Heads In Beds Show - Understanding The Lingo: Performance Numbers For Your Vacation Rental Business

Episode Date: February 5, 2025

In this episode, Conrad and Paul close the loop on the "lingo" series with reporting, numbers, KPIs and metrics that many vacation rental companies use to measure and gauge direct booking performance. Enjoy!⭐️ Links & Show NotesPaul Manzey Conrad O'ConnellConrad's Book: Mastering Vacation Rental MarketingConrad's Course: Mastering Vacation Rental Marketing 101🔗 Connect With BuildUp BookingsWebsiteFacebook PageInstagram🚀 About BuildUp BookingsBuildUp Bookings is a team of creative, problem solvers made to drive you more traffic, direct bookings and results for your accommodations brand. Reach out to us for help on search, social and email marketing for your vacation rental brand.

Welcome to the Head to Med Show presented by Buildup Bookings. We teach you how to get more vacation properties, earn more revenue per property, master marketing, and increase your occupancy. Take your vacation rental marketing game to the next level by listening in. I'm your co-host, Conrad. I'm your co-host, Paul. All right, Paul, good morning. How's it going? What's going on? level by listening in. I'm your co-host Conrad. I'm your co-host Paul. All right, Paul, good morning. How's it going? What's going on?

It is that magical time of year where I'm about to go south. It's gonna be vacation time for me in a little bit here. So it's about time to go down to Florida as we've been talking about a little bit because I can't do minus 20 minus 30 anymore. It's I guess it's not safe, honestly. I, it's like everybody, the rest of the country getting snow, the last week and a half, two weeks here. I think it just encapsulates that that's okay.

Snow's fine. Winter's okay. Everybody can experience winter, some better than others, I think. But this whole ridiculous freezing snow and, and, and we're freezing cold and we didn't have school last week one, one day because it was so cold. So yeah, I don't know. It's that time I start dreaming about warmth.

And it's fortunate that I work with with partners and customers and clients in warm weather destinations because I can that's that's the inspiration I draw right now. So you are kind of probably drawn from that right now How are you doing sir? Yeah Well as you alluded to we had snow last week This will come out a little bit after so you probably many people have probably already seen this if they follow the news and or If they're in one of these southeast destinations, obviously many of our clients are wild. What's crazy is I sent you a picture yesterday

There's still a tiny tiny tiny bit of snow sitting outside my window still, as we record here on the morning of January 27th. Again, this comes a little bit after that, but wild to think that not only we had snow, because we had snow in South Carolina before, it's not impossible. It's uncommon where I'm at, but it's not impossible. Three, maybe four times, it has never, it has never stayed for more than 24, maybe 40.

Yeah, not a sticking snow where it's like every day I'm going out and looking and seeing snow just stuck on the ground. And I'm like, what in the world? I thought I left this I thought I left this when I left Massachusetts and obviously not. Yeah, do I shovel it? Do I don't? We don't have a shovel. You think I have a snow shovel? I have a snow shovel. Come on, man. The right equipment for this. There was funny memes posted on I mean, I'm not like

a big like consume a thousand memes in a row on Instagram, but gosh, there were some good ones where, you know, the people were in Charleston and they were taking like salt from their kitchen and like putting it in the road. And they're like, am I doing this right? Like, I think I'm doing this right. There were some good ones that people had out there

because we don't know what we're doing here. And usually people panic. It was almost like people didn't, this would have been almost a somewhat appropriate time to panic because like you shouldn't be driving in the snow if you don't know how to drive in the snow. So it was, it was almost like people didn't. This would have been almost a somewhat appropriate time to panic because like, you shouldn't be driving in the snow if you don't know how to drive in the snow. So it was it was a good two days where the roads were, I think, unsafe. We didn't drive at all for two days. And my wife has actually has a four wheel drive car. So we could have

probably driven on one of those days, not the first day. But then people were out there like driving around and I'm like, all right, this would have been time for you to be like, go to the grocery store, get three days worth of food, that's fine. You know, go in there. And the funny part is, I don't know, people were actually doing that. And then I saw people doing like deliveries, like the day after the snow. And I'm just like,

I just know the state troopers were busy as heck with people just sliding off the road over the last few days. It had to be the case. There's no way these people are down here in South Carolina, no one had to drive in the snow. They don't know what they're doing. They're not used to that. No, there's no way, there's no way.

So it all ended up, you know, I think, hopefully everyone's okay. I certainly didn't see any horrifying news. So hopefully just, if you a fender bender, hate to say you deserve that if you didn't have to drive down the snow, so you know, you get what you pay for. That's why the insurance I guess, but that's right. If it comes out after then just know we're recording this before the Super Rolls we happen to be right. So, uh, all right, Super Roll picks, and then we'll dive into today's thing. Uh, give me a, give me a, uh, winner. And then of course, give me a score and we'll see who ends up closer. I, I'm going for history.

I want the chief. If they're going to do it, I, the Patriots let you down. I would like to see a chiefs three Pete here. I really don't like the Phillies as a Minnesota Vikings fan. We have not had great experiences in the Lincoln and with the Eagles. So yeah, I think Chiefs, and I think it's going to be a barn burner. So I'm thinking 34-31.

Even if Phillies good defense, I just have a feeling the offenses, there's too much talent on those offenses. So I think a big one, I think a big score. And I got to go with the Chiefs with the three. What about you, sir? Okay, we're a little bit off. So we don't think you I'm that I was worried that you're gonna pick something very similar to mine, then, because I was gonna pick a score a little bit lower. And then people go, Oh, you're just doing that in one point

lower. We're not on the same page here at all. So that's good. I say, I say the Eagles defense gets it done, and that the Chiefs offense, although it has looked better, has been facing a little bit lighter competition, perhaps that they have, then they will potentially in the Super Bowl. So I'll say the Eagles defense gets it done. I'll go Eagles. I don't want to this just my prediction. I don't want to say I don't think I want either seems to win. Can it be a tie?

