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SHOW NOTES
Not enough entrepreneurs know their numbers well enough to make accurate, REALISTIC projections (and therefore a budget) – but that changes today!
In this episode, we’ll review the “how to” of setting your ads budget using The Hirsh Process. I’ll give you some realistic numbers to use, based on who you are + what you sell… but here’s the thing – always, always, always use your own data (if you have it).
This will literally make or break your success.
Because, if you go through this exercise and realize, “Oh, I can’t spend that much!” you have the OPPORTUNITY to go back, select different “goal” numbers, and make new projections!
Remember, it’s all about the numbers. You can take the guesswork (+ your emotions) out of the picture and create realistic goals you can CRUSH.
Tune in, and then head over to Instagram (@emilyhirsh) to say hello! Slide into my DMs with your follow-up questions, and you might hear your Q on a future episode of the show!
NOTE – Listen to episode 93, “Process Behind Setting Your Ad Budget,” for a more in-depth explanation of how we move backwards from your goals to your ad spend. Listen to episode 88, “Ads AMPLIFY what you have already, not fix what isn’t working,” for more about the importance of buying data.
Key Points:
[4:45] Some basic guidelines for making projections with ads
[6:18] Let’s say you want to grow your list…
[8:05] A lot of ads agencies tell you to start here – DON’T.
[9:53] Because you have to connect your budget to your $$ goals!
[11:21] Here’s the problem with basing your projections off the Marie Forleo’s + Russel Brunson’s of your industry
[13:03] You shouldn’t be “guessing”… you should know your numbers.
CTA:
If you want help with your ads, we have two different options for you now! Go to HelpMyStrategy.com to apply!
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Episode Transcripts:
Emily Hirsh: I’m Emily Hirsh, and this is the Hirsh Marketing Underground Podcast. Attention innovators, influencers, creators, and game-changing entrepreneurs: your internet domination begins right here. We are the powerhouse marketers that you’ve been looking for. You’re already making waves in your industry, and we’re here to help amplify those waves of change, by creating a connection that cuts through the noise.
We take everything you’ve built inside your zone of genius and find its audience. With killer strategy and laser eye for impact, we launch multimillion dollar campaigns and skyrocket your reach online. And now we are doing the unheard of. We’re unveiling everything we’ve learned, taking you behind-the-scenes with the Hirsh Marketing Team, and giving away the secrets to our client’s success. Stay tuned for top-converting strategy, ROI reports, and insider knowledge you won’t find anywhere else. You’re changing the world, and we’re the team to help.
Hello, hello everybody. Welcome back to the podcast. I am, today, going to dive into one of my favorite topics. If you’re a very loyal listener, you’ve probably heard me talk about this before, but there’s some topics that you just talk about multiple times in different ways, because they’re so important. Today we’re talking about the extreme importance of having realistic marketing goals, and the reason I want to talk about this is, I actually did a training last week, an online training for somebody’s group, it was like a … what do they call it? Office hours or something.
And they do a monthly topic, and I was their pick. It was great, there [were] over 100 people, and it was really cool, great engagement. And one of the biggest takeaways people had is the way that I process creating your marketing budget and then going back and then possibly adjusting it… if you get to the end of the way I do it, and you say like, “Oh, that’s not a budget that I’m comfortable spending.” The reason why I’m so passionate about this, and why this is so important is because, if you don’t do this, you’re just honestly setting yourself up for failure.
Especially today when it’s harder and harder, honestly, to have amazing success with Facebook ads out the gate, or your funnel out the gate, because there’s just so much noise out there, there’s so many other people trying to do it. And you have to just be so intentional and focused and look at the data and just optimize it, continue to optimize it. But if you don’t start, before you even run ads, before you launch, with the process of creating what we’re calling in our team, projections, is what we really call them.
It’s setting the budget, but it’s also setting what you were expecting out of that budget. If you know The Hirsh Process [see episodes 1-6], it’s step one in The Hirsh Process, it’s a part of that, and it’s defining what success is for you and your marketing. For your business, for your numbers, for your products, all of that… define what success means. That means defining all of your numbers, which part of those numbers is your budget.
