, that works.
But if you were thinking, no,no, no, I need to get 10 to one,
well, that's not going to work.
(13:04):
And, by the way, I might addthat that's probably unrealistic
to think that, uh, that'susually not the way that works,
but it could.
I'm not saying it couldn't.
So now you know at least whatthe budget should be.
You know what you should bewilling to spend and where you
need to focus your time.
Cause, because you could do acouple of things there.
You could say, okay, well,since it caught, you know I had
(13:26):
$10 a lead, but I'd like todouble my leads but not spend
any more money.
Right, so I'll spend anotherthousand dollars, but I want to
double my lead.
So I got to cut my lead costsin half.
So I have to figure out a wayto get the same qualified people
to opt in at $5 a lead insteadof 10, right.
So then you go back to to optin at $5 a lead instead of 10,
right.
(13:46):
So then you go back to.
Okay, look at my ad.
Is my ad performing right?
Am I getting enough clicksright?
Am I getting enough eyeballs onit?
Am I paying as little as I haveto pay in order to get these?
Is my landing page converting?
Am I getting enough people toopt in on my landing page?
And then, am I getting enoughpeople to open up my emails,
right?
Am I getting enough people toopt in on my landing page?
And then, am I getting enoughpeople to open up my emails?
(14:06):
Right?
And am I getting enough peopleto click on my calendar?
And am I getting enough people?
What can I do there to get morepeople to book, to entice them
to book?
And so you have to analyze allthose parts to see if you can't
bring your lead costs down.
Now, the simplest, easiest wayis to try to work on your ad.
I mean, it just is.
It's just the simplest andeasiest way, but that may not be
(14:27):
the issue.
So you have to keep track ofall your numbers.
But once you do, once you getit dialed in, once you know the
number, then you're ready to go.
Okay, that $5,000 that you thatyou, you know held back is not
extra like money.
It wasn't grocery money, you,you held it back for this
purpose, for testing, forfiguring it out.
(14:48):
I mean, I just talked to a guyyesterday client been a long
time client actually but he hada different business that he
didn't work with me on themarketing, he had a it's a long
story, but anyway and hecontacted me yesterday because
he wanted to do a couple ofdifferent things and the
marketing company he was workingwith before told him they were
like look, if you're gettingsome sales in, I mean you know,
(15:10):
at this number, you've got tofigure out if you can double
that budget and triple it.
I mean you're not going to doit, no, until you do it, which
I've been telling him that for awhile, but sometimes you just
got to hear it multiple timesfrom multiple people and it's
the same with you.
You're not going to know untilyou do it.
If you want a guarantee, thenyou don't need to be in business
, or at least not running ads,because that's not going to work
(15:32):
.
So make sure that you are inthe mindset of hey, I've got
this money held back, that'swhat I'm going to spend, that's
my marketing budget, and I'mgathering data, I'm trying to
figure out what's working andwhat's not.
Okay, go in with that mindsetand I'm telling you, you will
figure it out.
If you go in with I've got toget and I hear this too a lot
(15:54):
I've got to get a sale.
I've only got.
You know, this has to work.
No, no, no, that's not going towork, not going to work.
So, okay, I think I've saidenough on this episode, probably
too much actually, and I reallyI really want you to think
about that and think about yourbudgeting.
(16:17):
All right, thanks for listeningto me this week and I'll catch
you on the next episode.
Are you late getting into theentrepreneur game?
I got you covered.
Grab my free newsletter atmarketingwithatwangcom and each
week you'll get bite-sized, noBS marketing strategies, just
for you.
Get it atmarketingwithatwangcom.
I'll see you next time.
Hey everybody, this is the Marketing with a Twang
podcast.
I'm your host, ben Blackman,and on this episode we're going
to talk about how to budget foryour marketing.
Here comes episode number two.
Alright, alright, alright, it'stime for Marketing with a Twang
.
You're down home no BS onlinemarketing show, so pull up a
(00:22):
chair and ease on in with yourhost, ben Blackman.
Okay, welcome everybody toepisode number two, and actually
I'm excited for this episodebecause I don't think we talk
about this enough and I thinkthat most of the things that
I've seen out there over theyears, when it comes in terms of
(00:42):
marketing, and specificallywhen it comes in terms of
running ads and things like that, is they're very vague.
They don't really give you anydefined numbers, and sometimes
it has to be vague, likesometimes there's a lot of stuff
you just don't know, especiallywhen you first start.
So the first thing I want tosay about this is you've got to
(01:03):
run your business like abusiness right now.
Stop waiting.
It's so funny that I wasrecording this.
I actually didn't know I wasgoing to record this today, but
I had just gotten done, justwriting out a few thoughts that
were going on in my head.
