“Marketing is 50% Psychology and 50% Numbers”
– Dan Kennedy, Marketing Genius
A common problem with most hypnotherapy marketing is neither of the above are used.
The numbers are CRUCIAL to knowing if your marketing is working and where you should be making changes to improve the effectiveness.
You have probably heard me say “Advertising is an investment not an expense”, and you’ll hear me say it again and again. This is an important mindset to have, because when you invest in stocks, real estate, or even pork bellies… there are NUMBERS available to evaluate the investment so you can decide to keep it, take your profits, or get the hell out before it sucks your account dry.
Numbers like P/E ratios, Debt to Equity, etc. are available and you can monitor the changes in these numbers on a daily basis. In fact you’d be a fool not to check the numbers on a regular basis. And history shows those who ignore these numbers usually get caught with their pants down when the doo doo hits the fan.
Advertising and Marketing should be measured and monitored in the same way. And likewise it’s foolish to put ads in the local paper, send direct mail, or buy Google ads, and not measure the results to the penny.
So what numbers should you ALWAYS know about your business? Here are the 5 Essential Metrics you need to know about your Hypnotherapy business. One of the first questions I ask my coaching clients is what these numbers are. If they don’t know (and most do NOT know them), the first homework assignment is to sit down and figure them out.
- Cost Per Lead
This is straight forward — what does it cost you to get a prospective client to come to you. This is basically someone raising their hand and saying “I’m interested, tell me more”. It can mean they come to your web site, call your office, call an 800#, ask for a free report etc.If you specialize in Insomnia, it’s a person who has Insomnia and is looking for a solution to their problem. That’s a lead. It does not mean they are ready to buy.How much does it cost you to get each lead?Note that you can further break this up by the source of your leads. For example, cost per lead from newspaper, cost per lead from Google Ads, Cost per lead from public speaking.You want to LOWER this number as much as possible. But… when you can afford to pay a higher cost per lead than any of your competitors, you can dominate your market.
- Conversion (of leads)
This is usually expressed in percent. What percentage of your leads takes a measurable action?The measurable action could be they sign up on your email list. They buy a Hypnosis CD. They come into your office for a consultation session. They buy your hypnotherapy package.If you are using 2-step lead generation, you would measure the conversion at each step. So as an example you would measure how many calls you got for your free report on How to Stop Smoking In Less Than 10 Days Without Any Withdrawal Symptoms or Painful Cravings. And you would measure how many of those converted to actual sales.If you only measured one conversion number, use sales.Example: 4% conversion to sales means out of every 100 leads, 4 actually buy the stop smoking programYou want to RAISE this number as much as possible. Even a very small increase can yield a big increase in cash flow over a years time.
- Cost Per Sale
This is best done as an average, but if you only sell a few of your multi-visit programs a month, you can calculate it for each sale.This should include ALL costs to truly evaluate your business, but it can be done just for the advertising and marketing as a metric tool.Example: Each Stop Smoking Now program costs $136.78 including marketing, monthly fixed costs (rent, utilities, etc.) and taxes.You want to LOWER this number.
- Revenue Per Sale
How much money does each sale put in your pocket? Seems obvious, but you would be surprised how many Hypnotists have no clue how much they make on each sale.Like I said, it’s important to know your numbers.If your revenue per sale is low… time to raise your prices or lower your costs. I will almost always advise you to raise your rates. Virtually all hypnotists charge way too little for their work.This is a number you want to MAXIMIZE.Now here’s a dirty little secret from the world of Heavy Hitter marketing… There are times when you will actually want to break even or go NEGATIVE on the revenue per sale.Why on earth would you want to do this???When you know you have a ‘back end’ sales process that nets you a large profit, you can not only afford to go negative on the first sale, it may be the best strategy. This is advanced marketing, and when done correctly can yield huge profits.I personally know two people in the hypnosis profession who use this strategy with great success. I’ll do a post why you would want to do this in the future.
- Lifetime Value of a Customer/Client
For most Hypnotherapists, this will be a new concept. It’s important so pay attention. This should cause a shift in your thinking about business.The lifetime value of a client is an average of all client purchases over the time they are with your business.Example: last week Harry the Hypnotist had 2 clients that paid for “Be A Better Golfer” programs costing $1297 each. In addition, one of those paid for Harry’s “Stress Buster CD Series” $157.00. Harry also sold 3 “Be Smoke Free” Programs ($497 each) , and one of those paid for 10 weeks of coaching sessions ($997).For this example, we will assume none of these people ever makes another purchase from Harry.
Total Clients = 5
Total Sales = $5293.00
Average Lifetime Value of a Client = $5293 / 5 = $1047.80
Now for this number to really be accurate would require more data, but let’s assume this is accurate for Harry.What does this number tell you? It tells you that on average for every lead you convert to a customer, you will make $1047.80. If you get 10 new clients next month, that will be worth approximately $10,478.00 to you in revenue.
And if you know your cost per lead and conversion ratio, you can figure how much it will cost you to get 10 new clients next month.
You can also calculate exactly how much you can spend to acquire a new client. This is the amount of money you can INVEST in your advertising to make your business grow.
Are you beginning to see the value of these numbers?
Here’s one last number that’s useful. You can calculate ROI (Return On Investment) for each advertising dollar you spend. If you spend $100 and make $500 you made a 5:1 ROI or a 500% return on your investment. When ROI approaches 1:1 it’s time to retool your campaign.
By the way… you will want to INCREASE the Lifetime Value of a client. And here is where the shift in thinking comes in… most hypnotists do their sessions and send the clients on their merry way. What you probably don’t realize is — the easiest person to sell to, is one that is happy with what they got from your business. And the hardest sale is to someone who has never heard of you or your business.
I suggest you take time today or this week at the latest, and figure out these numbers. You will be amazed at how much more you’ll understand your own business.