Is that possible? Can we do a tie? No, we can't do a tie. Super. Alright, so I'll go Eagles and I'm thinking it's going to be a tie? Is that possible? Can we do a tie? No, we can't do a tie. It's super. All right. So I'll go Eagles and I'm thinking it's going to be a little lower scoring. I think the I think it's going to be like Eagles 27, Chiefs 21, maybe 24. Let's go. Let's go. Let's go 2724 Eagles. Let's do that. So we're, we're a little bit off. So we'll see how it all shakes out. We'll listen to this a little bit later and see who's ends up being closer. Uh, it's gotta be like two points for picking the winner and then a point for picking the score. So we'll see how it all ends up that way. Well, speaking of numbers, that's actually the topic

of today's episode, which is we're kind of putting a bow on this lingo and numbers finale series that we did. So we did some previous episodes, go back in the feed. If you want to dig in, look around. We did one on, I think like SEO, we don't want to paid search. We've done on social media. I think this is the most recent one. And it was just talking a little bit more about the numbers. And I think this is the final recent one. And it was just talking a little bit more about the numbers. And I think this is the final thing to talk about when it comes to both lingo, like words that we use or metrics that we might talk about

and our day-to-day reporting or that your team might talk about if you're a vacation manager. And numbers, which is basically a lot of our clients are doing this now. I would say it's growing in popularity, which is a scorecard. So for those that don't know,

a scorecard is kind of one of the, I would say more important chapters and more important sections of a book called Traction, which is basically the EOS system. This has been popularized by lots of folks, including Brooke and I talked about it at length on the podcast that I do with him on the Venturi side of things.

But I think it's just a popular small business framework. It doesn't, it's not tied specifically obviously to the vacation rental industry, but it's just a good way to like run your business. And a lot of people are doing some version of this scorecard, if you will,

even if they're not calling it scorecard, or they're not using the EOS terminology. It's basically, what numbers do we track on a monthly basis, and where do we put those so we can all review them as we're reviewing the performance of our overall marketing efforts, basically. So that's one way to think about it. And I have a specific example I screenshotted.

I think the client that I have that's doing this the best, I have other clients doing this, I just want to screenshot is the one that I think is doing this the best in terms of their adherence to the EOS framework and also their clarity of what numbers they collect and why. So I kind of wanted to run through some of those today. And then, yeah, we'll talk a little bit about what you've done on your side of things.

I know you've touched on this framework before. And of course, maybe you can have a little bit more of like a homeowner tilt or just a different perspective on, we're trying to get bookings, we're trying to get inventory. Those things might need to be on the same scorecard, maybe it's different teams, who knows, but these are just different ways to think about it.

So at the end of the day, what do you kind of look at? Anything I missed there or did I do a decent job setting up what the scorecard actually is? I think you nailed it on the head there. And it is, I'm interested to dive into each of these little areas and learn what you're thinking and how you're prioritizing each of these areas as well. Yeah, maybe I'll go like two or three at a time just to not overwhelm.

I don't think there's an insane number on here. What is that? 123? There's like nine numbers on here. I mean, some of these things are just like giving a little bit more fidelity to breaking down the metrics. So that way I'm not, you know, monologuing here for 30 minutes because I could if you let me.

So the first thing that we might match track, as you might imagine, is how did all bookings occur all booking sales coming in from all sources. So it's including OTA, that's including direct, it's everything in one big pie. How do we do that month? So that's the first thing that's on that scorecard, which I think is a fair thing to look at right at the end of the day, when it's all said and done, what actually matters in the business? All right, how many how many points that we put up on the board, so to speak, if this were a single score game, like a football game or basketball game, it'd be how many bookings that we actually generate this past month. The client does this to

net of cancellation. So I think that's a fair way of doing it. I know some systems might report a little bit differently. But yeah, just do it net of cancellations. Obviously, we don't need to look at stuff that's canceled. I think they have a separate scorecard in their res team for what percentage is canceling each month. And I never see that number. So I think as long as it's within some reasonable guideline of what they expect to have cancellations on, they just don't ever review it. Everyone's smile will have a note where it's like, wow, we had really, really high

cancellations this month, usually due to extreme weather or something like that for this client. So this, you know, basically what happened this past week probably will cause some cancellations for January, although it is low season. This is a beach market. But yeah, at the end of the day, total booking sales net of cancellations, that's the first number. Second number, as you might imagine, is how much of that was direct booking. sales and out of cancellations, that's the first number. Second number, as you might imagine, is how much of that was direct booking. So as a dollar amount, and then we can obviously quickly figure out as a percentage, which is a good way

to measure it over time, obviously, what percentage of that is direct booking. Now, this client, I would say, typically averages somewhere in the neighborhood of, let's say, 35% to 50% direct bookings most months. There's months where it's obviously a little bit higher, a little bit lower. But since we've been working together,

that's actually remained pretty constant, even as they've grown. So I would say our percentage of direct hasn't changed drastically or hasn't changed meaningfully. The amount that we're driving from direct has gone up because they've grown, they've got more inventory. And I think we've done a better job with the overall marketing. But I think the way I've thought about this recently with clients is like, you have so many room nights to fill, you have so many room nights to fill as you get bigger, as you get to 100, 200, 300 units like this client set, you so many room nights to fill. It's bigger, as you get to 100, 200, 300 units like this client's at, you have so many room nights to fill.

It's not really always the most optimal thing. And I've said this many times before, for it all to be coming from OTAs, we've said that at length. And it's certainly not optimal or often economical, I would say too sometimes, to get all of your revenue from direct. Like very few companies can actually pull that off.

And I think the ones that do pull it off are probably actually putting themselves in a little bit of a weaker spot than they might want to admit. It's great that they have full control over the business, but I think they also are missing out on folks who might go on the OTAs and only go on the OTAs. They're gonna go on Airbnb, they're gonna make a booking.

