In this instructional video, Eric Deeran walks through a detailed financial model of a mid‑market agency generating $180‑200K per month with a $30K six‑month contract value per client. He identifies why the agency is losing money in the first month despite strong backend recurring revenue, highlighting low upfront cash collection (13% of contract), high cost per qualified booked call ($511), low close rate (15%), and generic ad creative that fails to qualify leads. Deeran proposes three core levers to unlock scaling to $1M/month: (1) restructure pricing to collect 50‑60% of contract value upfront, offering discounts for monthly payments; (2) overhaul ad creative using longer, educational sketch‑book/green‑screen formats to attract higher‑quality leads and reduce cost per qualified call to $200‑$300; (3) add an application/qualification step before the calendar booking to feed only qualified leads to Meta’s pixel, improving algorithmic optimization. He quantifies the impact of each lever on ROAS (front‑end ROAS rising from 0.88x to 3.24x with higher upfront cash, and to 1.8‑4x with lower CPL and higher close rates) and projects that implementing these changes could double monthly cash flow and reach $1M/month within 2‑3 months. The video also promotes a free financial model tool on apply.masterfilmmaker.com for viewers to audit their own funnels.
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We had someone ask us recently why their funnel wasn't working and why they weren't able to scale. So for reference, this company was doing about $180,000 to $200,000 a month. Uh, they had a lot of really good recurring revenue on the backend to where their client— I won't say any details about the business to give it away, but their client would basically pay them anywhere between $3,000 and $5,000 a month, uh, to work with them essentially. Uh, but the problem was, is that any new acquisition they were trying to get on the front end, uh, was just not profitable in the first month. And so it was profitable on the payment plans on the back end, and that was fine, but they were asking, why are my ads not working? What was going on? And how can we diagnose this? So what I did is I built a financial model that you can find on apply.masterfilmmaker.com. You just click the financial model, uh, and I'm going to go through this person's numbers right now and exactly what I would do to fix it. And the cool thing about this calculator is that it will actually tell you exactly what you need to fix, based on the problems and the bottlenecks and the things that we've seen. So let's dive in. Let's go over to my computer here. So this person was selling typically a $15,000— I'm sorry, a $30,000 contract value. It was about, I believe, $5K for average sticking rate, was about 6 months with the client. Their average cash collected upfront was about $4,000. Their close rate was 15%. Their show rate was 75%. Their cost per qualified booked call was $511, and their cost per qualified lead was $65. So when I plug all this in, their losing money on the front end. So they're, they're at about a 0.88x ROAS. So not even breaking even. Now the trick is, is the reason they're able to do like $180,000 to $200,000 a month is because they, they're making money on the backend and they have clients continue to stick with them for about $30,000. So they're making money on their contract value. So if you look at their contract value, they're at about a 6.6 to 1 ROAS. The problem is, is they have to wait 6 months to get this. Like they're not getting this in month 1, they're losing money month 1, and then they're, slowly making that money back on the backend. Um, and they're spending about $15,000 a month on ads right now. And this is one of the main issues that they have is they're like, how do I improve my, my ROAS? A couple of things when we, I'm not going to show you the funnel because it's going to give away who it is, but a couple of things that we found when we actually looked through this, this person's account and some of the issues that they were having. So, uh, let's dive into some of just the basic metrics. They have about a 13% booking rate. So lead to booking rate, it's about 13%, uh, 75% show rate, which is not bad. Show rate is fine. Close rate is low in my opinion. And then when you look at the P&L, they're losing about $1,700 a month doing this. And so obviously they have recurring payments from the previous months that are making up for that. It's not a big deal, but we'd ideally like to be making tons of money in the first month and then stacking continuously from there. So let's look at some of the suggestions and I'm going to talk through what I would do differently as well. So number one, they're losing money on the cash basis. They collect less upfront, which they They're basically collecting less than it costs to acquire a client. Uh, so they can't scale their ad spend because of that. Cash collected is below a healthy range. And so they're only collecting about 13% of contract value on the front end. We like to see 50 to 60% cash collected. That allows us to collect enough money to then put back into ads to continue to scale. Right? So if this company wants to get to $1 million a month, we really need to be profitable on the first month. Working with them or that they're working with their clients, right? So that obviously, like I said, parks their profit in future payments and slows down how fast they can reinvest back into ads. What we want to do is we want to try to pitch. So number one, they're pitching monthly to their clients. What we want to do is we want to pitch the entire thing upfront. So instead of saying, hey, it's— they're collecting a little bit less than $5,000 because they have some downsells and stuff mixed into this. Typically it's about $5,000 is their— $5,000 a month is their package. We want to pitch, hey, it's $30,000 for for 6 months working with us, and then we just sit there. And then the client's like, well, is that monthly or is that paid up front? We say, well, most of our clients pay up front, but did you need me to do it monthly? Like, did you need me to split that up monthly? And then give them a discount if they do it monthly. So instead of $30K, say it's $28K for 6 months. Easy. That will allow you to collect more up front, uh, and then you'll have people who wanna do it monthly as well. But it, that will number one, help us improve our cash collected because if we can take our cash collected from $4,000 to let's just say it averages out at like $15,000, let's move this around here, then on the front end, we go from a 0.88x ROAS to a 3.24x ROAS on the front end without touching anything else I'm gonna talk about in this video like with the ads or anything like that. So that right off the bat, by just doing that one thing that I just said, can take you from not making any money, losing money on the front end, to a 3x ROAS. Now let's take this back down to the $4,000 that it was before. 