Round 3 of CMO Strategy:

I’m going to be diving deep into how to run your numbers today. This is gonna be pretty dense, but I PROMISE this will make you a lot of money if you implement this and hold your team accountable to it.

Every multi 8-figure company I’ve ever worked with has done this to a tee. The majority that haven’t reached that level have failed to do this.

This is the boring stuff that makes a HUGE difference.

Also for context, I learned the large majority of this from Cole Gordon and his team at Closers.io.

Goals and Projections

Projection = the metrics you will absolutely hit at a bare minimum. This is worst case scenario, you will not drop below this. Every single “maybe” in the pipeline doesn’t close.

Goal = the metrics you will hit assuming things go well. A few deals that were on the line went, an optimistic mindset.

Side Note: I don’t just use projections and goals for building client acquisition systems. I use it in the gym and for pretty much everything I do in life.

A lot of companies will set KPI’s at the start of the month and say, “we’re going to hit $100K this month.” Then they fail to establish how they’re actually going to do it. They don’t hold their team to hitting those numbers.

Most importantly, they establish a company culture that is OK with not hitting their numbers.

Not good - if your company culture is ok with losing, that means you, as a leader, are ok with losing.

In other words, you need to do better.

You want to be able to reverse-engineer all of the numbers that you need. I do this for my team on both sales and marketing.

Start with big picture revenue goals.

Right now, our team has been struggling to hit $300K/mo.

We’ve been consistently hitting the $250K/mo range.

So we’re going to set $250K as this months projection.

We KNOW we can hit $250K. We did it 8 times last year. I would consider $250K a worst case scenario for us.

In order to find your goal you’re going to multiply your projection by 30% (I.E. $325K as this months goal).

[Keep in mind, these numbers are designed for a company of this size. If you run a $50K/mo business, chances are you’re going to have much less predictable revenue]

Now we need to reverse engineer.

Let’s say you sell a $10,000 product/service.

You’re going to need 25 units in order to hit $250,000 in contracted revenue.

[side note: I HATE the concept of contracted revenue. I know everyone in our industry uses it. I think it’s a bullshit metric that you can’t bank on. Especially in high ticket B2C where you have pathetic percentages of people who complete payment plans. I ALWAYS go off of cash collected.]

Let’s assume you’re using a 1/3 payment plan.

In order to collect $250,000 this month, we will need 75 front end units.

Therefore…

75 Units = Sales Primary Projection

For the sake of simplicity, I’m not going to include recurring revenue in these equations. Ideally though you should have an idea of what your recurring revenue will be. Then subtract that from your total revenue projection to hit your monthly cash collection projection.

Ok so let’s reverse-engineer further for 75 units as a worst case scenario.

What do we need bare minimum to hit 75 units this month?

Let’s say our sales team close rate is 30%.

That means we’re going to need our closers to take 225 calls minimum to hit our numbers.

That’s TAKEN not booked.

Factor in 50% no-show rate on calls, that means we’re going to need to book 450 calls.

Ok great, that’s our main projection for marketing.

450 calls = Marketing Primary Projection

How are we going to hit 450 calls?

REALISTICALLY your call volume on organic should be fairly consistent (paid will always have more volatility but also more upside).

We consistently book 50 calls per month out of the email list.

We also consistently book 100 calls per month out of IG organic.

That means we’re going to need to book 300 calls this month out of paid ads and setters.

We currently pay around 250 per call.

If we wanted to book 300 calls directly out of paid ads…

We need to spend 75,000 this month on Facebook to realistically be able to book 300 calls.

That’s a 2,500/day budget on paid ads.

So we’re going to set this months paid ads budget to $75,000.

Now you might be saying, don’t you need a bit of extra room in case things fall through the cracks?

That’s what setters are for.

Setters are calling all leads not just booked calls.

My setter is a straight up killer - I set his projection at 100 calls per month (I.E. 5 sets per business day).

So I’m confident with this budget, we’ll be able to hit our numbers.

Even in a worst case scenario…I am confident we will hit our numbers.

If an ad account goes down, I hound my setter to call old leads, hit direct offers on the email list and IG organic, and pay whatever amount of money is needed to get our account back up ASAP.

