 Hey, good afternoon, everybody. Tom Stewart here. I'm with Liz Trotter, our guest today is Matt Ricketts and this is Smart Business Moves. Happy 2022, huh? Oh, this is our first. That's right. I feel like so much has happened in this year already. It feels like we're like halfway in, right? Yeah, not quite that far. But okay, so I didn't have a chance to tell you about this, Tom. So my strategic success groups, we launched a new app in those groups today to manage workflow. Well, you did. I had no idea. You didn't hear about all those. That's news. That's news to me. Tell me. Tell me more. It was so bad. Yeah, so nobody has still been able to actually work in the app yet. It's where you are. It's like a clock. Yeah, it's just been. Like it's a project management tool of some kind? Yeah, I would say that project management tool. That's a good way of thinking about it. We don't want to name it until you actually get all the kinks worked out. But you're excited about it. But it's less than stellar first day results is what we're saying here. Yeah, so far I think it has been launched for about nine hours. And not one person has been able to enter any data. Hey, Linda, have you been able to enter anything into the app yet? So is it like the thorough beta testing didn't identify some of the? We thought we had, but apparently not. You know that we were at the last second scrambling for emails, et cetera. So you're like, what? I know nothing, Liz. No, I know nothing. No. Well. So just don't call them bugs. Say they're features. OK. And it was designed to do that. Yeah, OK. Thank you. So yeah, that was my fun day. I have 51 people all, hey, hey, Liz. Did you know that was not working? What do I do? Oh, man. But I'm sure people are addressing that as we speak, right? Absolutely. Yeah, absolutely. Made for a fun Monday, the first Monday. We evaluate software all the time, Tom. And so we're always looking for tools to make our workflows run smoother in the different organizations we run. And I feel like half our job is identifying the tools for our teams to use and do different things. So yeah, I mean, sometimes you think you found the right thing. And it turns out it's a little bit more. Well, this was not a found mount. We created it. So that's all. They built this. Yeah, we built it. Oh, OK. Well, Robin says he got it working. So there you go. They're on the verge of being MVP. They're right on the cusp. OK, you're building a SaaS product, Liz. This is big news to me. You're a SaaS founder. So I'm super excited, though. Robin got his KKI's again. OK. Robin, did you get all six of the required ones? Hopefully. That'd be awesome. Hey, Tammy. Good to see you here. Yeah, fingers crossed that you were able to. All right. So anyway, that was my challenging first day, first work day of the year. Cool. All right, see? Crisis averted. Well, it's only the KKI's. We need the Monday check-in. That's the tricky piece there that everybody's still waiting for. Keep an eye out, Robin. It's still coming today. Days early. Yeah, it's only five o'clock. He was on. It's only three o'clock where Liz is. Three o'clock for Liz. Or two. He's in Pittsburgh. So with an H on the end, just saying for all those people that don't know how to spell Pittsburgh. Right, Robin? All right, so I'm hoping. Robin knows. Robin, don't tell me. Robin knows how to spell Pittsburgh, right? Yes, he absolutely knows how to spell Pittsburgh. But not everybody else does. I would probably. I'd probably mess that up. So what else is going on? What else is going on this week? Did you guys have better Mondays than I did first day of the new year? You know, it's always Mondays there. I actually look forward to working. So I don't mind Mondays. Like, you know, there was a lot to do today. We've had three meetings together at least today. That's his name. Look, that's his name. What did you call Tom fear? It's a tech founder beard. It's like all the other hip founders all have scruffy beards, but you got to remember to shave the neckline so you can't let get like mines to scruffy on the neck. That's not a tech founder. How high do you go? Not that far. Like where it should be cut off here. Mine is too, mine's too overgrown right now. So this is probably too much for most people here. But yeah, there was a whole discussion in one of our, me and Tom get some coaching, you know, as well we eat our own medicine as far as our other businesses. And that was a discussion that somehow took like 10 minutes one day about how far up the neckline your beard should be. And you can tell somebody is a more of a salesperson or more of a tech person based on where they trim the beard. That is very cool. I'm totally Googling that after this Facebook Live online. All right, KPIs, we're talking KPIs. I know everybody here is super excited. Oh, that's funny. Robin, you were right on track with what we're talking about today, right? You entered your KPIs into the app, yay. And that's what we're talking about today, is KPIs, starting the new year off right. Yeah, so we're talking about one other thing just so we don't forget. What's going on in your world later on this week, Liz? Oh, so you were able to pull it up, yay. So I'm heading over to Colorado for Collins, specifically to see Laura Smith and join her event, the All Star Way to Operational Excellence and Absentee Ownership. So super excited. I know that this event is full, but we still wanted to point out that while the live event is full, the online version still has some opening. So if you are having a little feeling like, dang it, really wish I would have been able to make that happen, go check it out and see what's going on with our online events. It's gonna be the same stuff without the travel. You guys were getting better at being able to do online stuff here in 2022 because you're getting more experience, right? At doing online stuff. So it's gonna be a great course, even the online portion. For all of you that are gonna be there, I'll see you there in just a few days. Where's the start? Thursday, Thursday, the sixth, Thursday. Pretty impressed with her. She decided she was gonna do this and maybe two months ago and sold it out, I think for 40 attendees in short order. So that's not easy to do, to organize a live event. The materials, one thing, she's got great material, but