Leah and C.J. practically give you gold in this week’s episode on metrics, where they discuss nine different metrics you will find in any successful ecommerce business.
What are metrics? Metrics are a mode of measurement that you need to be aware of and be tracking in order to be a profitable musician.
The dirty details of “business” analytics can be off-putting to a creative soul, but if you’re going to succeed in this new music industry, then you need to know and understand the basic metrics that will propel your music career forward.
What are you supposed to be measuring? Tune in to Episode 83 and find out!
Key Points From This Episode:
- Email is still King
- “What is The Metrics?”
- Cost of Goods Sold
- Gross Margins
- General Overall Conversion
- Average Order Value
- Customer Acquisition Cost
- Lifetime Value
- Customer Retention Rate
- Abandoned Cart Rate
- Return On Ad Spend
“If you have 10,000 email addresses, that’s a potential of $10,000 a month.” – @LEAHthemusic [0:03:07]
“The goal is get those email open rates up.” – @LEAHthemusic [0:03:20]
“This has everything to do with how do you make money online, how do you advertise, all the principles of good marketing. But you put music in it and now we’re just in a new industry. – @LEAHthemusic [0:03:07]
“In e-commerce, you’re going to see anywhere between 1 to 3%. That’s a normal conversion rate…. So that’s going to give you an idea of how much traffic you really need to be getting to your shop in order to be profitable.” – @LEAHthemusic [0:15:42]
“If you want to become good at this, start becoming fascinated by psychology, because that’s all this is. It’s what makes people do certain things.” – @LEAHthemusic [0:18:28]
“Your money’s not made on the front end. It’s made on the back end. All the emails, those abandoned carts, those upsells, those relational emails. It’s all email and retargeting, showing people ads later on.” – @LEAHthemusic [0:22:40]
“If you listen to somebody’s early work, it doesn’t sound as good as the stuff they write now, and why? Because they grow as an artist, and you’re going to grow as a marketer. You have to give things time to work.” – @metalmotivation [0:33:16]
Links Mentioned in Today’s Episode:
Book a Call With Us — http://www.CallSMA.com
Top 9 Marketing Metrics Reference Download — https://savvymusicianacademy.com/tribe/resources/
Andre Tempfer (Elite Student) — https://www.facebook.com/dretamashi/Click For Full Transcript
00:20 CJ: Greetings and welcome to the Savvy Musician Show, the premiere music marketing podcast throughout all the interwebs. This is CJ Ortiz, and I’m the branding and mindset coach at the Savvy Musician Academy, and I also get to be the co-host of the premier podcast, The Savvy Musician Show, joined once again by her eminence, the lovely Leah McHenry. We’re doing this again. Good to see you.
00:46 Leah: Great to see you! Long time, no see.
00:49 CJ: Long time, no see. A few minutes! There’s something very weekly about doing weekly podcasts, Leah. And I was just trying to think in my mind when I started and how many numbers it’s been. We’re now into the 80s for episodes, and I know we were back maybe in the 40s or 50s, maybe, when I started. But it’s amazing how much they accumulate once you start doing them week-by-week.
01:15 Leah: Yep.
01:16 CJ: Been a whole lot of fun. We’re getting great feedback. In fact, for those who are listening, you’re always welcome to leave us a comment and a review because we do read them. We share them in our meetings, and it helps other people to find the podcast, right?
01:29 Leah: Yeah. Actually, I’m just going to ask, if you’ve ever gotten any value from these podcasts, this is free, and I want you to go and leave me a review. Leave us a review if you’ve gotten any value, any tips, any nuggets that have helped you, please. Thanks!
01:43 CJ: Yeah. Thank you! Listen, before we dive into this episode, I want to share once again, a student spotlight. This is from Andre Tempfer, who is one of our Elite students. And this is what Andre writes: “#Win. Okay, I’ve been pretty quiet in this group, but I’m usually just that kind of guy that observes, plans, then takes actions.” He put a laughing face after that.
“Well, last week I officially launched my shop and my email opt-in ads. Now I have made over a hundred dollars already and have over 70 email subscribers. That’s more than I’ve made in a week from online sales and not at a show in a while.” In other words “I haven’t played live,” I guess. “It’s a long shot from where I want to be, but it’s a start. Thank you, SMA, coaches and all of you for asking questions and problem-solving in this group. It’s helped a ton. Will try and be a bit more vocal going forward since I know I’m starting to hit some walls myself. Let’s keep going.”
