[social_warfare]
SHOW NOTES
Spoiler alert: your first milestone in your marketing is NOT to be instantly profitable.
I know that’s not what you want to hear, but the truth is that’s not reality.
Marketing is not about putting something out there and right out the gate you have a perfect cost per lead, a perfect sales conversion, and everything’s running without a hitch.
If you go into it with that mindset, you’re setting yourself up for disappointment because rarely does that ever happen.
Instead, your first crucial milestone in marketing is to break even.
You’ve got to be able to achieve this first before you can become profitable.
In today’s episode, I’m flipping the script on the long held belief that if you’re not instantly profitable you’re failing, and diving into everything you need to know in order to break even with your marketing, including:
- How long it should take to break even
- The benchmarks you should be setting and hitting in order to get there
- Potential pivots you might have to make along the way to pass this milestone
If this episode brought more clarity to you on the importance of breaking even, shoot me a DM on Instagram (@emilyhirsh)!
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Emily Hirsh:
Hello my friends. How are you all doing? I am so excited for today’s episode because when you are teaching all the time, and I’ve been in massive content creation because we re-updated our whole Ignite course. I added several new modules into it that I taught, and then I really looked at all of our core ways that we teach things like the projection calculator and the campaign planner and all of that. And as a, I guess I would consider myself a teacher in that way, you are constantly improving. It’s inevitable that as you teach and teach and teach, and then you get feedback from students where they’re unclear, you’re able to go and improve those. I kind of had this breakthrough when I was creating one of these presentations. And then I’m so excited about for you guys here. I’m bringing kind of this like one little shift in mentality that I think is going to help a lot of you.
So I have talked a lot about obviously planning your budget, and planning your ad goals, and having a budget that’s based on your goals for your ads. And so you know, okay, if I want to get X amount of sales, I need to get this many leads, or this much traffic to my page, and I need to spend this much. When I teach it, one of the biggest concerns or questions that people have is, well, what if I don’t have data? So then how will I know what I’m going to pay cost per lead or what I’m going to pay cost per landing page view or what my sales conversion is going to be. And my answer has always been use these industry averages. And so we give people these industry averages. And, but the problem with them is that the range is so big because it depends on your market and it depends on your offer and all of these things. I give my students and, and I give people, and I talk about it all the time, pick a $5 cost per lead or an $8 cost per lead. If you’re in, you know, cost per webinar registration, or a 1% sales conversion, but you’re kind of guessing, and then you have those benchmarks in there. So that at least when you go out to market, you have those benchmarks, which is all great, still relevant, but here’s I’m actually shifting a little bit the way I’m going to tell people to look at this, which is huge.
So instead of using industry averages, if you’re in the camp where you’d have no data, you have not run ads. You maybe have had some organic traffic success, but organic is different than cold traffic. So if you have basically not run ads and you’re in that camp, instead of using industry averages and just guessing, oh, I’m going to pay $3 cost per lead, or I’m going to hope to get a 1% sales conversion, which I still recommend over not doing that. At least have benchmarks, but instead the way we look at projections, we look at different scenarios. So if you’ve ever seen or bought or gotten access to, whether it’s an Ignite, or our toolkit, or in the Not For Lazy Marketers Club, if you’ve gotten access to our projection calculator, you know we have about five different scenarios where you can change the cost per lead or the cost per landing page view, and kind of see how that lines things up.
So with that, instead when I’m going to tell people, if you have no data, and what I encourage you to do is to try different scenarios where you’re at least at breaking even with your ads. This will allow you to say, okay, here’s my scenario of if I pay $5 cost per lead, and then there’s other metrics below that, but let’s say I have a 2% sales conversion. How many sales does that equal? And at what point, at what kind of combination are you at the break even spot. where are you spending a thousand dollars on Facebook and making that thousand dollars back, because that is your first crucial milestone in marketing.
I want everybody, and I want my students and people who are consuming my content to understand that the steps in marketing, and I’ve talked about it, but not in this clever way. So I’m really excited to like, bring this here, because I think it will bring clarity for you guys. Because pulling from industry averages is great and you have that knowledge, and we can still guess. But what’s happening is a lot of times, to be honest, people are going out and you’re not hitting industry averages right out the gate because you have to improve your messaging, because you have to improve your strategy, because you need to improve your targeting. And that’s okay, that’s normal. But what it’s doing is resulting in people who are like, I’m not hitting my projections that I set up for myself, or that we set up, and so then I’m disappointed.
Instead I want you to envision milestones. I actually created part of the update for our program and for our clients, we did this a while ago where we have a roadmap. And so based on where you come in, if you’re brand new and you haven’t run ads, or if you have run ads, you kind of have like these milestones that you’re trying to achieve. If you’re in the camp of you haven’t run ads before, whether it’s not run ads at all or, or not run ads just to that funnel or that offer, your first milestone is to break even on your ad spend. If you can do that, you’re in the right direction, because that means you’re getting sales. You’re making some money back and now we can figure out how do we scale you, which is the next milestone to becoming profitable, and then profitable with your other investments, such as an agency or a coach or whatever it is.