then the logistics of bringing everyone together. So that was great. She was able to pull this off. And it's great timing because I think people always can use this kind of structure and organization. Absolutely. And I don't know anybody that runs as buttoned up an organization as well documented. Maybe other people do it. My company runs really smoothly and really well documented, but we don't have it as written down and a lot of it's institutional knowledge. We really should create these kind of playbooks like she has and document more of that institutional knowledge. So it's really impressive when I took a look at it. It was, I was excited. Yes, great stuff. No, Linda, I am not speaking. This is Laura and Aja, you see Aja on there too. She will be presenting and hey, Aja. Not used to that red hair yet. I know she's already switched out of it, but yeah. So looking forward to seeing everybody. And hey, Deneet, I know Deneet will be there too. So it's gonna be a great event. Well, the event, everybody's gonna be talking about this stuff too. I don't think people have seen what Laura has put together or Laura and Aja have put together before in our industry. I mean, yes, the information is similar, but we all know that the information is not the whole story. So I think it's gonna be cool. It's all about the execution. And I think that you're gonna see it organized in a way that's gonna make it a lot more actionable. Yeah, absolutely. Can't wait. Absolutely fun. Deneet knows it's gonna be amazing. Well, Deneet's been helping Laura out, get some stuff together. She lives over there too. I'm just praying that we're all gonna be able to get there with these flights. All right, so. Well, that seems to be a challenge lately. I don't know, it was like 1500 flights so we're canceled this morning, like for today. I haven't heard that like at six o'clock. So I don't know what that while I'm doing. It's a better number than yesterday, right? Better than we've been doing, so that's good. I booked for, I leave here I think at six on Wednesday morning instead of Thursday. I figured that gave me a lot of time to bump flights. Still gonna make it there. You can still sleep at an airport somewhere and be there Thursday morning. Yeah, that's what I'm thinking, yeah. Yeah, it's definitely the airlines have always run at the margins of like, do they have enough staff, enough employees? And they've always done that. And then I definitely feel like as demand is compressed all of a sudden, they're really thin. And then on top of all the other people being out for various reasons with COVID and other things on top of everything else. It's like a perfect storm. I think I would definitely be having a plan C for everything nowadays when I travel. So yeah. You definitely want to, ooh, look Tom here. You're getting some props there on that. A gruff. A gruff look. Gruff, gruff, gruff. But so the travel thing will work its way out. I guess, you know, it's kind of funny the government spent billions of dollars keeping the airlines going through the end of 2020. And then that money ran out and they laid a bunch of people off. And as I understand it, you know, this better than I do, Matt, it's like if you're a pilot and you haven't gotten your hours, you just can't say, hey, come on back and fly your plane tomorrow. There's training and stuff it has to go on. Even Southwest that didn't lay anybody off, they had pilots that didn't fly for months. And so they're no longer qualified. So you haven't done enough landings in 90 days. You haven't touched the plane. Yeah, they had to bring people in for SIM checks just to get qualified again. Cause over, you know, over some period of time, they just basically just decided that a certain amount of the pilots were, they're going to pay them, but they just didn't have work for them. So they just sat around and so they, yeah, they became unqualified. And yeah, there's a spool up period for it. It's not just like, you know, I turned the faucet back on. So there's tons of stuff going on here. I hope it's all worked out by the time I have to travel in February. Yeah, so the weather hasn't been our friend the last few days either. No, no, not at all. The snow in Colorado, so. So let's go ahead and jump in just to kind of frame up what we're doing here this month. January is KPI month. And if you remember, it was only 12 short months ago that we were setting here. We spent like a month going through building out a PowerPoint deck. And it was kind of a free flow thing. And we built on some of the core KPIs that we actually focus on in foundations was what we were kind of using as our framework at the time. And I don't know, we have a PowerPoint deck of like 100 and some odd slides that we built over the course of the month. But we're going to be doing it differently this time. We're going to be using, I guess, really the process flow chart that we use in foundations. And we're going to take a process within that flow chart for each one of our shows this month and kind of break down, what does that process look like from a KPI standpoint? And these are processes that every cleaning business has. It's at a high level. It's like every cleaning business needs to find people who want to clean homes. And at the same time, you need to find homes to clean. And there's like a recruiting and a sales process. And you take all that and you schedule and dispatch and you actually clean stuff. So we're going to start with marketing because that's kind of the first step in finding homes to clean or arguably finding people who want to clean homes too. It kind of crosses over. Matt's going to take the lead on that for us. And every show we're going to have a different guest that's going to be speaking like, we're going to follow up marketing with sales. And Wednesday, Derek Christian is going to be joining us and he's going to be talking about KPIs and how they apply to the sales process. But that's on Wednesday. Today is going to be marketing. And thank you for joining us, Matt. How do you want to attack this? I've got a screen we can start with just to kind of give reference to some KPIs that we achieved. Now these are sales numbers that we were able to achieve for the months of 11-1 to 12-31. So I just grabbed a two-month slice here and we're going to start with