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Mastering Key Business Metrics to Boost Revenue
Joshua Rugg, one of our amazing account managers, shares the business metrics you should pay attention to to boost your revenue. He represents this through a chicken laying golden eggs, the chicken representing your business, and the eggs symbolizing revenue. He emphasizes the importance of a more holistic approach to what and how to feed your chicken so it lays more golden eggs. Listen to this episode to learn more.
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Transcript
I've never heard a business say, I don't want any more money.
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:the higher, this is the bigger, this,
the more money you're going to get.
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:So how do we get that or those
eggs, a lot bigger or more often?
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:we take a look at the chicken.
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:Hey, how's it going everyone?
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:This is Josh with
another Google ads video.
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:And today we're gonna be
talking about a chicken.
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:But not just any chicken, this chicken
is very business and puts his business
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:head on and gets to work at trying
to make as much money as possible.
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:But with all jokes aside, this is
a, metaphor, for business metrics.
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:You have your blended numbers slash
backend for the chicken itself.
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:Then you have the in app numbers, which
could be meta Amazon or Google ads
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:platform, what you see inside there.
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:That's the in app numbers here.
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:Then you have the golden standard
of revenue, that golden egg.
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:I've never had a farmer say,
Hey, I got too many eggs, or
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:I got, too many large eggs.
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:I've never heard a business say,
I don't want any more money.
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:the higher this is, the bigger this
the more money you're gonna get.
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:So how do we get that or those eggs?
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:a lot bigger or more often.
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:we take a look at the chicken.
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:And basically how business started
out is you start feeding the chicken.
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:New customers goes into new
orders, goes in, new cost required.
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:New customer goes in a
burr, AOV, total orders.
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:Then you start getting into kind of
repeat customer rates, open email
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:rate, customer lists, and LTV.
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:these are all interconnected
to each other.
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:They all share the same blood of,
All the stuff that's digested kind
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:of spreads across the chicken.
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:And if you take one of these
away, let's say opening, right?
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:You don't know what's going on there.
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:maybe it's really poor and you can be
missing out on making this egg slightly
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:bigger than, it could have been.
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:And same goes with me or
nac, we take away nac.
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:Then how much are you spinning
on a new client to come in
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:or a new customer to come in?
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:Which could affect
overall numbers as well.
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:It starts to dwin it down
into all these other areas.
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:'cause it could be the heart
line or the heart of the chicken.
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:And if it's not pumping out, enough
blood to all these other horses.
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:I could start taking a dive, that's
how the revenue or the golden standard
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:works is the health of the chicken.
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:Let's take these in app numbers.
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:And I consider these like
the droppings of, numbers.
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:Like you have CPA clicks,
CPC rows, conversion rate.
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:So it's not saying that
these numbers are bad.
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:you could definitely use these
numbers for trends and saying, okay,
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:like our rows dropped by a lot.
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:What happened there?
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:did we make any changes?
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:but we want to make sure that we're
not using these as a standard for
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:any one platform in particular.
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:let's take, for instance,
let's do some tests here.
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:We have Meta Amazon Google and
think of these as food sources
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:for this chicken right here.
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:let's say we want to scale up Meta,
it's getting really good ROAS.
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:So let's throw ROAS on there.
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:this is the formula for basically
ROAS, we scaled it up and
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:we got some unknowns there.
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:we know that we are getting some new
customers, but if we just take a look at
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:ROAS, it could be a lot of remarketing.
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:It could be a lot of repeat customers
that's scooping up and we're feeding
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:that chicken that type of, mix.
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:are we looking at the backend?
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:Are we taking a look at new
orders or new costs required?
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:Customer, might drop, if we're
just looking at ROAS because
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:it's so heavily in marketing and
then LTV might jump up slightly.
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:but in the long run, if this is not
being fed, then it's going to start
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:going and messing with everything else.
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:And then your revenue is going to
start dying off, and the eggs are
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:going to get smaller and smaller.
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:we don't want to do that, but the
good thing about that is we did an
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:isolated test with that just now.
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:We know that if we scaled up meta,
So let's say, okay, we know that,
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:maybe Google ads pushing a lot
of cold traffic, cause we have
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:a lot of good terms in there.
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:We're using some shopping campaign
and whatnot to just push cold
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:alone, but it doesn't look like it's
getting a lot of roads, but we want
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:to go ahead and test and see if we
scale it up or if we make a change.
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:what will it affect the chicken versus
just looking at these, droppings here
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:and saying, that's it, that's, that
CPA, that row is decreased by a lot.
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:We don't want to do that.
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:We want to feed the chicken, let
it go through its process and say,
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:okay, is INCAC up, the new orders
come in, is the MRR stabilized?
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:and then you can start looking at LTV.
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:Sometimes how did that
change when we did this?
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:more of an isolated test of that.
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:But if we start going and saying,
okay, we're going to increase
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:Google ads at the same time, we're
going to throw an Amazon ads.
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:We're going to chop that.
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:And then we're going to
increase, meta ads as well.
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:now you have all of this type of
food source going into the chicken.
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:And all these numbers start changing.
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:if revenue goes up, okay.
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:what actually affected the chicken?
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:Was it the Amazon blend?
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:was it Google then was it both of them
or if it dropped, what made it worse?
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:Was it Meta?
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:Was it Google?
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:So you really want to focus on
isolated tasks and not just throw in
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:a bunch of things because we can make
changes and say, Hey, maybe we're
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:impressed on a certain type of outcome.
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:We need this right away.
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:it's more of the long game of saying,
Hey, we need to really make sure that
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:these that chicken's being fed properly.
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:And saying, okay, that revenue is coming
out, solid gold versus like this murky
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:stuff right here where it says, okay,
click CPA, CPC went down or up, versus
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:what's actually going on in the back end.
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:So that's my little spiel, on the chicken
strategy, but, I'll probably start diving
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:into these a little bit more in depth.
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:I know this is like a general video
of kind of how things are set up.
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:And the, process of making sure
that we do isolated tests to make
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:sure that these numbers are nice and
healthy to get that revenue going.
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:so that, yeah, that's what I got.
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:Have a good one.