So that first milestone though, is your breaking even. Your business is going to be unique, obviously because of the cost of your offer, or because of your audience. You’re going to potentially have a higher sales conversion, or a lower sales conversion. So you can reference the industry averages, but also create scenarios in your projections. When you start running ads and say, what is the scenario that’s gonna get me to that first milestone, that’s going to get me to break even. So an example of that could be, if I have a thousand dollar course, and I am running a webinar funnel, and I’m going to spend a thousand dollars a month, I know that I have to get a 1% sales conversion. No, I don’t know that actually, I’m sorry. I have to get one sale, right? If I have a thousand dollar course, I’m gonna spend a thousand dollars. I have to get one sale.
So then what are those scenarios? If I’m going to pay, let’s say $10. If I put $10 cost per lead, and I get a hundred leads at a 1% sales conversion, I will break even, but what if my sales conversion is lower? Let’s actually go a little lower end for sales conversion, because this is a brand new product. I haven’t proven it before maybe, and I don’t know. So what if I get a half a percentage sales conversion, and I need 200 leads to get those sales. So what do I pay? You know what’s my average cost per lead that I’m going to pay if I’m hitting that. What is that kind of formula? And I would have different scenarios. I would say, what if I had a really high cost per lead? Or what if I had a really bad, not really bad. I shouldn’t say that, really low sales conversion because out the gate, I want you guys to realize you’re probably going to have that. At one point, you’re going to have a too high cost per lead. You’re going to have a too low sales conversion.
And this is where I get excited, because that’s where the magic happens. If you can improve that, that is marketing. Marketing is not putting something out there, and out the gate you’ve got this perfect cost per lead, and perfect sales conversion, and everything’s working, and you’re hitting those ideal average or above average projections. That’s not reality. If you go into it that way, you will be disappointed. Instead, we’re going to flip it and we’re going to say, what is the scenario or scenarios, the different scenarios where I would break even on my ad spend? That is my first crucial milestone in marketing. I have to get there before I can get to the profitable step. And that usually, breaking even ideally happens within your first 30 to 60 days running ads. You don’t want it to be more than 60 days. That’s hard, but it sometimes goes a little longer than 30, but it usually happens within your first 30 days. That would be like your main goal.
If you have a lot of things you have to do… let’s say you start ads and you’re not breaking even yet in your first 30 days, but you realize I have to update my webinar and my title, and I have to change the messaging. And you have a lot you have to do. That’s where it’s kind of pushing towards it might take that 60 days. But if out the gate, it’s minor things that you’re having to change and you’re super close, you might be able to get there in 30 days. That’s pretty great. And so that first milestone, what do I have to do to break even should be your goal that brings it down to reality, that allows you to feel like you’re not failing. That is how I’m going to help my students and our clients look at projections because it will, if you position it that way, and you understand that that is the first step to scaling to profit, you’re going to feel like you’re on track. If you create projections where you’re massively failing out the gate, you’re going to feel like you’re behind. You’re going to feel like things aren’t working. You’re going to feel like you’ve got to change. And that’s what I want to try to avoid.
So your first crucial milestone in marketing is what is it going to take, what is the scenario to breaking even? Create projections around what that would look like, your cost per lead, your cost per landing page view, your sales conversions, and just play with some different scenarios. Then once you go run ads, you’re going to see where you’re falling. Then you can shift the scenarios around a little bit more. Let’s say we run ads and we are actually getting that 1% sales conversion, but our cost per lead is really high. Well, we know we can improve that cost per lead, but that shifts our projections a little bit to say, okay, here’s where our reality is. Here’s where we’re falling, so this is where we have to stay in order to break even.
Sometimes you’re going to be in an industry where you pay a high cost per lead, but it’s worth it on the back end because you have a $10,000 offer. Projections have always been hard because it’s hard to tie industry averages. If you don’t have any data, you need something to anchor them to, but also everybody’s business and offer is so unique. And so all of those considerations have to be taken into account when creating those projections. If you look at where’s the break even point for my business, and what does that look like, it’ll help you create those custom realistic projections.
All right, let me know what you guys think about this. If this brought clarity to you, I’m actually going to be doing this in The Not For Lazy Marketers Workshop, which is happening in a few days. This month will be about setting this budget. We’ll be walking through our projection calculator and doing this. If you want to join that, you can go to notforlazymarketers.com/club and that will be like workshop style. So you’ll actually be doing it and walk away with those kind of new process that I’m doing for projections. Then obviously if you’re in Ignite or you are a client, you already have access to these updates. But if this brought clarity to you, hit reply to the email you got from this episode, send us a message. I love to know because you know, like I said, I put a lot into my teaching and, and clarifying, and that’s what I do all day. So being able to clarify this, I think this is going to help a lot of you to let me know if it does. All right guys, see you next time.
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