that before I actually look at the marketing data that got us here. But the top two lines are recurring sales. Some of them being customers that came back in yellow. There's no quote. And then sales that we had never quoted those folks before was the top line. So we sold 61 new recurring customers over that period in about 81 times sales. But look at the bottom number. We netted 20 new customers with a, that number to the right of 20 is 2,112 additional thousand per week basically. So quick back, quick math in my head is about $108,000. If someone has a calculator wants to check that, but that is adding $108,000 in annual revenue from the sales activity we did from November 1st through December 31st. So just to be clear that green line represents recurring jobs on a weekly basis in the revenue associated with them. So 20 jobs a week with revenue of a little over 2,100. So every week that's an additional 2,100. And $109,848 a year. You take that 2,100 and multiply it times 52 because there's 52 weeks in a year. Yep. So that's what we accomplished over these two months. So typically these are always good months for us. So I wanna kind of preface that marketing has to produce results, right? It has to produce arguably results to pay for itself to justify the expense. But I don't know anyone that wouldn't be like, I would, anyone here that would be like, ah, $108,000 extra per year in revenue. I don't need that, right? Like that's a significant amount of growth. And we're seeing that month over month, like 40 or $50,000 in annual growth month over month. So I'm gonna just kind of actually I'm gonna stop here actually before we do this. All of this is related though. All the KPIs are related though because really to make your marketing spend be as valuable as it possibly can, you need to be awesome at what you're doing and deliver great service. Liz, I haven't looked at your churn in a while but I did peek at it a long time ago when we were talking about it. Are you still around 2% churn per month? I never, the last time I looked, no. We were quite a bit higher than that last time I looked, Matt. Well, so understanding this is an important thing. I actually, I know that you're actually in the top quadrant of made central users. I haven't looked at the number, but there's a report. You guys are one of the leaders for churn. And churn being, if you have a hundred customers, how many leave per month? It's important to know that because that actually affects how much money you can spend on marketing because the longer they stay, the longer, the more valuable they are to your company. So if Liz is able to keep a customer for 50 months, which is what 2% churn represents, versus my company, which is historically around 3% of 33 months, her customers are worth roughly 30% more than my customers over their lifetime value. So, I talked to one of my friends last week who is struggling at like 10% churn per month right now with COVID. So, I mean, it's not unusual to see those numbers be higher this year, but if you're losing 10% of your company's customers every month, then obviously you need to be marketing just to kind of stay where you are. So the lower you can get that number, the better. And that's why on the sales report, it actually kind of leads off with some quality metrics, which are important. And then I also wanna look at my sales metrics just briefly, I don't wanna steal any of Derek's thunder, but knowing how many leads came in, how many of those you turn into quotes, how many of those turn into sales. And this is just new customers, not any returning customers. And sales to quote ratios, and even who your best performing salespeople are so you can hand those over and give those to the right people in your company. Knowing your lead sources and what's delivering is also important. And having some segmentation is important. I can tell you though, I do something a little bit more detailed with what I'm doing. So this is for a slightly bigger period. This is from 10-1 to 12-31. So a month prior as far as where this is for marketing. So what I do with all my data is I have a marketing agency and they actually upload all of my CRM data from 8Central and they upload that to Facebook. So I can get really good attribution as to what my total bookings are that came directly from Facebook. Let's talk about attribution for a minute because that's a concept I think is important. When you say that, what do you mean? Well, I wanna be able to say that the dollar that I spent on this Facebook ad can be attributed to the $10 that I earned down the road. So my ROI, right? So attribution is trying to match that customer, that activity that happened in your CRM to the first time that they interacted with one of your ads or your ads re-engage them in some way. So said plain English, if you have a lead, it's basically figuring out where it came from. That's a better explanation than what I just said, yes. So that's kind of important. So we're talking about KPIs for marketing and any type of KPI starts with having data and one of the key pieces of data that you need to have for managing your marketing is figuring out, well, where are your customers coming from and even backing up the funnel as you can see or where are your leads coming from? People who wanna use your business, how are they hearing about you? What's what incented them to reach out to your business to begin with? That's, I guess from a marketing term, the marketing professionals call it attribution, right? Yeah, I think that's probably though a very kind of couched way to talk about it though, like, you know, get it down to where everybody is. It's a lead source. Where are your leads coming from? What activities are getting you leads? And I wanted to talk about one specific channel that I feel like my company does differently. And a lot of us are afraid to do Facebook because we don't have the attribution. And, you know, this is hard to get unless you're using an agency because they have tools that we don't have. But first off, let's just start on the left-hand side there, that distribution. I had almost 800,000 views in my ad, not necessarily people, you know, eyeballs hit an ad. So an ad, I don't know the frequency on this report, but let's say that that's 80,000 people that they saw my ad 10 times, basically, is