We Guarantee Leads & Turn Ups

Now that I have your attention, I would like to say that the next time another agency promises you this, run. Runaway as far as possible.

Simply because there’s no such thing as guarantees.
These things don’t exist.

Here’s why…

Facebook Policies Changes Very Often
To make things worse, agencies are facing difficulties with adapting to Facebook rules. Two years ago, they want you to be specific with your targeting, now they want you to go broad targeting. Have 500,000 people in your audience, let Facebook have more data to push for you.

Last time, we were bidding on adsets, now they said, let them optimise with campaign-based-optimisation (CBO)

The list goes on baby… I’m serious

What Can Make Things Worse?
Just last week, Cloudflare was down, Shopify was down, Facebook was down. We went thru hell, almost literally.

One day, I’m doing $30 per lead and spending $300 per day for a client, then the next day had 1 lead at $300 CPL. Not fun bro……. not fun at all!

I can go on to explain how much unpredictability there are in the marketing business, so how can you expect any guarantees? Simply put. There’s none

So What Should We Focus On Instead?
I’m going to use the event industry since it’s something I’ve been doing for over 10 years and it’s one of the hardest to do, albeit getting a lot of people to turn up for a single event within a short period of time.

Assuming these few factors
1. Product cost: $3000
2. closing rate is 25%
3. Need 30 sales per month
4. $50 CPL on average before optimisation

This means that if we want to generate a revenue of $90,000 per month, you’ll need

  1. 25% closing rate and we need 30 pax = 30 x 4 = 120 pax in the preview
  2. Average turn up rate is 25%, so you’ll need 120 x 4 = 480 registered leads
  3. 480 x $40 = $24,000 ad spend per month

Know Your Numbers
So instead of looking at the wrong metrics, build up a sustainable funnel that for every $20,000 you put in, you get back $90,000. Then you look at improving cost per lead, turn up rates and closing rate.

Here’s what happens if you improve by a little bit more with $24,000 ad spend

$24,000 / $45 CPL = 533 leads (Improve $5 CPL)
30% turn up rate = 160 turn ups (improve 5%)
28% closing rate = 45 sales (improve 3%)

That’s a 50% increase in revenue.

Hence, when we want to increase our profit margin, it’s not always about lowering cost per lead. It’s about improvement across the entire funnel

Till the next article.