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July 5, 2017

These Two Numbers Simplify Your Entire Business

Hey there, Happy Wednesday!

I don’t know about you but I hate when I have to play “catch-up.”

It really grinds my gears because I feel I lose all momentum.

Everything gets pushed back, my to-do lists, my deliverables, my goals, my results…

So that is where I find myself this week. Playing a long game of catch up.

It easy to sit and wonder “why did I let this happen” but I’m not the type of person to dwell on the past.

Instead, I look for opportunities to speed things ups…make things more efficient.

For example, It normally takes me about two days to write a blog. Usually because I never actually sit down to write a blog. I’m always finding time in between projects to add a little bit here and there…

But this week, I found a little hack….

I normally use the speech to text capability on my phone to text, search, or even call someone and that got me thinking…

“What if I used the speech to text from my phone and used that to write my blogs?”

Boom! I knocked out three in one day…from my phone in under an hour!

Its true what they say, necessity is the mother of invention or in other words “Why didn’t I think of this sooner!?”

Now all I have to do it go back, edit, and make them look all pretty, but it sure beats spending a few days writing them out.

This also made me think about my business and what numbers I really need to be focusing on.

Depending on how you are growing your business, you find that many tell you to look at

Cost Per Click
Cost Per Lead
Lifetime Value of Customer
ROI
Costs of Goods Sold
Sales
Revenue
Profit
etc

The list goes on….

What I’ve discovered is that while all those metrics seem important, they do not come close to how important these next two are:

Average Order Value
Customer Acquisition Cost.

Talk about playing catch up when it comes to finding out if your business is making any money or not.

These two metrics are really all you need.

Why?

Because if your average order value is greater than your customer acquisition cost, then you are profitable.

Plain and simple – no need to complicate it.

If your customer acquisition cost is greater than your average order value, then you have a problem and you are losing money fast.

Still not convinced?

If your average order value is $100 and it costs $25 to acquire a customer, then you have a 300% ROI.

The math is as basic as you can get yet tells you exactly how your business is doing.

Your average order value consists off all the sales you make on “average” in your funnel. This includes any low entry offers you have as well as upsells, downsells, and order bumps.

Customer acquisition costs account for all the expenses you incur in order to acquire a customer. This can include advertising costs, designs, costs, printing costs, etc. It is the sum costs divide by the number of customers you have.

Knowing these two numbers will help you understand if your current marketing strategy is working or not, which costs in your business are way too high, and if you need to increase your prices or create more product/service offerings.

Always know these two numbers.

Average Order Value
Customer Aquisition Cost

If you don’t know these numbers, take some time to sit down and figure them out. You’ll gain great insight into how to run and manage your current business model.

Alright, that’s it for today, I got a bunch of catching up to do. Keep on keeping on!

-Oscar

P.S. I hope you have a great 4th of July!

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Oscar Garcia


Oscar M. Garcia is an online direct response expert. He is a sought-after consultant, coach, and speaker specializing in research, facebook ads, funnel implementation, and email sales sequences. Win the freedom you want online when you leverage Oscar Garcia's expertise and experience.

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