roughly what we're looking at there. So I got in front of 80,000 people, 2,145 actually, even if they didn't click on an ad or something else, they went ahead and searched for my company or did some research on my company after seeing an ad within a 30-day attribution window. So all of this is based on 30 days of activity only, like if they do some next step. 629 leads were created from this. So a lead would be somebody that filled something out on my website, right? And I have a very simple lead form, you know, I'm not asking for a lot and I'm giving away my call to action or my giveaway is just giving them a free price. You know, I call it get an instant price. And that resonates with people because they just want to know what it costs, right? And they don't want all the mystery and they don't need you to come out to their house. They just, they want to know what it costs. And you know what, if it's too expensive for them right then, you can stop the shop or if it's a good fit, you know, let them keep going. Liz, do we have a question? We do. So Patricia is asking Matt before we move much further off of this. If you haven't even started track insurance, how do you get started? A very simple way would just be to have a spreadsheet which would track how many customers you lost each month and kind of track the reasons. The reasons isn't tracking churn, but before we had made central, we had the spreadsheet where we would put customers lost and customers gain. And you're talking about recurring cut, you're talking about recurring customers? Recurring customers only. So then we would, so we would add the customers lost, I'm sorry, we would add the customers gain to the total customers that we had on a list somewhere at the end of the month and then subtract out the customers gain or lost, I'm sorry. Anyway, so the customers lost divided by your total customers is your churn rate. So basically if you have 100 customers and you lost 10 in a month, your churn is 10%. If you had 500 customers and you lost five in a month, your churn is 1%. So on average, I think most companies are 5%, would be where I would guess most people are. Doing a really good job in COVID times, probably 4% or less. And then exceptional like industry leading, 3% or less. And then just like a world-class benchmark, like only a few companies are probably like 2% or less to be where I would kind of create some benchmarks for yourself as far as churn. There was something that somebody told me about, maybe Derek when he does his call later this week, he can talk about this. He had some data on the franchise systems where their churn was like 8% or 10% monthly, like some really high number. And they were okay with that because they had such good marketing systems. That was a long time, I got it too. Yeah. Who knows what it is? Now, you might have new data, which would be awesome. Yeah. How Sharon is suggesting put up a wall chart. Tricia, you've probably seen these like the point charts that everybody uses. You keep track of, it doesn't necessarily measure your exact churn, usually the ones that we see, but I can see how you could measure churn on a wall chart so that people could see who's leaving and who's coming on a daily basis. Yeah. So, going back to this, the chart in front of us leads, really online bookings was super low, the last, I guess that's a three month grade. We really have had that pretty much turned off because we just haven't had the staff. So we only had four online bookings, but we had 21 one time services attributed to our ads with 12 recurring services. So 33 total bookings and attributed revenue from our CRM and we just looking at, this is not lifetime value. We're just looking for 12 months. We're attributing $66,000 in sales to just this Facebook campaign that we're running, this Facebook marketing. So, roughly a four times, ROI on an annualized basis, but when you get to your, if you get your churn down to 3%, that's roughly 11 or 12X return. So it really just depends on how long you keep a customer, but that's where you can really afford to spend more than your competitors is if you're good at what you do. And this is why having all of this stuff really kind of placed together is that if you're a great marketer and you don't do a great job on your operations, that's a really quick way to burn out your entire, your entire organization pretty quickly. Like lots of bad products with good marketing have been basically burned to the ground pretty quickly. So I really think the first thing to focus on, we're talking about marketing first, but I think the first thing to really focus on is being really good at what you do. And then you should be able to, go after whatever market share you want. If you know your company is good, then you should be able to do what you want to do. Do you guys have Martha coming on at some point this month to talk about kind of quality management and things like that? Yeah, I'm sure they have. I think that's really important, really some sort of quality measurement program is really important to have in place so that you know that your marketing efforts are really gonna pay long-term. And so this ROI includes both ad spend and what I pay my agency. So my total marketing investment over that period for this channel was $16,000. So I feel like, I know that's a very good return on investment for us to grow. And we've seen good results year after year with Facebook. And even in this constrained, I feel like if we weren't labor constrained, we would have blown up last quarter, basically. If we would have had the labor or the availability to do more of these online bookings, we would have seen explosive growth. So some KPIs to really, I feel like really understand to get the most out of your marketing spend is, is first off, is know your customer churn, like I mentioned. And really know your average ticket value of your cleaning. So how much does your average cleaning cost, right? Like one, mine's around 178. We can just round to 180 for, you know, for government work here just to kind of get close enough. And then know your frequency of your customers because that has a lot to do with what your customers are worth. So my friend, Joe Walsh, she's been on the show a lot of time, Tom's, all of our friend, Joe Walsh. We were, we had a call a week