In this episode, we explore how being realistic and adamant about the tracking and expectations of your numbers (data) and developing a framework to predict results, can be revolutionary for your business. Tune in for the complete breakdown.
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Hi Jermaine, great informative video. I wanted to know if you came up with the CPL number of $8 randomly or was it based on one of your campaigns?
It’s based on your end result of trying to make $2 for every $1 invested and taking into account realistic conversion numbers. At 1-2% conversion, considering your price, and 20-30% opt in rates, what is the most you can spend to acquire the lead… then the customer? Reverse engineer it based on a conservative 20% opt in and 1-2% conversion and it will deliver you the KPIs you need to hit.
Got it Jermaine, thank you! What threw me off was that you mentioned you were spending $x per day for one of your FB campaigns and then followed into the $8 CPL. One question, when you say “considering your price,” can I assume it’s for your front end offer? And, would your decisions vary considering the average cart value, or further, your client’s lifetime value?
As stated, our goal is to be profitable as soon as possible (and in most instances within 24 hours) so the numbers given are for the immediate front end product. All backend sales and increased lifetime value is icing on the cake. However, in more sophisticated models as I mention in a previous video, companies can wait longer to make their money back (in some instances several months). Small businesses can’t typically do that so we model all the numbers based on front end and we try to make that work as soon as possible to ensure scalability.
Awesome Jermaine! Ton of value, love it. Keep rock in’ men.
See you next automation monday 🙂
Thank you Paulo.
This week’s episode made me smile. I consider myself a spreadsheet jockey and I love turning data into useful information. I couldn’t agree more with you – tracking numbers and using them to manage a business is vital. You did a great job of explaining things in a simple and relevant way.
Right on Nick! Gotta love the data. Great to see you here!
Jermaine, I am wondering how you got the $400 for the CPA from the 2 sales?
Did you divide that by the $800 that was spent on getting the leads?
Yes, in that example, remember that my cost was always $800. The same $800.
To get CPC, CPL, CPA, you just take the same $800 and figure out what you paid per click (Facebook will tell you that), what you paid per lead ($800 divided by number of leads), and what you paid per sale ($800 divided by number of sales).
500 visitors for $800? = $1.60 CPC (cost per click)
100 leads for same $800? = $8 CPL (cost per lead)
2 sales for same $800? = $400 CPA (cost per acquisition).
Since my total costs are $800 and I got 2 sales, each of those sales simply cost me $400 each. If I sold something for $1000 each, $800 created $2000.
Tremendous production quality here.
And great value in dispelling myths and misconceptions of newbies….
Always incredible content! I used what I learned in your Sales Synergy System to become a Facebook expert. I landed a job in NYC and started running campaigns spending $150,000 per MONTH in ads and there was no way I could have done that without the course. Will be a lifelong fan