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My Digital Farmer Podcast
286 What's Your Farm Lead Worth? Farm Metrics: Understanding your EPL (Earnings Per Lead)
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November 6, 2024 by Corinna Do you know how much each lead is worth to your farm business? In this episode, we dive deep into the concept of Earnings Per Lead (EPL) and how it can transform the way you approach marketing for your farm. I’ll explain...
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Corinna Bench
Do you know how much each lead in your business is worth? Today we're talking about an incredibly powerful metric that can transform the way you think about your marketing strategy. Earnings per lead. And if you're not tracking this yet, after today's episode, you're going to want to let's get started. Hey there. This is Corinna Bench, and welcome to the My Digital Farmer Podcast. In today's market, it's not enough to just grow your product. You've got to know how to sell it, too. Welcome to the My Digital Farmer Podcast, where we reveal online marketing strategies and tips to help farmers like you get better and more confident at marketing, learn how to find more customers, increase your sales, and build a strong brand for your farm. Let's start the show. Well, welcome to episode 286 of the My Digital Farmer Podcast. I am your host, Corinna Bench, one of the farmers at Shared Legacy Farms out in Elmore, Ohio. I'm also the founder of mydigitalfarmer.com, which is all about trying to help other farmers like you get more confident in your marketing and sales strategy so that you can grow a profitable business. Welcome back to the show. How's everyone doing? Happy November to everyone. Big shout out to my regular listeners. I'm so glad you tune in every week. That really means a lot to me. Appreciate your loyalty and if you're sharing the show with your friends, thank you for doing that. I just want as many farmers as possible to learn about this show and get better at marketing. That is my mission before I retire, so thank you for that. If you're new to the podcast, I'm glad you're here today. Make sure you subscribe to the show, especially if you want to get better at marketing. And go check out some of my first 10 episodes. They were designed to be an onboarding into the marketing space for new farmers. I also encourage you to get onto my email list. You can go to mydigitalfarmer.com subscribe and when you do, I'm going to send you an email into your inbox like every five days for three months. And it's going to walk you through the marketing jungle. It's going to show you the most important principles you need to know, the metrics you need to be looking at. The I show you some great episodes people you should be following, tools you should have really good stuff. So mydigitalfarmer.com subscribe Today's episode is sponsored by my friends at Localline. Switch to Localline and grow your farm to new heights this season. Localline is the most comprehensive sales software built for farmers and food hubs. Its features include e commerce, automated inventory management, subscriptions, a website builder, point of sale, and more, helping you increase your sales and streamline your processes. So whether you're a CSA farmer, you sell meat, you run a food hub, or maybe you sell wholesale or offer a hard share, localline has the tools and features that you need to succeed. We're a big fan. Are you looking to switch to a sales software that does it? All subscriptions start as low as $49 a month with no setup fees or sales percentages. That's huge for me. Plus, if you join localline today, your onboarding manager will migrate your storefront at no cost so you can be up and running in no time, even in the middle of the season. As a bonus, if you are a podcast listener, localline is also offering a free premium feature for one year with your subscription when you use my coupon code MDF2024. So go to mydigitalfarmer.com localline and then enter the coupon code MDF2024. Make the switch today. And now back to the show. Hello. I'm back. How's everyone doing? Let's just check in. I hope you guys are having a good season. We're coming into the middle of Q4. How is it going? Are you getting close to your sales goals? And if not, do you have a plan for getting there by the end of the year? You still have time. There are all kinds of holiday promotions you could take advantage of, partnerships and collaborations that you could do. In fact, one of the things we're doing, since we don't sell a lot of food in the off season, I had the idea that I would do a collaboration with our new chicken share partner farm, Anderson's Farm. And I've asked them if we could put together some kind of a CSA or some kind of a chicken bundle package for the month of December that I could just sell and we might have like winter spinach and carrots and that's kind of it. But if we can say, hey, we've got some chicken too, that might draw in some more people, and obviously we get a cut of that as well. So I'm kind of excited for the first time ever to actually have a real promotion in the month of December. But that's an example of me using a collaboration, not even selling my own product, to try and get people to come to my store and purchase Something. So think about collaborations. Just want to encourage you, but I hope you are doing well. We finished up our CSA season so we're heading into a little bit of a break now. We certainly have things we're still doing on the farm. We've got a bunch of carrots in the field and some wholesale stuff to finish up. We'll run a few pop up markets here and there, but for the most part the hard work is done and we're taking a little bit of a break. I'm still continuing to recover from my year long struggle with gut health. Oh man, I feel like I'm at mile 20 of the marathon. So I'm getting