Marketer Math: When $1 Doesn't Actually Mean $1

pricing strategy Apr 02, 2019

You may have heard the Planning for Profit episode a while back where we talked about why you should stop worrying about making 6 figures in your business. Basically, online business owners get derailed looking at what other people are doing, how much others are making, and how far behind they are… instead of just serving their customers as best they can. Worse yet, a lot of those supposed 6-figure business owners aren’t taking into account things like taxes, overhead costs, advertising, etc. Of course, some business owners do make 6 figures and they are honest about those numbers, but a lot of what we see on the internet is people (specifically marketers) beefing up their numbers to sell something to others without having the proof to back it up.

This impacts us as we build our businesses, but also when we are trying to invest in ourselves and our businesses through courses, mentors, masterminds, and more. Sometimes, we’re sold an idea, an offering, or an expected return on our investment that we just don’t see. Why? Because the person selling it used “Marketer Math.”

What is Marketer Math?

Marketer math is not uncommon. We see it all the time when online businesses or online marketers use questionable math or not-exactly-truthful numbers to sell their stuff. This is things like “Make $100k in 6 days or less!” or “Save yourself thousands of dollars with this platform!”

But the biggest the reason I have an issue with this “marketing math” is — aside from the lack of truth, honesty, and ethics — is that it puts a sort of dark cloud over the industry as a whole. When people are using inflated numbers or vanity metrics when talking about their business or their offers, it makes others start to feel like a failure if they don’t achieve the same “success.”

Sure, we’ve all heard someone out there saying “Come learn how I made 6 figures in 6 months” but what they are failing to tell you is that they actually slaved away at their business for 4 years, making no money, before something finally clicked, their offer started selling, and they finally crossed that coveted 6-figure mark. It didn’t actually take 6 months; it took 4 years and 6 months. But that obviously doesn’t sound as impressive, After all, who wants to buy a course that says it will teach you how to make 6 figures after working your butt off for 4 and a half years? Probably no one.

People fudge the numbers, omit important details, and use that to sell a dream. So I want to shed some truth on this marketer math and also give you some things to consider and look out for so that hopefully you will understand what’s real and what’s embellished. I also want you to know that there is nothing wrong with you or your business if you aren’t making a million dollars in your first year.

Unclear Net Revenue

Ok so let’s start by talking about revenue. Gross revenue and net revenue are two very different things. So often, people are saying they made a whole bunch of money, i.e. they had a $10,000 launch of a new course. But what they may not be telling you is that they spent $8,500 on Facebook ads and experienced a terrible cost per lead. Meanwhile, I’ve had launches where I’ve made $5,000 but only spent $250 on Facebook ads with a really good cost per lead. Which launch would you consider more successful from a marketing standpoint? Obviously the one with the higher net revenue.

Misleading Language

How often have you heard someone say they have a 6-figure or 7-figure business? When I hear those words, I immediately assume your 6-figure is business is making 6 figures consistently every year — not that you made 6 figures one time eight years ago, when you were working 80 hours a week but haven’t been able to replicate that revenue again.

Unfortunately, that’s exactly what some people mean when they use those phrases. There are also people who consider their business to be 6-figures or 7-figures when they add up the total amount of revenue their business over its life (as in the total revenue they’ve generated the entire time they’ve been in business). The language is really vague — intentionally so. And it’s not like they’re lying per se. There’s no official definition out there about what it means to be a 6-figure or 7-figure business. But there are people who are taking advantage of this vague language and who are letting their audience make their own assumptions.

So now, I listen to the language and, if it’s vague, I assume the lesser of the two possibilities. If someone says, “I have a 6-figure business,” I assume that means they have made 7 figures over the course of the life of the business. This isn’t a bad thing, but it does give me more realistic expectations.

Vanity Metrics

Vanity metrics are metrics that don’t actually correlate to things that really matter in business. Instagram follows or Facebook likes don’t pay the bills. The metrics that matter are metrics that actually correlate to sales and revenue. Yet, so often people use vanity metrics to try and prove that they know what they are doing or that they are successful. But what I care much more is engagement and click-through rates; those can actually lead to sales and revenue.

There are many amazing entrepreneurs with really small followings and small email lists who are killing it in business and making far more money that some people out there with 100,000 followers or a list of 25,000 email subscribers. When you see ads, sales, or pitches, pay more attention to whether they actually know what they are talking about and whether they can get results… not just how big their vanity metrics are.

Exaggerated Value

Let’s talk about value — specifically, completely made-up value. Have you ever read a sales page and checked out the very inflated value placed after each feature in the “Included in your purchase” section? Don’t get me wrong, I’m all for showing the value of your offers. I do this myself and it’s so important that people understand the value that they are getting. And I know it’s important in marketing to show that, when paying for something, a buyer is making an investment and that the overall value is worth more than the price.

Unfortunately, we’re seeing people just pull numbers out of thin air. I’ve seen people say that a 30-minute bonus training is valued at $2,000 or that 8 group coaching calls are valued at $10,000. Really? Where did that number come from exactly? Because if the price of your course is $297 but you’re claiming the value is $25,000 that just doesn’t make sense.

The value your product or service provides is directly tied to the transformation someone receives from it and how much someone is willing to pay. You can try and claim all day long that your 30-minute bonus training is valued at $1,000 but unless someone will actually pay or has actually paid $1,000 for it, that’s just not true. You just made that number up.

Be aware of marketer math — and do better yourself

I hope that, after reading this, you’ll be more aware of these marketing tactics that aren’t always based in truth and transparency. Hopefully, you’ll be able to make better decisions about who and what you invest in for your business. I also hope that you won’t compare yourself, your business numbers, or metrics to all the marketing math out there. Instead, I want you to focus on helping and serving your people, and helping them get real results. Of course, if you want to highlight the real value of your own offerings, you can check out my upcoming NEW pricing workbook to help you highlight the real value of your own offerings. Stay tuned for that!


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