4, if I can do that, just type that in. Okay, great. Number 2, the close rate is low. 50% close rate is very, very low. Now with this specific person, they actually, they are the avatar that they're advertising to. And so they're advertising to a specific market. They are that avatar. So genuinely, I don't think the close rate, I don't think they're bad at sales. I don't think that's the issue. I think the ads are not doing the job that they should be doing, bringing them qualified people. And because the people aren't qualified, they're not able to close. And when I look at close rate, it's not only like, are you good at sales? Because if I'm giving you bad leads and you're really good at sales, your close rate is still going to be low, right? And so I look at those two things with this individual. He's good at sales. The problem is, is he's not bringing in the right qualified leads to actually close, right? So he's closing at a low rate. Cost per booked call is high. This is where I'd focus a lot of my attention. $511 for a qualified call is fairly high for this person's market. We like to be around $100 to $300, which is the norm. This is a booking rate problem and then an ad problem. Genuinely. And so when I look at this person's ad, which I'm not going to show you their ads, but when I look at their ads, they are very, very generic. They, they have some pain that they integrate into the ads, but the main problem I'm seeing is they're not doing enough educating in the ad and trust building in the ad and using formats like a sketchbook ad, using formats like a green screen plus sketchbook, sketchbook ad, and having ads that are like 3 to 5 minutes where the body of the ad is a sketchbook And then we can have different hooks that we put on the front end of that. We can educate that person a lot more before they come into the funnel and then get on a call with us and then hopefully close with us. Now that's only one part of the puzzle. The other person, the other part of this, this funnel that this person is struggling with is they're just running all the ads to just a calendar. They have a VSL above it, but they're running it to just a wide open calendar with literally no qualifying factors or questions on that page or on that calendar. So they're running it to that. And then they're sending back that data to the pixel, bringing bringing, like, basically sending back unqualified people to the pixel. Anybody who's willing to book a call. And if you've watched any of my videos, you know, that is a big no-no because Meta is going to optimize for the cheapest result. And if you're giving it really crappy results and unqualified people that are booking a call with you, it's going to go find more of those types of people and it's going to optimize around that, which is going to put us in a bad place. Now, number 2, I would ideally be sending them to an application before that call to where we can route qualified people to the calendar and then unqualified people not to the calendar, like to a DQ page. So then we're only sending qualified people back to the pixel, which I've tested this over $4.5 million in spend. Like, we've spent $4.5 million on just our own businesses over the past couple years. You will get a cheaper cost per qualified call because Meta is only optimizing for a qualified call, right? And if we can do that, we can bring the cost per qualified call from $511, ideally I've seen we can probably bring it down to like $300 to $200. Let's say we can bring it down to $250, right? So even if we just bring down the cost per qualified call down to $250, we're almost at a 2x ROAS on just cash collected upfront, and we're at a 13x ROAS overall. So when I go back to, if you go back to $511, right? $511, we're at a 6x, Contract value ROAS, which is not great, and we're at a 0.88x, we're losing money on the front end. If I can bring this down to a 250, which I, which I genuinely think we can do with better ad creative, then that puts us at a 1.8x on the front end and a 13x, almost a, or over a double on contract value. And so we're putting so much more money in our pocket. If we're gonna spend the $15K a month, we will genuinely add an extra $187,000 a month in additional cash or additional contract value to the business, which means we can scale to $1 million a month a lot faster. Now, when I go back to FiveEleven here to do right around there, we're only adding about $83,000. So we would theoretically double the amount of money that we're making every single month by just improving this one metric right here, which is improved by better quality ad creative. Right now with this, I don't only— this is not just a vacuum, right? So it's like, yes, I will improve my cost per qualified call, but my close rate, this is where it gets really crazy. My close rate will actually go up. And so we typically close at like 40% is our close rate across our closers. So if I bring this to— let's just say we bring it to 30%, I not only go from 15%, which is 1.8x ROAS, I would go to a 3.4x ROAS on the front end and a 26x contract value rate on the back end. This is why this is so key. Now, if I could take it to 35%,, right? Put us at a 4x on the front end and a 3.31x ROAS on the back end. We would add $457,000 in contract value every single month by simply just doing this. Not even like, let's say we don't even do, we don't even do the average cash collected. Like we don't even, we don't even collect more upfront. We just keep everything the same. We keep everything exactly the same on what we're collecting and we just improve your close rate and your cost per qualified booked call by having better ad creative. Like literally ad creative fix, fixes both of these things like right off the bat, right off the rip, that better ad creative and then better qualifying questions and then sending that data back to the pixel in a better way. Uh, and only sending qualified data back will help it learn. This 100% will fix this problem right here. And so if I can do that, we could be at a million a month in 2 to 3 months with this client or with this person, right? Um, by simply just changing these metrics here. This is why I wanna show you guys like You can access this, you just go up to under financial model at apply.masterfilmmaker.com. You can access all these things for free, like to see what the issues are. And then if you want to work with us, we'll help you actually fix them, obviously. But when I look at this, like there is a massive opportunity for this person to increase all of their numbers across the board by A, fixing the creative, and B, fixing the, the conditional logic that a lead has to go through and adding an application to their funnel. Like those two things would quadruple their business, which is huge. I just want to show this as an example for you guys though, on what you can do if you fix these metrics and how important these things are. So hopefully that makes sense. If you want to access this, you can access it on our site and hope this was helpful. And yeah, if you want our help doing this, there should be a link down below to book a call with us. If not, keep enjoying the videos. See you in the next one. See you guys.
