We had the highest-performing real estate investing campaigns in the United States (until we sold that agency in 2019). Those campaigns taught us that the way we all look at our data is flawed! And in this video, Kasim reveals his findings on why monthly reporting fails and what to do instead.
Marketers and business owners alike are obsessed with monthly reporting cycles. This arbitrary timeline seems to be built into the fabric of our souls.
The problem: it has nothing to do with anything.
The key is determining your impact windows. When you spend $1, how long does it take for you to see the impact? This is harder to determine than you may think, and there are multiple inflection points.
For our real estate investment (REI) campaigns, we found that $1 spent in top-of-funnel campaigns could average up to 45 days to result in a lead (depending on geography). This was critical information because it meant looking at our data on a monthly basis didn’t actually illustrate the campaign results.
In fact, a 30-day window of reporting for a campaign that ultimately took 45 days for users to convert would always look like a failure, regardless of how effective it was.
Here’s the formula on how to actually look at your data when trying to determine cash-in / cash-out performance:
ᴀᴡᴀʀᴇɴᴇꜱꜱ ʟᴀɢ + ᴄᴏɴᴠᴇʀꜱɪᴏɴ ʟᴀɢ + ꜱᴀʟᴇꜱ ᴄʏᴄʟᴇ = ʏᴏᴜʀ ᴅᴀᴛᴀ ᴡɪɴᴅᴏᴡ
awareness lag - How long it takes to bring prospects into attributable campaigns
conversion lag - how long it takes to get an engaged prospect to convert
Pro Tip: If you have a business with big swings between initial purchase and LTV, you might also want to factor that in.
How are you currently looking at your data? Was this video helpful and eye-opening, or stupid and obvious?
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Monthly reporting is a completely flawed model and it's going to leadKasim:
to nothing but disaster regardless of the business or industry you're in.Kasim:
Unless you have the shortest sales cycle of all time.Kasim:
And this is interestingly not even a marketing problem, thisKasim:
is a business ops problem.Kasim:
'cause very often marketing is forced into a position of reporting.Kasim:
On things monthly.Kasim:
As a matter of fact, the monthly reporting cycle is completely arbitrary.Kasim:
It has nothing to do with anything.Kasim:
But for whatever reason, every analytics tool I've ever seen is built to deliverKasim:
reports according to the 30 day windows.Kasim:
What you wanna do is you want to determine what your impact windowKasim:
is, what is your impact window?Kasim:
And you're gonna have multiple impact windows, by the way,Kasim:
and I'll explain what I mean.Kasim:
When you spend a dollar, how long does it take for you toKasim:
see an impact if you're selling.Kasim:
Candy bars might be 48 hours if you're a private school, let's sayKasim:
you're private Catholic school, it could be a couple months, Like how longKasim:
do mom and dad start doing research for the private Catholic school beforeKasim:
they decide to sign up for a tour?Kasim:
what is your impact window?Kasim:
What is the inflection point between you spending moneyKasim:
and actually seeing a result?Kasim:
I'll give you an example.Kasim:
We had the highest performing real estate investment campaignKasim:
on the planet for seven years.Kasim:
It was through an agency that we sold in June of 2019.Kasim:
what we found is we had about a 45 day impact window before for top ofKasim:
funnel to the bottom of the funnel.Kasim:
So I spent a dollar, it took about 45 days for that dollar to turn into a lead.Kasim:
Now already, I'm giving you a very solid illustration of where a 30 day reportingKasim:
window is massively flawed because what people do, and some of the mostKasim:
sophisticated real estate investors I've ever seen did this, they'd say, okay,Kasim:
we spent a hundred grand in January.Kasim:
How much money did we make in January?Kasim:
That's nothing to do with anything.Kasim:
The money you spent in January didn't impact the money you made in January.Kasim:
You at least, at least say, okay, we spent a hundred grand in January.Kasim:
How much did we make in February?Kasim:
Like a toddler walking through the world of marketing could sort ofKasim:
