What Does Knowing Your Numbers Actually Mean?
Know your numbers… What does that mean? You hear it being thrown around all the time but… could that be any more vague?
It means that there are certain numbers, we call them metrics, that let you know how something is performing.
That “something” could be:
– a marketing campaign
– an offer
– sales calls
– funnel sequence
Basically anything that you can track and infer a result from.
Typically, for most freelancers – you need to be able to track how your business is doing. Because if we’re not tracking it, it makes it infinitely more difficult to affect change.
Here’s why I’m writing this post…
In our business, we’ve had to become students of what we're doing – so that we don't make the same mistakes twice. The activity that helps us MOST to do this is…
Looking at the numbers.
You want to be at a point when you can recite your numbers at any time… so that you always know where you stand and what you’re doing to improve.
Let's first say – numbers are not intimidating.
Some of us don't like math. And I get that. But the goal of this post is to help you fall in love with math.
So let's go.
First I want to remind you that as a Freelancer, you get to wear many hats.
- You’re the sales team.
- You’re the marketing team.
- You’re the accounting team.
- You’re the tech team.
Now, obviously you can outsource some of those roles depending on what service you provide. But for most of us, we’re doing it all at the beginning.
Let’s not skip over how badass that is. Congrats.
Anyway – I want to make you aware of a role you probably have never heard of but are likely fulfilling in your business as well…
The Marketing Technologist
MarTechs are unique role because they are part creative and part analytical. They are also the gatekeepers of data… mean thing that at any point, a good martech should be able to tell you how anything in your marketing campaigns are performing – or at least be able to find it quickly.
If the MarTech is missing from the equation – things start to fall apart. Because we can’t make wise decisions that are based on data and facts – and not based on emotion.
It’s one of our core beliefs here: We make decisions based on data and not on emotion.
Maybe you want to steal that for your business ;-)
YOU ARE THE MARTECH
Because you are likely the one running the show, even if you have a “tech person,” it’s important for YOU to know how look at the numbers and make sound decisions.
Here’s how to do that:
Let’s start out with an example to give some context…
So for most freelancers we work with are photographers, funnel builders, designers, copywriters, ghostwriters, etc.
Those are typically selling some sort of a service. So in a typical funnel, your objective might be to book appointments and meetings. So what might that funnel look like?
It might look something like this:
Opt-in → Download Free Thing → Book a call on thank you page or → Email follow up → Book a call
This is a typical lead generation style funnel that a lot of freelancers run to get clients. I’m just going to use this one as an example to introduce the numbers we’re looking to measure here. Just know that you can use these same metrics no matter what funnel you’re running.
The Numbers That Matter
Say we have a hundred people, a hundred unique page views.
40 people opt in. That's 40% opt-in rate. Great.
10 people book a call on the back end, either through email on the thank you page. That’s 10% of the total unique page views.
So our actual conversion rate of the funnel is 10%.
Here’s how you would do the math on that…. Let’s use different numbers this time.
2000 Page Views
400 Opt ins
20 booked calls
To find out how our opt-in page is converting, we take the page view number and the opt-in total. Then divide the opt-ins by the page views.
400/2000 = .20
So the opt-in rate is 20%. This is a key metric to look at when trying to optimize your opt-in page. It gives up insight that we can then take to start doing tests. (Bonus: If the opt-in rate is low [sub 20%-25%] the first thing we look at is the headline on the page)
To find out the conversion rate of the entire funnel – we take the final result we’re looking for (in this case ‘booked calls’) and divide that number by the total page views.
20/2000 = .01
So the overall conversion rate (CVR) of the entire funnel is 1% Which is not bad for this type of funnel by the way:
These numbers can then be broken down by time frame to give you the whole picture. In fact, we NEVER judge a funnel on a single day’s performance. There are so many things that can influence marketing and sales performance on a given day… but it you continue to see the same trend over TIME, then there is an issue.
For example, we’ve had funnels start off hot… 40% Opt-in Conversion Rate, 4-5% Overall CVR in the first couple days… then tank. And if they STAY “tanked,” we know something needs to be optimized. And we follow the numbers to see where we need to start.
I’m going to leave you with a few acronyms that you will see marketers throw out. You will need to know these for your business and it’s good to have an understanding so you can communicate effectively with your team if you choose to outsource the tech…
Marketing Number "Terms" That You Need To Know...
CVR – Conversion rate. A lot of times when this is referenced, it’s in regards to the ENTIRE funnel: End Result Goal/Total Unique Page Views.
PV – Page views. In most cases, we want UNIQUE page views.
AOV – Average Order Value. How much do customers spend on average? If you have a funnel or cart system in your business with multiple products, this can be a useful metric because you can play around with product/offer sequencing to increase the AOV. It’s also useful because it can dictate how much you can spend in paid ads to get people to the funnel.
CPC – Cost per click – how much does it cost to get a single click? Total ad spend/Total UNIQUE clicks.
CPL – Cost per lead… this is typically something you’ll see from media buyers. It’s important because the higher the CPL, the higher the CPA. Total ad spend/Total amount of leads.
CPA – Cost per action or cost per acquisition. Think ‘what is the result of this funnel?’ that is how to calculate CPA. Total ad spend/total number of ‘desired result.’
LTV – Lifetime Value – How much is each customer worth to your business (in revenue) over the lifetime of your business/client journey. So if you are a wedding photographer, and your top package is $15k… and that’s the ceiling for how much they can spend, your LTV is $15k. But if your top package is $15k and you can sell them family sessions or albums on the back end and get another $5k… your LTV is $20k. This metric is CRUCIAL to understand because it informs how much you can afford to spend to acquire a customer.
Shew… that was a lot… but it’s all very important when you’re trying to make the best more informed decisions for your freelance business offers.
Remember – Emotions DO NOT drive decisions. Data drives decisions.
When you can understand the data, you have the power.
If you’d like to watch a full training on this from our Senior Martech, Phil Stewart to hear even more examples for how this can work in your business AND receive a free marketing numbers tracking sheet we put together… go here to watch it for free in our group Freelance Growth Tools.