© 2024 DJRW LTD trading as The Lead Source
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Knowing your numbers in any business is important. But what do we mean by numbers? Which numbers should you be looking out for and keeping track of? How will knowing your numbers help your business to grow? In this article, we have all the answers to these questions.
Running a business means juggling a lot of numbers. You need to keep track of money coming in and going out, marketing costs, Ad spend, staff wages, profit and loss, petty cash, studio space and more!
The overall important numbers are your profit and loss. How much money is your business making or losing. Hopefully you’re making a profit – if you’re not, come talk to us.
The profit and loss statement, or P&L, is a financial document that summarises your business’s revenue and expenses over a specified period, typically monthly, quarterly, or annually. Revenue represents the income generated from the sale of goods or services, while expenses encompass all costs incurred in the process of generating revenue and maintaining operations, including operating expenses, salaries, and taxes. By subtracting total expenses from total revenue, the P&L reveals the net profit or loss, providing a snapshot of the company’s financial performance and operational efficiency.
Analysing the P&L enables business owners to identify areas for improvement, streamline processes, and make informed decisions to enhance profitability. Moreover, it serves as a valuable tool for stakeholders, investors, and creditors in assessing the business’s financial health and prospects for growth.
If you’re running at loss or breaking even, something needs to change. Often, just making more money can solve that. That’s where Lead Generation and Paid Advertising comes in.
Paid Advertising comes with it’s own set of numbers you need to know. Some are more important than others but it’s useful to understand most of these marketing terms.
A single impression is when you appear in someone’s newsfeed, therefore cost-per-impression is how much is costs to appear. On Facebook this is often pennies.
How much does it cost you for a thousand impressions.
Cost-Per-Click is how much it costs you each time someone interacts with your advert with a click. This can be improved by creating compelling ad images.
CPC is calculated by taking your overall Ad Spend and dividing by the number of clicks.
For example, if your campaign cost was £300 and you received 1000 clicks, then your CPC is £0.30
As it suggests, this number is how much money you make in return of how much your spend on your Adverts.
This can be improved in many ways like increasing the cost of your product or working on your sales pitch and experience in order to increase your average customer spend.
We know that on average, our Photographers make a 4300% ROAS with our strategies and processes.
How much each lead costs you to get into your sales funnel. This is calculated by taking your whole Ad Spend and dividing by the number of leads.
For example, if you spend £300 on a campaign and achieve 50 leads, your CPL is £6.
How much you need to spend for a lead to complete your sales funnel. This is calculated by taking your total Ad Spend and dividing it by the total number of conversions – not leads!
How much money are your customers spending with you on average!
If you’re a portrait studio photographer reading this and your average customer spend is less than £500, something needs to change; whether that’s mindset, products or processes. You’re in a lucrative industry and you can be making a lot of money if you follow our advice.
All these numbers can change, for better or worse.
If you want the “for better” option and you’re not happy with your numbers, take a step back and make a realistic evaluation of what you think needs to change. Let’s discuss some of these changes – some are going to be home truths, so try to remain open and not defensive.
If you want to make serious money and go on nice holidays, drive a flashy car, or simply be financially stable – and you currently aren’t – you NEED to read this next section.
First, we’ll explore how to improve the costs of getting people into your studio. The truth about Facebook Advertising in particular is that your cost-per-lead figures will vary from campaign to campaign and day by day – it can be very frustrating! Here are just a few tips to ensure your ads have the best chances.
This is the big one. What products are you selling?
“My customers only spend £200 with me, they won’t spend more.”
Sound familiar? More often than not, photographers saying this are offering USB sticks and Digitals as main products.
If you’re offering these as well as the option of Wall Art, customers are going to be thinking…
“Well, I can get all my images on a USB, why would I pay £800+ on albums and Wall Art?”
They’ll leave with a £200 USB stick. So how do we combat this?
Easy…
Stop offering USB sticks and Digitals.
That might not sit comfortably with a lot of people but very few (perhaps none) of the £100,000+ studios are selling them as their main products.
You don’t have to completely stop. If your client purchases a beautiful album, they can have digital versions of the prints they purchase – but not without the album!
But won’t that piss the customers off? Well, then we need to talk about setting expectations.
Firstly your website.
If your website says you sell USBs and Digitals, you’re setting the expectation that the client doesn’t have to spend much with you in order to get their images.
“That will drive more customers away”.
If you want to make a proper business of this, are the clients that only want USB sticks the right clients for you?
Don’t get us wrong, there’s a market for them – but it’s saturated and you’ll have less money to spend on advertising, marketing and getting more clients in.
If it’s costing you £50 to get a client into your studio, and they spend £200 with you on a USB, you’ve just made £140 profit (minus £10 for the USB).
Our photographers set expectations in their Ad text, socials and their websites. Leads know exactly what the experience involves and are purchasing Wall Art for £800+ and now you’re making £400, £600, £1000+ profit per customer!
Now those are numbers you can work with!
If you think you might be the perfect photographer for us but the costs are a little daunting, then you could get a FREE month of our service with a paying referral!
Introduce us to your referral and if they come on board we’ll give you a month of marketing.
Hook us up to your Ads Manager account and we’ll schedule and manage your campaigns.
Leave the hard work to us. We’ll design your scroll-stopping ad images and write your ad copy.
You’ll receive an SEO and website audit to guide you in the direction of building an organic marketing approach.
© 2024 DJRW LTD trading as The Lead Source
