August 2021 Profit Report: Here's How We Increased Our LTV by 33%
Episode 576: Show Notes
Are you ready to join us on a journey back in time? We’re taking you back about 40 days to talk about our August numbers. We did so many things in August. It was a whirlwind of a summer! In today’s episode, we’re going to give you the scoop of what’s happening in our business in a way that doesn’t make you feel like you get “comparisonitis,” because there’s nothing worse than that. We approach these profit reports from a strategy perspective and what works for us, and we share achievable percentages which will allow you to look at your own business and decide what does and doesn’t make sense for you.
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We started doing profit reports almost two years ago, and these involve us talking about profits and percentages and our goal of achieving a certain profit for our business. If you go do a binge listen of all of the profit reports we’ve done so far, you’ll get some great insights into our business and our brains.
The Commitment We Made to Growth in 2021
A lot of people experienced a lull this summer because of people going back to traveling and actually trying to be more intentional about taking time off, because last year was not normal. But we did not chill! We had a lot of chill last year, and we bottled that up and turned things up a notch this year. In late May, we decided we were going to grow our business, and in June we got the wheels turning. We decided to invest in learning new strategies and techniques which would actively help our business to grow. So many small business owners expect growth when they’re not putting active attention on growing, but that’s not how it works. We did a deep dive into our business and asked ourselves what we wanted to be doing differently and how we could show up better for our community, our members, and our team.
The Effects of the Changes We Made to Our Fastest Growing Membership
The changes we made to our membership came into effect in August, and they were poppin’! Essentially, the changes involved just adding to the Creative Shop Co-Op and the Template Shop, including adding a new members-only community, a private members-only podcast, and one strategy call per month with your wing woman. The reasons we decided to make these changes were not only because we were actively putting intention into growing the membership experience but also because we received so much amazing feedback from the member surveys we sent out earlier this year. All of the changes that happened were a direct result of the feedback that you all gave us! We’re here to support you and we so appreciate you showing up and helping us do that. Members on a whole are really enjoying the changes; retention numbers are up a lot, and looking at the numbers, going up 33% in less than 3 months is adding so much to our bottom line!
Why We Don’t Suggest That New Business Owners Start With a Membership
Memberships are complicated. When we decided we wanted to add more value we deliberately didn’t increase the price. We did that knowing what it would cost our business in time and money, and knowing the pay off. It was worth it for us because we have a high volume of members. You’d be mind blown at the amount of resources and energy we need to have to provide our members with the quality services we do, and it is not something that we were capable of doing in year one or year two. The reason we can do it now is because we’re not doing it for 20 or 50 members, we’re doing it for nearly 1000 members!
Getting Into The Numbers
The membership was 52% of our revenue in August. That percentage is the same even though the revenue keeps going up, which is an exciting thing for us because it tells us that our business is growing across the board. On the affiliate front, we did a huge affiliate launch for Dubsado in July but got paid in August, and for that month affiliate dollars made up 26% of our income. Our signature program brought in 14% this month, which is a healthy number for where we are and where we’re going with that.
In terms of costs, we’ve been mindful of the changes happening with Apple and Google. The percentage we spent on advertising dropped from about 20-25% to 18%, and that's a trend you can expect to see continue into the future. Our healthy cost of goods is around 30%, and year to date we are on the money with that, but for August it was sitting at 22%.
The team changes have been fast and furious! We went from 2 to 6 employees in 90 days, despite the countless times we’ve said we would never hire employees. In August we had a contractor who moved on to open her own business, which has been a big adjustment, but we also hired an ops assistant who has been learning all the things. Our team was 30% of our revenue in August. We’d love for it to be 25% but with the way we’ve grown, we’re really happy with where we are.
The Importance of Being Intentional
In the past, we let the business happen to us, but this year we’ve made so many more choices about the direction we want the business to go. There’s been lots of things that have happened that were out of our control but we really focused on being intentional about the choices we made in all aspects of our business. When you’re just moving forward all the time, you sometimes forget that you have to set aside time and energy and resources to stay true to the things you say.
Quote This
So many small business owners expect growth when they’re not putting active attention on growing. You don’t have to do that, but don’t expect those results when you’re not making those actions.
Highlights
The Commitment We Made to Growth in 2021. [0:04:37]
The Effects of the Changes We Made to Our Fastest Growing Membership. [0:06:18]
Why We Don’t Suggest That New Business Owners Start With A Membership. [0:10:16]
Getting Into The Numbers. [0:12:15]
The importance of being intentional. [0:27:14]
#TalkStrategyToMe [0:41:52.2]
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ON TODAY’S SHOW
Abagail & Emylee
The Strategy Hour Podcast
We help overwhelmed and creative entrepreneurs break down their Oprah-sized dreams to create a functioning command center to tame the chaos of their business. Basically, we think you’re totally bomb diggity, we’re about to uplevel the shiz out of your business.
