Episode 683: [Live Demo] How to Determine an Membership/eComm Biz’s nCAC

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In this special live workshop edition of the podcast, the team at Tier 11 dives into a behind-the-scenes strategy session with a real brand, tackling the financial backbone of scalable growth. From calculating Net Allowable CAC (NAC) to mapping out customer LTV and building membership-first funnels, this episode is packed with actionable insights. Discover how to avoid costly scaling mistakes, implement profit-first media strategies, and make smarter decisions with the right data. Whether you’re driving eCommerce, subscriptions, or both, this is a raw, real-time breakdown of what it actually takes to grow profitably at scale.

Chapters:

  • 00:00:00 – Welcome to Perpetual Traffic: Let’s Get Into It
  • 00:00:17 – Business Models, Boundaries & What We’re Not Sharing
  • 00:02:40 – NAC Unpacked: The Metric That Changes Everything
  • 00:05:08 – Meet the Team Behind the Strategy (and the Brand in Focus)
  • 00:06:12 – Dollars in, Dollars Out: The Ad Spend That Drives Growth
  • 00:08:44 – LTV vs CAC: The Truth Behind Customer Profitability
  • 00:11:23 – Drawing the Line: Setting Smart, Scalable NAC Targets
  • 00:14:49 – What It Really Takes to Scale Without Burning Cash
  • 00:18:53 – Membership vs E-comm: Mapping the Buyer Journey
  • 00:19:23 – Ads That Stick: How to Push LTV Higher From Day One
  • 00:21:06 – Target Smarter: Tools That Take the Guesswork Out
  • 00:22:48 – Why Subscribers Are the Real Growth Engine
  • 00:23:40 – Power Moves: CAPI & Data Suite in the Acquisition Stack
  • 00:26:07 – Looking Back to Move Forward: What the Data Tells Us
  • 00:30:51 – Hit the Number, Kill the Churn: The NAC Target Playbook
  • 00:35:01 – Wrapping It Up: Takeaways, Clarity, and What’s Next

LINKS AND RESOURCES:

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Mentioned in this episode:

AppSumo – 13% off with code traffic13

Tier 11 Data Suite

Read the transcript below:

[Live Demo] How to Determine an Membership/eComm Biz’s nCAC

[00:00:00]

Mike: morning guys. How you doing Mike?

Mike: Doing great.

TJ: How are you guys doing? Very well, thank you.

TJ: Alright, so, uh, Ralph, thanks for jumping on. we figured we can get started here, with Mike and take us through some things. So I have some slides on kind of ads, account review, sort of general hygiene, best practices. so I’ll absolutely send those over.

TJ: We can take a look today, but I, I think honestly the, the real info is gonna come from John and Nick I’ll get outta the way and let these guys kind of run the show here. So, John, if that’s all right, I’d love to start with you and I can kind of fill in the last couple of minutes with the account review stuff.

John: Sure. That sounds good. So typically what we would like to do, in terms of starting our, financial review is to make sure that where and when and how, the ads dollars are spent is spent profitably before we, find out 2, 3, 6 months later that, oh, man, that this whole thing we lost $10,000.

John: Like that’s fairly common. Paid media is the most effective way at, growing a a company, but it’s also the most expensive. and it’s something that, has to have a, really good deal of thought and [00:01:00] preparation put into it before a proper strategy can be developed and then even more properly measured.

John: So I’m going through the, Customer, LTV, lifespan, cogs worksheet, also the, customer acquisition worksheet. I have a couple questions and I know that, tj, you and I were discussing how updated this is. I was gonna share screen for a moment. is this part here?

John: The one A? Is this completed?

TJ: Nick, this is the one that you had provided for. So you want to, okay.

Nick: Yeah, let’s clarify this, this one here, this is from the Shopify store. This is for junk, purely Shopify data for e-commerce, and Got it. Then, you know, the first tab there, we have a LTV from SamCart for subscriptions of $124.

Nick: that’s the first tab there. But can probably, you know, on the first tab, ignore the cogs and any of the other numbers there. So.

TJ: Mike know that, that when you and I spoke last via email about getting cogs for the e-comm side, that was something that your team is still working on.

TJ: So we’ve got some sort of early, I think, version of these numbers, but, to my knowledge, there’s some of that we’re still waiting on from your side. Is that right?

Mike: [00:02:00] Yeah, that’s right. Luke would be a big help there, and, he had a baby about four days ago, so things are a little slower that Oh, yeah.

Mike: Yeah. He hasn’t slept in four days too.

John: Uh, that’s awesome.

TJ: So, uh, the last kind of takeaway that we had, uh, you know, provided, again, it, it’s early, right? But we said, Mike, that, we’re looking at basically ways to grow the e-com side of the business profitably, for a peer revenue stream, basically as a separate kind of initiative from, club memberships, like we talked about.

TJ: So, John, as we kind of go through these things, right, keeping these. In mind, obviously there’s a lot of overlap here. Uh, and ultimately it’s the same p and l, but we do separately, you know, kind of separate lines of business here that each have their own, numbers to work through and so on.

Mike: Yeah. just for us, like the flow is always, membership first. the e-commerce business doesn’t work without the digital membership, we always look at the, the LTV of a member, over like a, a new customer on Shopify.

John: Mm-hmm.

John: Okay. Got it. Got it, got it. I think that’s [00:03:00] this part here that we didn’t have yet, was that right? That was the subscription portion,

Nick: correct. Yeah. So we have Okay. We have to be able, yeah, we have the, got it. The average LTV for a subscriber that we have. And this is, you know, going back from data, from all years.

Nick: The day that we have in SamCart is we have $124 average LTV.

John: Okay.

TJ: Cost for the digital products. However, cost for the membership is one thing we were a little unclear on. Is that right?

Nick: Yeah. Well, the cogs obviously, you know, with the digital product, the cogs, there’s not gonna be cogs that move in the same way as the COGS for e-commerce.

Nick: But, watching the previous calls, there are production costs involved with, delivering the digital, content, the subscriptions. so that’s where Mike, on the previous call, you mentioned a number of $50 as you said that’s about, what the acquisition cost should be for a new member.

Nick: and, you know, combined with that, there is usually the new members will. The [00:04:00] NAOV for new members will be around one 70 when they, you know, they buy the VIP package. Some of them will buy the, 12 month membership, some will buy the monthly membership, but on average that’s gonna be $170 when you include the e-commerce products they buy.

Nick: but that’s where, suggesting an NAC target for new members. That’s where, you know, we want to just get a little more clarity there and, be confident. If we’re gonna set a number that we’re gonna use as our target, we wanna make sure that’s gonna be profitable, because there’s always gonna be upward pressure on, CAC as we scale.

Nick: So we wanna make sure we, you know, we know that ceiling.