02:42 Leah: Yeah, I heard a really cool stat. I read this the other day, that you need to build your list because each name is worth $1 per month.
02:52 CJ: Wow.
02:52 Leah: So that makes sense. He had 70 new opt-ins and already made $100 so there you go.
02:57 CJ: Right.
02:58 Leah: He made more than a dollar per email.
03:00 CJ: Think about that.
03:01 Leah: Yeah!
03:02 CJ: A dollar a subscriber.
03:05 Leah: Per month! So if you have 10,000 email addresses, that’s a potential of 10,000 a month. Now, you might not make that at first, but the potential is there. So the goal is to get those email open rates up. And we’re talking about numbers today anyway, so that’s why I bring this up. But this is the type of thinking I want you to have, even if you’re at the very beginning and you’re just thinking about releasing your first album ever, I want you to already be thinking about your email. This needs to be a primary objective for you
03:41 CJ: And Leah, I think this is again, where people I think miss and can be critical of your own testimony, of your own results and our approach to things, because they’re unfamiliar with this process. They can’t get their head around the results, they can’t understand and so they tend to criticize or they speculate that it’s happening some other way other than you selling your music online. How can this possibly be? But the email aspect is a huge aspect and I think we need a statistic like that to be able to get our heads around the potential of this sort of thing, that if you do have dedicated fans on an email list, then that’s a huge part of the earn. In fact, the central part of the earnings.
And this is why, because someone had… I was talking to somebody the other day, I think it was about Facebook versus email. And we were talking about just the different dynamics of how you perceive a platform. And when you’re on Facebook you’re not necessarily thinking initially about buying things, you’re kind of more scanning. And now Facebook is trying to change that. In fact, we covered that in the last issue of the Inner Circle, where they’re adding more features and things. In fact, they just started to offer to pages, monetization, which I think is really, really important. Because if you’re like me, who has a Facebook group that’s monetized, that people pay a membership to be a part of, Facebook is now, in other words, it’s their Patreon version.
05:13 Leah: Yes.
05:14 CJ: But, all to say is, people when they, they’re not necessarily in buying mode when they’re scanning their newsfeed. But they understand that you get ads in things and offers in an email. You know what I mean? They understand that that’s the case. So they’re not thinking about other people. They’re not thinking about the newsfeed. All they’re thinking about is whether they’re going to open your particular email. And if they really, really love you and really, really love your music and you’ve got a great offer, guess what? They just might buy.
05:43 Leah: That’s right.
05:45 CJ: It’s not a mystery.
05:46 Leah: It’s not. And so, yeah, when people don’t understand what I’m doing, every once in a while I see those kind of comments, I understand where they’re coming from because they’re just stuck in the old industry and they just don’t understand what marketing is. They don’t understand what marketing online is. They don’t understand the way things operate today as any kind of successful business owner. So take the music out of it. You don’t need to even bring music into this. This has everything to do with how do you make money online, how do you advertise, all the principles of good marketing. But you put music in it and now we’re just in a new industry. That’s all this is. That’s it. So email has always been the primary revenue platform or revenue driver of e-commerce sales and remains so. I’m not saying it’s Amazon or something. Amazon is a channel. But email is still, even above Amazon, like the number one revenue driver of e-commerce sales when it comes to channels that you fully control.
So that’s why you need to do this. So email is not, it’s so many things. But it’s a place where you control someone’s experience. It’s where you get to control the perception of your brand, develop a real relationship where they’re replying to you and you’re replying back. Transactions are happening, order confirmations, updates, all kinds of things. I like to be quite personal and share things about myself, being transparent. So all manners of and facets of relationship, whether it’s transactional or just strictly relational. We’ve talked about the three Ps of email before, promotional, professional, and personal, and that those are three different categories of things you can be using. So a dollar per email, that’s the potential that you have. So if you want to make more, build your list, it’s very simple.
07:48 CJ: Yeah, it’s powerful. Well, and this takes us into something today which is metrics, which is something that people may not necessarily be familiar with. But metrics are results. Metrics are things that-
08:02 Leah: You can measure.
08:03 CJ: … whatever actions you’re taking, yeah, that you can measure and see what’s going on. These are really, really important to you. You are such a great analyzer of these sorts of things Leah. I’ve always thought that your approach to things, especially as it relates to the music marketing is so dead-on. In other words, there’s no wishing here. There’s no flying by the seat of your pants. You’re adjusting things in your music business and your emails and your marketing and whatever, based on these measurable results. So let’s talk about today, some of the marketing metrics that you use that you feel like are really key for growing a music business.