understand like, well, the money I made in January is gonna be reflectedKasim:
in the income I made in February, but for whatever weird reason, we've justKasim:
decided like cash in, cash out is all.Kasim:
Time doesn't exist.Kasim:
Time's not a variable that I'll concern myself with.Kasim:
So this 45 day impact window was absolutely critical because if I wantedKasim:
to see what lead flow looked like against spend, I should be looking at it onKasim:
a 45 day cash in cash out timeline.Kasim:
Now here's what's really even more interesting is.Kasim:
That was just spend to lead.Kasim:
What we found from a business perspective is it took roughly seven months forKasim:
the average deal to become a closed deal with real estate investment.Kasim:
Specifically, we were going after distressed homes.Kasim:
And so somebody says, I need to sell my house fast for cash.Kasim:
And we say, okay, we're interested in buying your house.Kasim:
And we put their house under contract or the investor puts their house underKasim:
contract, and then once the house is under contract, the investor goes andKasim:
they shop the house around they try to sell the house to somebody else.Kasim:
And then once they've done that, they made their money seven monthsKasim:
on average for that whole process.Kasim:
So if you're trying to do a cash in, cash out comparison, if you wantKasim:
efficiency ratio or r o i or whatever, it's that you're trying to identify.Kasim:
If we spent a hundred grand in January asking yourself how much money you madeKasim:
in January, you don't get to do that.Kasim:
January expenses aren't gonna show any results until August.Kasim:
So now you can see like this 30 day window that I've thrust myself into.Kasim:
You're making decisions on these 30 day window.Kasim:
All right, we spent how this much money in January.Kasim:
How much are we making in January?Kasim:
Or, you're being super sophisticated, how much money are we making in February?Kasim:
Spend a hundred grand in January.Kasim:
How much did I make in August?Kasim:
That's the correlation that I wanna identify and then follow through.Kasim:
Look, what happened is I boosted my ad spend here, decreased my ad spend there,Kasim:
again, I saw sophisticated marketers doing this, and I see sophisticatedKasim:
marketers do this all the time.Kasim:
What you wanna do is you need to identify where your lags are.Kasim:
What's the awareness lag?Kasim:
How long does it take for me to get somebody who's not aware at all?Kasim:
To be problem aware, solution aware, and then drive them to the conversion point.Kasim:
What's the conversion lag then what's my sales cycle?Kasim:
Lag plus conversion.Kasim:
Lag plus sales cycle equals your data window.Kasim:
And sometimes that could be months, if not years, months, if not years.Kasim:
And you're gonna see massive swings.Kasim:
That's the other thing that's really interesting too, is people, especiallyKasim:
young businesses that assume an L T V.Kasim:
Or calculate their L T V.Kasim:
If you've only been in business for two years, you don't know what your L T V is.Kasim:
What if you end up having customers for 15, 20 years?Kasim:
now, you might say like, that's not the business I'm in.Kasim:
what if it was, what?Kasim:
If you're in a business where you could have customers for extendedKasim:
periods of time, but you haven't been in business long enough to understandKasim:
what your L T B could possibly be?Kasim:
knowing these numbers and being able to zoom out appropriately andKasim:
properly, that's what's going to equip you to, to market correctly.Kasim:
So you have to look at your data properly, have to look at your dataKasim:
according to the right windows.Kasim:
I'm sorry if I got too passionate here.Kasim:
There's no such thing.Kasim:
Anyway, I hope this is helpful.Kasim:
Would love to know what you think.Kasim:
Incidentally, how do you look at your data?Kasim:
What tools do you use?Kasim:
How do you zoom out?Kasim:
How do you identify where, where those lag periods are?Kasim:
'cause you can't always tell.Kasim:
Sometimes it's anecdotal, Like, you can't always tell whenKasim:
somebody's at the top of the funnel.Kasim:
That's very, very, very difficult to track.Kasim:
Anyway, I'd love to hear from you.