Mike: I understand. So, that 1 24, that was the e-commerce LTV of members. strictly on the Shopify side. So then, kind of what you’re saying, when you take in the a LC actually

Nick: what, what I’m looking at, I’m, I’m looking at SamCart right now, and it’s saying the average LTV, and this is saying that this is just revenue from SamCart, which I’m assuming is only for the digital products that that LTV is 124.

TJ: You wanna share that, [00:05:00] Nick?

Nick: Yeah, I’m just, just sharing the screen right now. Okay. I’m just looking at SamCart. and this did not change when I, you know, when I, even when I went to all time, this lifetime value is still going to show up here as 100, you know, 124.

Ralph: So that’s for the membership site plus anything they buy in e-commerce.

Ralph: It’s 1 24 LTV.

TJ: No, I think it’s just memory. Yeah, there’s no just membership.

Ralph: Just

Speakers 1: membership. Okay. Got it. That’s awesome to know.

John: Yeah. And there’s no really cogs on membership. Right. That’s what Nick was kind of explaining is basically just, Okay. now then my question for that, would be here, this customer, LTV and lifespan, Shopify.

John: I have accounts that I work with that have the subscriptions show up in Shopify just differently and some that do not. Do we know if this spreadsheet here of the sell strong customer, LTV, lifespan and COGS worksheet, if this is including digital and, tangible SKUs.

Mike: So there was, a period where we were, gaining subscriptions on Shopify through Recharge.

Mike: Mm-hmm. well I [00:06:00] know there is, some recurring subscription revenue there. but for the most part , majority should be, just physical products.

TJ: Is that something we could, uh, filter by time, right? That stopped in 2022 or something like that and we can go and export based on that?

Mike: Yeah, I could get you those dates. Okay. Okay. Yeah, because I was looking at the, the kind of total amount spent per order just looking at average a OV, it’s about $52 and 21 cents from this worksheet. What is nice though is the total amount spent on average of that $52, total amount in a OV. If we look at the total amount spent going all the way from, infinite lifespan days to recently, it’s 265 days.

John: So what’s nice about that is the average LTV in terms of just the dollar amount going all the way back to, 2022 is 2 65. So My curiosity was looking through here and saying if it was 2 65, I didn’t know if it would show up in here. They, they didn’t quite jive together. And so I’m trying to identify the differences so I can [00:07:00] perform a proper technical analysis on the financials.

John: Nick, this where, right here of the average customer lifespan in 12 months. Is this just as a, benchmark or is it like this

Nick: is, yeah, no, this is, this is purely taken from, so using the and

John: payback

Nick: customer cohorts. Yeah.

John: Got it.

Nick: Okay. And then, yeah. And just one other thing, that 5% other cost the OPEX agency fees, that was me.

Nick: Just buffet it. Yeah. Take that off. Yeah.

John: Perfect. Okay. So if we have an average of cogs of 50 and a max allowable percentage of end rev for paid media, 45%. Essentially what we’re looking at is First, a, a NAC target and then comparative to LTV, and then we simply just overlay our percentile of gross and net profit.

John: It’s a very, very actually simple equation. So what we’ll be tracking what. In perpetuity, in scale, obviously there’s gonna be a few things we’ll be tracking, everything we’ll be tracking, but what we’ll be focusing on is targets our cost required first time customer, the returning customers, the subscribers.

John: Those are things that we don’t wanna continuously pay for [00:08:00] or overspend on. We do wanna focus on a scalable volume, but at a ceiling or below NAC target. So what we’re looking at from an example here. , not an example, but we have the metrics so far. We’ll just wanna iron ’em out after we agree that these are, the metrics is if we have a max allowable end CAC of, you know, either 26 44, 50 56, this is our profit payback model.

John: It’s essentially a CAC payback. And what a CAC payback basically means is if I spend $25 and I get a customer, maybe that sale that was $50 and we technically lost six bucks on the first, you know, sale, but they’re on subscription and there will be LTV and there will be growth. So in the first month, if we basically say, Hey, we have $26 and we, we made $26 and that’s our gross profit, like it’s a break even.

John: It’s a free customer. That is typically how we like to look at things at scale because it turns into what they call just a media efficiency ratio, compounding success, which means as we always gain new [00:09:00] customers, we will always be able to benefit from the returning sales that they make with us.

John: Without having to pay for it in perpetuity. So this is an example of an account that I’ve done this with for a few years. I’m gonna use what I would consider an inferior third party metrics tool, but it was one from like four years ago and they just haven’t got it off, onto data suite yet. But this is something that I would like to just share as a quick example so you can kind of see visually how this looks when it’s executed.

John: We had an NAC target of this client of about $10, all inclusive. that’s like Amazon. Everything, is a cost required first time customer, $10 or less. So it’s going from like February to February last year. We can see that we’ve kept our NAC at. S within 7.9% of our goal, right within that $10 range, that’s when we get a free customer.

John: Now we scaled up a bunch, like 60% scaled to 66 million, which you know, obviously yes. Like wow, it’s raising scale. This is not like everybody gets this when they come here. We spend a hundred million dollars a year. This is just a very large [00:10:00] company, well established. But the growth and the tracking is what allows us to make very educated decisions on where to place ad spend.

John: So as an example, when we’re looking at our NAC target, as long as our top line is here, I don’t mind if Facebook says 50 and Google says 27 and whatever it is, we focus on that top line metric that is your bank account essentially. And when we go into, the. report here, which we’ll, have inside of data Suite, but we’re looking at just a profitability report.

John: it’s only going one month. That’s perfect. this may take like a half a second to load, but it is important for me to share with you the compounding success year over year. When we’re looking at our NAC target, it can be as profitable or maybe in the negative as we allow.

John: It depends on how much time we’re willing to wait at scale for that money to come back in month one. If we get a hundred free customers, month two. 25 of those return, that is where now that is going to kind of grow in perpetuity. So that NAC target is extremely important. ’cause if we do get that wrong and we scale, we’re losing money at a [00:11:00] faster rate.

John: So this is where we look at our Profit Purdue customer. You can see it’s like, a couple dollars here and there, but over time now our repeat customer sales every day is, 80 to 90,000. This has taken about four years to get there. But, we wake up and there’s a hundred grand before we even, start a turn on a campaign.

John: So that’s how we kind of have to think about the growth of this. So we’re looking at this here. This would be a fairly aggressive end CAC target, like $26 for a new customer. All in everything that will be profitable. Month one. My thought process is we’d probably wanna live in a comfortable area.

John: Somewhere in between. Here is my suggestion. I’m gonna pause here and see if there’s any questions. I go too fast a lot, so I wanna just pause and see me. Mike, what questions do you have so far?

Mike: no. All, all good. And, makes sense. so this chart here, I just wanna make sure, when we say customer like this is also including, a digital membership.

John: Yeah. And that’s why I just wanna make sure Nick, this is including digital membership.