08:41 Leah: Yeah, I’m going to give you fair warning here. I’m about to get into some heavier-type terminology and topics that, if you’re just starting out and you don’t even have an album out yet, this may be too advanced for you. And I want you to know that I want you to hang in there because during the month of March we’re going to be really focusing a lot more on some of the more fundamental, not just beginner, but fundamental things that are really going to help get you to this place where I’m about to talk about. And for those of you who have been doing this a long time, you understand the basics of marketing. If you’re one of our students listening, this is going to be valuable for you. But know that it is more advanced.
I’m going to share with you nine different metrics, which is a mode of measurement that you need to be aware of and know what they are, and be tracking to be a profitable musician. These are metrics that you will find in any e-commerce business. And any business… If you were to talk to your neighbor, and say they have a Shopify store selling socks or whatever, slime ingredients, my kids are into that, and they don’t have these numbers, they don’t know about them, I guarantee you they are not very profitable. They don’t know what they’re doing. They are not running a good business. So what I’m going to share with you here are standard metrics. These are standard. Everybody should know what these terms are and what they mean and should have a mode of tracking them, whether it’s in an Excel spreadsheet or you’re looking at… Some of these come from a Facebook ad manager, but these are things that you should also just have them somewhere. And I will say, listen to the end of this episode because I actually have a way for you to download this list. Okay?
So I’m going to explain to you, this is my superpower, taking some of these concepts that are not so sexy for musicians and making them easy to understand. Because I don’t like complex things and so I have to break it down for myself. So if I’m not able to explain these concepts to my five-year-old, then I’m not doing a great job and I need to do better. But this is really what I consider myself good at, is communicating these things.
And my dad was in education. I think I get this from him because he was able to take complex ideas, and history and politics and different things, and be able to explain it to his high school classes when he taught. And he was always everybody’s favorite teacher. And still, people I connect with that were in his history classes, they still tell me, “Your dad was by far the best,” because he would be able to just explain these things. And if we got him on a rabbit trail talking about some unrelated topic, there was the whole rest of our class. We didn’t have to do anything. He would just talk. So I think that’s why you and I get off-track too because you’re kind of the same way.
11:37 CJ: Guilty.
11:39 Leah: Yeah. So anyway, here they are you guys. Okay, I’m going to list them out. Now listen, there’s way more than nine, but these are the important ones that I want my students and anyone listening to this, tracking. Remember, I’m talking, take the music out of it for a second. This is the business part. This is a business podcast episode right now, okay?
Number one, you need to be tracking your cost of goods sold. COGS, for short. Cost of goods sold. That means, if you’re selling a CD, your cost of goods sold means everything that it took to create that CD, including the items itself. So the disks themselves, the reproduction of it, the artwork that went into it. All of that. How much does it cost for you to have that physical item in your hand, all in? Okay? And that’s also going to include the shipping for it. It’s also going to include, if you had employees or something. All of those things.
So at the end of the day, what is your cost of goods sold, landed, shipped to the person? That is an important thing to know. And the reason why is because you do not know how profitable you are on that item unless you have that baseline, because you don’t know what to charge for that item. You could be losing money. If you’re only charging $5 for that and it cost you six, all in, but you didn’t do the math to really figure out your cost of goods sold, you could be losing money and then, of course, you’re not going to be making a living off of that. So you need to do this for every single item that you sell. Your vinyl, vinyl’s very expensive. And so that’s why if you’re an independent artist, you have to charge quite a bit more.
You need to do this for every T-shirt. You need to do this for every single one. Now some of these get fairly simple if you’re doing print-on-demand and stuff because a lot of those things are… You just look up the manufacturer and they tell you what it is. And a lot of them have flat shipping rates and stuff so it’s very easy to keep track. But I have it all in a spreadsheet, every single item, I know the costs of goods sold.
And the other reason this is important is because when you’re running ads, you want to know what you can afford to spend to acquire a customer who’s going to purchase that item. And now that gets a little, if that goes right over your head, don’t worry. These are things that you will learn, and I just want you to absorb it, absorb the terminology. It doesn’t even have to make sense to you right now. But I want you to just get used to these words and these ideas because eventually, it’s all going to click. It will.
