#287: ROI is Not Just a Marketing Metric
We’ve all heard the classic business cliché: "You have to spend money to make money." But honestly? I’ve never really loved that phrase. It leaves out the most crucial part of the equation. What if we rephrased it to: You have to spend money to make money, but you also need to know if the money you’re spending is actually working.
In this episode, I’m challenging product-based business owners to stop looking at Return on Investment (ROI) purely through the lens of digital ad spend. The truth is, every single dollar that leaves your business is an investment, and every investment deserves a return.
From hiring team members to investing in photography, copywriters, and coaching programs, I break down how you might be flying blind with your capital and how to start tracking profit metrics instead of vanity metrics. I also share a simple, three-question audit you can start using today to ensure every dollar has a job and is doing it well.
Key Takeaways
- The ROI Reframe: ROI isn't just a marketing metric. If cash is flowing out of your business in a dozen different directions, you need to measure what is coming back in return for every single one of those streams.
- The Danger of Raw Ad Metrics: Generating $3,000 in sales from a $1,000 ad spend sounds great on paper (a 3x ROAS). But when you factor in a 50% cost of goods ($1,500), agency fees, fulfillment labor, and shipping, you might actually be paying to run yourself out of business.
- Measuring the Unmeasurable (Employees): Hiring feels like growth, but without tracking output, it’s just added overhead. Employees don't always generate direct revenue, but they must generate a measurable return—whether that's freeing up your time to bring in new accounts or increasing production speed.
- Learning vs. Implementation: Buying a coaching program, course, or mastermind and only implementing 20% of it means you are losing money. Learning is not a return on investment; implementation is the return.
- The Secret of Profitable Businesses: The most profitable product-based businesses aren't necessarily the ones with the highest revenue. They are the ones with the fewest dollars going out the door that don't serve a clear purpose.
The 3-Question ROI Audit
To keep yourself from flying blind, I want you to perform this quick audit this month on any expense—whether it's a software subscription, a new piece of equipment, an employee, or a mastermind:
- What did it cost me? (Be sure to include your time, not just your money).
- What specific outcome was I expecting from it? (Name a tangible, concrete result).
- Did I get that outcome? (Yes, partially, or not at all).
My Advice: Once you have your answers, act on them immediately. Double down on what’s working, fix or re-engineer what is underperforming, and ruthlessly cut what isn't producing.
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