So why not have your inventory there as well? So I find myself in the weird position, I guess going through this, of defending almost this idea of being somewhat OTA, not dependent, of course, but being OTA, I guess, yeah, agnostic, Yeah, like open, you know, it's like you're in an open marriage with OTAs and direct, like you don't have to commit to one, you know, you can do them all. That makes sense. See, that's good. That's kind of, you know, we'll talk about that each month. And the good news with this client is that we can be more aggressive on advertising and things like

that. We choose to optimize a little bit more for profitability. That's what this client wants to do. But if you want to, hey, you can make your direct booking percentage 100%. Just double your price in all the channels. You know, we're gonna get 100% of our bookings on the website. Now we might lose two, $300,000 of bookings, but hey, congrats, you made yourself completely. So what it is, of course, like we always talk about,

is a blend. What's the overall revenue? What percentage of that is direct? How efficient are we with getting those direct bookings? And that's what some of the other numbers generate. But you know, you've spent time and you're spending maybe a little bit more time now on the guest side of things.

If you have clients with this sort of mindset, how do they look at this as like the overall percentages and then what percent direct, what's kind of your framework on that? Yeah, I think, I mean, I think that's broken down really well because I do think the people who are just focused on when they're only putting that direct booking sales number out there,

or they're not focusing on the multi-channel or the omnichannel opportunities that are available. It is, I think it's just, it's not even whether you're focusing on that channel, the channels or not, it's the visibility. You don't want that blind spot. Holistically with these scorecards, scoreboards, that's what this is about. It's about not having those blind spots. So it doesn't have to be 20 things long here, but I think the ones that you're covering, especially that total bookings, again, getting that total, getting the direct, and then bringing in all those other

channels, I think that's such a good way to look at it because it does. It paints a good picture, it tells a good story of not just this one piece of how everything's performing, but you want the good business pulse here. So I think you've covered it all there, and that's exactly what I'm looking at when I'm focusing more on the guest side now is trying to understand where those total bookings are coming from and how we can drive, not necessarily more, but the right percentage,

the right even mix, the right even blend of direct versus when you're coming from OTA versus when you're coming from phone call sales versus when you're coming from other areas as well there. So I think that's something that telephony is one thing that it brings me back to the track days a lot because that's, I mean, it is, it's something that I think more people go online right now, but there's certainly not, it's not a hundred percent of people go online and, and nor is it the 0% that are coming and

calling into your business as well. So I think if I were going to add something, that would be something that if they've got a CRM or they're tracking that stuff through the phone lines and stuff like that, I'd probably wanna have that in there just to have that understanding. But operationally and marketing wise, I think this is a great start there.

Yeah, no, it's a good point. In this case, we do pull the direct booking revenue data from Google Analytics. And we've had to work a lot with this client to try to match up and true up GA data with what they consider revenue in track. And boy, that is a rabbit hole that we could spend a lot of time on if we wanted to. But long story short, we have Yeah, I was gonna say the short version is that we have many different understandings of what revenue actually means depending on the client. Taxes are the most

obvious one to take out potentially as like taxes aren't really revenue, where it gets really muddy past taxes is the fees I charge and how much revenue I derive from each of those fees as a percentage of margin, right? So like for most of our clients, commission is going to be on the base rent. That's typically 15 to 25%. That's a pretty common range.

Some a little bit higher than that, some a little bit lower than that, but pretty much that's kind of the standard. So to make it simple, if a client does $100,000 direct bookings, they're probably gonna take in roughly $20,000 in commissionable revenue. But then the fees start,

and that's where it can get really muddy. You know what I mean? Some fees that our clients charge are basically a pure margin, like a res fee or an admin fee, where it's like, yeah, we just get all that. And then some things have a little bit more nuance. Cleaning fees, for example.

I have clients tell me they lose money in every clean, but they try to keep it as low as possible to help themselves get more bookings. Okay, fine. Other clients tell me that they oh, no, I make I pay my cleaner 150 bucks, I charge 300 bucks. That's the budget I need for inspections. That's the budget I need for additional, you know, infrastructure, manage cleaners and stuff. I'm not saying what's right or wrong. I'm just saying like what I've seen, you know, come up over the years. So it's like, all right, well, really $150 that is revenue per clean. So kind of kind of count that as revenue

in a way, you know, net of net of costs. So it gets really, really messy, depending on how you know, nuance you want to get on it. And we could sit there and five people in a room all work for the same company and they all disagree on like what exactly, you know, the revenue, quote unquote revenue should be from like, advertising standpoint. So I guess God's been good luck to you, if you're trying to figure that out, try to get everyone in the same room degree upon it and make it standard. But in this client, in this Reggie, that's pulled from analytics. That number is net of taxes, but nothing else. So it's all fees, all red put into one number. But taxes, we do exclude because taxes I look at as like, if anything, you could argue it's negative margin, because you got to hire an accountant to take the taxes in and then fire that revenue over the city or state or something like that. So you could argue that you lose money collecting taxes. But of course, we should, you know, follow the local regulations and such as well. I was gonna say if you're gonna play the state game, then if you're going in the doing business in the state of North Carolina, God bless, good luck. That's the head is just the

pressure cooker of all tax states or any I mean, you know, whole different level out there. So good luck to the other 49 states. Oh, man, I will say also one of the many things that Milo has said that I will agree with is his stance on the fact that Airbnb will collect your taxes in certain scenarios. And then they won't actually prove that they paid the taxes. They're just like, yeah, we collected your taxes. Then he's like, Yeah, but I have to prove that you paid it. Yeah, he did a rant on that one time at one of the VRMA events. And I was like, you know what, that is a good point. So few things that were aligned on there. That's one of them.MA events. And I was like, you know what, that is a good point. So a few things that were aligned on there,

that's one of them. But anyways, we could do a whole thing on taxes if we want to. All right, total booking sales, all direct booking revenue. Again, if you want a simple one, what percent of my direct bookings are now part of all booking sales?

