Here's a simple rule for success in life:

If something's working well, do more of it. If it's not, stop it. If it's marginal, tweak it until it works well. And if you can't tweak it to work well, stop it.

Obviously it's a simplification. But it works.

The big problem is if you can't actually tell if something is working well, if it's not, or if it's marginal.

And that's the case with most marketing for online courses.

The way most people market their course post-launch is to do “a bit of this, a bit of that”.

A Linkedin post. A YouTube video. Blogging. Maybe some ads for a while. Maybe another mini-launch to their email list or social media contacts.

Or maybe you try the latest technique your favourite guru says is “crushing it” (before they sell you another course on another technique that's crushing it next month). We've all been there.

We know consistency is important. But it's difficult to be consistent if you don't know whether something is working or not.

And the key to knowing whether something is working is to understand your numbers.

For online courses (and memberships and other online businesses) the key numbers are your customer lifetime value (LTV) and customer acquisition cost (CAC)

In other words, how much money you make in total from a customer from all the products and services you sell them, and how much it costs you to get them as a customer in the first place.

If you only sell one course, then the lifetime value is the price of that course. If you have upsells, other courses they can buy later or other services they can buy, then the lifetime value is the price of the initial course plus the price of the others times the percentage who “upgrade” and buy them.

How do you figure out those numbers?

If you've been selling your courses for a while you should have some historical data on conversion rates. If not, you'll have to make some estimates.

But the good news is your numbers don't have to be all that accurate.  Many people make the mistake of giving up on calculating LTV and CAC because they can't get it 100% accurate. But all you need to know is a rough estimate of what your LTV is at least and what your CAC is at most.

You're going to use those numbers to decide whether to do more of what you're doing, stop it, or tweak it. So as long as you're in the right ball park, you'll make the right decision.

In his book The Automatic Customer, John Warrillow suggests that the “magic formula” for successful subscription based businesses is where LTV > 3 x CAC.

I've found that formula works well for course business too. It gives a decent margin for error and for ongoing “cost of doing business” expenses.

So what you do in practice is calculate the average value of your customers. Then calculate your marketing costs per customer.

If you're using paid advertising, your tracking should tell you that. For more organic marketing, work out how much it costs you (in terms of your time and any out-of-pocket expenses) and divide by the number of customers it brings you.

Of course, there'll be time lags. You'll do marketing and some people won't buy straight away but may buy later. But if you use a long enough time period of, say, a few months, then for a product with a reasonably short sales cycle like an online course, the numbers will be good enough. Certainly, if your lifetime value is nowhere near your cost of acquisition after a few months it's unlikely to ever rise to more than 3x.

You really want to be able to do this for your different marketing channels, so you'll need to have some tracking that tells you which channel a customer came from.

Again, it won't be super accurate. Some people will click on a Linkedin post and then a Facebook ad for example.

But it's good enough.

When you know those numbers – even just roughly – you can make sensible decisions about whether your ads are working. Or whether all that posting on Twitter is worth your time. Or whether you're better off spending time doing YouTube videos.

It tells you what to do more of, what to stop, and what you might be able to tweak to get working.

Without those numbers you're stuck in “a bit of this, a bit of that” land, hoping that something is working but not really knowing what – and so not being able to stop anything and not being able to double-down on anything.

Now I'm going to be honest here: I don't have all these numbers on tap for my business.

I wish I did. But the truth is I have to dive into a few systems as a one-off exercise when I want to see them. And make a few approximations and informed guesses.

But even then, the results are hugely helpful.

You can do the same.

– Ian

PS Don't forget, there are tons of great case studies and tutorials for you to learn from for free on the Course Builders Hub – including lots of examples of tried and tested approaches to marketing your courses (which, of course, you'd want to measure the LTV and CAC for :) )