Sales Yield: How to not waste money growing a business


If you ask a digital business owner today what their job is, I bet you’d get pretty strong alignment:

“My job is to grow revenue – 10%, 50%, 100% over last year” – Every digital business owner, everywhere

But if you ask the next level question, you’d likely get a lot of disagreement, confusion, and if you have more than one of these guys in a room, an 8% chance of fistfight.

The common threads of Ecom VPs, Digital strategists, CMOs and other titles that business owners take on are instead: confusion, misinformation, and wasted opportunity.

Some folks will tell you that the right answer is to give all of your money to Google, others will tell you that they have a preferred high-cost consultant, and others might say that spamming their shrinking email database is the way to go.

The right answer, as it is with so many things is – it depends.

For products and services that are either super pain-point driven, or extremely timely, it may not at all be a bad idea to put some money into search. For products that are interesting, and at an impulse price point, channel partnerships make a ton of sense. For commodity items that are selling on known terms, it might make sense to have another dimension of value, like a well-known affiliate, help to peddle the goods.

But no matter what, no one should go into such a mission with unflinching preconceptions of the right answer. The marketing budget should be split by month and by channel – and then measured rigorously for conversion optimization.  So if at the start of this program you don’t know what the hell you’re doing (this is not an insult: the first step is admitting the existence of an issue), and if you have a theoretical $1,000 for the month, put $333 into search, email, and affiliate and track the results. This may involve discount codes, or it could involve cookie tracking – whatever your level of savvy is. The next month, maybe you do the same split but for display ads, sponsored posts, and radio (don’t laugh, I know some brands that make an absolute killing on remnant radio).

Over time, you should have a reliable list of different marketing methodologies, conversion rates by cohort, and a real shot at calculating yield: dollars produced per dollar spent.

Acquisition cost and LTV get all the headlines, but for all their pomp, they remain really challenging metrics to get right. You could run a dozen campaigns and get a different CaC for each one, and run three different styles of calculation for three different LTVs per.

Yield, however, is yield. Keep doing high yield activities, and eventually you will dance past your competitors.