close. I am like so close to being done with it, but I'm still not quite there. Some of you have been asking and I appreciate your prayers. Continue to pray that God would see me through and one day I'm going to share the whole story, but I have kind of this policy that I don't do that until it's, until it's done, until I have a story to tell. And I still feel like it's a little too early, a little too raw, but, but eventually one day I will be able to kind of share that whole story with you. So much growth and goodness has come out of the struggle, you guys. I can't stress that enough. God has been so faithful and there have been doors that have opened, there have been periods of rest where I've really had to stare into my soul and see what is driving me. Like what the heck is driving me every day and is it really what I value and is it really important? And I've, I talk a lot about this with my family and friends, but I feel like I've had a identity shift like, like I've. Like a snake that's, that's shed its skin. That's a metaphor that I use a lot with my friends. I just feel like I've shed my skin and I feel like I'm a different person now in so many ways and ah, it's kind of freeing. So like I said, I'm grateful that this is happening to me because it is making me better. It's making me more alive, more grateful for what I have and just more confident about the future that, that the future will, will unravel and unfold itself as it will. And I will be provided for in the moment. So learning to live in the present. But I wax on poetically, but I'm doing better and better, getting better and better and I am working with A great functional medicine doctor who is just. Just rocking it and giving me so much confidence. So the other cool thing, just personally, is that my youngest son, Josiah, is probably going to end up going to Toledo Technical Academy, which is a essentially an engineering school. It's a special tech program, magnet school in the Toledo Public School district that helps develop future engineers. And he was accepted, so we're really proud of him. I haven't told him yet. He's gonna absolutely freak out when he finds out. He's gonna be so excited, but we're just thrilled to see him developing. It's just really cool. And Jed, who is a junior right now, is really thriving at school and is turning into a man. It's so cool. He actually is thinking about going into the Air Guard, and there's a base here in Toledo that he just did a tour with. He came home all fired up. He's like, mom, that's what I want to do after high school. So I may end up being a military mom. Super cool. I got another year and a half to go. But just for all of you who are in the active military, just I may be joining you, joining your ranks, sort of. So that's my personal life today. Let's get into the episode, shall we? It's been nine minutes. All right, I want to lead off with a question. Do you know how much each lead in your business is worth? Do you know how much each lead in your business is worth? So hopefully you're collecting leads. Hopefully you're collecting an email list and you're seeing the value of that. And if not, this episode is going to convince you that collecting leads is definitely worth your time. We are going to be talking about a powerful metric that can transform the way you think about your marketing. It's called the epl, or earnings per lead. And I'm going to be doing a whole focused month inside of our marketing school in the month of January. There's going to be an entire. What do I call it? Project about marketing metrics. We're going to be looking at the most important marketing metrics that you need to be paying attention to that really drive results in your business. I think a lot of us as business owners don't even know the metrics we should be tracking, much less how to track them. And so that's kind of why I decided I really need to make that project. So that's going to be running for the first time live in the month of January. If you haven't joined farm marketing school yet, that might be the month you want to join so that you can watch that and learn from that and maybe use the month of January to get clear on your metrics. But one of those metrics we'll be talking about in that month is this epl. I thought I would give you a little bit of a teaser here today to teach you all about it. This is going to be a little bit of a deep dive. We're going to cover what EPL is, how you can calculate it, why it's important, and how it can help you optimize your marketing. Plus, I'm also going to show you how to calculate EPL for both paid and organic marketing efforts. And I'm going to share lots of specific examples to help you wrap your head around this. This was not something that I was tracking at all for the first, I don't know, 14 years of my business. It was fairly recently. And it's an important metric. So let's. Let's talk about it. All right, so what is an epl? Let's start with a definition. It stands for earnings per lead. And this is a metric that helps you understand the value of each potential customer or lead in terms of the revenue they bring to your farm business. So you might find out, for instance, that Your EPL is $86.11. Okay, so that would mean that every potential lead that I have on my email list is worth $86 in revenue. Okay, that's kind of an example. So why does this metric matter? It's going to tell you how much revenue you are generating from each lead that you acquire. And so the higher your EPL is, the more valuable your leads are. Okay, That's a key concept I want you to remember. Higher EPL is, the more valuable your leads are. So we're always trying to get our EPL to go higher and higher. Now, what is the EPL measuring? So EPL is going to help you understand the efficiency of your marketing efforts. Are you getting enough return on the leads that you're