I am excited to finally get this project going. Are you ready to start scaling your business? We are going to show you guys how to scale up your business using Facebook, Adwords, and Instagram Ads. Especially Video Ads.
When I say scale, I mean increase ad spend which will, in turn, increase your leads.
More leads equal more sales for you business.
This is part 1 of a 4 part series so keep an eye out for the other blog posts. This could turn into a 10 part series. I will keep going as long as you guys keep reading. Feel free to ask questions, make comments, and share this article. There are businesses that need it!
A lot of people have a problem with scaling. It can be really nerve racking and it takes a leap of faith: Faith that you have the right offer, faith that your product brings value, faith your funnel is set up correctly, and faith your message will bring conversion.
The reality is, you could bomb and lose money.
That should not stop you from trying. You have to take a risk! If you want to grow your business, scaling is a great way to get rapid growth. It may take testing and tweaking. So make sure you are ready mentally to do this.
We know this first hand. Case and point!
Many of you know, Yinc does marketing for all types of businesses. We like to focus on video marketing but many of our clients need a lot more then just video ads.
We are currently working with a business that is ripe for scaling. Our cost per lead is around $1 and our cost per customer is around $9.
Their average customer spends around $70 on their first order, which puts us at a $61 gross profit.
On the surface this looks amazing. The numbers above are definitely scalable, but the company is basically breaking even. They have a net profit margin that is so tight that we have not convinced them to scale yet. This is where the Lifetime Value of a customer comes into play. If their customers order more product, instant profit. But they have to be willing to break even on that first order.
Like I said…it’s not easy.
During this process, you will learn about your product and offer. Take what you learn and make adjustments. It’s also important that your adjustments are made quickly. If you have a web guy that takes weeks to make a correction, you have problems. If you can’t create a Facebook audience in a hour, you need help. If you have no idea how to create an Instagram ad, you better educate yourself or get someone who knows what they are doing.
This is not a game for beginners. You will lose money and quite before you become profitable. I see this all the time!
This is not to scare you. I just want to make sure you have the little things adjusted before you decide to scale.
The History Of Scaling Ydraw
We’ve come to the conclusion that we want to scale our Animation Company Ydraw.
Over the last couple of years we have been content with the growth and profits but we want to add another 100k a month in revenue.
One of the biggest limitations of Ydraw is that each video is customized. It takes a lot of creativity and human capital to create a Whiteboard Animation Video. It’s even worse with 2D and 3D animation videos. For us to scale perfectly, we would need to have a turnkey video in place or we have to find a lot of new talent.
We don’t know if we want to do this yet.
So once we increase our sales another 100K a month we will put a freeze on our ad spend and decide if we want to go on another hiring spree.
Where We Currently Stand
When I talk numbers, I will only cover Adwords, Facebook, and Instagram. The numbers do not include referrals, SEO, repeat business, referral partners, etc.
We’ll be discussing Ads and Video Ads only. All the leads are coming from Ad spend.
October 2015 Ad Spend (not a good month)
Cost per lead $99.79
Click To Conversion Rate was 3% to 9%
Facebook and Instagram (Zero)
Last October we were running the following:
Keywords Search Ads (Adwords) : These are just simple keyword targeted ads.
Gmail Sponsored Ads (Adwords): These are Gmail ads that pop up on the Gmail promotion tab
Video Placement Ads (Adwords): Hand picked YouTube videos that allow ads
Retargeting (Adwords): Banner ads and video ads for visitors
Although we had great success with running Facebook ads, last October we had turned them off. We felt we needed to make some changes first.
Step 1: Scaling your online business. Online Marketing Assets
Do you have everything necessary to run an effective online marketing campaign?
You are going to need the following:
- Videos (30 second ad and a full length explainer video)
- Banner Ads
- Email Campaign
- Website Forms
- Adwords Account
- Facebook Account
- Instagram Account
- YouTube Account
- Conversion Pixels
- Analytics Goals
- Facebook Pixel
Everything should be branded correctly and have links out to your landing pages. I have created plenty of video tutorials to help you. Just visit my YouTube Channel.
When scaling, everything works together. Traffic we get from Facebook becomes part of our Remarketing campaign in Adwords. Our Search traffic on Adwords becomes part of our Lookalike audiences on Facebook and Instagram. The likes and shares on Instagram become part of our Remarketing group on YouTube. The point it…It’s a full system.
The Assets above are the foundation. Do not go any further until you have everything in place.
For those who have everything, I would suggest revamping or double-checking your work or go down the full checklist which I provided above.
After looking over our numbers I realized we needed to make some adjustments to the website. I knew this for some time, but I’m busy and I didn’t make time to for the necessary adjustments.
This seems to happen a lot with business owners. We get caught up in so many different things that we neglect making necessary adjustments; especially if things are going great and you’re making good money. It’s human nature to keep the status quo when all is well.