Try to compare apples to apples, obviously, they're there to make that as fair as possible. Now this client looks at a number of direct bookings made at the website and then average booking value as the next two metrics. So I see these as kind of more secondary. It's really, really hard to find a scenario where we're seeing growth in, you know, overall revenue from direct bookings. And we see some really strange anomalies, anomalies with

number of bookings and then average booking value. I think it's just their sanity check to be like, seasonally, it's going to change a lot. You know, in this summer peak season booking times, they're going to get bookings right now, for example, for summer, that are seven nights at peak full rates, right? So those are going to be quite a bit higher than once we edge more into the fall. And this particular client will get two, three night bookings at a much lower rate. So more so just like looking and understanding like 100 bookings or not 100 bookings, you know, the revenue from those bookings can drastically differ depending on the number of nights booked, obviously. And then of course, the the rate that that guest is paying, which I think is

an underrated part of the direct booking movement that we probably don't talk about as much on our side of things, which is that the earlier we get the booking now with all these automated rate rules, the more you get per booking. And no one ever talks about that, you know, again, back to that comment, not all 100 bookings are made equal. If I could get 100 books in my Airbnb last minute, and then 100 bookings direct, those could potentially have 30 4050% difference in revenue, you know, you can make $100,000 from one

and $50,000 from the other, even if it was the same unit for the same number of days, because of how a lot of these rate rules work. So again, that's another little rabbit hole. But it also shows how complex some of the numbers are that we talk about in our space are, and open the open a key data dashboard, right? I'm sure you've done that before, Paul, and you see how many metrics can can be used to describe, you know, what is actually going on. But sometimes we struggle, you know, if we're in a one hour call with a

client, we're talking about what we're doing, we're talking about the activity. But at the end of the day, you almost need like to sit down and like really process the numbers and think about that. Probably not every single month, maybe, you know, to that level of detail. But like, once a quarter, once a twice a year, maybe you should sit down and like really understand exactly how much revenue is coming from these different sources. Because we have clients that love getting direct bookings, because they get to take the money and hold it. They love the fact that they typically come in early, they typically stay longer. They typically don't leave a negative review as well, by the way. They get some, but less than they get on OTA

platforms. And so they're like direct bookings are good for us in many ways beyond just the fact that yes, it's direct booking. We control it. There's a lot of pluses there. So understanding how many direct bookings you're driving is helpful. And then you can calculate a quick average booking value. Again, do I do a lot with this information? No, unless I see some massive anomaly. You know, so for this client, over the past year, it was like, 3200 is like a pretty typical booking value for him. Like if I look at the average, but in the peak summer booking time periods, meaning the early part of the year when people are booking for summer, it was like almost 5000. And then in the winter, you know, sled way down to, you know,

1100, 1200, 1300. So, but again, that's expected, that's common. So there wasn't really any red flags there. But when you've looked at this metrics before anything that really sticks out for you there, or you're looking more for like the red flag, but like the gremlin that's gonna smack you in the side of the head, that sort of thing. It's the trend line. It really is. It's, it's, it's understanding. And I think it's, it's making sure that we don't want to see those huge spikes or huge drops. You want to see that consistency one way or another. We know that there's going to be seasonality in this space. That's the reality. Whether it's, I mean, that's universal. That's owner and guest side. We're going to see that at that either way. The more information here

that we have, I think it is valuable. Some people are a little cagey with some of the data here, just because is it really beneficial to the marketing side? I've had people ask that question. Yeah, absolutely it is. It's business data, business metrics of some kind that we can use to inform other decisions. So data-driven decisions is always what we're looking for here. But I think it's to be able to see that breakdown, and some people are gonna break down more than others,

certainly of by OTA channel, by those individual channels that things are coming through. But being able to tie it back to your efforts as well. I think that's the tricky part here, but it is, it's why you have this is that we're doing so many things. One of the keys here, anybody who's running a scorecard like this, they are, they're not just letting the business run on their own. They're putting marketing into it. They're putting sales into it. They're putting operational flows into it.

This is more of an advanced business. Even if you have five units, you're running it at this scale because it does it. It just, I think it better informs all these decisions that we're going through. So everything's solid. It's this is and well, I've referenced it a couple times, but you're not overdoing it. We've talked about five, six data points here, and we've got a couple, two, three left here. So yeah, easy to go over on a call easy to discuss easy to gain insights from and kind of go further with. That's my feeling. You mentioned something at the end there that I think is my feeling about most scorecard metrics, which is that you might look at them and if your average booking value was expected to be $1,200 and then it's $1,207, then you just move past that. You spend no time. You're just like, okay, yep, looks good. You don't spend any time on it. I think where the

scorecard can really help you and where it's helped me in my own business too is like, I expected like one of my metrics on my scorecard, it's kind of similar to total booking sales, obviously, I don't sell bookings, I sell, you know, marketing contracts is cash collected that week. And I have targets, basically, or estimates for how much cash I'm collecting each week. I have actually one thing I've done to make it a little bit funny. This is just a way to format your scorecard. If you want to do a little bit more, add a little flair to it as I have conditional formatting Google Sheets, where if it's under a certain number, it's like light red. It's like, if it's way under a certain number, it's like dark red, it's like, if it's way under a certain number, it's like dark red, it's like

flashing at you. And I like doing that. I know it sounds simple, but it's like it really allows you to look at that quickly and be like, where are we at? You know, and if I have a first week of the month where I don't take in a certain amount of cash collected, it starts a little thing in my brain where it's like, all right, I expected to collect X, I got X minus X thousands of dollars, like I need to go in collections mode now potentially and be like, hmm, who's invoice didn't go through properly? Who's, you know, let me, you know, but sometimes it's green and I go cool. Like I expected to collect X, I collected X plus X amount of thousand. I'm good. I close it, you know, I'm on to the next thing. I don't spend any

time on it. So I think that's what scorecard does for you. Um, also one thing I didn't say this before, I don't think, I think there's a lot of value in not automating this process. So right, because this is a spreadsheet in theory, you get connected to super metrics, or these fancy API tools, you could pull this and stuff in automatically, I've chosen, especially for the monthly one, I think that's fine to not automate it intentionally, and to instead manually put these numbers in here, because it forces you or someone on your team to review it and actually

make sure it's accurate. And I think that's actually a huge plus with respect to how you manage and, you know, manage the process basically of going through and creating a scorecard. So I don't know if I mentioned that before. I know I mentioned on previous episodes, but I think there's a lot of value in not automate this. And I love automating stuff,

but in this case, I think it's okay to not automate it, particularly if it's a monthly thing. All right, so we talked about average booking value, talked about number of direct bookings. I can go through the next three relatively quickly, and then I'll run aside the last three, and then I'm curious yours here. So the next three is their revenue minus webbooking.