I’m going to move on. That’s number one. Number two is you want to know what your gross margins are. Your gross margins is the revenue minus your cost of goods sold. So it’s just a simple math equation. Okay? So let’s say I made $20 on the CD. My cost of goods sold was 10, my gross margin is 10. I like simple math.
14:51 CJ: Mm-hmm, yes.
14:53 Leah: That’s all I can handle. Trust me.
14:54 CJ: Right.
14:55 Leah: Just ask anybody who knows me. I am not a math person. I’m also not a data person. I’m not an analyst-type personality. I have to tell you this. It is not in my nature to be a super analytical-type person. Some musicians are super mathematical, especially drummers. So this’ll be like easy peasy for them.
Number three is going to be your general overall conversion rate. A conversion usually means a purchase, a transaction of some kind. Okay? So your conversion rate is going to be… Say on your shop, for example. On Shopify, they actually tell you, you don’t have to do any math, they just tell you. Out of all the people who visited and were on your shop, how many people converted into a sale? In e-commerce, you’re going to see anywhere between 1 to 3%. That’s a normal conversion rate. One to 3%. 3% is doing pretty good actually. If you can get to 5, you are blowing everybody out of the water, really! So that’s going to give you an idea of how much traffic you really need to be getting to your shop in order to be profitable.
So how do we get all that traffic to the shop? Oh, a variety of ways. That’s for another show. But the idea is that you understand what is industry standard. 1 to 3%. And that’s also the same for email as well. It can be quite a bit higher if you have a very engaged list.
The next metric is going to be really important, which is your AOV, your average order value. I love this metric because it tells you a lot about your potential and your profitability, and there’s so much usually room to grow in this particular metric. Your average order value is basically, what is the average value of the orders that people spend within a certain time frame? It’s usually going to be like a 30-day window. So one person bought a $5 item, another person bought a $45 item. And when you take the average of that over 30 days, what does it average out to be? So we always want to increase the average order value. And that’s one of the ways you can become instantly more profitable without spending more, is you can add more customers, you can increase the amount that they spend, and you can also sell to them more than one time.
So, increasing the average order value, you do this a number of ways, but you can offer more expensive products. You can try and entice them to buy more than one thing through upsells, down-sells, all within Shopify. You can offer deals like two-for-one, things like that where they’re just adding more to the cart. Hey, free shipping over a certain amount spent. So hey, free shipping over $75 within the USA. Sometimes, it’s like, it’s a psychological thing where they would spend less than that. Or what happens, let’s say they add, yeah, $50 to their cart and they get to the checkout and they see $20 of shipping. They’re like, “Oh, forget this. I’m abandoning my cart.”
But you say, “Hey, add 75 to your cart and you get free shipping,” they’ll go for that.
18:19 CJ: Yeah, yeah, yeah.
18:21 Leah: So it’s like more expensive for them. But it’s all psychology.
18:25 CJ: Right.
18:25 Leah: And that’s why I always say if you want to become good at this, you actually want to be a musician, musicpreneur or music marketer, whatever you want to call it, start becoming fascinated with human behavior. Start becoming fascinated by psychology, because that’s all this is, is what makes people do certain things. And then it becomes fun. This becomes a game when you realize it’s all about, “Hey if I make this button green instead of red, what happens?” Green is the color of go. Red means stop.
19:04 CJ: That’s right.
19:05 Leah: Think of stoplights. So if you make all your buttons on your shop red, what are you telling people? Don’t click this button or the bomb will go off. So it’s just psychology. So that’s why things, you know, average order value is… You want to be tracking that and there’s so much we can say. We could do a whole episode just on average order value.
19:25 CJ: Well, let me just say, I think even though this is a little heady for some folks who may not be familiar with it when it comes to the average order value, basically what Leah’s is saying is we want to, even though they’re coming in maybe for a $19 item, we want them to leave paying $35. And whatever you got to do to combine your different products and sales and things to keep creating that average order value, you’re obviously going to make a whole lot more money in the year. So in other words, try not to think, “Well how many CDs do I have to sell in order to make six figures?” No! Think about the whole kit and caboodle that you have to sell, the bundles, all the different things that you can to raise that average order value. So in that sense, a very, very important metric which will determine really your income for the year. Anyway, what else do you have for us?