I titled it Acting Like aBusiness Owner.
The first thing that I put downwas talking about scheduling
(01:24):
your time, which I do, so Irealize this is a show about
budget, but it's along the samelines.
You'll understand in a minute.
And the next thing was put yourhead down and work, which I
think is hugely important.
I use a tool called Focusmate,where they kind of match you
with people all over the worldand you co-work for 25 or 50
(01:44):
minutes together and you justfocus on one task and the other
person focuses on their task andyou check in at the beginning
and the end.
So I use that a lot and havefor several years, or a few
years anyway.
But the next thing I put downwas keep your books, and what I
mean by that is that when itcomes to your finances and
(02:05):
budgeting and everything, it'sgreat to have a bookkeeper I
have a bookkeeper, I have anaccountant Fine, that's great
but it does not alleviate yourresponsibility from paying close
attention to it, okay, andespecially when it comes to
budgeting for your marketing.
So let's talk just a little bitabout what marketing is not.
(02:26):
Marketing is not redoing yourwebsite.
That's not a marketing budget.
That's a fun thing, because youwould be tough to find how many
sales.
It would be tough for you tofind how many sales came back to
your website.
That's where it originated.
That's what made the difference.
Now you could argue that whenpeople were researching you
(02:49):
before they purchased, that theydidn't like your website for
one reason or another.
But again, you're not going tobe able to quantify that for the
most part, and you're not goingto be so.
If you pay a lot of money toredo your website, you're not
going to be able to tell thedifference that it actually
helped you either.
That's, that's the whole thingwith that.
Now, I'm all about it lookingnice and being functional and
(03:12):
all that stuff.
Yes, ok, that that shoulddefinitely happen, but I don't
separate out money just for thatpurpose in my marketing budget.
Rebranding is the same way.
I have a client.
I love her, love her.
Actually, I love all my clients.
Frankly, I just do.
And I mean she must come upwith a new branding scheme and
(03:34):
logo every month, few months,you know.
I guess she just gets tired ofit and that's her thing.
You know, that's her thing andthat's cool.
So what I'm going to suggest isnot worry about that, or at
least not use your marketingbudget for that.
Marketing isn't.
It's anything that you can'tdirectly attribute to a sale.
(03:56):
That's what it's not right.
If you can't tell that you gota, you're getting sales from it.
It's not really marketing in myestimation.
So this is why you've got tobudget for your marketing,
because you're going to do oneof two things You're going to
spend time or you're going tospend money.
So you've got to budget itcorrectly.
So the other thing is budgetingnow, before you might need it.
(04:17):
So if you're not running ads,let's say, and you think that
you're going to be at some point, go ahead and start budgeting
for it today, not later.
You don't want to wait untilyou need ads or until you're
trying to scale or be moreconsistent with your sales and
then start budgeting for it.
You want to start today andwe're going to talk about that.
(04:38):
So I just want to kind of runthrough this real quick, and
that might be harder toconceptualize right here on the
podcast, so I'm going to giveyou a download.
So if you go tomarketingwithatwangcom and sign
up for the newsletter, I'll makesure you get away to get that
check.
This is just a little checklistor a little sheet for this.
(04:59):
So the simplest way to do it isand I use the Profit First
modeling so if you've never readProfit First, please do.
It's a game changer.
It was for me.
I mean, I can't even tell youhow much more money I'm able to
not only make but keep becauseof that book, and in fact I
usually send it out to myclients, like when they sign up
(05:20):
with me as a client.
That's one of the things I sendto them.
But I do do a slight variation.
So I call it profit first plusmarketing, and so it'll make
sense, hopefully in just asecond.
So if you think about how muchmoney you're bringing in your
revenue, that's 100% right.
That's the total amount.
So it's $10, or whatever thenumber is, let's just say ten
(05:42):
thousand dollars.
What you want to do is allocate,have allocations for other
things that you're wanting to dowith your money.
So the first thing is profit.
You want to hold back somemoney for profit.
I'm not talking about payingyou, I'm not talking about your
salary or whatever.
However you're going to do that.
I'm talking about pure profitthat you can distribute later
(06:03):
however you see fit.
You can do that quarterly, youcan do it monthly, you can do it
yearly, whatever you want, butyou want to pull out some money
for that every time you get paid.
So and I reconcile this once aweek in my books, like I go
through and make sure that Iallocate the money once a week.
But profit's usually around 5%.
Depends on how much yourrevenue is.
(06:24):
But we're going to kind of keepit easy and you can adjust these
numbers up and down a littlebit, but it has to have
something.
It's not going to be zero.
So we'll say 5% profit.
So basically out of $10,000,that's 500 bucks.