or two ago and Joe always blows my mind because he has significantly less customers than I do, but he makes similar money than me because his average frequency per customer is 2.3 cleanings per month, per mine is 1.7. So, you know, focusing on increasing frequency and getting more money from every available customer is just as important as getting more customers, right? So I know this isn't like marketing message, but it's, but this is all stuff you really should have a better grasp on if you want to make as much money as you can off the dollars you're gonna pour into your marketing efforts. So once you know those three pieces, right? How long your customer stay, their average ticket value and their average frequency per month, you can figure out their lifetime value pretty easily. So, you know, just for some rough numbers, my average ticket is 180, my average customer stays roughly 30 months right now and my average frequency is 1.7. So I'll do the math really quick. So, 180 times 30 times 1.7 is roughly 9,180. It's lower than it was prior to COVID when we were probably closer to 36 months per customer. But, you know, it's... As this pertains to marketing, the high recurring frequency, ideally, you want to be selling bi-weekly and weekly recurring customers. A friend of ours, Carrie Knight, who's been on the show from time to time, has a whole program about getting higher frequency recurring customers. And she builds marketing campaigns focused at incenting people to sign up for high frequency recurring service, putting deals together. The irresistible deal, I think, is what she called it. The irresistible offer. Offer, yeah. So one of the metrics, one of the KPIs associated with your marketing would be, you know, what is the lifetime value? And part of that equation is, okay, you got people signing up for recurring service, but are they signing up for bi-weekly as opposed to every four weeks? Yeah, and that was a big, you know, what's funny is I had over 700 customers prior to COVID. I've got like 605 right now. Yet our run rate is, we've raised prices. There's lots to do with it, but a lot of it has to do with our frequency went from like under 1.5 to 1.7, which doesn't seem like a big deal, but it's a 20% increase in frequency. And I'd like to get mine closer to two, like my idol Joe in terms of getting those, you know, that frequency up. So yeah, your marketing dollars are more effective if you can sell recurring services, you know, and sell at a higher frequency at a higher dollar. So yeah, that's the thing is we sell a product that could be worth $3,000 a year if you don't manage it very well, or it could be worth, you know, $3,000 total or it could be worth, you know, $12 or $15,000. If you manage all the different KPIs really well, and then, you know, if you can earn $15,000 off a customer, you can spend more to get a customer. Cause this number would scare people, spending $300 almost per service booked. Does that number scare people on the call? Does that sound like a ton of money to people? Do we have another question that ties into this list? We do. I think that 296.76 doesn't sound like a scary number all by itself until you think, oh gosh, $300 for 21 one-time services. So cause that then sounds a little bit scarier. It's like, wow. It's the total number though, cause you have to get some of those. And that, the way that we're tracking it is we're only looking at, you know, really the report we're looking at is showing whether they booked one time or, I don't know, I'll have to look at how we're capturing that. We're using one of the campaign reports and made central to get that data. It does look like it's 33 services booked. And one of those was at 296.76. And so I think that the scary piece of that is, wow, 21 one-times at 296, sometimes that's not much more than I'm charging for my one-times and that's not going to cover it. But what you have to think about is the 12 that is not, those aren't one-time and those are going to keep delivering. I think that's your point, Matt, is people and that's a lot more money. And you have to also look at it as, part of the philosophy of selling to people is, is you're a lot more likely to sell them again if they've used you once too. So if you have them and they've tried your service, even if they weren't ready to be a long-term buyer, and I would consider, there's like a whole funnel of like the cycles of a sale. And one of them is like a trier and one of them is a buyer, right? So like a trier, I would consider somebody to be somebody that just did like a one-time cleaner and a buyer is somebody that has recurring service with us and we're trying to move them from triers to buyers. And the only way to do that is to get more triers, but those 12 recurrence are worth roughly $4,000 a year annually for me all on its own at this point. So that's a big chunk of it is that we've really increased the value of every customer on an annualized basis quite a bit. So knowing your average lifetime value, knowing your average lifetime value makes it really easy to rationalize a bigger marketing investment. The important part of that is that you need to be thinking about though is the cash flow associated with it that if you're spending Tammy in your case, almost $500 for a new customer and if a third of those are recurring, you can still rationalize the math off of that if you've got a low churn rate, but you might have to clean that house for two thirds of the year before you are actually recouped your marketing investment. And I think- So we're also asking over here, Tom, Matt too, if you guys can see, what is the target for customer acquisition costs? Do you have any ideas? They're a benchmark or? I think I've always heard different numbers, but it really matters on how much you take care of those customers and make money over them over the long term. So your number 487 sounds a little bit higher than what I'm at, but part of it is I have better attribution because I'm running this through Made Central through my CRM and then I'm running it through Facebook's API. So I'm capturing more data that you might be missing, that it becomes hard unless you have some of these really advanced tools. There's things you can do like strategies like send all of your Facebook traffic to a certain page on your website. However, just