Here’s an exercise that has happened so many times with people where they then have to adjust their budget to make it more realistic, or their goals to make them more realistic. The way that I do it is I start backwards. I start with your sales dollar goal for a launch or for a monthly evergreen funnel. We start with your dollar sales goal. Then we figure out your… and I’ve done a whole episode on this before [episode 93], so we’re not going to get into like, how to literally do it, but we’re going to go over the generalized version of it.
We start with your sales goal dollars, then that tells us the number of units we need to sell, because that’s an easy division. Okay, if I want to make $10,000 and it’s a $1000 product, I’ve got to sell 10, okay? Easy numbers to do mentally there. And then from there, we can say, “Okay, how many leads do I need to get into my funnel if I want to sell [to] 10 people?” Well, you have to either guess or look at past data, what’s the percentage? If 100 people sign up for your webinar, how many people will buy?
Now, an average percentage of total registrants, remember, total registrants, not live viewers, because you’re only going to get 20-30% people who actually watch the webinar, but an average percentage is 1-5% of people are buying the actual product, and the funnel’s converting. If you do not have any historical data, which this question came up a lot on the training I did last week, you have to guess.
So, I’ll give you guys some general numbers, but if you have a higher priced product, go low with the percentage. If you’ve got a $2000 product, go towards more like 1%. If you have a $500 product, you’re probably going to convert more at the 5%, you need to convert more at the 5%, because otherwise it’s going to be hard to make it profitable.
If you are targeting business owners, they tend to buy more, and they are more expensive in the cost per lead, but they tend to buy more, so you might be able to go a little higher in the percentage. If you’re targeting consumers, they tend to buy less and they’re harder to sell to, but then you’ll make it up, because your cost per lead will be cheaper. But you adjust the percentage based on that. So, right now if you haven’t run any ads or you don’t know your percentages because it’s a new funnel or you haven’t tracked this way, you don’t know, you don’t accurate data, just guess.
What we do for clients who haven’t run it before is, we’ll do like, “If it converts at 1%, this is the [projected] results. If it converts at 3% … and if it converts at 5% …” and we look at all three of those. Because that way you’re able to really visually see, too, like, “Wow, if I get my sales funnel conversion up 2%, then look how much more money I’m making off of my ad spend,” and you’re able to really break that apart, and it’s so, so powerful. And we have the coolest documents for this! Spreadsheets galore.
We’ve got calculators, we have a whole projection sheet, and you plug in one number and it changes all the numbers. It’s amazing. Our students get that, we use it with our clients all the time, and we have really in-depth calculators. What you have to do is, all right, now you’re at, “How much do I need to grow my list?” Let’s say we decide we need to grow our list by 2000 people. Okay, well what am I going to pay cost per lead for them? And again here, if you don’t have historical data, you’re going to be guessing, so you would say, “Okay, I’m going to put $4 cost per lead if I pay that much.”
If you know how much you’re going to pay, because you’ve [run] ads, of course use that number. Now, I’ll give you guys some more historical averages. For webinars, we see anywhere from $4 to $10, cost per lead. Again, consumers … not again, because I’ll re-say this, but… consumers will be cheaper, so they’ll be at the lower $4 probably cost per lead for a webinar. Business owners, entrepreneurs are going to be higher, because they’re bombarded with webinar offers, but they’ll sell easier.
And a webinar is going to usually cost more than a PDF opt-in. So, keep that in mind, too. If it’s a bigger barrier of entry commitment for somebody, because they have to go to a live training, it’s usually a more valuable lead for you, because you’re getting them to go to a live training and watch you on video, but you’re going to pay more cost per lead probably for them.
If it’s a basic opt-in, you could be paying… we still have dollar conversions in some cases, which is really unheard of, but in some cases, in some markets, you absolutely can still get dollar conversions. We have clients right now under a dollar, dollar conversions. That’s because their industry, their market.
You’re going to have to guess, and again, do worst case scenario, best case scenario, and see the fluctuation. Once you do that, you times that cost per lead by your number of leads you need to get in, and that gives you your budget. That is the way we work backwards. A lot of people, you’re going to go to, you’re going to talk to an agency, you’re going to talk to someone and they’re going to say, one of the first questions they’re going to ask you… Test it out, if you talk to a different agency besides us, is… “What’s your monthly budget?”
They’re going to ask you that question first. You cannot start there. Because your monthly budget should not just be a number that you pull out of your hat and you decide. It has to be an intentional number. You don’t know what your monthly budget’s going to be until you figure out all the rest of those other numbers. We flip it around and we start backwards, and we decide our monthly budget based on how much money we want to make, and then we go through that process.