Nick: Well, [00:12:00] this here was actually purely Shopify data, so, okay.

John: Yeah. And there could be some could be not, but we’ll, add to it. let’s just say this number of changes by five bucks, as an example, after we add membership, That would be okay. Our LTV will be higher. Our lifespan will be longer. This can be higher for sure. but that’s kind of what we’ll wanna get to is hopefully we can do from this meeting is say, here’s how everything works. This number may change, plus or minus 25% after we get the subscription data in.

John: And then we can quickly review and say, okay, I understand what this says here. If that number is that, am I happy with that? Can I sustain that? that’s kind of the decision that we kinda have to make from a financial standpoint.

TJ: John, is it worth, and Mike, maybe you’ve got an opinion on this too, is it worth having a version of this that includes when members purchase through the e-comm store versus if there are non-members purchasing and what an NAC target would be for somebody, who, who all we need them to do is buy, you know, bait and tackle, for example.

TJ: That’s all we’re asking ’em to do here by way of n cac. as opposed to the members who are much more common. Mike, if I understand, they’re the ones [00:13:00] mostly purchasing through the store now. So the NAC target includes acquiring them as a member and then, it’s like getting your, your Costco membership, right?

TJ: They’re the ones shopping in the store. But if a hundred percent

Speakers 1: Yep.

TJ: If we were to expand that Mike has already said a few times, we’ve got into the notes here as well, that that is the primary goal is memberships. However, if there is this sort of secondary of just getting, e-comm customers sounds to me like they would have a separate set of calculations for things like nac nac, target, LTV, So do you separate those out and have one with and one without here? Or how those things sort of, sort of fit together here?

John: My opinion, and just lemme know if you guys would agree, it is common to get a person that has an e-commerce sale that then comes back and signs up for membership that has nothing to do with paid ads.

John: the paid ads brought the e-commerce sale, but very little to actually bring it across the finish line for a subscription. If we optimize the structure a bit more, for example, some simple CRO ad copy, features, benefits, Ben Franklin close and ad copy, et cetera. If we start to push [00:14:00] membership and we start to see our membership increasing.

John: And that will have an effect of a higher LTV. So we can kind of see, because those things may move in and out quickly. Person, we get a membership, they cancel membership, but then they buy from SKUs or they come in from SKUs and they switch to membership. It will maybe a little bit difficult to say, Hey, this is one path.

John: That’s another path. I would imagine those two paths cross very often. Would that be, would that be true, Mike?

Mike: Yeah, absolutely. we do not have much tackle revenue from non-members. Mm-hmm. Right. It’s all essentially through members and we have, you know, an opportunity where we have, I think it’s 30% or 40% of our current members who are not yet tackled customers from this.

Mike: so that’s gonna focus as of late. So it definitely starts with memberships and then them flowing into tackle customers. Now we would love to know, ’cause we can get tackled customers pretty cheap. Like non-member tackle customers, you know, through free plus [00:15:00] shipping, 50% off deals. Like, we’ve done that pretty well.

Mike: We haven’t been able to do it necessarily profitably, like immediately. but what we’d love to see is we’ve always looked at it from a profitability standpoint and not like, what is the LTV of that tackle customer 60 days, you know? Yeah. A day becoming members, should we look at them as more of a customer acquisition versus trying to make profit on, on our tackle ads?

Mike: So, and that’s a big question for us.

John: Got a question. What’s , the e-commerce site built with.

Mike: Shopify,

John: is it Shopify. Okay. one thing that we could do, I think I have this, so I, own a company called Bully Stick Central. we sell dog shoes.

John: , it’s a, yeah, kind of a small pet project, but, I wanna share something with you that I think could be helpful. There’s a tool called Buy the Numbers. It’s like $12. and we don’t pay for it anymore. We needed it for like three months and then we got rid of it, but we still have the free version. One thing that is nice is if we look at like, last 30 days, that kind of [00:16:00] stuff.

John: what we can actually do in this is go into the preset segments. do you use Klaviyo? No. Okay.

Mike: we had Klaviyo for a bit, um, and now we’re moving to HubSpot.

John: Oh. I think this integrates with HubSpot I’ll to look into it. But one thing that this machine does very well, and this is kinda like a bonus and it’s like 12 bucks and.

John: it gives you these preset segments that help with your targeting and your segmentations for those type of communications. So for example, this is just the standard ones that give us where it’s like dormant customers at risk. So people who purchased, you know, that kind of stuff. I’m not saying the memberships would be here, but these would be all the people that like purchased once and never purchased again.

John: Those would be your SKU customers. And this would be, customers that purchased 12 months ago and will likely churn. So they purchased once and never came back and there’s 4,000 people in there. and then we basically can just link this up to Klaviyo and it was gonna automatically sync.

John: Basically every week so that it just dumps in all those people and you put ’em on a, on a drip campaign of like the features and benefits of a membership and how they can actually get tackled cheaper now. I don’t know, we’re just, spit balling here. Yeah. But for 12 bucks and you get, I mean, there’s I think 40 of ’em in here, [00:17:00] retail customers that include a tag.

John: So, and we will go back and backdate everything since inception for you and then organize it and then you click one button, it’ll synchronize it right to your email marketing campaigns, by the numbers. I don’t even know who made it, but I just found it one day and I thought it was pretty cool.

John: So I wanted to share that with you. , So I think right now we probably wanna have a very, very tight focus on subscribers. That I think is pretty much our only thing that we should focus on and measure. The SKU customers, I think, are gonna be too expensive to go after a paid media. , I call ’em skew customers with product, we call tackle.

John: But the tackle customers, I think from a holistic standpoint about going after a large portion of those people, in my opinion, is not necessarily where our folks should be at. That’s kind of uncontrollable for MRR and even a RR for growth. So thinking that if we were looking at an nac, target for simply subscribers or, or new customers that have a subscription have not a subscription.

John: one thing I did wanna share with you, this is a data suite, feature, but I do want it to be, , something at least I, I can at least share with you. So are you [00:18:00] familiar with, Data Suite? I know I this is first time meeting. Yeah, so John,

Nick: John, salt Strong. They’re actually all already on Wicked, so.

Nick: Oh, perfect.

John: Okay, cool. So this data suite, then essentially you add on Bolt benefit, et cetera. I think is extremely important just because, you’re familiar with capi. No. So CAPI is an offline import into a paid channel. So what that means, I’ll use my, again, it’s like another company I’m involved with.

John: I always share data kind of from companies that I’m, working with that I have an equity stake so I can, there’s no issues there. But the company here, what we really needed to focus on was a new customer. this is two ways that we do this with data Suite, both on the Google side and on the meta side.

John: And those are primarily our, first areas that we would attack is when we’re training those algorithms. We’re training those pixels with the conversion action. we’re trying to have it focused on a particular audience. And so the. New customer or new subscriber is something that can be imported into [00:19:00] both Meta and Google in order to train its models to focus on those people.

