Knowing Your Numbers

Originally sent out: 06/02/25

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Do you know your cost of sales?

What about your gross profit margin per product/service line in your business?

I thought I’d ask you this week, as I’m asking everyone else it seems.

Every day I speak to prospective clients about their marketing and the conversation always starts with their numbers.

Knowing your numbers is vital, and yet so often I’m seeing gaps and unknowns in this business-critical information.

A good marketer will want to know your GPM’s (gross profit margins).

A good marketer will want to know your CAC (customer acquisition cost).

A good marketer will want to know your AOV (average order value).

A good marketer will want to know your LTV (life time value).

Knowing your numbers means you can have better, more conducive conversations about how to grow your business.

When I’m talking to a prospect, I want to know all of the above at the outset.

Beyond those headlines, I want to know the same information on a product, category and service-line specific basis.

Why? Because when armed with the numbers we can make better business decisions.

All too often, businesses want to dive into marketing and start talking about Google Ads and Meta Ads before they have a full grasp on their numbers.

That’s like putting the cart before the horse.

It isn’t going to work (well, not very well).

It should always be business first, marketing second and that is never more true than when it comes to the numbers.

In the past week, I’ve spoken to several brands about precisely this and here are some of the key takeaways from those conversations:

Brand A: Home furnishings ecommerce brand who were looking at their sales and marketing on a ‘per brand’ basis. The trouble was within each brand they have wildly varying AOV’s (average order values) and LTVs (life time values), as some were products with a repeat purchase, others were not but much higher initial purchase value.

With this brand, they needed to better understand their numbers on a per product category basis. Doing this will result in being able to bid more aggressively and scale their ad campaigns based on true customer value.

Brand B: Lifestyle brand who were so focused on looking at their results on a per-platform basis, they hadn’t considered their overall CAC (customer acquisition cost).

Once we ran those numbers on a ‘total in, total out’ basis, we could see the CAC had increased more than 50% year-on-year and so they needed to focus more on the successful product lines, not all product lines, as they had been doing.

Brand C: Gardening brand who is keen to prepare for peak this summer. They came to me with a pre-set marketing budget. When I challenged them on how they arrived at this figure, they said it was based off of their GPM’s (gross profit margin) and their overall ROAS (return on ad spend).

When we overlay their Shopify data to their ad data, we saw a high customer repeat rate meaning the LTV (life time value) was significantly higher than they realised and this meant a new customer was worth more than just the original purchase. Knowing this, we can focus more on new customer acquisition this summer.

Those are just three examples of conversations I’ve had in the last week.

Every one an example of how important it is in knowing your numbers.

I’m finding businesses of all sizes are not as clear as they should be when it comes to their numbers and that is what I’m here for, to help them gain clarity.

My aim with T.E.A Break is to reflect what is happening in my world every week and this first week of February has once again been all about knowing the numbers.

So, have a think and ask yourself: how well do you know your numbers?

It’s most definitely not all about ROAS – far from it.

It’s about understanding your CAC, your AOV, your LTV, your margins and looking at all of these numbers for each part of your business.

When you do that, with consistency… a funny thing happens: you suddenly become a lot more profitable and who doesn’t want that?

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