The digital space is so saturated with advertising options, it can make deciding what or how to advertise seem like a never-ending maze. Ever feel like you’re desperately searching for the sweet spot only to run into yet another dead end?
You’re not alone, especially on Facebook, where its ever-changing algorithm and ad options can cause a lot of people to simply throw money around hoping to find something that works, which generally results in frustration and little return. But, there is a way you can make Facebook ads work for you and your business.
Learning how to measure your return
The number one problem I see with my clients and my potential customers is that they’re focused too much on front-end numbers: paying the lowest cost upfront and then hoping their leads will turn into revenue.
This is like trial and error, which isn’t always a bad tactic in business, but is certainly a bad approach to Facebook ads. You can -- and should -- do a little math on the front end to determine the cost per lead that makes sense for your business.
In order to calculate that, you need to keep your focus on the big picture. It’s extremely important before you start Facebook ads to have an understanding of your goals. What action do you ultimately want the customer to take?
Selecting the right starting point
Let’s say the end goal is to have a customer purchase a three-product kit from your ecommerce store. Your instinct might be to run an ad straight to that product, but that would be a mistake.
You want to start with something called a tripwire -- a one-time offer. Give customers a massive discount on your product if, and only if, they opt in to your mailing list right away from your Facebook ad.
Why is this an important first step? Because now they’re in your funnel, allowing you to continue to nurture the lead. People rarely purchase a product or service the first time they come into contact with a brand, so this allows you to easily stay in touch and continue to grow the “know, like and trust” factor that will ultimately lead them to buy from you.
Testing your audiences
Facebook ads have to be targeted at a specific audience, and choosing the right audience can be confusing. By starting with a tripwire, you can test different audiences to determine which is converting the best.
On Facebook, depending on your industry, it should cost you about $2 or $3 per lead if you’re running your ad to cold traffic, or a user who’s never heard of your business before and has never visited your site. Your tripwire would be considered a success if you were converting 6 percent to 10 percent of those people. If you’re not hitting that number, you’ve either got the wrong audience or your tripwire isn’t enticing enough -- change one thing at a time until you figure out the problem.
Let’s look at another example: Your tripwire could be an entry-level product at a deeply discounted price or something like an ebook if you’re a service provider.
If your tripwire costs just $47, and you bring in 100 people while spending an average of $250 to get them to your list ($2.50 per lead) and you only bring in the lowest average amount of people buying your tripwire (6 percent), you’ll net $32. That’s making back everything you spend on ads. That’s what we call a successful top-end funnel (test yours with this calculator).
The goal shouldn’t be to generate revenue from your tripwire -- the revenue will come from the products and services you sell further down your funnel -- but to provide you with enough money to fully fund your Facebook ad campaigns without you having to dip into your bank account.
Approaching your ads strategically
You don’t necessarily need to have your product or service completely ready for the customer before you start ads to grow your leads and to grow your email list, but you do need to know what you want to spend, offer and make back. This also works for developed businesses looking to offer their product to new customers. Simply break down what you can offer first-time users as their tripwire and go from there.
From here, you can start to balance your data (using a reactive spreadsheet that calculates your percentages automatically as you input numbers can be super helpful) and adjust your marketing to target those audiences that are converting the best. You may also find that your tripwire is producing enough revenue to allow you to increase your ad budget, growing your list and your leads.
The old saying “know your numbers” applies just as much when it comes to Facebook advertising as it does to anything else in your business, but too often I find businesses throwing money into ads without a strategic approach. You wouldn’t throw money into another area of your business without understanding how you’ll produce a return, so don’t fall into that trap with Facebook ads.