John: So that as we look at all of our purchases, we see that we have, 4,600 purchases, but 4,200 of them are new. This is gonna be extremely important, especially with your audience that does flip flop and people that are on subscribers are buying tackle. And that gets very messy when we, clump those two together inside the paid media platforms.

John: That’s where most companies actually fail at scale is because they’re dumping in a lot of money, paying for just simply the activity of their member base. And it’s just showing up as roas and it looks fantastic because they’re your customers, they’re warm people. So this is just a, quick side note, that I think that this is something that is already integrated into the wicked, functionality is just a feature of data suite.

John: So that’s something that we really need. So we’re looking at NAC targets. I know that our cost for acquired first time customers, one 90. This is also on a subscription model, we actually started this in December 1st. So we stuck a new customer acquisition goal on here and then started to scale it.

John: but when we’re focusing on [00:20:00] those subscriptions, this one is in recharge. Before we focus on, we could not make any sort of headway. We added an ad spend and things just kind of ebb and flow. once we installed data suite to account for those new customers, the new subscribers, that’s all we’re paying for now is, or all we’re really tracking is the cost of those, new customers, they’re expensive for us.

John: They’re like 195 bucks, but we’re selling like hip and joint medications for dogs. So it’s a little difficult. The, analytics though, show that after doing this, So we started this December 1st. I’m just gonna go back like the last 12 months as an example and then let’s turn off the comparison.

John: see the whole line there? but this is going back all the way from like February 26th. We can pretty much go back to even like last year if we wanted to. but this is one of the things I think is extremely. Pivotal in, these types of markets is because we can have this kind of slow growth right here, and then we kind of stagnate and then once we start optimizing for new customers, that’s our active subscribers just continually going up.

John: And this is just from December. the reason why we’re able to do that is we were able to increase this by about [00:21:00] 732 grand. Since December 1st, we were able to pump, you know, a whole bunch of money into this thing go from 25 to 800 and that seeing that cost for a first time purchaser go down. So that’s kind of how this operates, is we focus on NAC targets of those subscribers at a profitable level.

John: We know our NAC targets and NAC payback models. You’re agreeing with it, happy with it. We’re measuring it to make sure it’s there. You’re already on Wicked. So it’s fantastic. And then that kind of scale and that push is something that we analyze each week. How many new customers, how much did they come in?

John: Is it profitable? Is it verified? Is our data matching your data, et cetera. like wicked and backend metrics. But I think that we’re probably at a good, safe stopping point right now just until we get that subscribers. I think that is gonna be, pretty much everything that we’re gonna focus on.

John: , the skew customers will be a benefit.

TJ: So getting there, John, costs have to be factored in, right? So we know what the NAC target will be of a subscriber. Mm-hmm. Uh, and I know, you know, Mike, you said Luke is otherwise engaged at the moment, but figuring out, you know, what those costs look like.

TJ: And obviously at this point, because they don’t scale the way a COGS would with the, you [00:22:00] know, with a tangible product, we’re really focused on, gross margin and contribution margin here. that’s part of the calculus for us is figuring out what those costs look like. But, John, there are any, any other pieces that we absolutely need and, you know, some homework that has to be done here before, we can make some real recommendations and, what, what else kind of comes next in order to achieve that?

John: Nick, you were saying that we were still missing a piece and that was new for me, so my apologies. I was a bit outta the loop on what that we needed there. Nick, you mentioned we’re still waiting on some subscription data.

Nick: Well, it was really just, If we’re gonna set a target for the subscribers, you know what mm-hmm.

Nick: Really just, you know, what that target needs to be seeing. We don’t have the cogs, the physical cogs that we do for e-comm. Got it. Um, what then do we need to factor in if we’re setting a target for, pure per subscribers? So, just looking at the last three years, this was, I separated the ad spend going through , the meta and Google ad accounts from spend going to the subscriber, landing pages, the funnels, and then breaking that out by e-comm.

Nick: it’s gonna be very close. There are some [00:23:00] campaigns where I was looking at and, you know, I was going through each campaign, looking at the landing pages. So, it’s gonna be close. They might, it a little, little bit off, but generally you can see the spend here over the last three years on the membership compared to E-com much more, much more spend here.

Nick: but this is the historical impact over the last three years for new subscribers taking the SAM South subscribers. So we had $40 in 20, 22, 30 $6 in 2023. Mike, I think you mentioned something last call, that 2023 there. it was big, big, big, surge subscribers 2023. then the N CAC last year came up pretty significantly to $51. So it’s, it’s identifying, is this too much, is $51, getting into unprofitable territory for acquiring subscribers.

Mike: Yeah, exactly. yeah, it seems like, I’m sure we’re close because you’ve got.

Mike: LTV on the e-commerce side. We’ve got the data here on the subscription side. So, yeah, I’d be really excited to, know what that combined LTV is, , and dial in on that number. ’cause like I said, some [00:24:00] data, some instincts. We, we think that 50 number is, okay. and that’s what we’ve been pushing forward with at the moment.

Mike: but we’d really like to dial it in and, and know what we can scale at.

TJ: Mm-hmm. So in the process of getting there, Ralph, I might lean on you for this one, right? the number or I guess the types of costs that we would recommend, factoring in so that we can get to that target NAC or the allowable nac.

TJ: What should that calculus look like So that tier 11 has, a recommendation back to the salt strong guys here of here’s what we think the NAC target should be and so on. How would you recommend we, we sort of calculate those things out? ,

Ralph: I think the analysis that Nick did here the last three years is super helpful.

Ralph: I didn’t realize that that was done. So that’s knowing historical data is. Very helpful. the question really then becomes back to you guys. Like we try and figure out n CAC from, effective LTV, which is, LTV for in this case membership, minus, any chargebacks and then take out cogs.

Ralph: The digital product might be a little challenging to figure that out, but [00:25:00] then like what your desired profit margin is on that. And because then we look at e-commerce as sort of icing on the cake. That’s gonna be additional, it is like a prime membership. It is like a Costco membership. ’cause once you get them in, it’s really, then it’s about focusing in on maximizing sales to the e-commerce site and obviously minimizing churn as much as possible.

Ralph: But that number of 50 in 2024, are you guys comfortable with that? Any cap number to acquire a new customer? Or are you not? Because that’s really, it’s more of a judgment call than anything else. Because, when we factor in N cac, we always factor in, at least I do when I do it, I factor in a certain amount of profit margin.

Ralph: And if your LTV is 124 and you’re acquiring for 50, like there’s additional costs, like you guys need to get paid. There’s sg and a, there’s operating expenses, you know, there’s all the other things that go along with it, but it’s like, what are you comfortable with for an n CAC figure? Because we can say, [00:26:00] all right, at 50 we can scale, but at 60 we need to optimize it 40 or 30, we need to step on the gas and ramp things up.

