Omar Zenhom (0:00)

Foreign. Hey. Oh. Welcome to the $100 MBA show. Making business a little bit easier every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher, Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014. And in today's lesson, you will learn how to simplify your business growth to one number. Taking action to make sure your business grows can get overwhelming. There's so many things to look at. Website traffic, on page conversions, the average sale, the average value per customer, retention rates, trial conversion rates, all kinds of numbers to track to make sure you're on track to hitting your growth goals. I personally got really overwhelmed when it came to all these metrics, all these numbers to follow. So I decided to boil it down to one number. And I want to share with you how to do this in your business so that you could focus on one thing every single day to make sure you're growing your business. As long as that number is growing and you're taking action to make sure it is growing, you're in good shape. I can't tell you how much stress this relieved me personally as the person in charge of growth in the business when I got it boiled down to one number. So let's get into it. Let's get down to business. In the 2011 film Moneyball, Brad Pitt's character, Billy Bean, the general manager of the Oakland A's, a national baseball team, hired Peter Brand, played by Jonah Hill. And in the film and in the story in real life, because this is based on a true story, they wanted to break down what it takes to become a successful baseball team and talk about numbers. Baseball has so many different stats to track. But at the end of the day, in the movie, you could see that they boil it down to one number. They basically come to the conclusion they need to win a certain number of games and in order to win those games, they need to have a certain number of runs. In order to get runs, they need to get on base. And that is basically the number they just focused on. How many times can we get on base? If we get on base enough times during the season, we'll have a winning record and having a fighting chance of winning the World Series. In that season, the Oakland A's broke the all time record of a winning streak which winning 20 games in a row and went all the way to the World Series. Now what's brilliant about this is that they did this with one sixth of the budget of the New York Yankees, which is the most successful baseball team in history. So they worked smarter and not harder. So regardless of your business's budget, you can use this methodology, boiling down something down to one number, allowing you to focus on getting one thing and focusing all your marketing efforts, all your funnels, all your webinars, all your everything to getting that number. So in order to illustrate this exercise and for you to do it yourself, let me show you how I did it in my business. Webinar Ninja, my software company. Early on, in the first two years of our company, our goal was to hit 20,000 MRR, meaning making 20,000 monthly recurring revenue for the business. This would prove the product had legs and that we had product market fit. There are so many ways I could try to attempt to reach that goal, but I wanted to break it down to one number so I could just focus on one thing. So what I did is I realized, okay, how much value does each customer have in my business? So I found out what the average monthly value of each customer is because we have different plans. We have some plans that are $29, some are $99. So I want to find out on average, how much money does each customer spend with me every single month so I can know how many customers I need to hit $20,000 every single month. I found out that number for me was $66. So I divided 20,000 by 66 and realized I need 303 customers to hit that goal. But I also wanted to account for the fact that, hey, I need more customers because not every customer stays. I need to account for churn. How much is my churn? What percent is my churn? So say my churn is 5%. I tack on 5%. That means I need 318 customers. All right, now we're getting somewhere. But that's not the number we're looking for here. Because what's the process of buying? So for us, customers would come to our website and they would sign up for a free 14 day trial. And then from that trial, they would convert after 14 days to a customer. Now, I know that 33% of all people that take a trial convert to a paying customer. That means in order for me to get 318 customers, my goal, I need roughly 955 trials. If I get 955 trials, I can hit my goal of 315 customers, knowing that that's my average and that becomes my number. 955. I need 955 trials. I got to do everything I can to hit that number. That means all my efforts are to get people to sign up for trial. Whether it's a webinar, whether it's my sales page, whether it's with my email marketing sequences, whether it's with my automations, whether I'm speaking on stage or I'm on a podcast as a guest on another show, this is all I care about. Getting people to sign up for a free trial. This is my Moneyball number. Basically, I'm reverse engineering my goal down to one number. You could do the same in your business. Let's say, for example, you're an e commerce store and you want to sell a million dollars worth of product every year. And you know that on average, your Customer spends around $220 every year on your e commerce store. In this scenario, you need around 4545 customers. Now, let's say, for example, you know that every time somebody gets on your email list, 10% of them become a customer. That means, Roughly, you need 45,500 people on your email list for the year. Your job is to grow that email list because you know one thing leads to another. Having one number allows you to really focus and get real results. So as you can see, by simplifying your business down to one number to follow, this helps you reach your goals faster because all your discussions are about hitting that number. For example, when I go to my marketing meeting and somebody comes up with an idea or we have a discussion about something that we want to do for marketing, I asked the question, will it help us grow our number? Will it help us get more trials? If it's a yes, we do it. If it's a no, we don't do it. And it's an easy way to know if we're on track and we're doing the right thing. This also allows you to know where to spend your money. So if you're spending your money on marketing or on the growth of your business, you got to ask yourself, does this directly help my number grow? If it does it, it's money well spent. If it doesn't, you better think twice. Thanks so much for listening to the $100 NBA show. I hope today's episode helped. I hope this simplified things for you, because it did for me. And it really was a breakthrough and a relief because now I can just go and go to town and focus on one thing, knowing that if that one domino falls, the rest will fall. If you love today's show, make sure you hit subscribe or follow on your favorite podcast app or on every single app, Spotify, Stitcher Radio, Apple Podcasts, you name it, we're on it. Go ahead and just hit that follow button in the triple dots and you're all set. Before I go, I want to leave you with this. So much of business is just averages. On average, how many customers you get on average, how much do they spend? On average, how much is your conversion rate? Working with these numbers makes it easy because you can just rely on the averages to work out for you if you feed the right number. A lot of entrepreneurs, especially creatives, they resist the math portion of business. Math is your friend in business. It makes things simple, easy and ensures you're on the right track. Thanks so much for listening and I'll check you in tomorrow's episode Q and A Wednesday. I'll see you then. Take care Sa.