Here’s why this is so important. Because sometimes you’re going to go through this exercise… and this has happened with my students, with our clients, with potential clients, with people on that live training I did last week, with people I speak in front of… all the time. We do this exercise, we get to the end, and their budget comes out to like $20,000 to make their, maybe it’s a $100,000 launch, come true.
And they’re like, “Well, I can’t spend $20,000. I don’t have that upfront to spend,” or “I’m not comfortable. I haven’t proven my funnel, I don’t want to invest that.” That is 100% fine, but you have to then adjust your goal to be realistic. The first launch, you may not be able to spend $5,000 to make $100,000. In any launch, you’re probably not going to do that, unless you have an amazing conversion, out of this world, or a ton of warm traffic and a following, you might be able to.
But that is why this exercise is so important, because you might get to the end and say, “I can’t spend that budget. I’m not comfortable spending that budget.” But at least you did your job and you gave yourself that knowledge of, “Okay, I’m setting a marketing goal,” which a lot of us have marketing goals. Most of the time people have an idea of like, “I want to make a million dollars” or, “I want to make $100,000 in my launch,” or, “I want to make $10,000 a month in my funnel.”
Most of us have those goals. It’s not that people aren’t setting goals, it’s that they’re not connecting their goals with their budget, and they’re not having it [make sense] like, “Is this possible?” This is true with so many things, and I think it’s like an entrepreneur thing, too, because you also have all these goals, and then you realize, “I have four weeks to get all this stuff done,” and you’re like, “Well, that is completely not possible.” Then you have to redo it. But if you don’t actually connect to those things, you’re never setting yourself up for actually having success and meeting your goals and having realistic goals and not feeling like you’re failing.
The reason why this exercise is so crucial is because you might get to the bottom and say, “I’m not comfortable spending that budget,” which is absolutely fine, but then readjust your goal. And when we go into our launch or we go into launching our evergreen funnel or launching our Facebook ads or spending money on Facebook ads, and we have a realistic goal. We’re set up for success, and then when we hit it, we feel like, “Yes, it’s working!” and not like, “Man, I thought I was going to make triple what I made in this launch.”
It’s such a huge problem. And one of the reasons it’s also a huge problem is so many people out there teaching marketing have a massive following. They have millions of follower. And I’m going to use Russell [Brunson] for an example. I’m in Inner Circle, so I will see… and I love Russell, I have nothing… I’m in Inner Circle, I pay him $25,000 a year to be in Inner Circle, to be in that community. I think what he created is great.
I just think you have to be realistic with your followers when you are able … When he has… and this is not just him, this is any huge influencer you’re following. And I’ve also worked with huge, huge influencers, so I see on the backend, the way difference in their conversions. They can literally launch a funnel and spend almost no money in ads and make like 20x their ROI.
Because they’ve spent years and years and years building a following. They have gone viral with their following in a way where they have tons of organic traffic, and somebody who’s just starting out and doesn’t have that and has never run ads and doesn’t have those audiences, doesn’t have that email list, doesn’t have the credibility, doesn’t have any of those things cannot even come close to replicating that success.
That’s the reality, and that’s okay, because Russell started there, too. But you can’t take somebody’s success saying, “Oh, they’re making a million dollars” or, “They’re getting 10x return on their investment,” and “I heard it through a mastermind,” or, “I saw it on a webinar,” and then say, “I’m going to get those numbers.” Because there’s so many factors. There’s your following, your credibility, have you sold the product? Do you have testimonials? All of these things that play into it.
So what you need to do is create projections and goals and budgets for you, for your business, for your market, for your product, for where you are today in your business, and then you need to go and achieve those. What we do for our clients is, we set… and this is what you should do if you start ads, say it’s a new funnel. If it’s a new … This for an evergreen funnel.
We set 30, 60, and 90 day projections, because a lot of times for a new funnel, that first 90 days is a massive testing period. So, we’re setting still… When you’re testing, it’s not that you’re just throwing money out there and you’re like, “Let’s see what happens!” You still want to set a metric and say like, “Here’s what I think I can do. Now I’m going to buy data and I’m going to test this and then I’m going to come back and I’m going to compare, did I hit it or not? And then I’m going to adjust for the next set of projections.”
