The ONE Key To SUCCESS With Facebook Ads!

0:00hi guys it's been Heath from lead guru and in this video I'm good to show you the one key to success with Facebook Ads I've got an Excel document up in front of me with some numbers to help explain how this works but I'm sure you're intrigued by the title in my opinion the one key to success with Facebook Ads is to score at least a 70 km it confusing don't worry I'm going to explain now before I get into these details on the left hand side which I will do in a minute I want to cover this stuff right up here at the top so here I've got some

0:33numbers from an example Facebook ad campaign and and here I'm using an e-commerce business but you could apply this to a service business as well so don't worry that that it's not not applicable this can apply to all businesses running Facebook ad campaigns so let's assume that you've run a Facebook ad campaign right and your cost per purchase is coming out at $25 each so one average is costing you $25 to acquire a new customer let's assume that your average order value so how much revenue how many sales you're generating from that customer on their first transaction is $35 that means that your return on adspend

1:07or Roe ass that it's which is the shortened version is 1.4 I'm going to assume that in the case of this business your margin on your products is 50% so your cost of goods is going to be 50% the value of the sales over that makes sense so very very simply you generate $35 worth of sales you have to pay out $17 50 worth to the manufacturer or if you're a service based business perhaps you're paying up 50 percent of the value of the contract to your employees or your subcontractors or however your business is set up okay with those numbers you're generating either a profit or a loss in this case a loss of

1:45$7 50 per new customer acquired now the way we get to that is very very simply you have your average order value is how much each sale is worth you deduct your cost per purchase and you deduct your cost of goods and that's how much you've got left or in this case a negative number now there are some businesses that are okay with running a Facebook ad campaign in generating a $7 50 loss and to acquire new customers the vast majority aren't and this would not be a sustainable way to run Facebook ad campaigns yes there is lifetime value in customers but a $7 50 loss per new customer is a really big

2:20loss to eat upfront now I've created all sorts of videos around increasing your average order value in ways you can use up cells and stuff like that so check out my youtube channel for things along those lines that's increasing this number here which is one way to improve your RO ass and improve your profit profitability but the purpose of this video and what I think most Facebook advertisers are trying to do when they run Facebook ad campaigns is reduce their cost per purchase maybe we'll talk about a high-performing Facebook ad campaign they're usually talking about a Facebook ad campaign that generates purchases or leads for a very low and

2:53very profitable amount so how do you go about reducing your cost per purchase from $25 to something that is a lot more profitable because if for example we were to change that to $10 you can see that that number instead of being a $7 50 loss becomes I didn't mean to do that when it's picked the green one to show that it's profitable and becomes a $7 50 no fair profit okay just by changing this cost per purchase from $25 to $10 you still got that number you take away your cost of goods you take away a cost per purchase and you're making $7 50 profit which is very profitable Facebook

3:31ad campaign you can acquire customers with that method nicely you can build a big customer base you can sell to them again happy days so let's take this back to 25 that goes to negative 750 I like to just use red and green because spreads are lost screens of profit just makes things easier when you're taking a look how do we get this number down from $25 well that's what the one key to success is with Facebook Ads if you can get and we're gonna explain this stuff now on the left hand side this total above a 70 you will almost certainly get that cost per purchase low enough to run

4:06a profitable Facebook ad campaign so what have we got going on at over here what I've done is I've broken up all the basic elements of a facebook advertising sales funnel into ten component parts okay we've got ten component parts campaign setup targeting asset recovery millio duties what you need to do to really be successful with Facebook Ads is to school an average of a seven out of ten on each of these ten options giving you a total of 70 plus now hopefully you don't see it as misleading the title saying one key to success with Facebook Ads being a 70 the truth is that there's no one

4:43individual thing that's going to make your facebook ad successful you can't just get the targeting right and everything else work nothing in marketing in business works like that you need to have elements in place performing well in order to get this to work okay so it's really important so the one key to success as I said hopefully doesn't sound misleading is to average a really good score across all your elements so what does that look like okay let's say the $25 we've got campaign setups nearly perfect so we've got a nine there but your targeting is really poor let's say that's a two out of ten your delivery which refers to

5:17things like placement options and stuff like that let's say that's a four out of ten and let's assume you got a pretty good product so let's give that a seven out of ten but you're selling it for too much of four out of ten it's just too expensive you can people can find products elsewhere your introductory offer perhaps you don't have an initial discount or anything like that perhaps have some one out of ten maybe your ad creative you know you've done a good job with your grade if you're pretty proud of it you put a lot of time into the copy and the imagery in the videos let's