generating? So it's a key indicator of how well you are converting the leads that you have into paying customers. So, for instance, if you are running paid ads, or you're growing your email list, or you're trying to boost your CSA membership, EPL tells you the average earnings that are tied to each new contact or prospect. And in those campaigns, are those leads high quality? And is your marketing efficiently driving revenue? And if it's not, if your EPL ends up being low, then it's kind of like a red flag. And it gives you that data to know I've got to fix something here to increase the quality of my leads so I can get that number a little higher. Now let's talk about how we actually calculate the earnings per lead. What is the formula? So let me give you kind of a step by step guide here. First, I recommend that you select a specific marketing campaign, like in my instance, a CSA signup push or some kind of a product launch. You determine the total revenue that you generated from that campaign. So for me, if I did my early bird CSA launch, I'm running that for seven days. I'm going to look at the revenue that comes in for that seven day period. Then I'm going to count the total number of leads that were acquired through that campaign. Now, when you do this, remember, don't just use your entire email list. You want to just use the leads that came from that specific effort. So if you're only emailing a small portion of your list, that's the number you're going to use here. In my case, I'm only going to use the number of people. I don't know. I think it's like 410 or something. 410 people that are tagged as CSA 2024 members. That would be the number that I'm using. Okay, if this is more of a promotion that you're pushing out to people that include current members, but also people that maybe know about you yet, then you're also including those people out in the big wide world that are brand new to your list. Right? Not just the ones that you targeted with that email campaign. Okay, so count the total number of leads that were acquired through that campaign. Then divide the total revenue by the number of leads and that gives you your earnings per lead. So let's look at an example. If you generated $16,000 from a CSA promotion and in the process you collected 185 leads. Some of those could have been from your current list, some of them could have been new people that found out about it through social and got onto your list and bought and bought. Your EPL would be $86.49. That's 16,000. Divided by 185, that comes to 86.49. Okay, your EPL is $86.49. That's the data that you want to stare at. And we're going to talk about, well, what does that number even tell me? Okay, now I want to make the point here that you don't actually need to spend money to calculate your earnings per lead. And this was a little confusing for me at first when I first learned about this. You can track EPL from your organic marketing efforts as well. Whether it's social media, email list growth, or referrals, any kind of lead generation can be measured. So let's just use the example of organic social media posts. If you're actively posting on Instagram or Facebook and you're driving people to sign up for your CSA wait list, or maybe download a lead magnet like a free guide, you can calculate the EPL based on the revenue that gets generated from those leads. For example, if you post on social media and you collect 50 leads for free, and then those leads end up resulting in $5,000 in revenue for that month you're measuring, then your EPL would be a hundred dollars per lead. Okay, let's talk about email list growth from, let's say a website pop up. If you have a pop up on your website that offers something valuable, like I have my CSA A to Z vegetable storage guide, maybe you have a farm event signup. You can track how many people join your email list and then eventually convert into paying customers. So if 30 people join your list via that website form and then five of them end up buying, let's say a CSA share for a total of $800 each, you can calculate the EPL based on that organic list growth. Okay, here's another example. A referral program. If you have a referral program where current customers recommend your CSA to friends and family, you can track how many new leads come in through those referrals. What revenue do they generate? Okay, you can get an EPL for that. So for example, if 10 people are referred by current members, three of them purchase farm shares worth $2,400 in total. You could then calculate the EPL based on the referral leads. Are you getting this here? You see how this works? Farm events. If you host free farm tours or events or workshops and you collect emails from the attendees, even though you're not spending ad dollars, you can track the revenue that's generated from those leads. So if 40 people attend a farm tour, 10 of them buy products worth a total of $4,000. Your EPL would be $100 per lead from that event. And let's look at the example of collaborations with other farms or local businesses. This is another great way to get leads. Partnerships or collabs with other businesses, like doing a joint promotion maybe could generate new leads organically too. So if you track how many of those leads convert, you can determine the epl even Though there was no direct advertising money that was spent. Okay, so EPL is not just limited to paid campaigns. It's all about measuring the revenue that's generated from any lead generation activity, whether it's paid or organic. The main thing you need is to know the number of leads and the revenue that they bring in. Now, I also want to just make sure I mention here that a lead is not just someone who it refers to people who buy, but also to people who don't buy. Okay. So you could collect someone's name on a subscribe form, pitch them an offer through your email campaign, and they don't