So at the end of the day, they're looking at their gross margin. All right, we drove, they get a round number, we drove $100,000 of revenue. They have a formula they've given me so I can determine exactly how much their revenue was their revenue. So again, that's gonna change drastically

depending on the client, depending on your margins, depending on your cost structure. They've given me a nice little simple formula that they say is not perfect, but like over the course of the year, it will be accurate. But each month it might be a little bit off, it might be a little high, it might be a little low. But it's their way of saying, all right, all this money came in, how much of it is actually ours? You know, they give me that ratio, that formula based on some numbers we talked about before. Number of bookings, that helps me

understand the fees. Average booking value, that helps me understand the commissions. And then I come to a number of, all right, here's how much we actually took in from direct over the past month. Next one is we look at basically how effective was our advertising. So the next few actually commissions. And then I come to a number of all right, here's how much we actually took in from direct over the past month. Next one is we look at basically how effective was our advertising. So the next few actually are really all about traffic and then advertising. So how many how many sessions game to the website divided by how much money we spent in ad dollar. So it's there. It's actually pretty decent one. This was their idea, not mine. I would typically look at ROAS not

session divided by ad dollar. But how they look at it is how much money do we spend and how much overall traffic came into the website, not just looking at ads traffic, but all traffic. So it's kind of something they came up with. I like it though, because it's a handy way to measure from month to month, how much efficiency is coming through the system. I think of it a little bit like not to get weird sports here, but I think of it kind of like yards per attempts. If we think about NFL quarterback, which you know, I talked about before, which is not how many times did I throw it, but how effective was I when I threw the ball,

right? So it's like session per ad dollar, my mind is not how much did I spend, but how effective was the money I spent in driving the actual visibility and traffic to the website. So one that they use more than I use, but it's something on their spreadsheet. It's to a decimal point too, to like give it a little bit more fidelity so we can get on the right spot there. The next one, as you might imagine, is analytics sessions. That's just simply put how many people came to the website, which I like that this is the bottom of the spreadsheet behind all the sales metrics, because we've had months where a lot of traffic comes to the website and we don't see a big bump in direct bookings. We've had months where not a lot of traffic comes to the website, but it's just the right

traffic and we get a lot of direct booking. So I think if your metric of sessions, you're on the wrong track most likely because you're looking at something that is typically speaking a little bit too, you know, there's too much noise in that signal and that data for month to month. Like, for example, we've talked about this before, I have a client that has a viral Instagram post or a viral Facebook post, you get all this traffic, but you really don't often get a massive increase

in bookings usually for a large property manager. That's different for a small host, if you're averaging a few bookings, then all of a sudden you get a bunch of traffic. Sure, that can be different, but for the most part, when you do analytic sessions on a large property manager like this client, it's a little bit more steady, but you'll have these random spikes of interest,

that email list went out, hey, one article happened to perform really well last month. We did a New Year's, how to spend New Year's in this destination blog post. And it got all this visibility, but it really wasn't booking intent traffic. So a lot of sessions, not a lot of bookings came from it. So that's interesting to see kind of on that side of things. But certainly lets you know, if you see a huge drop in revenue and a huge drop in direct bookings, or my session's down as well. So that's a quick little metric where you can be like, wait, we got 20% less bookings than we anticipated, but our traffic was down 40%. Well, let's go in and dig into that and figure out what's going on there. So you

don't break this out by per source. It's just all sessions from all traffic sources. And finally, to bring us home here, it's just advertising expense. So this particular client focuses just on Google and meta, if you will, Facebook and Instagram. So we just simply put in how much you spent on Google, how much you spent on better or Facebook and Instagram ads. And then we sum that up for a total adspent number as well. So we spent $5,000 on Google ads 2000 on meta, it would say five to and then seven

would be the final number 1000s to give us kind of that that final metric number. And that just lets us know it's especially valuable, I think we compare month over month, we'll have months where we obviously spend $10,000 more in advertising than other months for this particular client. And then of course, we see a change in bookings, but that's often a seasonal trend. My last kind of thought here, and then I'll kick it over your way to see what else you do on the homeowner side is we're now doing this, the school. So we're working with, we started working with this client in the tail

end of 23. So we worked with them all the 24. And of course, now we're starting with them on 25 as we record this. And so we're putting 24 numbers directly under 25. So there's not a separate tab, separate spreadsheet. We're not killing that spreadsheet. It's one spreadsheet, one scorecard, and we got 24 and 25 right there. So it's so easy just to like literally look down the page now and say, okay, last January, we spent $12,500 on Google Ads. Do we want to spend the same more or less than next year?