20:19 Leah: Because that’s actually really important and that leads me to the next two here. The next important metric is customer acquisition cost. So how much does it… This is in terms of spending on Facebook for ads, for example. How much does it cost me to acquire a customer? Let’s say that you spent $25 to get the first purchase, but your margins and all the other numbers dictate you can only spend $12. Well, that first sale means it’s going to cost you, right? It’s going to cost you to get that sale. That is okay. And this is what I want my students to understand, and other people, you are not always going to be profitable on the front end. That is your cost to acquire that customer. Do you realize how valuable it is once you have a customer? You will now sell that customer over and over and over again and now everything else, you’re in the profit zone. Even if on the second sale you break even, by the third, fourth, fifth time, you are all in the profit zone.
Now you’re thinking like a business owner. If you think that you’re going to spend money and only make money on the front end, and if that doesn’t happen, you’ve failed and the system failed, and the course has failed and it’s all, nothing works and you go write some comment on Reddit, you’re delusional. You have no idea how business works or what you need to do to actually make a business work and be profitable. So, if you happen to break even on the front end, you are killing it. Wrap your head around that, let that sink in and it will change your mind about how all of this works, and expectations for yourself. It will most likely cost you on the front end to acquire those customers. Or break even or somewhere around that ballpark. Great! Now, that’s not where your money’s made.
Okay, so I want to get this really clear. Your money is not going to be made, if you’re spending, like if you’re doing Facebook ads and you’re just trying to like, to a cold audience and “Here’s my T-shirt and here’s my music and buy it.” If you are breaking even or anywhere around that you are absolutely killing it. But even if you aren’t, all the rest of your money is made on the back end. Your money’s not made on the front end. It’s made on the back end. All the emails, those abandoned carts, those upsells, those relational emails, it’s all email and retargeting, showing people ads later on.
There’s something called a customer journey. We’ve done episodes on this. We can do it again if you want us to. Leave us a comment. But there’s so much more to this picture than just the first sale on the front end. You are not thinking strategically if that’s all you’re thinking about. So in the world of e-commerce, that first sale, that’s the entry, that’s the first door, that’s the first in. But your job is then to sell to them over and over and over again. Sell them more things.
23:21 CJ: Yeah, that’s that value, right? That’s that, what’s that customer worth to you? And I think if people only see that the customer is just worth that one sale, then you haven’t really valued the customer properly. Because that customer is not spending their last $20 on your CD.
23:40 Leah: No.
23:40 CJ: The customer will have more money, you’ll have more things, so if you can create a relationship, then how much really is that customer worth? They’re potentially worth a whole lot more than $20.
23:52 Leah: Absolutely. And Shopify will actually give you these metrics. And that actually brings me to the next metric, which is the lifetime value, also known as the LTV. What’s the lifetime value? What can you expect one customer to spend over a lifetime, over a long period of time with you before they stop buying from you? You obviously have to have a lot of data to acquire this information, but if you’re doing this as long as we… Like I can see in Shopify, I can actually get a report. I have some fans who have spent $5,000 with me between crowdfunding and this and that and things that are run through it. Thousands of dollars. So I can… You have to understand, I am now willing to spend $30 on the front end to acquire a customer who’s going to spend 3 to 5,000. Do you understand? When you know that, you’re not banging your head against the wall when you’re not profitable from the ad at first. Because you understand what they’re actually worth over the long period of time.
24:53 CJ: Yeah. Well you think of… We recently did a episode on your planning for 2020. And you said you weren’t releasing an album this year. “Oh, well then how is she going to make money?” Well, she’s already worked with her team about what the kind of sales are going to run and the kind of things they’re going to do, and products and what have you.
So in other words, that lifetime value is built into your assumption about how a year is going to go. You realize that you don’t have to necessarily put out a… You might do some new shirts here and there and that kind of stuff.
25:24 Leah: Absolutely.
25:24 CJ: You can always do that, but you’re not going to put out the big album. But you’ve got a backlog. There’s people who’ve never heard you yet. You’re bringing in new customers all the time. If that customer comes in and you get them barely make any money off of something that they buy from you in January, by the end of the year they may have spent $200 with you.
25:46 Leah: That’s right.
25:46 CJ: And that’s just a year.
25:47 Leah: That’s right. So when it comes to lifetime value, the saying goes, is that the most expensive sale you’ll ever make is the first one. Okay? So the most expensive sale you’ll make to a new customer is the first one. And when you can make a new sale to a returning customer, now your cost per acquisition goes down. So it affects everything else. This is why any business owner who knows anything about anything is going to have these metrics. They’re going to know these things, they’re going to be tracking this.