Our number 1 goal for the website is to collect a lead. We want their email address or we want them to pick up the phone and call. Calls have a much higher closing rate, but a lot of people are in research mode and will only leave their email.
That is ok.
Once we collect an email address they enter our Email Campaign.
Our website was ok at the time, but was random and lacked a clear call to action.
Plus, there were a couple of issues on Mobile that needed to be fixed.
Over Thanksgiving break we went to work on the website. The updated version would have a clearer CTA and would eliminate a lot of the clutter.
Basically, we simplified.
Our website contains:
- A Clear CTA
- Case Studies
- Social Proof
- Strong Headline
- Mobile Friendly
- Loads Quickly (click here to test your speed)
Below I will give you the results.
But first, I want to go over the numbers.
Numbers You Should Know:
-Cost Per Leads
-Cost Per Customer
-Profit Per Sale
-Life Time Value Of A Customer
If you are losing money every month, one of the numbers above is messed up.
Cost Per Lead is different for everyone.
If your industry is highly competitive you could be spending $50 dollars a click which could turn into a $500 cost per lead. This is not uncommon (Attorneys are known to spend this type of money on leads).
At Ydraw we can afford to spend $150 to $300 per lead or $2500 a customer, and still come out on top. You may only be able to spend $3 a lead.
Just make sure know your numbers.
Obviously, the name of the game is to get the lowest cost per lead.
We will get into this later but if you can only spend a couple of dollars to generate a lead, Adwords might not be the best place start. I would look at Facebook or Instagram. You will have difficulty reaching your goals with Adwords unless you find a way to increase your prices and profits per customer.
Either way, you have to test it.
Dan Kennedy says, “He who can spend the most per lead wins.”
Russell Brunson is always preaching that it’s ok to break even to obtain a customer. He will even lose money because he knows profit’s are made further down the funnel.
The Lifetime Value of a customer is important.
Fast forward to Jan 2016
It was time to start scaling up. The new website was up, Instagram ads were working and our Facebook strategy was in place.
Number of Leads: 117
Cost Per Lead: $84.62
Click to Conversion: 5.69% to 10.53%
Facebook and Instagram
Number of Leads 446
Cost Per Leads: $10.45
As you can see, the website adjustments made a big impact on our conversions. We saw a 35% decrease in Cost Per Lead and close to 87% increase in Click to Conversion.
You will also notice that Facebook and Instagram campaigns really added to the number of leads.
Our Cost Per Lead is way lower on Facebook and Instagram, but those leads are not as high of quality as Adwords.
There is a difference between people who are actively searching and people you interrupt. Facebook and Instagram are interruption techniques. Meaning they are not actively searching for our product or service.
There is a longer sales cycle, but the ROI is still big.
What I love about Facebook and Instragram ads are the shares, likes, and comments. Here is the Instagram video ad we are running.
Take note of the comments and shares. This is powerful because we are getting free customers. When one person sees our ad and thinks their friend needs it, they share the ad.
This is like an instant endorsement.
These are factors that are extremely hard to measure. All I know is that things are working.
In one day Wes, our sales VP, had $18,000 in sales from Instagram Ads.
We spent around $150 on ads that day. The whole month of January we spent $4665 on ads for both Facebook and Instagram.
I do not have the exact amount of sales that came in from Facebook and Instagram, but it was a lot (still trying to track them more effectively).
These are exciting numbers.
The Plan Moving Forward:
Over the coming weeks I plan to increase ad spend by $3000 and make some more adjustments.
The goal is to lower or maintain the same Cost Per Lead.
Here are some key factors that contributed to our success in the month of January.
- New Website Design
- New Facebook and Instagram Video Ads
- Lookalike Audience Created from Conversion
- Increase Ad Spend
I will create a separate blog post about Lookalike Audiences because I think Facebook changed their algorithm a few weeks back. It was a good change because their effectiveness increased dramatically (more to come).
In the meantime, good luck scaling your ad spend. If you have questions, feel free to reach out to me. I would be happy to discuss your business.
I am excited for what 2016 holds.
Thanks for reading.
Scaling A Business With Adwords, Facebook, and Instagram Video Ads. Part 1
Fresh out of college he started his first business. Which grew into a multi-million dollar company. Mistakes were made and eventually it all ended in disaster. His philosophy needed to change.
The Next year he read 150 business books which gave him the knowledge to start other ventures. Now he runs and operates 2 other companies, Ydraw, one of the world’s hottest explainer video companies, and Yinc, one of the fastest growing Video Marketing Agencies.
Jace loves to help others grow their business and is always happy to help.
Latest posts by Jace Vernon (see all)
- Turning Off Automatic Targeting On Remarketing (retargeting) Campaigns. - November 5, 2018
- Is Your Drug Detox Center In Trouble? - September 19, 2017
- Will the Google Ban on Recovery Centers Put You Out Of Business? - September 18, 2017