And that actually makes easier decision making on my part and the client's part because we can look and see how effective things were and what their expectations was. And then we set up a quick plan for 25 based on that metrics. Of course, what I would say with clients is budget strategy, they should be written pencil, not pen, we need to be able to change them. But now we got that data right in front of us, we don't have to go hunt it down

or how much did we spend last year and go export a report from Google spreadsheet and all that kind of stuff. It's just right there, nice and simple. And I think that's gonna make this clients planning a lot easier in 25. Obviously we still gotta go do the work, but the planning process has got a little bit easier

from a stress perspective, from our perspective, and from the client's perspective. So what'd I miss? What are your thoughts on that? No, I definitely, I love having the 24, like in the same spreadsheet. I mean, even separate tabs, it's not, I mean, that visual you do,

you wanna be able to look top to bottom. And that's something that, yeah, that is, as long as I've been doing these types of reports, that is how I've done it. Just kind of cascading them down the thing. I can remember we had some four or five block chains of those, because you had four or five years of recurring data. And it's just so powerful to be able to visualize that. I mean the spreadsheets aren't, if you're putting the conditional formatting in, yeah they're gonna have some visual cues there but that's not supposed to necessarily be a visual medium. Yes, it's great to be able to organize and do everything but it's really

beneficial for me when I'm looking over and just can take that quick look there. So generally speaking, there's a lot of the same stuff that I thought that we're talking about on the homeowner side. My top of my mind looks a little different there, whereas we are focusing more on the total homes and portfolio. So that's kind of the baseline there of, okay, how many homes month over month do I have in the portfolio? So next one is going to be new homes game and then homes turn.

We want to make sure we have those those those in there as well. Again, trying to look for those trend lines of understanding that seasonality. Okay, season, our signing season for mountain markets is going to be over the summer months or some signing season for homeowners on the beach market side is going to be over those, you know, September to February or March time period. So understanding is that when we were adding new homes in, is that when we were trading homes as well, and that the signing season is not just about signing, it's about making sure you're holding on to the owners that you have

right now. So that's one of those things that, especially when you are, when you're growing your portfolio, you have to have those numbers in place. You have to be able to visualize those numbers. I think everybody just kind of knows that what's your total portfolio, what your total count is, but how many new homes did you add in a month? How many homes did you churn in a month? And really understanding, you know, you start to understand that churn percentage that Brooke talks about so frequently there as well. So that's where it starts for us. And then it is kind of breaking down for how are we bringing in some of those those new leads? So new leads, leads in pipeline, and then close deals,

really understanding where those are. Now, some people are going to want to qualify, you know, are they marketing qualified leads? Are they sales qualified leads? And I think that's more in your individual sales work. You're going to have different levers. They're going to try to pull different areas, you're gonna try to understand there, but I think it's helpful in understanding what that pipeline is. In some markets you might have a pipeline of a hundred homes that you're kind of nurturing along or might be putting through a cold email sequence or a warm

email sequence or something like that. So that's always important there. And some, you may have five or 10 leads in your pipeline. So that's an incredibly important stat to understand as far as for the people who are looking for big growth, if you don't have leads in the pipeline, there's not a whole lot of closing that you can do there. So looking at the total homes and portfolio and leads generated, what are your thoughts on that from the, from your side of it?

Yeah. It's so funny. The, um, although we don't focus exclusively on homeowner marketing, you know, it is part of what we might touch on from time to time with the client. And the, uh, the churn one is the one that made me smile a little bit. If, if nothing else, not a sarcasm, because I think clients, I'll just be honest, I have clients that's just straight up forget their churn or they, once they're gone out of theirasm, because I think clients, I'll just be honest, I've clients that's just straight up forget their turn or they once they're gone out of their system, they're not tracking it, they're not looking at it. And it's like an X that they just want to forget about, you know, it's an ex girlfriend, they don't want to think about anymore. Maybe in some cases, they wanted that client to turn, but they don't track it. So I think

understanding the net gain each month is so valuable, because you and I have talked at length so many times offline and online about the fact that, you know, a lot of assumptions occur on some of these metrics that are talked about with the value of inventory. And I think it's all true if you look at the assumptions and you assume that those assumptions line up with your numbers. But if you're off, if you're not keeping a home for 10 years, for example, that's something that, you know, Brooke will say, for example, if you keep a home for 10 years, but if your average is three years, then you got to completely redo your math on customer acquisition costs, LTV, all those kinds of things. And you may find that you can't spend as aggressively on homeowner marketing. You

may find that you need to adjust your criteria. Maybe you need to improve your service. Like one thing I think that's missed in that debate sometimes is you're not going to keep a home for five years or 10 years if you're not delivering revenue, if you're not delivering investment to that person that they feel solid in. Like over a long term, you have to outperform your competition, right? Like you may offer a little bit better service, maybe your tickets, maybe you're a little bit more friendly, maybe you're not, you know, maybe you're doing a lot of things right, response times are good. Oh, the short while you can get some level of success doing just the basics well, but over the long term, you have to figure out

how your company can actually be one of the top companies in the area, or people are not going to choose you over the long term, they're going to eventually their eyes are going to wander and they go, wait, why am I with Joe Blow XYZ, who manages 50k yard my property, when I brought to this company, and they said they could do 70k a year in my pocket net of fees. That's a really, really hard conversation to have unless they think that person is not going to do a good job, right? With the overall property care experience, that kind of stuff. So yeah, that's my take on it is

that people forget about churn people forget about how many they've lost. I did the same thing in my scorecard, I have to go mark my churns in there. And some of them hurt. I'm not gonna lie, right? I don't I didn't want to lose some of these clients. And it hurts me when I have to go write them in there. But I also know that it reminds me that, yes, we're signing, but we've got to keep the net number. That's the number that really matters at the end of the day, right? If you go sign 20 homes,

50 homes, 100 homes, that's awesome. If you go lose 120 cough, cough, a casa cough, cough, then you really don't end up with any growth whatsoever. You can sign a lot. But if you're losing more at the, cough, a casa, cough, cough, then you really don't end up with any growth whatsoever. You can sign a lot, but if you're losing more at the back door, then your company's going to, going to go nowhere. And it's, I think it drained completely on your team operationally. And, you know, from a booking perspective, having to move guests and all that kind of stuff, you know, it's a really concerning sign.