end up buying, but they would still count as a lead. The person who buys, they still count as a lead. Right. They're all kind of in the same category. All right, so by calculating your EPL on both your paid and organic efforts, you're going to get a really clear picture now of what kinds of lead generation work best for your farm and how valuable your leads are. Because you're going to notice that some of those different lead generation strategies have higher EPLs than others. And that's going to make you go, aha, Maybe that's where I should be spending more of my time, because those leads are actually worth more. Now, I wanted to pause here and spend a little bit of time talking about the difference between earnings per lead and cost per lead. Okay, EPL versus cpl. What's the difference? Why does it matter? Because this was something that I struggled with. Maybe you will, too. Earnings per lead is telling you how much money, on average, each lead is generating in revenue, whereas the cost per lead tells you how much it costs to acquire each lead through your marketing efforts. And both of these metrics are important to measure, and they're just telling you different things. They do work together, though. So the goal is to have your epl. Your earnings per lead should be higher than your cost per lead. I hope that makes sense, because this means you're making more from each lead than it costs for you to acquire them. Right? So if Your EPL is $100 and your cost per lead to acquire each lead is $20, well, you're earning $80 in profit for every lead. And then that can actually give you confidence to continue to put money behind that Facebook ad. For instance, if you've determined that that's what's going on, you're going to be like, oh, well, I can keep spending on this because it's giving me this much return. Right. But if your cost per lead is higher than Your epl, then you're losing money and you would definitely want to know that so you can stop doing that behavior or try to optimize it and figure it out. So why is the earnings per lead so important? Well, it's going to inform your budgeting. That's the first thing I want to point out. EPL is going to help you understand how much you can afford to spend on lead acquisition. So if you know that Your EPL is $100, then you can confidently invest in lead generation activities that go up to that amount. You could spend up to $90 to acquire one lead and know that you're still coming out ahead. Right now there's a little. But you got, there's some other things you got to think about here. I know that, but it just gives you a good idea of like what, where is my budget and am I comfortable spending money on this lead acquisition process? Sometimes I, you know, I find there's resistance on the part of business owners and farmers to want to spend money on growing your email list. It's like what, you want me to spend money just to get people to subscribe to my email list? Well, if you know the metrics, if you know the EPL and your EPL is telling you, yeah, like every customer that you get on your every. Excuse me, every lead that you get onto your leads list ends up being worth this much, then you're going to feel a whole lot more comfortable spending 20, 30, 40, $50 to acquire one person on your list. If the EPL is high enough. Right. And we're going to talk about later what an average EPL might be for, let's say a csa. So just wait, that's coming. The second thing, why is EPL important? It, it's going to help you evaluate the performance of your promotion campaign. Like, how well did it do? Was it effective? And you'll be able to compare the different marketing campaigns that you have. So a higher EPL is going to show that that campaign is producing valuable leads and this one over here is not. So you might discover that your referrals are kicking butt. Your collaborations with other businesses is where you're really, you have a hype epl. Maybe your social media is not, or your lead magnet is not performing very well. It's not giving you high quality leads, your EPL is low. And then that can give you a clue like, oh, you know what, I'm going to spend more of my time investing in my collaborations, in my referrals, to grow my list or to grow my leads and. Or I need to figure out a better lead magnet or I gotta look at my nurture sequence that drops out over email after they subscribe to my form. Maybe I need to make that better because I'm not connecting with them before I pitch them. Okay. And you'll just know that and you'll be able to assess what's going on. It's also going to help you predict future revenue. That's probably the biggest thing for me. So once you know your epl, you can estimate how much revenue future lead generation efforts are going to bring. So if each lead is worth $80, you can set a clear target for the number of leads that you need to acquire to reach your revenue goals. Right. And now, you know, I need, I need to get a hundred people if I want to make this much money for my csa and I know my EPL is xyz, then that means I have to get this many leads and you can invest up to a certain amount to get that many leads and then you'll hit your revenue goals because that's what the numbers tell you. Today's podcast is sponsored by Farm Marketing School. This is my monthly membership program that helps farmers build their marketing systems for their business. If you are a farmer that doesn't really have a good machine in place, that's helping you collect leads, attract your ideal customer, deliver your offer, nurture them into super fans, and learn how to continue to make revenue off of them, then this is a program that you might want to join. This is a monthly membership which means you pay month to month. And inside I have over 10 to 12 different marketing projects that are 30 day project builds. And farmers can come in, they take an assessment to