If you’re sick and tired of living and dying by yesterdays days performance
If you’re just over all the stress of managing day to day
If you wish, you could plan for weeks or months into the future
If you just can’t stand another ROAS lie
PSM is perfect
This is how we scale
A sale today is not revenue tomorrow.
Marketers have taught for YEARS to prioritize transaction margin.
They’ve been told that this is how we can grow, and then they’ve consistently seen issues when trying to grow as the transaction margin disappears seemingly overnight.
Highly volatile metrics in a dynamic environment that is meritocratic are nearly useless when trying to make plans for future decisions.
We must understand that these signals are never consistent and, thus, can not be trusted as high-confidence data points.
ROAS not only presents issues around duplicitous attribution to multiple channels… but it also is built on two troublesome metrics without context
AOV is not stable
AOV does not correlate to LTV
CPA does not include operational costs
MER is just the same problem w a more considerable scope
ROAS (& MER) is ego, not profit
The usefulness of any data point is defined by its ability to be actionable and its trustworthiness.
Because MER (or ROAS) is at best a know out-of-context view with varying degrees of myopathy.. they require many other data points to be helpful.
The PSM equation includes those data points by its nature…
Media buying isn’t about an excellent report
It’s about achieving business goals
Because part ROAS is built on a volatile metric out of our control, we can’t make decisions with confidence for the future based on it.
“How much is a customer actually worth?”
It is a FAR MORE IMPORTANT question to know the answer to than…
“What percentage of this single transaction’s revenue do we have to pay in commission to the last touch point?”
Hoping we don’t have to pay more than one.
Would you rather have a good profit from today’s cost to make a sale & the revenue generated on today’s transaction
Or
would you rather have an upside of nearly 250% on the lifetime value customer
Which metrics do you think are more critical in your decision-making?
“How much more can I scale this offer?”
PSM gives you this number, and since we know added spend doesn’t come without more traffic, awareness, and conversions…
Lifting all other channels along with it
We can have a great plan of how much we can safely plan to grow budgets.
PSM allows you to take advantage of, and lean into, fractional banking economics for the growth of your business
Rather than reacting to the past
We can plan for the future
Creating overlapping and rolling revenue streams is a SUPER POWER you need to start taking advantage of!
“You can’t move mountains if you worry about the pebbles!”
Aligning your growth and acquisition efforts with your business needs in terms of revenue and business model, rather than focusing on vanity metrics, is a GAME CHANGER in your business growth.
Using PSM to laser focus your paid media promotion efforts on the best fit single offer
not only helps the financial side of your business
It also forces you to lean into making machine learning more powerful by removing the opportunity cost liabilities to efficiency gains.
How much $$ have you invested into something that has limited value to your business?
No FB Audience improves LTV or COGs.
They also aren’t scalable w/ projectable stability.
So the opportunity created by a lower CPA can’t be monetized equally & they hurt incremental lift.
As a marketer with quite an ego…
I can promise you this.
Putting the financial health and planning of a business above making a report look good with a self-interested lens to boost the ego of the marketer…
It will fundamentally change the growth trajectory of a business.
Share On:
RECENT POST
CONNECT WITH ME