So measuring churn was actually the thing that stuck out to me from your, from your scorecard data on the homeowner side. Definitely. It is. I mean, I think this next kind of areas here, it's because we talked about direct mail is a big part of it and email is a big part of it. I do, you know, total emails sent,

total direct mail pieces sent, I think are important there. On the email side, open rate is good, but I think open rate is good because you're doing a lot of cold open. Click through rate is great, but in most cases, again, you're not, you're not doing a whole lot of calls to action in those cold emails. It's,

it is more response based. So getting those open rates, getting response rates, those are all, those are also going to be on scorecards as well. There. If you're doing a postcard, you know, if you're getting a QR scan, or if you're getting, if you're able to attribute back to that somehow, that's always important there as well and then kind of getting into those costs you know I think the two main cost metrics that were that I look at there are cost per lead and then cost per closed deal because we might be able to get the leads in relatively cheap and those are some of your quotes happy air

quotes that I'm using there but then it it is, it's how, you know, what is that close rate and how much is it actually costing to get that close deal in the indoor? I've seen a lot of people who their cost per lead is maybe 150 to $200. Their cost per close deal is closer to 1500 or two grand just because, you know, a variety of reasons. There's qualified leads, but it's tough. It's tough to sell these homeowners. So I think understanding how much it's going to cost to get that initial lead, very important, but understanding what it takes to actually close that deal, get the homeowner to sign on the dotted line.

That is a whole nother thing. And I think that's a very different conversation for some people like, oh, you're getting all these great leads and they're expensive leads and I can't close them. And then it's another conversation of, okay, what kind of help do I need? Do I need some business development support? Do I need... Is it timeliness? Is it... What am I actually struggling with to get these deals across the finish line? So I think that those two numbers tell a bigger story about just how the entire owner acquisition strategy is going to work.

And it puts in perspective that you can drive a great return on investment on the guest side of things. And you can do it on the owner side, those numbers just aren't gonna match up the same way. So making sure that people understand, okay, 15 to one, 12 to one, 7 to one ROI, great on the guest side of things. Let's take a look at what that really looks like in reality over

on the owner side as well, because there's value. Certainly there's value. I mean, you get a home that's $150,000, $200,000 in gross booking revenue into your portfolio, boom, that will pay itself off. But there's just a little more nuance to seeing that revenue come in and seeing, you know, the cost per lead and cost per conversion. What are your thoughts on on that kind of that second half and how the money gets tied in, in addition to the ad spend and stuff like that? Yeah, well, I've two I have two things to think about. And again, these are things that we've discussed before, but I

think it's worth going over in this episode, which is that the money you pay happens today, the revenue you earn happens tomorrow, right? And with and with homeowner stuff, I think people often forget and the ratio that we need to do better understanding of I'm paying two or three, four, five $6,000 a month at homeowner marketing expenses today. If my homeowner marketing campaign is successful, and I'm signing, let's just say two homes per month, my cost per acquisition $3,000, that works

out on paper, it really does. Right, right. And all the math that has been talked about in our industry by many people is correct. However, they're looking at it over a very long time horizon. So you're laying out, imagine, imagine a scenario where I almost wish I could visualize it in a way where it's like, you're laying out six grand a month, you're bringing two homes, initially, those two homes are bringing you very little. And let's let's say I sign a home today, it's let's just pretend we sign it for February 1 of 2025. If I get it live, and it's actually able to be booked to my website by February 15, I've done a really good job, really, it might be more realistic to assume that's going to be bookable

on my website by March 1. So I might have a month where I've signed the home, it's in my program, I'm getting it ready, photography, etc. By the way, I'm also paying money to the photographer and I'm hiring copywriter write the description So there's other but we'll put that aside for a second. We'll make this simpler. So I signed $6,000 You know, I paid $3,000 basically per contract to sign that home on March 1st ready to book on my website If I do a good job I might be able to see have it see a few bookings in March and I might start to get some commission towards the tail Into March. So here's February 1 is I laid out the cash and I got the contract signed. On March 20th, I might get my first booking, you know, for that property, and it might be a single

booking for $2,800. You know, there's my $500 commission on that. So I'm out three grand, I've got 500, you know, you know, in that scenario, right. And imagine that exacerbated or duplicated across every single month, every single home is going to take time to go through the process and get it on board and stuff like that. So I think one thing I would want someone doing this type of homeowner marketing that you're discussing to be really clear on is how much money can I pay out before and what cash am I collecting in the first like 30 days, 90 days, 60

days, one year, like that sort of thing. Because most small businesses, my own included, I feel like many small businesses were cash constrained. I only have so much money I can put out. If you tell me if I spend $1,000 to run this ad and I will eventually get a client off of it that will eventually pay me down the road, I could probably do that. If you tell me I have to spend $100,000 a month to eventually get $100,000 from that client, I can't do that.

There's not $100,000 piggy bank in my small business that I can dip into month after month after month, right? That that just doesn't make any sense right on my side of things. And I think some folks have been convinced or talked into being more aggressive than they're able to be on homeowner marketing, because they're looking at this two, three, four year cash collected cycle, not what they need in the next 90 days. And they're, frankly, their wallet just ain't thick enough to have that conversation, right? Like the really aggressive homeowner marketing stuff works better when you have a thick wallet. And I think a scorecard to what you're talking about here exposes that so clearly because you can see

what I'm paying out versus what I'm getting in. And if you can't sustain that gap, if you can't sustain that trough of disappointment, I think is what it's called, that you guys have talked about before, financially, if you can't sustain that, then you're gonna find yourself just in a bad spot and you're gonna feel frustrated too, because you're like, wow, I spent all this money, I did

get some homeowners, but not enough to make it worth it, because it's measured over a much longer time horizon than what you may be measuring it on when you're a small business. And you just, everyone has limited funds. I mean, I've worked with the biggest companies in the space, maybe not public ones, but I've worked with individual vacational managers in markets where they do tens of million, hundred million dollars almost in revenue, in one market that I'm involved in is happening for this property manager. And they don't have a lot of budget, they have a high budget. Certainly, it's way more than your small property manager. But at the end of the