figure out where they are in their business, what elements they might be missing in their marketing system, and then you build the different pieces of the machine month by month. You get to decide what to work on first. I have projects about the website makeover. I have a project about building your email nurture sequence, writing a weekly email, building a promotion calendar. This coming month, the month of November, we're actually doing a live book study on building a story brand by Donald Miller. And you will be building a brand script for your farm, getting clear about what your marketing message is. So that's the live project going on right now. And in the month of January, I'm going to be releasing a new project all about marketing metrics and we're going to be doing a deep dive on the key. It's kind of a short list of the metrics that you need to be tracking and I'll teach you them one by one. And then your homework is going to be to go find that metric for that week and build it into your workbook so that you can be tracking it. It's going to be super good. So if you want to join this community, head to mydigitalfarmer.com FMS to learn all about it. It includes a host of project builds. Each project has a teaching workshop, it has a project planner, it has templates to help make the process of building your own version a lot faster. And we also have a monthly Zoom meetup where we talk out our questions. So I hope you decide to join the community. I'm super geeked about it this winter to work with my members and work one on one with them and help them go to mydigitalfarmer.com FMS to enroll now. And now back to the show. So let's look at some specific use cases for measuring the epl. Let's look at a CSA lead generation example because I want to make this practical for you. Let's say you're running Facebook ads to try and grow your CSA subscribers. Raise your hand if you've tried that. Okay, I'm raising my hand right here. This is not something that does very well for me, but I'm raising my hand. Okay, EPL is going to help you determine how much revenue each lead is worth. Even if, and this is important, even if they don't all convert right away, okay, you're going to be able to see that EPL number and you'll feel confident like, okay, that's what the numbers are telling me, that each lead is worth this much. And so I just got to trust this number that these people that are coming in the door that are subscribing to my list, that go through my pitch the first time and don't buy, that's okay, they're still worth this amount because maybe they'll come around and they'll buy eventually on the second time. And that's just, you know, how long it takes for someone to warm up to this, to this offer. If you sell farm products online in a farm store and you use a pop up to collect email addresses, tracking your EPL can help you determine how many emails you need to collect to reach your revenue goals. Make sense? Let's use an example of farm events. For a farm to table dinner event, your EPL can show you the value of each ticket lead which is going to help you price your future Events more effectively. Now, I know what some of you are asking right now in your heads. You're wondering, well, what is a good EPL for a vegetable CSA farm? Now, a good EPL for a CSA farm can vary depending on factors like the size of your customer base, the product pricing, and just how effective your marketing is. But I think we can outline a few considerations to help determine what a strong EPL might look like for for you if you're a CSA farm business, especially for vegetables. Number one, product pricing. So CSA shares are typically high ticket items. And I mean, I think a price might range from $300 to $800, maybe even more for a season. And the higher the price of your CSA share, the more potential revenue each lead could generate, which would lead to a higher EPL marketing channel. That's also another factor that affects epl. So if you're using organic methods like social media or just your email list, you might have a lower cost per lead, which can make a lower EPL still profitable for you. However, if you're using paid ads, you'll want to make sure you have a higher EPL that can cover that ad spend. Does that make sense? And then also conversion rates matter. How well you convert those leads into CSA members is going to directly impact your epl. So a higher conversion rate is going to boost your EPL as more leads obviously translate into sales. So I would say a low EPL is around 10 to $30 per lead. This might occur if you are generating a lot of leads, but only a small percentage are converting into paying CSA members. And this could indicate that while you know your marketing efforts are reaching people, maybe they're not the right audience, or maybe you don't have a nurturing process in place once they get on your list, or you're not giving them enough time to warm up and you're just expecting them to immediately turn into CSA customers and you don't have a process to like honor this idea that it takes maybe several months, maybe a year for someone to finally decide to do it and you don't have a nurturing process that's strong enough to convert them. A low EPL could still be profitable if your lead generation methods are organic and low cost, like just using social media or an email list. I want to make sure I say that, but I would say that that would be a low earnings per lead for a CSA type of product. A moderate EPL would be around 50 to $100 per lead. To expect that to be the number this is often, I think Considered strong for CSA farms. If your EPL is around that range, it means that your leads are fairly engaged and many of them are converting into CSA customers eventually. So, for example, if you're selling a CSA share for, let's say $600, an EPL of $75 would mean that each lead is bringing in a significant portion