Nov 6, 2019
I was chatting with a long-time client this past week and she was sharing with me some of the decisions she was making around where the team was spending their time, if they’re going to continue with some big projects and and how they’re testing different things for the future to maximize their ROI.
And while this may seem like your run of the mill coaching call there was something she’s doing very differently this year than she has in the past because of clockwork.
She’s looking at the true cost of things in the business and making decisions from there versus blindly.
Their company does a lot of content marketing — as many of us do — and one of the things they’ve been working to understand is the true cost of a free blog post. That’s right — the COST of a free blog post. And it’s not FREE.
Their team calculated how much time it’s spending them to write, edit, and then format each blog post — and then was able to calculate the cost by multiplying each team member’s hourly rate by their time spent and adding it all up. On average ~ $300 per blog post. Not cheap. That’s at least $1200/month we’re talking and sometimes double that depending on how many posts they have planned.
Now that’s not the end of the equation though...it would be easy to just say — well, that costs too much let’s stop doing it. But we do content marketing for a reason — to connect with our community and eventually create sales. So, they now need to make sure they can track the conversion metrics related to this blog post to see how much each blog post is actually WORTH to them. How much does it earn them over time so that we can make a better decision.
Turns out — they’re best blog posts have earned them over $30,000 over time by turning those readers into digital course purchasers at the end of the post. And we have another client who has earned multiple 6 figures from one blog post alone. But on average — each post is generating $500 — so we can still make the decision that this is a good investment. Spend $300, earn $500. But again...they don’t stop there — because I want them to also analyze if there are other more profitable ways to earn that $500 that may be worth investing more of their resources in. Limited resources means constantly making decisions on where to spend that time, money and energy to get the MOST results out of it.
THIS is the value of knowing your true costs, your real metrics and then being able to make better business decisions from there.
I know we’ve been talking about free content here, but the same rules apply for your products, your programs, and everything else your business does. You need to have clear metrics of what the true cost is — including team time which most people leave out when doing their Profit/ Loss statement on a launch for example — oh we spent $20,000 on ads and made $50,000 — but if you also spent another $20,000 on team time developing assets + resources or delivering the program or answering customer support responses, we need to add that cost in to really know if something is profitable or not a good use of our resources.
If you’re constantly asking yourself “hey, where did all that money we made go!?” or not feeling very confident when making decisions about what to trash and what to hold on to in the business...then we’ve got to get a better handle on where your time is going, where the teams time is going, and what each project truly COSTS you, so that we can calculate the real profitability and make better and more efficient decisions.
This is where you can get efficient much more quickly + confidently, and then be able to double-down + pour resources onto the things that are working well...creating even faster growth opportunities too.
If you haven’t done a 4D time tracking exercise yet — I encourage you and the team to start there! This data and the metrics you can be tracking alongside of it are invaluable to your business!
Grab your time tracking sheet here.
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