day, I can only ask for so much advertising, I can only ask for so much to run in marketing. There's a lot of other bills you got to pay as you get bigger too, right? That aren't there when you're smaller. So I think that's something where I wish someone in who you were advising or someone that we were working with would have a clear understanding on how much you willing to spend, what are my expectations? Are they reasonable? We talked about smart goals previously. And then

when we're looking at scorecard, when I when I pay out the expense of advertising or marketing costs or whatever, versus when I get that cash collected back in my door can be quite a long time horizon, I'd want someone to really understand that before they got deep into it. I think a scorecard that you've described here can expose that very well in a good way. So you understand what you can, what you can do what you can do. I don't think it's a bad thing I'm talking about. I think it's just reality. And we all have to

take a dose of reality sometimes when we grow our business. I think and I think on the homeowner side, it needs to be more real like it is you need more of a dose of reality because it is I think, especially when you have so many people who have grown the business indirectly, innocuously, it just kind of happened. It's when you actually want to put some effort and energy into growing and then you don't see the same success of, oh, all these referrals came in, I closed those, no problem. Once you're starting to do some more cold sales and do stuff like that,

you realize that a little bit of luck got me to grow my business to the size that it is. Now that I have to, I think that the scorecard, it does it, it opens up those conversations, but it keeps you on track. And the one thing that I think on the owner's side of things, you can put a goal up there. You can put that five, 10, 15, you want to grow that large or that much over a specific period of time, but you're not going to hit that unless you want to grow that large or that much over a specific period of time, but you're not going to hit that unless you understand these numbers that are built. That growth

goal of 15 over the course of the next 12 months doesn't mean anything if you can't reverse engineer it because yeah, okay, some one owner brings six properties in. Okay, that covers part of it, but what did it take for that one owner to bring this in? I just think also is that an anomaly? I think what a business is very small I think we we take an anomaly and we sometimes want to copy and paste that as It's always gonna be like that or that's gonna happen with the regularity. I'll say, you know I got a I got a large line two years ago. That has been a great relationship for me It's my biggest client by Billings and I've been able to replicate it since I've tried and I've not been able to replicate it

Right. I'll say it now I got a little lucky and we all have to set ourself up in a way where we can take advantage of good luck when it happens. It was a little bit of fortunate timing and good luck on my side. I think I also set myself up to potentially get some of that luck and benefit through doing marketing and doing advertising and stuff like that. But I also know this type of client is not just right for the picking out there or the one

homeowner that owns six homes back to your example, people don't tune into here about out there or the one homeowner that owns six homes, back to your example, people don't tune in to hear about my business. The one homeowner that owns six vacation homes that signs up with you is pretty darn uncommon. It's not impossible. There's probably a handful in most markets where that does exist, but it's pretty uncommon. So yeah, I think we're all guilty of that. I also think maybe a square card, maybe this is a finishing note here too with this kind of stuff. Maybe do it for three months and don't change anything. Maybe just track your data for three months or two months or something, just get a little bit of data in there, start to measure this stuff. You can go weekly, by the way, to mine is actually weekly that I

do with myself, the cash collected comment I made earlier. That's a weekly one. So you don't have to do a monthly, you could do weekly, and then just start to see like what's happening. Because I suspect if you ask a lot of folks what they thought was happening in their business, as far as number of contracts are signing, net losses, all these kind of things. And I said, All right, cool. I'm gonna track for the next three months, we're going to meet again 90 days from now and see how close they were.

I think they'd be pretty far off. I think that a lot of us miss, misjudge or don't estimate properly, what's actually going on our business, maybe we're, we're overly, you know, thinking that we're doing, you know, something that's having an outsized effect here. And then on the other side, maybe we're like, Oh, I thought this is working well, it's not working well at all. So I think that by getting the what's nice about the scorecard is that it's not emotional, It's not hearing a report through a superior in your business. As you as you get bigger, like I've noticed that something that's happened in my own business, but every director of a department, everyone who leads, you know, an effort on a team is going to say everything's good. Like very few people have the actual candor to say like, No, this is not going well. Like, actually,

we're having lots of problems right now. But a scorecard will tell you that because the scorecard is not emotional. And a scorecard is not sugarcoating anything. A scorecard is saying here's how many direct bookings we got last month. It's black and white, you know, and there may be some reason why it was a bad month or a good month, right? But it's black and white. And over the course of a long period of time, it is the ultimate truth telling your business. I think that is what you need if you want to be successful with homeowner marketing or with guest marketing is you need someone to tell you the truth and figure out what the facts actually are on the ground. Awesome. Well, Paul, we can keep rattling on.

Is there anything else that we want to dial in here or should we put a bow on this one on the scorecard data side? I think we got this one all wrapped up here. It was a bit of numbers and data. It was also a bit of like a therapy session maybe for you and I to talk a little bit about, hey, here's what's going on. Here's what we see all the time with our clients, which we love, by the way, if you're a client, you're listening, we do love you. But, you know, we also need to give us the right guidance for us to be successful And I think I've done a better job this year of asking that kind of stuff for clients more proactively

So it's something I'm working on and every year we got to get better That's what that's what everybody has to do If you want to reach that top level if you want to work on the best small businesses, you've got to keep getting better So hopefully we can do that one thing that I'm noticing by the way, Paulie I don't know if you got this we don't get many reviews We get thousands of listens tens of thousands of listens now at this point, but no one leaves us a review. So one metric that you could place in our scorecard that would make us happy is leave

us a review, go to your podcast, have a choice, iTunes, Spotify listeners, you are the ones that download it the most. Therefore, you made it all the way to the end and you are on iTunes and on Spotify and haven't left us a review. You also want hopefully for giving you some knowledge, giving you some feedback, give me some juice in your day to get you started. We appreciate you. We thank you. We'll see you at a Super Bowl Pixar and we'll catch

you on the next episode of the Heads and Beds show. Have a phenomenal day. Thank you so much.