Ralph: And that’s really back to you guys.

Mike: Yeah, that would be awesome to know.

Ralph: Yeah. I mean, that’s real quick. Maybe that’s a joke. Maybe that’s a joke question.

Mike: Yeah. And I, I’m in here listening. I’m in my truck. Uh, but yeah, if 50, if we’re talking about. The actual, CAC of what we’re spending on paid media. Then, dude, all day long, I told Barry, I’ll give you a million dollars a month if you can get new members at 50, assuming that we also get some referrals and some freebies, and we obviously have about a hundred thousand people a month organically just finding us through, Google and, being in, YouTube.

Mike: so the answer on that one is an absolute yes at 50 or less. the other thing, just so you guys are all aware, Jason on our team is our head of operations and he is, he’s about 60% done. It’ll definitely be done in March where we’re breaking out the p and l. ’cause we essentially have two companies.

Mike: It’s, part of the problem. We have an [00:27:00] e-commerce company and we have this membership. And so, our accounting group and Jason’s heading it up, I mean it should be spot on. It’s not just guesswork. P and l for both companies. And at some point we might even split ’em up and have two completely separate companies, but at least we’ll have a p and l So you guys can see, all right here’s what this really looks like on the e-comm side on Shopify, and here’s what it looks like on the membership side.

Mike: but if you look at our mission statement and our vision and everything that we do as a company, you don’t see the word tackle or equipment or Shopify. Mm-hmm. Or e-comm anywhere in there. It’s never mentioned. So I think you guys are on the right path where we are a club, we’re a community. that’s what I get excited about.

Mike: That’s what keeps us up at night is how do we grow this club and this community and really get more people in and fix the churn Problem is, is probably a bigger pain point than, selling more, uh, more tackle. And then finally I’ll say, Ralph, you’re lucky just from listening here, John and TJ and Nick make you look really [00:28:00] good.

Mike: So, uh, you got a good, uh, good team here.

TJ: Thanks for putting me on that list, Joe. I appreciate that.

Ralph: Even the sales guy. It’s, uh, that’s good. That’s Joe Simon’s for me. Uh, that’s awesome. Um, I mean that’s really, that’s the crux of all of this. this is why we do all this pre-work because we can run paid media for you and if we don’t know a number that just makes you go outta business faster and we don’t want that, we want you guys to be with us for a long time and have you be as profitable and the relationship make the most sense to you.

Ralph: But we need to know what those ranges are. Now that range, that $50 or $50 is like your midpoint, less than that is great. A little bit higher. Okay. We need to have a discussion. But then the question really becomes, all right, all day long, get you $50 members, but then how can we decrease churn?

Ralph: churn for us was our biggest issue like three or four years ago. We’ve solved that [00:29:00] because you know what, Joe, because we do this now, because now we’re on the same page with everybody that comes into us. But I know that churn is like the most expensive thing. So how can we help with that?

Ralph: We have additional services, we have email, we have CRO, we have all these other things layered on top of that. Maybe that’s sort of a secondary thing, but if we have a number to start with paid traffic, like that’s golden. and if you, as the owner say, like 50, is it like that’s what we shoot for. The question then becomes for the smart guys on the call here, can we get to 50 and at what scale?

Mike: Yep. and the reason. Mm-hmm. It might look bad if you’re only looking at. A blend of all our e-comm and like many, even the people that took a 2 97 free pack of lures, but we actually paid a guy name is Adam, and this would’ve been 20, either 2022 or 2023. he went back and did a true LTV long-term, not a 12 month LTV of our members only.

Mike: So we did not count any e-comm stuff, just members. And for, non [00:30:00] VIP. So these are people that didn’t take any of the one click upsells. it was like $300 was our true LTV long term. And the people that were VIP, it was like 4 97. It was almost 500. So knowing that in terms of us looking long term, I’ll pay $50 all day long.

Mike: And now once again, that was over a, five year period of time. but we did a pretty good stick rate and we’ve done the full, Logo analysis of how long people stick around. And in general, we do a pretty good job, but if you could do $50 and we get better at keeping people and then the onboarding process, which we kind of suck at, man, could scale this thing, long ways.

John: Yeah. Awesome. But can I touch upon the churn issue you’d mentioned earlier? Can you elaborate on a little bit of what you’re seeing?

Mike: So you look historically, it’s always been around 3%, per month. Are, are churn on average. And when you’re at 20,000 members, it’s not as noticeable and you’re at 50,000 members, that same 3% is a little bit more noticeable and you have to spend more money to keep up with it.

Mike: what we’ve [00:31:00] realized is our onboarding is all over the place. Even some of our testimonials, they’re like, man, I was really overwhelmed when I joined. I didn’t know where to start, but I just dug in and figured it out, and this has been the best investment ever. That’s, not a great, I mean, it’s a good testimony, but it’s not great.

Mike: And we hear that over and over again. It’s like, man, you guys have so much stuff. I don’t even know where to begin. meaning we have a great product. We just gotta simplify it. It’s, I think if you asked our leadership team, all right, where do people go when they first sign up? And you probably get six different answers.

Mike: I don’t think any of us truly know where people are, going. And so to me, if we could just focus on a better onboarding experience, I think it’ll help the churn out. I don’t think churn’s ever gonna get to one. But even if it just got to 2% or one and a half per month, I mean that would, that’s a big reduction.

Mike: Change. Our, that would change our whole business.

John: A 50% reduction. I churn is massive. Yeah.

Ralph: Joe, I have three to 4% churn per week. Mike mentioned that on our previous call. Is that accurate

Speakers 1: [00:32:00] per week on our

Mike: company?

Speakers 1: Yeah. That’s what I have in my notes. Is that No, it’s, per month. Per month. It’s per month, okay.

Speakers 1: Yes. Okay. per

Mike: week, we would be out of business. That’s what I

Ralph: was about to say.

Mike: I was just looking at percentages. If

TJ: it compound, it seems like three to 4% consistently, right? Yeah.

John: Yep. Okay. I have a, another question there, or not question, kind of a thought process. Is there a time period where it’s like, if they, and this is something I find quite common, especially with subscription models, is there’s a time period where the attrition rate drastically drops and sometimes it’s like the 60 to 90 day.

John: So signing up, first 30 days, getting a little bit overwhelmed, maybe using some portion, maybe not you know, in the second month it’s either the make or break like, oh wait, I got charged again and Yeah, I actually, I never used this. Lemme cancel. Is there a time period like a 60 days or 90 days or, or maybe something we could look into that says okay, they, we have a 90% retention rate for a year long after month two.