So let’s drill down a bit further.

On marketing, in addition to # of booked calls, I set projections for:

1. # of marketing qualified leads (MQL’s)

2. Cost per lead (CPL’s)

3. Cost per booked call (CPBC)

4. Cost per acquisition (CPA)

5. Front End Return on Adspend (FE ROAS)

The reason I track the number of MQL’s is to have a gauge on lead quality.

A lot of times you’ll have this back and forth between sales and marketing where you’re debating who is at fault.

Does our marketing suck? Or do our salespeople suck?

MQL’s gives you an objective metric to go off for determining lead quality.

I track total number of MQL’s. I also track our call to approved call percentage.

I track CPL and CPBC to make sure we hit the lead volume we want to hit. I don’t like to use hard metrics on these, they’re more of guidelines for our media buyers.

I track cost per acquisition because it’s an easy way to determine our profitability and whether or not we’re ready to scale.

I will do a further article on cost per acquisition because I feel this is a relatively complex topic…

But in addition to adspend relative to cash collected, you’re going to need to factor in things like Closer+Setter Commissions, marketing overhead, taxes, chargebacks, payment plan completion percentage, software fees, quarterly leadership distributions, and a few other metrics.

I track FE ROAS as another measure of profitability. Obviously the goal is to be breakeven or profitable on the front end. That’s not always going to be the case but I like to make sure I’m keeping this number in check.

For setters, I break down projections by:

1. # of sets

2. show rate on sets

3. # of closes

For Closers, I break down projections by:

1. Closes

Pretty simple on the sales side.

Daily Tracking

A lot of people will setup something along these lines at the beginning of the month and then never actually hold their team to it.

As a CMO, you need to track this stuff like a HAWK every single day and hold your team accountable to hitting the numbers they’re supposed to hit.

This is largely a cultural thing in my opinion.

If your closers say they’re hitting 5 units this week, if it’s wednesday and they’re at 1, you need to be ON THEIR ASS about it. Don’t wait until Friday morning.

This can be turned around.

Have the uncomfortable conversation, isolate the problem, and fix it immediately so that you stay on track.

Do you know what you CAN”T turn around?

If your closers monthly projection is 30…there’s a weekly left in the month and they’re at 3…probably not going to happen.

You need to be on top of this every motherfuckin day.

Is this uncomfortable? Yes.

Do you know what’s a lot more uncomfortable? Having to fire people for not hitting their numbers.

How to track this?

You want to keep a running tracker for:

1. Current metrics (I.E. on February 10th, we’re at 30 units)

2. Pace (I.E. we’re on pace to hit 90 units, putting us 15 ahead of projection)

I do this for every single metric.

I spend an insane amount of time in hyros on a daily basis pouring through numbers per channel (I recommend hiring a VA to do this long term).

Now the key is to constantly keep tabs on all metrics until you have a baseline, then find where it breaks.

Then…fix what’s broken.

You need baseline metrics in order to determine problems.

As a CMO, if you can do this, you’re a weapon to any organization.

I had a client last year who had a killer Closer that closed 40% of calls that showed up.

On marketing, we were consistently below a $50 cost per lead and $300 cost per booked call.

We were booking an INSANE amount of calls from paid ads yet barely anyone was closing.

Applications were solid and lead quality was good enough.

We’d book 100 calls from paid ads and get 2 closes…putting us deep in the red.

Ultimately, after spending hours digging through our CRM, I realized the answer was very simple.

We couldn’t get paid ads leads to show up for the calls.

Our show rate was like 5%.

Why?

A few reasons.

1. We were using VA setters who didn’t run a proper triage call

2. Nobody was confirming calls day of

3. Calendars were set for unrealistic times for the prospect

So we hired a proper setter, trained them on how to run the triage, and started having them confirm calls.

We also adjusted our Closers hours.

Makes a HUGE difference.

But someone has to be able to zoom out and see the big picture on stuff like this.

I believe that’s your job as a CMO.

That’s all I’ve got for you today.

If you’d like this email, shoot me a reply back. I’d love to hear your thoughts. I’m probably going to shoot a YouTube video on this at some point.

• D

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