of that total value. And a high earnings per lead would be a hundred dollars or higher. Anything above 100 bucks, that number would indicate that your leads are very valuable and that your, your marketing is super good, it's efficiently driving revenue. You're likely converting a large percentage of those leads into CSA members and each lead is bringing in significant revenue. So for instance, if you have a high ticket CSA share that's priced at, let's say, $800, $1,000, whatever, an EPL of $120 would mean that you're getting strong returns from those, those marketing efforts. So what do you do with your EPL data once you have it? I want to give a few insights here. First of all, it's going to allow you to optimize your lead generation. I've sort of hinted at this several times now in the episode, but if your EPL is lower than you want than you expect, then it might be time to adjust your lead generation tactics. Maybe you need to switch out a lead magnet, or maybe you need to test out an email nurture campaign and change out some of the emails that you have in there to warm them up more. Maybe you need to have a different first offer. Right? So it's just going to show you some ideas for testing out some different lead generation tactics. I think it will also help you set lead goals. So you can use your EPL to set goals for the number of leads that you need to hit to get your revenue target. So for example, if you need to generate $10,000 in revenue and you know that your EPL is $80, well, that the numbers are telling you that you're going to need around 125 leads to get there. Right? So now you have a target, you have a goal, and that's really powerful. It also improves your lead quality. And I can't stress this enough, sometimes the issue of a low EPL is that whatever you're doing to attract people to your email list, that magnet, that piece of content that's getting them on the list, is not the right piece of content. You're attracting people who are really not your ideal customer. Maybe it's just too generalist and you might need to Go a little more specific. So the quality of your lead magnet or your campaign can highly affect your epl. And this is again, something that you can refine and test to see if that will make a difference. So. So those are just some ideas to get you started. I also think it's a good idea to compare the EPL between your different marketing channels because farmers often market across several platforms. If you're like me, you might use Facebook ads, you might use Instagram, you might use email marketing, you might use referrals or farm events. And tracking your EPL by channel can reveal which platforms are giving you the highest quality leads, which are the ones that have the highest cpl? That's really powerful. So, for example, if your Facebook ads are bringing in leads that are worth, let's say, $30 per lead and your email wait list is generating $100 a lead, well, that's an insight that's going to help you decide where to allocate your resources. Right. EPL can also help you determine the quality of your leads. So not all leads are created equal. I like to say that a lot. Some may convert into loyal customers, while others will sit on your list forever and never buy anything. And so that higher EPL means that the leads you're bringing in are a better quality. So we just want to know, compare the different marketing channels because some of them are going to attract more of your ideal customer. So that data is really powerful and you can spend your money and your time in the right places. Let's talk a little bit about lead nurturing and earnings per lead. So, you know, we want to always improve the conversion of our leads. That's one way to get the EPL to go higher. And one way that you can do that is through better lead nurturing. I've hinted at this a few times in the episode, but this might include things like developing stronger follow up emails. Once they get onto your email list, what is your strategy for warming them up? Do you have a weekly email that you send out? Do you have an email onboarding? Do you have a nurture sequence? That's one of the projects that's inside a farm marketing school and it's there for a reason. Because it's so important to have that before you ask people to buy you nurture them with this nurture sequence. Can you give them content that's going to build goodwill? Can you create some kind of educational farm tour or a workshop or a piece of content that's going to, again, make them feel a sense of goodwill for you like, oh my gosh, she taught me that. That's so cool. I want to support them. So leads who don't immediately buy can still be valuable. Your EPL is going to help you see how nurturing those leads through these additional touch points can increase your eventual return on that investment. Okay, so don't just write someone off because they've been on your list for a few months and they still haven't bought. Like sometimes it just takes them a while. And do you have things in place to nurture those relationships along? That might be something that's on you. I also want to bring up customer lifetime value, the CLTV versus the epl. Okay. Let's not forget the long term focus. So with, you know, EPL gives you that an idea of the immediate revenue that's generated by each lead. But it's really important not to forget the customer lifetime value that reflects the total revenue a customer is going to generate over their entire relationship with your business, which may be 10 years. Right. This is especially important for farmers like me who, who have CSA programs, who have recurring memberships. I have customers that once they're in my system, you know, they spend like $1,500 a year with me and if they're with me for 10 years, that's a lot of money. Am I willing, you know, to spend 50, $70 to acquire that lead? Yes, yes I am. Because I know what