Grow your business 100% YOY with KPIs

Estimated Reading Time: 2 minutes and 12 seconds

Feb 23, 2023

In any business, there are important metrics that should be constantly monitored to increase profitably, drive growth, and help you make more money. These metrics are commonly called Key Performance Indicators or KPIs.

These could include:

ROAS(return on ad spend)
Conversion Rate
Open Rate
Top line Revenue
COGS(cost of goods sold)
CAC(customer acquisition cost)
CPC(cost per click)

Understanding your businesses KPIs is so important to success, growth, and profitability. One of my mentors once told me “If it’s not being tracked, it’s not going to perform well enough.”

Today we’re going to take a look at tracking KPIs to optimize your ROAS.

What is ROAS?

Last week I had a conversation with a photographer who was looking to grow her business by driving my traffic to her site, and in turn get more bookings.

Currently she is doing around 5-7 sessions a month, with her average revenue around $250 per session.

5 * $250 = $1,250

Not bad for a little side hustle, but she was looking to make it closer to full time.

The goal was to spend $1,000 a month on Facebook and Instagram ads to drive additional qualified site traffic.

Let’s assume it costs her $5 to get a click on her site. With $1,000 she can expect an additional 200 site visitors.

$1,000 / $5 CPC = 200

If her landing page is designed well, she could reasonably expect 5% of page visitors to convert to actual bookings.

200 site visitors * 5% conversion rate = 10 additional bookings

With 10 additional bookings, our photographer is able to triple her monthly revenue.

10 bookings * $250 average booking = $2,500

The ROAS is $2,500. For every $1 spent in advertising she can expect $2.50 in bookings.

Obviously these numbers are mostly assumptions. The different KPIs will vary depending on how well the marketing campaign runs. Typically these types of campaigns need to be evaluated and adjusted frequently to meet the goals of your business.

“You have to spend money to make money.”

I made this cool ROAS calculator in Google Sheets. All you have to do is enter in your marketing spend, CPC, and LTV and your ROAS is right there!

https://docs.google.com/spreadsheets/d/1l2rUqkkuLLzRz5TMLWK7iwqwpUe_wKaU87jGFpJFY20/edit?usp=sharing