John: Before month [00:33:00] two, it’s like 66%. Sometimes there is a big, big portion there. If we can find that something that we’ve done with SaaS companies especially this is, this is important for them because they do a lot of free trials with 10 other competitors also doing the same 10, 30 day free trial.

John: So it’s a big race to who can impress The quickest is that portion is something that we have to overcome as a hurdle. form that onboarding. If you simplify it, make it like, not onboarding, but you understand like bringing those new, new subscribers in a more simpler way and more, more, transparent way to them where they know what they’re getting and they can understand how to use it.

John: One thing that we’ve done in a previous, previous SaaS companies that worked well was to have a small amount of daily ad spend dedicated to the people in those timeframes. The first 30 to 60 days as example where we are. not overloading them, but we are touching upon, why something’s good and where to find it and how easy it is.

John: So it’s like, Hey, have you checked out this tool? this is something in your dashboard that’s here. Now what this does is blah, blah, you kind of keep reiterating the features and benefits of the membership and, where to go and how to use it. And you do that [00:34:00] through essentially video on meta and video on YouTube and just purely remarketing for just the people who signed up in that time period.

John: What’s nice about that is it’s a rolling 60 day on average, not going from like a hundred thousand people to 200,000. Well, now we’re like, okay, now we need, three, four, $500 a day. This can be fairly fully covered with about 50 to a hundred dollars a day for everybody.

John: Just because our cost per million might be $10 max, maybe $5. And what that means, it costs us, you know, $5 to impress a thousand people. So if we imagine those first, you know, 60 days, not a whole lot of people in there, small daily ad spend, but could make a very large impact.

Mike: So to kind of answer your first question, if, you look at our membership base as a whole, we have, it’s like 53,000 something, but let’s just say it’s 50 for easy numbers.

Mike: Mm-hmm. About 35,000 of them. So it’s 70%, 35,000 are on annual. ’cause we make it very obvious that it’s a way better deal just to pay annual upfront. That’s the 97 upfront. So that means only 30% are paying monthly. And we have all this data that we could [00:35:00] send to you if you really wanna dial in. But what we found with the annuals, ’cause that, just looking at kind of the 80 20 or 75, 30, 70 30.

Mike: If we can get them past the first year we’ve got them, they stick around for, I think it was three years on average that guy added. Oh wow. Oh. So if we can just get ’em there, but it’s, any of you guys have ever bought a boat or had a friend that’s bought a boat or neighbor’s bought a boat? It’s no different.

Mike: You get super excited. They’re all gung-ho and they use it for the first month and then it sits there in the garage and they don’t use it. Next thing you know, the spouse is complaining, why do we got this boat payment? We haven’t used year. And it just sits there and it’s literally, that’s what happens.

Mike: So either the other guy uses it and their family’s having great memories. they’re absolutely loving it and getting value from it. But that seems to be our issue. If they don’t continue to use it all year long, we obviously lose them. they get an alert from Sam Carter Stripe that says, Hey, you’re about to be charging 97.

Mike: And they drop it. that’s kind of our bigger issue that we have to solve is how do we get people to use, even if they’re not fishing, to use [00:36:00] the app, to use the education to get in the community and be part of our awesome club, to take advantage of tackle discounts even if they’re not fishing as much as they want to.

Mike: the monthlies, I don’t know. I’d, be, uh, kind of guessing to this point, but the annual is, is our biggest opportunity ’cause it’s the vast majority of our members.

John: Okay. Well what we could even do too is going from day 300 to day 365, even two of the people have opted into a one year membership that is also potentially another area that we could say for two months we drip on these people, new things coming out, plan things coming out, you know, get them kind of rebuild the hype and rebuild excitement to see if we can get ’em across that finish line of over one year and sign up for year two.

John: So some things that we can kinda love upon those people that are in those. So it’s not like we don’t have to necessarily only use paid media, like drop ’em off at the door and then cross their fingers that you guys can figure out how to get them to stay. It’s not as black and white as that. It’s working together obviously for strategies and then also dumping a small amount of paid media to help, sing the same tune that we’ve been singing to them the whole time, along with email marketing, reminding them that kind of stuff too.

John: So have a, different, or potentially more of an enhanced version of [00:37:00] our, of their onboarding and first year and even, their decision after almost one year.

Mike: Yeah, we did an experiment one time when we first started realizing that, hey, we’ve got this journal. Let’s see if it’ll go down.

Mike: And we sent. Every single person who had an annual, their first year annual renewal coming, a free pack of lures and a little thank you letter and very similar, Hey, here’s all the cool stuff that’s coming over the next 12 months and here’s a little thank you gift. And the crazy part is it didn’t affect churn at all.

Mike: And we did it, I think it was for two months straight. We think every single person, it was like, but maybe it increased LTV, maybe the people that were gonna stick. Love this even more. We hurt for people saying, man, that was so awesome. I love you guys. so I know it didn’t hurt, but, it was interesting.

Mike: didn’t stop people from leaving at the same rate. Yeah. Yeah. And what’s nice is it’s really, a smaller amount of ad spend, that would be needed. It’s probably less than what those postcards cost you, to hit ’em on every single channel.

John: yeah, agree. So it could be something that we can I like that. Yeah. Yeah. That’s why I like is I like small scale, low risk, high reward testing, and then, push into what we see working well.

Ralph: Yeah. Throughout [00:38:00] the 12 months period. it sounds like the majority of your churn, like what we did, an analysis of our churn, it was very clear where that churn was happening.

Ralph: So you’re saying, Joe, it’s at the 12 months for the annuals for the monthly, and I didn’t get the numbers there. You, said 30 5K. 30 5K are on annual. How many are on monthly again? ,

Mike: yeah. approximately 50,000, minus 35. So we have 50,000, you know, active paying members a little over, but, and there’s th maybe it might be 33,500, but it’s somewhere in that range that are annual and the rest are, uh, are all monthly.

Mike: Got it. the monthly, I, I don’t have that data. if I had to guess it was in that three to four month period, now we do get some people that once they really like it on monthly they do upgrade. We kind of put that in their face quite a bit when they’re on our website. it’s actually, only on desktop obviously, but on the right hand side it say save whatever, 20% by going annual today, and we give you a little gift.

Mike: So we’re, constantly putting it in their face. But, yeah, it’s, that year mark. if we can get them past that [00:39:00] year, they tend to stick around for multiple years and eventually maybe even go VIP, they’ll buy more tackle. They join a chapter meeting, they refer people. But if, we can’t get them that year and the worst one is they get really engaged. First month they stop using it, life gets in the way or gets cold, whatever it is. And then all of a sudden they stop checking our emails. And because of Keep, keep is really specific with their email, their email service provider, if they don’t click anything for it’s either 30 or 60 days, we’re not legally allowed to email them.

Mike: Yeah. And so all of a sudden now they go without clicking our emails for 30 or 60 days. Now they haven’t heard from us and then all of a sudden they get a bill that we just charge ’em 97 and those are the people that hate us. and this is not just like one or two. We get this every day.