Then you want to hold out anamount for taxes, because you're
going to pay taxes.
We don't want to get on thewrong side of that, we don't
want to get behind on that,because you never get caught up.
(06:45):
It's just a nightmare and I'vebeen down that road.
And so we say 15 percent.
Now you know you need to factorother things into that, right
where you are, and you know youknow whatever state you live in
or wherever you live.
So you just want to adjust thatup or down as necessary, but
just say 15%.
So that'd be $1,500 out of the10,000.
(07:08):
The next thing is owner'scompensation.
So that would be let's just sayit's 50%, so you're going to
keep 5,000 out of that.
So that's how much you're goingto pay yourself that month.
And then the next number ismarketing 10%.
Now you know, some people can'tdo 10%, right, they need to pay
themselves more owner'scompensation.
(07:29):
So they need to do 55% there.
And only, do you know, uh, uh,5% marketing.
That's fine, if that's the wayit has to work out.
That's the way it has to workout, but don't make it zero.
Okay, hold back money everymonth and it'll accumulate over
time.
If you're not spending it,it'll accumulate.
And then what that does is, ifyou do it exactly the way I
(07:49):
suggested, that leaves 20% leftover.
So what's that for?
That's for everything else,that's for all your operating
expenses.
So what you don't do when itcomes to marketing is you don't
pay out all your expenses,including your marketing, and
then whatever's left over, youpay yourself.
No, that's not running abusiness, that's letting a
business run to you.
(08:10):
You've got to allocate thisstuff out.
And then if you're like well,20% is not covering my operating
expenses, great, then you'regoing to have to cut some stuff
out, right, I mean, that's allthat there is.
So you're going to have toreally take a hard look at what
you're doing and how you caneither generate more revenue or
cut out expenses.
(08:31):
But you're not going to cut outwhat you're getting paid, what
you're paying in taxes, whatyour profit is and what your
marketing is.
So it's got to be somethingother than that, all right.
So that's just kind of high,high level budgeting for the
business itself, ok, and how youget a marketing budget.
(08:51):
So then it comes to how do youallocate that budget once you
have it.
So let's just say that nowyou've, you know you've been
doing this for a few months andnow you've got five thousand
dollars to spend.
Before you know it, you knowyou've got five thousand dollars
that you can spend on marketing.
Great, that's great.
How do you budget it?
So it depends on what you'regoing to do.
If you're going to run ads, thenthe way that you budget that is
(09:12):
based on which ad platformyou're going to go with, and
it's likely for most people atleast, as of this recording,
going to be Facebook.
That's the most likely one, andmainly because the entry point
is easy and you can change fastand there's just a huge amount
of information out there on it.
(09:34):
So you know you're not going tobe fumbling around trying to
figure out Rumble ads orsomewhere else you know where
you know, which is, just youknow, probably not going to be a
good place.
So now you do want to make surethat you're matching it to your
market, though, right?
So if your market, for somereason, isn't on Facebook and,
frankly, everybody is but if youfeel like they're not, they
(09:54):
truly aren't Then you have to goto a different platform.
You're likely not going tostart on LinkedIn, not because
your market's not there.
It's because the barrier toentry is so high.
It's hard to make that workunless you have a super high
tech product or service and youhave enough money to spend on it
to get those sales.
(10:15):
So you're going to allocate aportion of this money, this
$5,000 or whatever it is, toFacebook, and then you're going
to say, okay, now what?
What am I going to do with,like what?
What's my intention here?
Well, maybe your intention isto have a lead magnet.
Okay, so you want to have alead magnet and you want to get
people into your funnel, andonce they get into your funnel,
(10:35):
then maybe you get them to booka call and then once you book a
call, you close a sale with them.
Great Fine, sounds good.
So the lead magnet you want tokind of clearly articulate I
don't know why I said it thatway.
You want to just put down howmuch you're willing to pay per
lead, and you may not know, youmight be like I don't know what
(10:58):
I should be paying per lead.
Susie's paying a dollar andJohn's paying $25.
I don't know what I should do.
And that's really good, likeeverybody starts there.
And when I was talking onepisode one about comparing to
your neighbors, that's kind of.
My point is that you don't knowwhat other people are doing and
it's not really how much peopleare paying for leads.
(11:18):
I used to see that all the timePeople were just boasting about
how low their lead costs are,but they really didn't talk
about their sales as much.
You know, they're just talkingabout how many leads they were
getting, you know.
And then then, if they did talkabout leads, they were talking
about their warm market, notcold traffic, or you know,
there's always something I'm notsaying people are trying to
deceive people.
(11:38):
I just mean that that we don'talways get the whole story, and
so you have to just be verycautious when you hear stuff
like that.