a ton of people never click on those ads. All they do is they see it and then they research you and then it depends on your attribution to determine how are you identifying whether that was a Facebook lead or not. And unless you have like an advanced CRM, you won't have that data. So you're probably better off than that 487 represents is my point. You're probably getting more return on it than you actually even see there. But it's a combination of your average lifetime value for a new customer. And it's also a function of what your loaded direct payroll to revenue is. And having those two numbers, you know what your gross profit is off of every new customer and really it's a game of how long do you have to clean a recurring customer in order for you to actually break even? And the larger, more successful companies have the ability to pay more for a new customer because they can handle the cash flow part of it because it takes a while. That lifetime value, you have to earn that over several years. You don't get all of that the minute they sign up for your service. So the answer really lies in your data and how good your retention rate is and what your gross profit per customer is. But you hit it on the head there. It's not your net profits, it's your gross profits because you're figuring all your fixed costs, making sure those are all covered. So if you're at like most of us at like 45% with direct and then another 10% for all the other things, you have about a 45% gross profit margin. Let's say 40 if it's a little weaker. Go slow, so remember a lot of times why people are on this show is because they're trying to learn new concepts or to really dig in. So if we whiteboard this out, right? So if you have a customer that's, most of us think of our profit margin as what's left over after everything is paid, like, oh, I only made 20% or whatever. But really, we wanna think about our gross profit margin here, not necessarily our net profit margin because we can justify in that some of those other costs are a function of just the fixed cost that we already have. This is the cost of just operating this cleaning is this cost, this variable cost. So our gross margins is what we wanna look at. So the first thing that's our most expensive thing for most of us is our direct labor where I try and target mine at 45%. That includes PTO, including sick time, but it doesn't include taxes or workman's comp. So I'm at 45%. By the time I add taxes and workman's comp, I'm at a roughly, I don't know, 55%, 55% cost of goods sold when I look at that. So I have 45% that is gross profits that's left over. And we can just use 50, 50 if it's an easier number. But if I sold something for a dollar, 45% is mine if we use the 45, 45% is the company's to cover the rest of the costs, the fixed costs after that. So I'm really more interested in the variable costs when I'm looking at marketing dollars of growth. I don't know if this is getting into the weeds too much Liz, but... I think it's helpful for people to keep hearing these concepts, right? And looking at them from different directions. I don't wanna get off the marketing piece too much, make sure that people know the marketing KPIs that they really need to be focusing on. So one that we heard right off the bat that a lot of people don't think about is the LTV, the lifetime value of the client. I don't think that that's a marketing KPI that a lot of people focus on. And Matt, I think you're making a really great argument for why that's a really, really important number for people to be looking at. How many times I can say looking at? Well, yeah, the thing I always, when people always ask, what can I afford to spend on this marketing program? I do always look at like, I always like to look at, well, what's your turn? If they don't know that number, try and come up with a rough estimate of it. But yeah, I don't think you can make any good decisions at all until you know that number, right? I don't think, and honestly I don't, I think so many people are over focused on grow, grow, grow, grow, grow. And they're looking at all these levers that they can pull to grow. If you can improve your lifetime value of a customer in some meaningful way, I've been on people's websites and we're looking at growth hacking their website and we're like, my conversion rate from visitor to sale is like 1%. If I could just get that to 1.5%, I would get an additional five sales a month or something like that. And if you want to talk about a 1% number that can actually grow your company by like 30% as if you want to shift the number by 1%, it's reducing your churn from 4% to 3%. That would create exponentially more value than all the time you'd spend, growth hacking on your website. All those numbers are important, but I just think you have to have that foundation laid of a company that delivers on its promises and keeps its customers long-term and we can all be better at that. I mean, we all drop balls, but it's such a funny thing. We're talking about marketing, but I wouldn't even throw money like this at marketing if I didn't feel like my company was delivering on promises and had the operational expertise to make our customers happy. So that is a point that we hammer on a lot and so I'm just gonna hammer on it one more time, which is why you need the data. You need to be looking at the numbers. So, so much of the time, we see people that are wanting to know how much they should spend. What percentage of the most common question we get is what percentage of my revenue should I be spending on marketing? And the answer is not a certain percentage. It depends on these other numbers, right? So you can spend a lot of money if you're making a lot of money, but if you're not making any money, you need to stop spending money at all until you get your problems fixed. And then start spending money. So, and sometimes it's not always just a marketing thing. It's also sales and it's retention. It's all these other things, why we're talking about all of these pieces together and we'll be talking about sales again on Wednesday, right? They all work together well. And honestly, I got better at marketing. I mean, not to, I know you guys aren't planning on any more foundations courses, but I got much better at tying my marketing together and really getting