Mike: right. So that’s kind of our bigger problem is how do we get these people continuing to use our stuff to create habits with it. and I think HubSpot maybe has slightly more liberal rules where we can keep emailing [00:40:00] them even if they haven’t clicked in 30 days. But that part’s been an absolute nightmare that we’re not allowed to email our customers, because they haven’t clicked something in, uh, 30 or 60 days.

Ralph: Have you guys done anything with SMS?

Mike: Yeah, we use, voxe right now. I think that might change once we go to HubSpot, but, Mike, you can talk on that. That’s a little bit of a newer thing, but it obviously, it actually crushes it. Yeah, absolutely. We want to be using it a lot more. The tough part is it’s not integrated into the CRM, so it’s, a big lift to do anything with it.

Mike: workflow automations don’t work there. Yeah. Yeah. Although, uh, HubSpot does have an SMS function. Yep. Yeah. It works very well too. I mean, dripping that, I just think you gotta get out of the inbox in a lot of ways.

Mike: Yeah.

Ralph: And not being annoying, I have a membership from like five years ago for some group that I joined Joe, like post-war room, and they, I’m still on their SMS and they, text me like once a month, like, Hey, just making sure, like, the [00:41:00] call we got coming up this week, it’s gonna be super exciting.

Ralph: I’m like, delete, delete. But I’m like, you know, at least they’re persistent.

Speakers 1: Yeah.

Ralph: If I was a paying, I mean, I’m no longer a paying member. The point is, is like something like that over a 12 month span, like once or twice a month, you might find that’s how you eliminate a lot of that. And just reminding them of the value of it and or having a two way.

Ralph: So, you ask them questions and then having someone, a low paying individual, like on staff. Because if that’s the key, the key is not necessarily getting ’em on board, it’s at that 12 month period But you can’t send it. Like you said, you send them allure at 12 months, they’re like, yeah, that’s great, but it’s in effect churn.

Ralph: it’s almost like, the horse is outta the barn at that point. They’ve already stopped using it after month one.

Mike: Agree.

Ralph: So, yeah, I

Mike: like it. Yeah, a combination of both. I mean, we have a lot of older members, the majority of our members are men and they tend to go a little bit older and if they have issues, even downloading the app, ’cause that’s a big part of what people want is the smart [00:42:00] phishing spots app.

Mike: If that onboarding experience is bad, where they can’t even get in, there’s no way they’re gonna renew. And I know that’s a big part of our issue. ’cause we look at it, we look at our stats of how many people are using what they’re paying for, and it’s, surprisingly low. And it’s not that the product sucks, I think a lot of people just are, it’s overwhelming how much stuff we have.

Mike: We got, you know, now 10 years of data. We have, dude, I looked at, we have over 3000 videos, 3000, different videos and blog posts that we give our members. And we don’t really have, we have a library, so they could search for stuff, but it’s not really organized in a, in a good fashion. I can only imagine how overwhelming it is for like a 72-year-old dude who gets in there, who’s not even tech savvy.

Mike: He is like, what the heck do I do with all this stuff?

Ralph: Right, right. Do you find that people that use the app stick longer? Is there any data on that?

Mike: I don’t know. I’d be guessing.

Ralph: Okay. Have you guys ever tried running campaigns? Do know you can get them

Mike: in the community? Like the one thing I do know for sure, we have a private [00:43:00] community.

Mike: It used to be a Facebook group, and now we built it on, PHP. It’s a custom one, and the people that get in there and actually like, make a post or engage at all skyrockets, like, if we can get them there, it’s a game changer. it’s just tougher, even like my dad who’s obviously a member and a someone who wants to support his sons, he doesn’t get in there and he loves fishing.

Mike: He’s very active. He fishes every month and he’s just like, ah, I’m just not into the community social media part of it. My dad, it’s not social media. He just get in there and make some posts and he refuses to, so it can be tough to get people in there, but if we can, man, they’re in, they stick around a whole lot longer if we get them in the community.

John: have you guys ever tried running app campaigns?

Mike: We’re in the process of figuring the, tracking out and setting it all up right now. Gotcha.

John: Yeah, those things can be, can work very, very, very well. and you’re right, the tracking is, and actually, if you don’t mind, I’ll give you like a, one minute quick tip.

John: this was a campaign that we ran from January one. This is in like the RV space. Think of it like an Airbnb for RVs. These two campaigns, like it was 13 [00:44:00] grand of our 312. So it was a, it was a small portion of it, but there’s a fairly. Hard issue to overcome with getting iOS integrated with Firebase because they just don’t send information to each other.

John: But when we’re looking at, like first opens, for example, like they can get the download and then they can open it. Anything subsequent like that? Anything further on down the line? Yes, it’s definitely important to track that like, a signup or logging in or making, a purchase of something.

John: I don’t know what we can track a deeper level, but, At least getting the first opens is good, but this one spent, you know, $6,500, got 2501st time opens and cost us $2 and 57 cents. This could be not to cold traffic. This could be for our new signups so that it’s always there and advertising to them with really an expensive by getting the app downloaded.

John: Great

Speakers 1: idea.

John: Absolutely. And anybody that gets the app download then goes into a different audience of a YouTube series that is just shown to them potentially as a, series. Like, Hey, join our series. You have your app. Watch this three step video that’s gonna show you how to log in, use the [00:45:00] Phish, um, I forget what you call it, the phish finder.

John: I forget what the fish finder. Yeah. Use the Phish finder and, start today, locally. Just enter your zip code. Like, I mean, just something really, really, really simple like , that says, oh, okay, like, I know I downloaded it. Now they’re kind of teaching me. We can support all that with very, very, very little money to keep them, to get, to keep that subscription model.

John: or just keep the drop off rate, as low as possible. Just loving on them constantly.

Ralph: You

John: read my mind,

Ralph: John. So may I, I didn’t know that it was that cheap for the, because I know that client very, very similar to, to you guys in a lot of ways, that’s a retention strategy. Yeah. that’s it.

Ralph: I mean, I was thinking like text, get the app through text, SMS integration, anything to get them to stick, but mm-hmm. Like at that cost. It’s stupid

Mike: cheap.

Ralph: It’s stupid cheap. And there is the whole other side to it that you could use the app to acquire customers potentially. I, I don’t know, as if I’d start that way, however, as a retention strategy, like Yeah.

Ralph: Shooting fish in a barrel,

Mike: Yeah. the idea, we throwing a dad joke here, but it’s, yep. [00:46:00] Yeah. Just the idea of the ad drip to new members, opens up a whole new world for us. that’s a really, great idea. We kind of do it with tackle ads. We literally just switched from going.

