The Goal to Focus on in 2024

Looking back on what helped us get to the IPO the most important change was shifting our goals, focus, tracking and reporting to the right metrics. Here are the 4 goals that, when increased, fundamentally strengthened our biz more than any other change.

It helped us transition from a complete focus on growing revenue (at all costs) to laying the foundation for sustainable profitable growth.

Before we get to specific goals, the single most important change you can make, if you haven't already, is to ignore revenue and place all focus on contribution dollars and contribution margin. Announce the change to the team and to the board. Front and center.

Four Goals to Focus on in 2024:

1. New customer contribution dollars from unpaid channels
(measured in trailing 3 & 12 month $ amount minus that number for the same period last year)

2. The percentage of new customer contribution dollars from unpaid channels as a percentage of total
(measured in trailing 3 & 12 month % number minus that number for the same period last year)

3. Total contribution dollars from all sales channels
(measured in trailing 3 & 12 month $ amount minus that number for the same period last year)

4. The total contribution margin across all sales channels
(measured in trailing 3 & 12 month % number minus that number for the same period last year)



Notes:

1. Why these 4? These goals, when increased, strengthen the fundamentals of the business. They will directly contribute to sustainable profit growth. If you don't break out contribution dollars, or paid vs unpaid, it becomes too easy to rely on driving revenue through paid means, which I learned is not sustainable.

2. You want to drive both dollars and margin. And, you want to ensure the source of the dollars are coming through unpaid channels. New customer acquisition will still be your biggest driver of sustainable repeat revenue growth.

3. You want the quality of your new customer acquisition to increase. The only way to do that is by making more and more of it come from unpaid channels.



Definitions:

Everyone knows revenue, but fewer people, especially individual contributors, understand contribution, variable costs, etc. Eessential to define terms so everyone is on the same page

1. Contribution dollars = revenue - variable costs

2. Variable Costs = Marketing costs, advertising costs, agency costs, discounts, product COGs (credit card fees, and per SKU shipping, returns and CX costs can also be included, but don’t let perfect be the enemy of good here)

3. Unpaid Channels = All sources of revenue we don’t directly pay for. Traffic sources include: organic, owned, and earned. Basically it’s our business NOT coming from our facebook, google or TikTok ads.


Sweet - hope this helps.


The url to the slide template: https://docs.google.com/presentation/d/1S17GOzX3dgytKAQNJyRaJc8nnEca9NqJUWhnBPux2Z0/edit#slide=id.g2a77c1ae465_0_95 
—
Thanks for reading. If this post was helpful, here are 4 things you can do right now to 

• Get more strategic + tactical nuggets on brand building, 

• Tactics on connecting brand building to financial impact, 

• And specific things you can do to build strong emotional connections with your audience: 

1) Subscribe to the Brand Builders podcast on YouTube or Spotify, and Apple Podcasts. 
2) Apply to join our brand builders slack community (suuuuper small group exclusively for brand founders and operators), 
3) Follow Tom and Preston on Linkedin for regular posts on this stuff
4) And heck, share this with someone