So if you don't know, right, ifyou're just like I, have no
idea, then just pull a numberout.
Let's just say it's $10 a leadOkay, it's an easy number $10 a
lead.
Okay, 100 leads $1,000.
That's what it's going to be.
(12:00):
Know that you're going to spend$1,000 out of that $5,000.
Okay, you got 100 leads in.
Now what?
Well, how many can I get tobook a call?
Let's just say it's 5% Okay, soyou're going to be able to get
five to book a call.
Great, five book a call.
So you just spent $1,000 andyou had five book a call.
That means it's $200 a call andthat's what it costs.
(12:23):
Then $200 a call, and that'swhat it costs.
Then you close one, okay, oneout of that, and so it costs you
$1,000 to get one sale.
Now, if you're selling a lowticket item, that's not going to
work, is it?
There's just no way you'regoing to make that work.
If you're selling a high ticketitem let's just say you're
selling a group coaching at$3,000 and you paid $1,000 to
(12:43):
get the sale does that work?
I don't know.
I don't have the answer,because only you know what you
have to make Now for most highticket coaching.
That does work, that's good.
You're talking about three toone, that works.
But if you were thinking, no,no, no, I need to get 10 to one,
well, that's not going to work.
(13:04):
And, by the way, I might addthat that's probably unrealistic
to think that, uh, that'susually not the way that works,
but it could.
I'm not saying it couldn't.
So now you know at least whatthe budget should be.
You know what you should bewilling to spend and where you
need to focus your time.
Cause, because you could do acouple of things there.
You could say, okay, well,since it caught, you know I had
(13:26):
$10 a lead, but I'd like todouble my leads but not spend
any more money.
Right, so I'll spend anotherthousand dollars, but I want to
double my lead.
So I got to cut my lead costsin half.
So I have to figure out a wayto get the same qualified people
to opt in at $5 a lead insteadof 10, right.
So then you go back to to optin at $5 a lead instead of 10,
right.
(13:46):
So then you go back to.
Okay, look at my ad.
Is my ad performing right?
Am I getting enough clicksright?
Am I getting enough eyeballs onit?
Am I paying as little as I haveto pay in order to get these?
Is my landing page converting?
Am I getting enough people toopt in on my landing page?
And then, am I getting enoughpeople to open up my emails,
right?
Am I getting enough people toopt in on my landing page?
And then, am I getting enoughpeople to open up my emails?
(14:06):
Right?
And am I getting enough peopleto click on my calendar?
And am I getting enough people?
What can I do there to get morepeople to book, to entice them
to book?
And so you have to analyze allthose parts to see if you can't
bring your lead costs down.
Now, the simplest, easiest wayis to try to work on your ad.
I mean, it just is.
It's just the simplest andeasiest way, but that may not be
(14:27):
the issue.
So you have to keep track ofall your numbers.
But once you do, once you getit dialed in, once you know the
number, then you're ready to go.
Okay, that $5,000 that you thatyou, you know held back is not
extra like money.
It wasn't grocery money, you,you held it back for this
purpose, for testing, forfiguring it out.
(14:48):
I mean, I just talked to a guyyesterday client been a long
time client actually but he hada different business that he
didn't work with me on themarketing, he had a it's a long
story, but anyway and hecontacted me yesterday because
he wanted to do a couple ofdifferent things and the
marketing company he was workingwith before told him they were
like look, if you're gettingsome sales in, I mean you know,
(15:10):
at this number, you've got tofigure out if you can double
that budget and triple it.
I mean you're not going to doit, no, until you do it, which
I've been telling him that for awhile, but sometimes you just
got to hear it multiple timesfrom multiple people and it's
the same with you.
You're not going to know untilyou do it.
If you want a guarantee, thenyou don't need to be in business
, or at least not running ads,because that's not going to work
(15:32):
.
So make sure that you are inthe mindset of hey, I've got
this money held back, that'swhat I'm going to spend, that's
my marketing budget, and I'mgathering data, I'm trying to
figure out what's working andwhat's not.
Okay, go in with that mindsetand I'm telling you, you will
figure it out.
If you go in with I've got toget and I hear this too a lot
(15:54):
I've got to get a sale.
I've only got.
You know, this has to work.
No, no, no, that's not going towork, not going to work.
So, okay, I think I've saidenough on this episode, probably
too much actually, and I reallyI really want you to think
about that and think about yourbudgeting.
(16:17):
All right, thanks for listeningto me this week and I'll catch
you on the next episode.
Are you late getting into theentrepreneur game?
I got you covered.
Grab my free newsletter atmarketingwithatwangcom and each
week you'll get bite-sized, noBS marketing strategies, just
for you.
Get it atmarketingwithatwangcom.
I'll see you next time.
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