Mike: just blanket coverage to let’s just run to our insider members because those are people most likely to bite tackle anyways. Yeah. Because that’s kind of a retention play. If someone after they join becomes a tackle customer, you know, and they save money on the tackle, they get hooked on another dad joke in there.

Mike: I’m sure hooked on using our tackle. , so it’s along those lines, but not so much. A few of them here this morning. Alright. Yeah. adds to it. Engage in what they just bought. Super interesting.

TJ: we’re coming up on time here. lemme recap a couple of notes that I think that we need to, either do some homework on our side or get from you all so we can finally present back to here’s a comprehensive plan that tier eleven’s gonna recommend.

TJ: So getting clearer on the costs for club memberships, right? The digital content, whatever other components would go into that. We would need that from you. Similarly, margin breakdowns, [00:47:00] right? SG and a could be in there. Profit margins, contribution margin, whatever the cost structure looks like.

TJ: All of those rolling up into what can tier 11 say, this is what we think your end c target and allowable should be. I know we’ve got the operating at 50 at the moment. Can we provide any better ranges and clarity and definition on that? And this is where the cost of would, would factor in. I’ll add to that also how to organic acquisition channels factor into that.

TJ: obviously we wanna be sort of global in assessing the, the NAC target here. so John, I don’t know if you’ve got an opinion on that or if it’s something we can just follow up on later, but looking at the whole picture, right, so we can get as clear as, possible on these numbers. so I’ve got a few others on churn reduction, but those are the three that I see in terms of, you know, here’s what tier 11, we’ll wanna validate it with you, but here’s what we think your target and allowable are on nac.

TJ: And now, now we’re, we’re good. We’re ready to, scale on ad spend and so on based on, what we’re seeing there. So, I guess John, Nick, Ralph, am I missing any pieces of what we would need from the salt strong guys?

John: No, I think that that’s probably everything. everything from, I, obviously, I know the, the meanings about financials and I think that should be everything unless Joe and Mikey have [00:48:00] any other questions too.

John: All good there? No. Yeah, I think that’s, that’s a good direction. yeah. I mean I would say like the big number is the NCA number, right? Yeah. that’s our true north. Like if we know we’re in that range, like everything else makes sense and it makes sense financially for you guys. So, with increasing traffic, I mean there is this law called the law of, inverse profitability.

Ralph: as you scale more, your NAC tends to increase depending on the efficiency of the market. However, we need to know kind of what that range is, what’s your upper end of the pain range? ’cause we know 50 is great, below 50, fire it up. You know what I mean? So that’s the big thing for me is like that because we know like there are all these other issues here, like retention, all that, that those are secondary business issues that we can address and consult on over time.

Ralph: However, like that’s the big number. If you guys wanna scale, get new members, and we know it’s 50, can we get there? And I think the data shows [00:49:00] that yes, in 2024 you guys were there. We just need to be comfortable with that. You need to be comfortable with that. And like, what’s the upper and lower end of that range?

Ralph: I look at it as like, NAC zones like 70, eh, I don’t know. You need to optimize 50. Great. 40. Kill it to guess. Yep. Yeah.

Mike: you guys probably saw in the notes, but an initiative for us is to expand outside of meta, can we get that end C on. Other platforms,

John: and that was that tracking tool where you saw like, there’s meta then Google and everything.

John: And we’ll go through a whole like what we call benchmarking and omnichannel attribution and first click NCL and blah, blah, blah, blah. The tracking portion is gonna be a whole other scenario where things are gonna not look right. But the top line should, and we’ll go through that. But that’s, yeah, that the expansion is omnichannel, but the global NAC does ceiling does not raise whatever we do.

John: Yeah. Cool. and the, thing with, like you guys already have Wicked Reports, we have an integration between Wicked Reports, another Edge server called Blot Out, and then we actually capture that data as first party [00:50:00] data. And inside data warehouse, we call it the Tier 11 data suite. The only reason that we are pushing on NAC is ’cause we know like with 99% accuracy, that’s the actual number, the number that you see inside Meta is not necessarily the number they’re guessing.

Ralph: ’cause a lot of that data is modeled everything inside GA four is total bullshit. Even if you have CAPI integrated. So Wicked reports the data and wicked reports, like John and I have looked at every single freaking tool that’s out there, even been investors in other tools for hundreds of thousands of dollars.

Ralph: Yeah. And this is the tool that will show you. So we know that number is true, and then we can double check it, obviously with what your guys are seeing inside your CRM, but very high degree of accuracy.

Mike: That’s what I was gonna ask is, yeah, how will that compare to the CRM, and where’s the source of truth?

John: it’s actually probably gonna be better than the CRM. I’m not even joking. I tested this, I know we’re up on time and we have, we are, we’re two minutes over, but if I can share with you just a half a second. I had a company, that was like a, about a year ago that we did, I’m [00:51:00] just trying to grab it and talk at the same time quickly, but I, basically, my company, we resold luggage So I did a 15 month test and this is my screenshots. , so this is where John

Ralph: does all his mad science lab and his own companies by the way. So we come up with all this stuff. Go ahead, sorry. Yep, no worries. So it’s

John: called Travel Lu. We basically just resell luggage and from October 21st, 2023 to January 9th, 2025.

John: So over years with the data, I know because of my company, the quarter million that I spent was only in shopping and only in Google. I didn’t spend anywhere else. That’s why I have the proof, ’cause it was me GA four shows that only half of my sales came from paid shopping. It looks like 1400 out of 2,700 or 1400 or 2,800, whatever it’s, but basically 50% like the direct organic, organic social.

John: This is more like what CRM tools track. It’s kind of like the last one to two to three things that they can string together, but not from six weeks ago. And so this is only about 50% accurate. Now, pulling into the data suite, that’s where that same time period, October 19th, 2023 to January 9th, 2025, it [00:52:00] gave all of my revenue.

John: I understand where the $4,600 came from, but 4,000 out of 540,000 could not be found. So that’s where this thing after a year is like, yeah, I can go all the way back since inception and be like, it came from there. And that’s exactly right. That’s where I have the proof. GA four was almost 50% off.

John: It was, it’s ridiculous.

TJ: All right, excellent. So we, uh, couple homework things that we’ll send your way guys that we need from you, cost breakdown and so on. after we get that, in the meantime, what we’ll start , working on is basically a plan. Here’s what we think, step one, phase one is gonna be X from tier 11, our recommendations, phase two, phase three, , and of course with that come costs and then proposal and, so this kind of gets us into, what an agreement would look like.

TJ: so we can start working on that in the meantime. But I’ll send over to you with the homework items that we’ll need, and then we can meet in the middle and, this again.

Mike: Awesome. Thank you

John: guys. Great job. Sounds great. Awesome. Thanks everyone. Thank you guys.

TJ: Thanks very much. Thanks, Nick.

John: Take care.

John: Bye.

TJ: Bye guys.

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