If you'd invest in Mark Zuckerberg for sales, why not invest in the same caliber across your entire team? 🤔 Marketing's ultimate job is to increase revenue. You're winning if your LTV (Lifetime Value) and CAC (Customer Acquisition Cost) are far apart. Ideally, you want a 10:1 ratio, but aiming for anything above 4:1 is a solid target for most. It's crucial to utilize cross-over strategies to optimize the overall company average. 💪 💲 Don't compartmentalize your budget. Invest wisely across your team and watch your business thrive. 📈 #GymMarketing #LTV #CAC #FitnessBusinessGrowth #GymBusinessOwners #GymSales #GymLeads #FitnessLeads
🔎 Sometimes, the easiest & most powerful marketing techniques are right in front of us—and we can't see them. Yesterday, I talked with someone doing $72M/year in a massage business with several locations. ⏰ In a quick 10-minute conversation, her perspective on marketing...shifted. Here's the recap: Me: "So, how are you getting customers right now?" Her: "We run paid ads, getting #leads for about $10/lead depending on the platform, then we get a lot of referrals." Me: "That's great. What's your conversion rate on the paid leads?" Her: "We get about 30% to book and show, then we close about 1 of 10 into a recurring member." Me: "So, you're paying about $33 per show ($10 per lead divided by 30%). Then if you're closing 1 of 10 into a recurring member, that's $333 CAC (Customer Acquisition Cost), right?" Her: "Yes." Me: "And your LTV (Lifetime Value)?" Her: "About $1,800." Me: "That's excellent. That's a 6:1 #ROI (Return on Investment). Can you just spend more?" Her: "I can, but I wanted to drop the CAC even lower." Me: "Fair. Do both. Spend more, and in regards to dropping your CAC - what about referrals from the new and recurring members?" Her: "Yes, we get a lot of referrals. About 1,500 per month." Me: "Holy cow! What's your referral marketing strategy?" Her: "We don't have one. We just create a great experience." Me: "Wait... so that's all unprompted referrals? There's no actual campaign?" Her: "No. We don't want to pay for referrals at all. With that many, it'd cost too much." ------ At this point, we shifted her viewpoint. ------ Me: "No matter what, you're still going to get your unprompted referrals. But what's your closing rate on #referrals vs. #paidleads?" Her: "Way better. We'll close about 1 of 3 into recurring members." Me: "I bet. And you paid $0/lead, thus also $0/sale. However, if you want to drop your company's avg. CAC, you have a budget of $332 or less to make that happen." Her: "What do you mean?" Me: "Your current average is $333. For each customer you get for a cost under that, you reduce your average. What if your members knew that for each person they refer and becomes a member, you'd gift both a free massage or give a bunch of value that costs your company significantly less." Her: "Yes, but 2 massages would be like $300. That's a lot." Me: "It is, but 3 things to consider: 1) You're currently paying more than that 2) $300 is their value, not your cost. You just have to pay the therapist, which will only cost like $100 total, right?" ----- Here, she got it. #Marketing's job is to increase revenue. You're winning if your #LTV and #CAC are far apart. 10:1 is a great ratio, but anything above 4:1 is a solid target for most. You can cross over strategies to bring the overall company avg. down. Don't compartmentalize. If you'd pay Mark Zuckerberg for #sales, why wouldn't you do the same for anybody else? And yes... I had a.i. create an image of a #massagetherapist massaging a bag of money. 😏