How to know you are working on the right things. EP #254 - Shorty

Well, hey, guys, it's Dan here. And I wanted to start this episode by acknowledging the fact that you might be wondering what's happened to this podcast in the last couple of months. And the truth is, we've been testing some different things, and I'm a great believer that in any marketing endeavor, you have to keep testing to see if you can improve or adapt what you're doing to make it more effective. And the way that we know this is working or not is through data. And so whilst it might be a little bit weird that sometimes we're doing podcasts and other ones are clearly videos, what we've been doing is trialing, making YouTube videos to see if we can turn them into podcast episodes as well, so that we can fundamentally create more content and distribute that across multiple channels. And we're still very much in that testing phase, but it was just to acknowledge the fact that, you know, we are trying some new things. And I'm always a great believer in putting my money where my mouth is. I don't want to recommend you do or test anything unless I've done it myself. So in today's episode, we're going to talk about the power of tracking data and creating dashboards so you can get a really good idea about what's working in your business and what's not.

Welcome to the Video Business Accelerator Podcast. Each week, we uncover the secrets to creating a wildly successful and scalable video production business. With your host, Dan Lenny, discover how the accelerator program is transforming the lives of our members at www.videobusinessaccelerator.com. enjoy this episode.

So let's talk about dashboards and reporting. It's an area that is not often prioritized by video production companies. Okay. And the reason for that is because it kind of goes in the too hard pile. But I want to just share some of the advantages of tracking key data. But first, let's start with a little analogy. So if you were getting into your car today and it didn't have a dashboard, so it didn't have anything other than a pedal and a gear shifter and a steering wheel. You didn't have any speedometer, you didn't have a fuel gauge, you didn't have a rev counter and a temperature gauge, so how would you know how far you could go? How would you know how much fuel you have in the tank to be able to predict how far you can go? And how would you know when the engine was getting hot, when you were burning out because of, you know, overexertion in terms of capacity. The truth is it would be very, very difficult to know with any certainty. You might put a bunch of fuel in a tank and go, well, I can usually get about 500 miles in that. But that doesn't take into effect, you know, into consideration your driving style. You know, how many revs are you, are you firing if you're driving a petrol or diesel car? If you're driving an electric vehicle, you have no idea of knowing how much power is left in the battery. And so I want you to think about that analogy and then relate that to your video business. Because most businesses are driving blind. They look at profit and loss, which is a historical figure. Any profit and loss you're looking at happened a month ago. So when you're looking at that data, let's say on the 15th of the following month, it's historical data. It doesn't actually give you any indication of what's happening this month or into next month. The only way to know how healthy your business is is looking at cash flow and how much money you have available in the bank to ride out a storm if necessary. And that is something that is really, really important. So if you're driving your business essentially like a car without a dashboard, how can you know how much fuel you have? Cash is your oxygen. It's the oxygen that helps keep your business alive. And if cash flow gets tight, it becomes very challenging to be able to know how far you can go. You can't spend any money on marketing, so cash flow is very important. Profit and loss is an important metric for taxation purposes and for understanding what your taxable liability is going to be at the end of tax year. But the metrics that I want you to think about are more of the marketing and what I would call funnel metrics, which is how do you currently get opportunities into your business? What is the main source of traffic that drives opportunities into your business? And for the most part, people will tell me referrals. Enough people know me that the phone always seems to ring. But what we want to do in a business, of course, is make that more predictable and not simply rely on it kind of ad hoc nature of stuff coming in and the phone ringing. And this is a very challenging obstacle for many business owners because it's pretty challenging to have to look with a microscope at how much effort you're putting into the right areas of your business. So if you get very clear on who you want to target.

The best way to get new opportunities is through LinkedIn, by identifying your ideal target market person on LinkedIn using Sales Navigator. Now, Sales Navigator is a paid service, but it allows you to search job titles, organizations, industries, how big the company is, and then you can actually send that person a connection request and an introductory message to say, hey, I would love to connect. We actually do some work in this space in terms of videos. So whether it's construction or engineering, it's like we actually have a specialism in making engineering films.

If you reach out to 100 people a week, about 20 to 25 are going to accept a connection off you, and they are going to.

Out of that 25, maybe four or five will actually involve you in a deeper conversation, which might yield some opportunities down the line. But oftentimes it can take 60 to 90 days for that to happen. So the more people you reach out to, the more people you're going to connect with, the more conversations you're going to have. We actually work with some of our clients to do outreach for them. And average, if we do 1200 connections in 12 weeks, about 50, 60 conversations will be about the norm.

So next thing is, how many of those conversations are then going to your website? And what kind of call to action do you have on your website? Is it book a discovery call? Is it get a quote? And from there you want to identify how many of those people are clicking on that and going through that process. Process. And then from there, how many quotes are you sending out? And then how many sales are you making at the end of that week with the quotes that have gone out? And these are some of the basic metrics you should be tracking so you can identify. If you have not enough quotes going out, then you're not going to be making enough sales. And what is your sales conversion ratio? How many sales are you making? So if you're having four conversations a week and you're selling one project, then your sales conversion ratio is 25%. If you're selling two projects out of every four calls, then your sales conversion ratio is 50%. If you're selling three out of every four, your sales conversion ratio would be 75%. So what you have to think about is if you know what your sales conversion ratio is, then to make more sales and therefore generate more cash flow, all you have to do is put more people into the front end of the funnel, which is marketing, in order to help push people through your sales funnel. And then from there, if you're putting 100 more people a week into your funnel, then you're going to be spitting more people out the back who are going to be asking for quotes. And that really is the kind of the basic metrics that you need to be checking and testing to understand how well your business is going. And those are your metrics. So your front end lead acquisition is like your fuel tank? Well, not really. Your fuel tank's probably cash. Actually, fuel tank is your cash flow and number of sales.

The amount of fuel you have in the tank. The range is determined by the number of opportunities coming into your business. So I hope that's of some help to you. I really want you to think about how you track this in your business. Most businesses aren't tracking this, which is why there are periods where cash flow gets tight and there's that roller coaster that we're so experienced with as freelancers in this industry.

You've been listening to the Video Business Accelerator Podcast with your host, Den Lenny. If you are a video business owner who is tired of going it alone and would benefit from mentorship, support and weekly accountability, then mouse over to www.videobusinessaccelerator.com to learn more about how the Accelerator program can help you today. Don't forget to send, subscribe and rate the show over on itunes, and we'd really appreciate you taking a few minutes to leave a review.