better results from my marketing by going to foundations and understanding these metrics. Like, I know that's why we're doing this call, but it was such a transformational thing for me to really understand, you know, how else to do it. And you know what, it's kind of like an old rock band. You just never know when foundations might come back for another tour. But there's nothing on this. Foundations coming back, it is coming back. We've reconfigured stuff. So for all the people that are out there wondering about foundations, yes, it's coming back. There will be an F12. Feel free to reach out to me and ask about it. I don't want to waste my time here talking about it right now. So, if you want to know more about how to calculate lifetime value of a client, I dropped a link in chat with a KPI video that's on cleaning business today. So, is there an easy way if you have make central one? Because I know a lot of people, I see a lot of people that are on here hitting out. Sorry, Tricia. They want to know what their lifetime value. Is there a place that I can... Yeah, we need to build this as a, so you'd have to look at two different screens to get most of the data. So... If you take the spreadsheet... What? Wait, wait, wait, wait. So, the most perfect, most amazing software out there, can't tell me what my lifetime value is. It can. Oh, it definitely can. You just have to do a calculation. I'll figure it out. Yeah, we could probably build a dashboard for this, but so you'd have to, first off, know this churn data. Do you guys want the LTV number? You want it just pop up there or you want to have to go figure it out? I know. For every customer. Well, we could. We could do that. You know, that's what we're going to be. You know, it's not a destination. It's a journey, Liz. We're constantly developing it. And I'm pointing out two things. One is you have to have this information, period. Doesn't matter how you go get it, right? You can get it out of them. You can get it from Mate Central, but even in Mate Central, you're going to have to work. Or you can get it another way. You have to go get it, though. The point is get it, get it. Yeah. So two of the key numbers are right here from this report. Your revenue per job. That's for F-12. And your customer attrition. So this is, this is, those are two of the key metrics. The final number you need is you can get from the service set tracker report, which again, you've got to do a little bit of math, but so your jobs per week. So how many jobs do you do per week? Times 52 weeks in a year. And then divide that by your total customers. And this, this is not even a true total customer. This is service sets here, but 603. And that's how you can turn, that's how you can solve for your, your, how many frequencies per month. So we obviously could identify that veteran and manage that and make it easier. Cause you're right. It's a number that's important. For everybody that wants to know about this, drop this in the comments for me, if you want, cause I have to go at 5.50. Just fast forward to 5.50. And Matt's going to tell you exactly how to get it. This is how you get your, figure out your lifetime value. He just showed it. So you don't have to, you can get it here anytime. So for those of you that are like, that's so hard. I don't know how to do it. Just come back to this video. Come back here. Look at how easily Matt explained it, right? Take these two numbers and go to this other low screen, that's this other number and you got your number. So, all right. I am going to let you guys finish. I'm not going to interrupt you anymore today, but I'm going to see you all, Tom. See you on Wednesday. I'll see Derek on Wednesday. Bye y'all. Thanks Liz. Bye. That's nice. Good job. Good job, the filthy bucket. I love that. Okay Matt, now Liz is gone. What do you want to do? I think, I'm going to go drink a cup of coffee. Oh, busted, busted, never mind. Yeah, I'm going to go drink some coffee. That's what I'm going to do. There you go. You never know what's in this cup. Yeah, it's later where you're at the night where I'm at. So I'm still on the work day for another minute or two here. Yeah, I mean, there's just so many things you could be focusing on with marketing. So I'll just kind of wrap with this. I do think you want to pick marketing channels that you can identify and create attribution for. If somebody wants to sell you something and you can't identify easily where that lead source came from, that there's a return on that investment, I wouldn't spend that money. I really like digital because you can get all that information much easier than the old days of spray and pray. You can argue that direct mail is pretty effective in some ways because you're targeting an exact area that you want to cover more so than digitally can do where you can get really laser focused. But the cost per impression is really expensive for print compared to digital. So we talked, you know, a couple of KPIs is how cheap is it to get in front of an eyeball in front of somebody? So I had roughly 800,000 impressions. So eyeballs seeing that. Explain what that means. Because that's a big number, that's almost a million. Yeah, so an impression is just somebody was shown one of my ads in their news feed. They could have just been scrolling by at a million miles an hour. And that's an impression, right? An impression could be somebody, just your car whizzing by somebody. So when marketers talk about impressions, sometimes it's not really clear as to whether that was like a great impression or not. But like a billboard gets impressions by how many cars drive by that billboard per day. So the cheapest impressions aren't always the best marketing channels, but you do want to know how much it costs to get in front of an eyeball in front of somebody. So if I spent roughly $9,000 on ads last month, so 800,000 divided by 9,000, my math, it's actually the other way around, 9,000 divided by 800,000 is it's a penny per impression. That's really cheap. You know, a postcard would cost you 49 cents per impression. I don't even know what a postcard costs and more than that. Plus a lot more than that between postage and print and design, right? Yeah, who knows. But yeah. So, but even just the mailing cost to get it in somebody's mailbox, I don't know what it costs anymore, but