my customer lifetime value is. So that's something that you want to be looking at along with your epl. So we're complementing metrics, right? EPL is going to give you a short term insight, but when it's combined with that customer lifetime value metric, you can see how valuable a lead might be over the long term. So a lead that buys $100 product right now could be worth $1,000 over the course of several seasons with you. Are you tracking, you getting that? And then finally your EPL can vary by product or service. There are different EPLs for different products. If you sell a variety of farm products like a CSA share or meet or farm events, you're going to have different EPLs depending on the products. For example, a lead that's, that's generated for a high ticket item like a farm to table dinner may have a higher EPL than a lead for a single vegetable box, you know, a one time purchase and product specific campaigns. If you're tracking EPL for each product or service, it's going to help you identify which leads are most profitable and where to focus your marketing efforts. So if CSA shares have a higher EPL than other products, you might allocate more budget to your marketing campaigns that promote the csa. Right. So we want to be tracking that EPL by product and service. That's another option that you can have. Don't forget, your EPL is a snapshot in time. So we want to be recalculating it regularly. It's not a static number. It can fluctuate over time through your season as your marketing tactics change, as your customer behavior changes. So make sure that you're regularly calculating it after each major campaign just to track your progress, just to see, you know, how are we doing, Is it going higher, is it going lower? Did that work better or worse? And it's just going to help you make more informed marketing decisions. Okay, before we wrap up, I wanted to make sure that I did an example here of tracking EPL in an email campaign for a farm store sales. I know a lot of you use an online store like I do. We use localline. So how does this work? If you wanted to track EPL in an email campaign, let's say that you're running an email campaign to promote a seasonal sale in your farm store. You might be doing that here coming up soon for the holiday season. Maybe you have a special holiday promotion and you're going to promote this package or this offer in an email campaign. So it's being sent to a segment of your email list and your goal is to generate sales of items like grass fed meat or eggs or preserves or chicken bundles or turkey, whatever. Okay, so let's just use some examples here. Campaign details like you're going to send the email to a segment of 500 subscribers who are regular customers of your farm. Okay, so they already regularly buy your offer. Let's say your offer is going to be a 20% off sale on farm products for a limited time. After the email campaign, let's say 30 people make a purchase totaling $6,000. Okay, so you send it to 500 subscribers. 30 people make purchases, and the total number of subscribers who received that email, the total leads therefore is $500. So the step by step EPL calculation in this scenario, first of all, what's the total revenue? So total revenue generated from that email campaign was $6,000. Total leads. That's the number of leads. The total number of subscribers who received the email, whether they bought or not, was 500. Okay, so we're taking 6,000 divided by 500 and we're getting an EPL of $12 per lead. Okay, so now, what does that number tell us? Each email subscriber on average generates $12 in revenue whether they made a purchase or not. And this is helpful because Even though only 30 people bought something, the value of each lead is spread across the entire segment of 500 people. Do you see that? So how do we use that data? Well, we can optimize our future promotions. Now that we know that our EPL for this campaign was $12, we can use that to refine our future offers. For example, if we want to make $10,000 from our next email campaign, we'll need to target at least 834 leads if we want to assume the same EPL. It could also mean, hey, maybe if we want to try and get the EPL higher, maybe we just didn't have a good offer. Maybe we weren't selling the right stuff in the store. Right. We could tweak our offer and see if that makes a difference. We could segment further. We might also notice that certain subscribers engaged more than others. And you could refine future email campaigns by segmenting your list based on the engagement and on the purchase history. And you could target those who are more likely to purchase and that could increase your epo. Okay, I want to finish up by using one more example of a promotional campaign that shows how this would work. So let's just say that I'm advertising my CSA and I want to promote it through Facebook ads. And I spend $50 a day for seven days during a promotion. And the ad is designed to get people to download a lead magnet. My lead magnet is csa. Right for you, seven questions to ask to find out and let I get 35 people to download it. I also send emails to people that are already on my list who are my CSA wait list of 150 people that I've been collecting over the past year with either organic, social or through my website pop up. And let's say that at the end of that campaign, a total of 20 people buy the CSA share valued at $800. How do I figure out the EPL for that? Okay, so there's a scenario for you. We're going to walk through how to calculate it. Let's review what the campaign details are that are relevant for this scenario. Number one, your ad spend would be $50 a day for seven days. That would be a total of $350 spent on Facebook ads. We're using a lead magnet. That's where the ad is pointing. Is CSA right for you? I get 35 people as new leads from that ad, I have existing leads. So there's a number there. 