The next one is your customer retention rate. Now this might apply more to those who have fan clubs and people who have items where they are recurring or a subscription. But it’s a really important one to just be aware of. And so in some businesses there is a cost to maintain a customer. Especially if you have a Patreon or something. Are you focusing on retaining the people once they’re there?
There are, on Shopify for example, there’s a ton of apps and stuff where they’ve got loyalty programs. And you can do points and you can do things that make them want to stay and become loyal to your brand. So that would be a small cost. The apps are a small amount of money per month, but it could help. I haven’t actually tested that too much in my music business. I’m going to be doing it more in the candle business, but I may bring that over to the music business. So it’s just a customer retention rate. We keep track of that in Savvy Musician Academy like gangbusters.
So we are keeping track of not only tracking it but finding ways to make sure our customers are happy and satisfied, and that they’re getting value out of it constantly, because what you don’t want is churn rate. Churn is the rate in which people stop subscriptions. And there’s industry averages for this as well. So a lot of times, at least in the information world, subscriptions usually have a churn rate of about three to four months. That’s what’s normal. And so we strive to go much longer than that because we want to… That’s telling us, are people consuming the information, are they getting value? Are they remembering to log in? Are we giving them as much as we can? Are we serving them in our best capacity? If everybody subscribed and then unsubscribed after month one, that tells us a whole lot. Something sucks. Something really sucks. So this is why this matters.
28:11 CJ: Yeah. And that’s that again. So it’s amazing how you’re listing, these are nine metrics, but it’s amazing how intertwined they are and how mutually dependent they are on one another, especially these past two or three. And because the lifetime value of a customer is going to be controlled by your customer retention rate. Are you able to keep them on board? And this is another reason why what we teach in the Savvy Musician Academy is so important, because we place a great deal… We talk a lot about the relationship that you have with your fans. We talk a lot about the culture, the lifestyle, all of these things.
The stuff that you post, the stuff that you, the comments that you make, the interactions, that’s all a part of the sale process. Because as we’ve always said, they’re only going to buy from those whom they know, like and trust. And so that’s your responsibility now and why there’s no better person that can do it then you can. You can’t have somebody else be you. But what an empowering thing, because if you can keep that customer, a customer is going to spend and that’s what we mean by that lifetime value.
29:17 Leah: Yep. Well we’re on to number eight here. Number eight’s a really big one. If you are one of my students who are embracing the whole e-commerce aspect of the music business, and that is your abandoned cart rate. Next to your overall shop conversion rate, this is the second one you want to lump right next to it, is your abandoned cart rate. Because just by improving this one thing, you can improve the overall conversion rate. In general, in e-commerce, the standard abandoned shopping rates, the most common number is up to 70%.
29:52 CJ: Wow.
29:52 Leah: Up to 70% of people, I’ve even heard higher, I’ve heard up to 80 in the past, abandon their cart for a variety of reasons. Especially if they’re shopping on mobile. People have a really short attention span. They’re getting text messages, they’re scrolling, they’re looking on Facebook, they add something to the cart because they think it’s interesting and then they’re like, “Oh, I don’t have time to find my credit cards, enter this. No, I’ll come back later.” There’s a whole whack of reasons why people abandon. They see the shipping rates. These are things you want to think through, all the psychological reasons why someone might be abandoning. But it’s normal, it’s normal and it’s what’s happening.
So what we want to look at is what the current rate is and we want to improve it. That’s the whole optimization part. And that’s why, if I spent all year just doing that, I will make 25 to 40% more just by optimizing this stuff without doing anything else. So one of the things we teach in the Elite program is how to retarget people. Every time someone goes and enters their email and they start the checkout process and then they abandon their cart, we’ve captured their email. And that email can become part of a custom audience on Facebook if it matches. So we can actually retarget all those people. We can even show them the exact product that they had in their cart and say, “Hey, come on back in case you forgot.” And you can entice them with an extra coupon if you wanted. There’s a variety of things you can do.
But that’s some of the lowest hanging fruit you could possibly grab. And we teach you how to do that, over-the-shoulder tutorials on how to do that inside the Elite program. It’s really important that you learn that. It’s easy to do. And yeah, it’s a little learning curve, but it’s powerful.
31:32 CJ: Yeah. One of the things that Shopify does, you go onto your dashboard, it’ll tell you, “Hey, you lost this much money this month to abandoned cart.” And you’re looking at this-
31:42 Leah: Ouch!