So you’re still setting the metric in your head, of success, and a goal, because I think that’s really important, and you should be tracking against something. But you might just have to adjust it, because you’re in a buying data phase. So that first 90 days of a new funnel, or a new product, you’re in a buying data phase, but we still set projections. We set 30, 60, 90 day projections, and every 30 days we come back and adjust based on the previous 30 days.
Basically, my internal strategist who does our client strategy calls, she sets these. She goes through this process, we set the projections, the client looks at it, says, “Yes, I’m comfortable with that budget,” or, “No, I want to adjust it,” or, “No, that conversion doesn’t work,” or, “My funnel’s going to be able to do this instead.” We agree on the projections, we run them for 30 days, our team’s tracking every single day against those. Because that is telling us how many leads we need to get a day, how many sales, how much we’re going to spend.
There’s no guessing here. It’s numbers, and we’re tracking against it. We’re tracking against it, and at the end of the month, we come back on a meeting with everybody. My internal strategist team, client, we look at it: Did we hit the projections? Did we not hit the projections? Let’s adjust the next 30 days. We already made those 30 days, but we might have to adjust them, because we’re in a buying data phase. And what this does is [it] constantly creates realistic goals, it sets you up for success, and it gives you metrics to track on if you’re successful or not, and then it tells you where the holes are, which is so important in a buying data phase because …
When I say buying data and you don’t know what I mean, I did a whole podcast just on it [episode 88], so if you Google “Hirsh Marketing Underground Podcast buying data,” you’ll find it. But you’re in a buying data phase, a testing phase, so it’s so important for you to be able to find the holes. You can’t find the holes unless you can see cost per lead, budget, sales conversion, and then find where you need to improve it. And then what’s really fun is you can go into that calculator and be like, “If we improve our cost per lead by $1 or 50 cents, here’s what it’s going to do for our ROI,” and it’ll change it all, and it’s really empowering.
Then you see the importance of actually making the changes on your webinar and getting that cost per lead down and focusing on what actually needs to change. Because if you don’t know what needs to change, you’re just going to be feeling crazy and like, “Is it my ads? Is it my funnel?” The answer is always in the numbers. But we have to know our numbers before we can answer those things. Make sure you go through this exercise. Make sure you come back to this exercise, especially if you’re in a buying data phase where you are spending 30 days getting data, then tracking against some numbers you set, and then you’re going to do it again for 30 days.
Come back to it, reset, make any changes where you need to, and then you’ll be able to really hit your goals, fix everything to hit your goals, hopefully within that 90 day period. All right, you guys. I think this is a super important topic, very passionate about it. I don’t think enough people are talking about it out there. I don’t think honestly, enough people know their numbers to be able to talk about it. I mean that for like agencies and ads people. Because I cannot tell you how many times I go speak or I go to one of these, I go to an event or speak in front of a group and people are like… there’s an entire room of people, and none of them are getting reports from their agencies.
To me, that’s not just level of service, it’s like, how are you making decisions if you’re not looking at numbers? Marketing is numbers. So let’s set our goals based on numbers, let’s connect our budget with our sales goals and make sure they line up, and let’s kill this thing and do awesome with our ads, because we did that pre-work, because we did that foundational work.
If you want support with Team Hirsh, you want access to those calculators, you want us to do your projections for you, we have two options. We’ve got our premier, which is our high level clients. They’ve got a proven product, they’ve got a funnel that is converting. Or our performance clients who are in the buying data phase, and they want us to do those projections, test against their projections, and get their funnel working. You can go to HelpMyStrategy.com and apply to work with us.
We only work with people we know we can help, so we do put you through an application process. But if you’re the right fit and we feel like the right fit to you, we’d love the opportunity to support you with your marketing and your ads, and be super numbers-oriented with everything you do. I will talk to you guys next time.
Thanks for listening to the Hirsh Marketing Underground Podcast. Go behind-the-scenes of multimillion dollar ad campaigns and strategies, dive deep into The Hirsh Process and listen to our most popular episodes over at HirshMarketingUnderground.com. If you loved this episode of the podcast, do me a favor and head over to iTunes to subscribe and leave a review so we can reach more people and change more lives with this content. That’s all for now, and I’ll catch you next time.