150 people who are already on my wait list who have shown interest in my CSA and have been tagged that way. So my total leads would be those 35 who downloaded the lead magnet plus the 150 existing leads on my list. So that's 185 total leads in this campaign. Okay, That's a number we're going to use in our formula. We also need to know the number of conversions. So that's 20 people who actually purchased and bought the CSA offer valued at 8, $800 each. Maybe they got a vegetable, animal and a fruit share, or a vegetable and an egg share, whatever. So $800 and my total revenue would be then 20 times 800 or $16,000 in revenue. Okay, this is just a scenario I randomly came up with. Now, the step by step EPL calculation for this would be taking the total revenue of $16,000 and then dividing it by the total number of leads so that 185, those 35 leads from the Facebook ad and the 150 leads from the email list. Okay, so 16,000 divided by 185 equals $86.49 per lead. That's my EPL for that campaign. Okay, so if I saw that number, what that tells me is that each lead in that specific campaign, whether they were new from Facebook ads or already existing on my waitlist, was worth approximately $86 to me. That means that for every person who interacted with my campaign, on average, I earned about $86 in revenue. Okay, that's what that means. Now, Since I spent $350 on Facebook ads, I hope you can see how much value those new 35 leads contributed compared to my ad spend. Right. So what would you do with this information? Well, this is going to help with your ad budgeting. So knowing that your EPL for this campaign turned out to be $86, you now understand that you can comfortably spend up to that amount per lead in future campaigns. If you were to repeat this very same campaign again and probably get similar results, you know how much you could spend per lead. Now, if your cost per lead is significantly lower than your epl, well, you're in a really good spot. If you end up only spending, I don't know, $15, $20 for a Facebook lead, well, you're actually making money on that because your EPL is $86. Now, we also look at lead quality. This data will. Will give you some insights into how valuable your existing email list is compared to the leads you got from Facebook ads. So if, for instance, you discover that a larger proportion of the conversions came from your existing white list, which is something you can analyze, you might adjust future spending and your nurture strategies, frankly, to focus more on the organic leads. And then I think it also has a lot to say about your future campaigns. You can use that EPL to set a realistic target for revenue for the future campaign. So if you want to generate $10,000 in revenue, you now know based on that EPL that you're going to need approximately 116 leads in your funnel. $10,000 divided by 8,649 is 116. And that's a really powerful number. Now you have this target that you can try to hit. It's all just math, my friends. When you know the numbers, you have power. Okay? So even if not everyone on your email list makes a purchase, when you run them through your campaigns, I want to make sure you know every lead on your list still has value. And so by calculating the epl, you can determine the average worth of every subscriber and set more realistic revenue and lead goals for your future campaigns. All right, let's wrap this up. We covered today what EPL is, how to calculate it, and why it matters. And I also hope that you saw how you could use it in your farm business. So remember, you can track EPL for both paid and organic marketing campaigns to see where your leads are coming from and how much value they're bringing in based on those different marketing channels. Super powerful metric to pay attention to. So my call to action from this episode is to go take a look at your recent marketing campaigns and start calculating your epl. I'm going to do that after the end of this CSA early bird promotion push. Understanding that number can help you make smarter, more data driven marketing decisions moving forward. And that is so huge. This is. This is the difference maker between farms that scale and farms that don't. So if you want to kind of graduate to the next level, you've got to become savvy with numbers. There aren't a ton of metrics that you need to be tracking, but there are a few key drivers and I can't wait to share what those key metrics are in farm marketing school. The month of January is when we're focusing on that project. But when you become good at this skill, it opens up doors for you. You make better decisions, you feel more confident budgeting and building out your promotions, and you'll be able to predict what's going to happen. So if this has inspired you to start learning the numbers, I encourage you to join Farm Marketing School. Be there inside for the month of January. You can learn more@mydigitalfarmer.com FMS Even if you just come in for that month, that's fine. Learn that. Take that class. Learn it. Walk away with that tracker and start looking at your numbers. It's a perfect time of year to be doing this. All right my friends, that's all I've got today. I hope this was helpful and not too overwhelming. Today's show notes can be found@mydigitalfarmer.com 286 if you liked this episode, please go. Leave me a rating or a review or tell a farmer about it and say oh my gosh, you have to listen to this and share the link. Don't forget you can also get onto my email list. I'm gonna just blow you away with tons of awesome material to grow you and your marketing edge. Go to mydigitalfarmer.com subscribe all that stuff is free. And of course this podcast is a gold mine. Over 275 episodes full of marketing wisdom and guests that can help you learn this skill. You guys, thanks so much for joining me today. Have a wonderful weekend and I believe in you. Have a great week.