31:42 CJ: … several hundred dollars going, “What! I lost, how much?” And of course you can, as you said, you know, through… And it’s just through apps and other things that you can utilize. And all of this stuff, it’s not like you have to get in there and email a bunch of people afterwards. No, it will be automated for you once you have it all set up. Yeah so if you could pick up another few hundred dollars-
32:08 Leah: Absolutely.
32:08 CJ: … in any given week-
32:09 Leah: That’s money on the table.
32:11 CJ: Oh absolutely.
32:12 Leah: Yeah. Most people are leaving all that money on the table. They boost a post and then say “Facebook ads don’t work,” or “I tried it the way you said and I lost money. I didn’t make anything. Your course sucks.” And they’re not even doing any of this. I mean guys, this is what it takes to be successful. You can’t run one ad and try one. No. And you need to run a thousand ads and they all need to fail and then you’ll know what you’re talking about and you’ll know what you’re doing. By then you’ll be an expert. You need to reset the expectation for yourself.
32:50 CJ: And if you run a thousand ads and you fail, you just suck.
32:53 Leah: Yeah. Not all of them are going to fail.
32:55 CJ: Yeah. In other words, you’re going to get there. It’s just like telling somebody about music. It’s by playing music for a long time and doing all that, just talk to somebody like me who doesn’t play would say, “I don’t know how you write a song.” But to somebody who writes songs regularly, they know how to do it. Why? Because they’ve, trial and error. And you listen to somebody’s early work, it doesn’t sound as good as the stuff they write now, and why? Because they grow as an artist, and you’re going to grow as a marketer. You have to give things time to work. You just have to.
33:27 Leah: Yeah, that’s right. Well I got one more for you guys. And this is more to do with those of you who are running ads. Okay, this is going to be a super important one. And that’s your ROAS, your return on ad spend, your ROAS, return on ad spend. And that just means for each dollar you’re spending in advertising, how many dollars are you getting back? And they put it in like a decimal. So you’ll see like a 1.5 or a 2.5 or a 4 or whatever. So that means if I’m getting a 4 ROAS, which is very good for e-commerce, like spectacular really, that would mean for every dollar I’m spending I’m getting 4 back. Okay? So those are the things you want to factor in when you are looking at your profitability, your gross margins. Like you said, all of these things are really related to one another. They’re all interdependent. This is information you need to be keeping track of regularly.
If you want this list, I’ve put it together for you in a little spreadsheet. You can go to the show notes and we’ll have it ready for you. All my students, if you’re a student in the Elite program, you already have this. I’ve made it be available for you so you don’t need to worry about downloading it. For everybody else you can go ahead and download it in the show notes.
This is important stuff that if you aren’t, again, if you’re not ready for all this advertising stuff we’re talking about, I just want you immersing yourself in the vocabulary of it. I want you realizing that this is where you’re headed. This is where it’s all going for you eventually, and it will become easy. If half the stuff went over your head, you’re like, “Oh my gosh, I don’t want to even think about that.” Listen, I was there. This is not natural for me and you will learn it. You will learn the things that you need to learn in order to become successful. And your brain can adapt. You can do hard things. You can learn things that don’t feel normal or natural to you as an artist. Your brain will adapt if you’ve decided it’s important.
For those of you who are just like, “Oh yeah, Leah, you’re like, this is kindergarten for me.” That’s awesome and that means I expect that you’re going to be doing this. You’re going to be keeping track of this and I want to hear how it’s going and what you’re doing to improve these things. Whether you’re a student or you’re not a student, go ahead and let us know in our Facebook groups or in the reviews here. I want to hear about it.
Regardless guys, this is advanced stuff but it’s like I said, what every business owner needs to be doing. And I don’t care if you run a personal training business outside of your music, or you’re just trying to get more people to come to your gigs. This is all stuff that you need to be knowing and immersing yourself in.
36:07 CJ: Good, excellent, so that’s wonderful, wonderful. So, so, so good Leah. Yeah again guys, if you want to get that free download, it is featured in the show notes and the quick way to get there is just savvymusicianacademy.com/83, because this is episode 83. Savvymusicianacademy.com/83, and you can find the link in the show notes. Download that and start learning about your metrics for your music business. So again, leave us a review. We appreciate each and every one of you. Thank you so much for listening, and we will see you soon.
36:43 Leah: Bye for now.