it's so expensive. Television, television, it's close to a quarter per impression. And again, you know, where is the attention going? It's moving to these other apps. Like, you know, I have a television show that I like called Yellowstone and I don't watch it on chart. I go to Paramount Plus or Paramount or like their app now. I would have never thought that's where I would go to watch television but they've made it all fractured now. So they've done it to themselves a little bit too. So yeah, I don't know. I think the cool thing about that is you might be able to better target your market, your niche. Like if we were selling Star Wars memorabilia I would put all my advertising dollars into Paramount into the Paramount Plus app or something like that. Run ads on Discovery or whatever Star Wars shows that they're running. So television could still be the right channel for some of you based on your markets, but I know that digital is very inexpensive to get a lot of eyeballs to see my brand. And people always tell me, man, I see you everywhere. And the only thing that I'm doing really, I used to have 17 cars. I have four cars now. So it's not because of the cars that we have. It's strictly the Facebook advertising. And you go to my site and you will continue to see my ads for, I don't know, 180 days, maybe six months. You'll get some sequence of advertising from me or marketing from me for some period of time. So cost per impression is important to understand and where the eyeballs are kind of moving. And it's a changing, it's a moving target. If you could figure out TikTok, that would probably help. Yeah, that's probably, you know, the new social platforms are probably going to be playing a bigger, bigger role in our digital marketing mix. With the five minutes or so that we have left, we should probably be thinking about what the overarching points are in terms of a measurement standpoint, a KPI standpoint and how that pertains to the marketing function. I'll let you lead that. So what do you normally teach them to measure? It's, you know, it's about the data and you start it off. Could you go back to your sales funnel? You know, this is your typical sales funnel. And, you know, you got the number of impressions, reached, I presume that's when somebody like interacts with on your ads, clicking on it. That's a clicked on ad, yes. Okay. And it leads is where it really starts getting interesting. And then your conversion rates on those leads. So, you know, you wanna know where your leads are coming from. The fancy word is attribution, but basically it's a lead source. You know, how many are you getting from Facebook and, you know, just natural search. And if you're doing any paid Google advertising or, you know, Angie's list or whatever the case might be, you wanna know where your leads are coming from. Various leads converge at different rates. I wanna stop on that point too, is getting those leads means that you have control over them forever and can cheaply market to them forever. You own that lead now. You have probably their SMS and their email address. So, you own your marketing channel from that point forward and have zero cost to remarket to those folks in terms of, you know, through email or SMS channels. I mean, there's a little bit of marginal costs of those to send, but it's, I mean, it's fractions of a pension. And most of the leads you get will not sign up for high frequency recurring service. You know, some will sign up for like one time service or, you know, on demand service and some of them won't buy at all, at least initially, but you have the opportunity to market to them on holidays and just, you know, sporadically if you have an email, not email, but a newsletter that you send out, you may want to certainly make sure that you always wanna be keeping communication in front of them. You just never know when one time you catch them and it's like, you know what? I do need to get my home clean and some of them will become recurring clients. And that's funny, you should ask Derek this morning on the call. I had a conversation with Derek one time where we were both comparing our lists and he was like, oh, you make about a dollar per every email you send out and I make about $1.10. So my list is better than your list. So ask Derek about that if he still tracks that, like that metric of like, of how much he makes per contact in his list. Cause he was basically like telling me his list was more valuable than my list, which I agree his list, you know, he was making a dollar 10 per contact on his list per send and I was making a dollar. So arguably he beat me. He loves winning. So part of that's execution. What are you doing with your list? You know, we're all setting on these lists. So we should be and some of us work them, do more with them, squeeze more value out of them than others, but we never want to forget about that. And, you know, the retention, your monthly churn is an important part of it. You know, factors into the lifetime value and you start putting the numbers together though and it paints you a pretty good picture as to where you need to be spending your marketing dollar and how much of it do you want to spend what you're willing to spend per lead and per new customer. Yeah, and I can, so if you're not in the Made Central Facebook group, I can put by the end of this week, I'm going to sit down and do my marketing plan for the next quarter. I'll put out my strategy in that group as to like what my ads are going to be, what I'm going to be, what my, you know, what my target lists are as far as like, you know, what, who these are going to be going after. So like a lot of this is I create lookalike lists to my current customers and go after those. And so I'll share all that strategy. So if you're not in the Facebook group for Made Central, join that group and I'll put something out either late this week or early next week with my quarterly strategy that I'm going to be building for Better Life Mades. Okay, so we are at the top of the hour. Matt, thank you. This is a good way to start KPI month, start with sales. We'll follow it up on Wednesday with, excuse me, this was marketing Wednesday. We're going to do sales and Derek's going to be with us. Five o'clock Eastern. So we'll see you Wednesday at five o'clock. Take care. Bye bye.