5:43give that an 8 out of 10 we've got separate ad creative about copy let's say that that's good as well you know both the creative any ad copy a really solid 8 out of 10 let's say your landing page is it could do some work let's give it a sort of middle 5 out of 10 and let's take a look at your sales funnel perhaps you've been through one of my trainings you've got the perfect sales funnel we can give that a 10 out of 10 so you can see here that right now we're totaling a 58 58 out of 100 because there's quite a turnout of these

6:09and the total is obviously out of 100 in fact let me put that in here make it really obvious so a total is out of 100 we're scoring on 58 and that produces a cost per purchase of 25 what you need to do is go through all the various elements and really be honest and think is this ad creative good enough could we improve that is the you know the the product how really good is this product could we add something to the product and the product could be the service you know an actual physical product price point is that really the best price that we can offer

6:39are we being you know a little bit short-sighted by trying to charge more and then you can go through the various elements so let's say your campaign self is nine great we know the campaigns have been through some of my trainings you know the campaign set up right back through that targeting yeah you know what if I'm perfectly honest with myself with my targeting I am just sort of grabbed a few interest targeting options that I thought sounded good did we get my research so that's a 2 out of 10 great so that's a potential area for improvement so perhaps you go through my facebook audience insights video to find some

7:08great cold audience targeting options I'll include a link to that video in the video description in case you want to go through that perhaps you work out how to create look-alike audiences and you create some look-alike audience is based off previous customers you know and you get that up to let's say an 8 out of 10 well we've gone from a 58 to a 64 by improving that one element that might mean that your cost per purchase comes down to let's say eighteen dollars okay we're still slight loss but getting closer to the neutral numbers we want to be operating with let's say that your price point can't change you know the

7:44price point is that a four you really want it to be a much better and but you're not interested in competing on price with your competitors it's not a sort of is somebody you want okay the price point can't improve perhaps the introductory offer can so instead just advertising the product or service perhaps you could bundle something in with your other product so when you buy one of these you get one of these other things free perhaps you can incentivize your service by offering something in addition to what your customers would expect what your competitors are offering and perhaps you can improve your introductory offer up to something

8:16like a six now we've reached a 69 you know that introductory offer could make a big big difference and that might reduce our costs per purchase to let's say $14 now we're slightly profitable I'm gonna make that green because we've gone from a loss to a profit now we're slightly profitable okay let's take a look at some of these other elements all right great landing page that's pretty low at a5 maybe you're not a designer I'm not so I'm terrible personally a design I have to hire people to do design I try to do it myself at the beginning and everything just looks awful I'm much more comfortable with numbers

8:50and strategy and targeting options and things like that and we all have our strengths and weaknesses so I know that I have to outsource my design work so perhaps you get a designer on board you say look I'd really like you to create me some custom graphics on this landing page let's really make this look fantastic and perhaps that person's really really good at a job and they can get you up to a nine boom we are now averaging a 73 so perhaps that takes you across for purchase down to ten dollars now obviously I'm just sort of plucking numbers you know I'm sort of giving you

9:19examples here this is not actually what happened on by the way your cost for folks are coming down we'll give you a seven dollar fifty profit but you can see the sort of thing I'm talking about when I say you have to average in my opinion above a seventy if you have all these elements of your Facebook ad campaign dialed in the chance of success is enormous and what I see a lot of people make the mistake doing is they think I've got a great product and my targeting options are great so you know they might have ten and ten in product but I take a look at you know some of

9:51their stuff and perhaps that landing page is just awful they haven't got the right campaign setup its proper to in there and the ad creative really needs some work and you can see that yes you've ticked two out of the ten boxes you need to take but your average is too low to have success does that make sense I hope that makes sense the other thing I want to highlight about all these elements is that not everything needs to be perfect do you need to average above at 70 okay so let's assume for example that your ad copy was really quite poor didn't put any time and effort into it

10:27but your landing page was phenomenal your introductory offer was a nine out of ten and the price point of your product was super competitive at an 8 out of 10 let's assume that your campaign setup is really well put together you can we've achieved a 75 here you can achieve a 70 plus score which as you know is the one key to success of Facebook ads it's to get about a 70 even if some elements of your Facebook ad campaign perform really really poorly I can think of perfect examples of businesses we've worked with where their product is incredible it's an amazing price point and they have an inch

11:04we offer so if we go in to have a look on numbers and we go 10 10 10 in those three that gives you a lot of leeway to perhaps not have the best you know landing page perhaps your ad copy and creative aren't as good as they'd like them to be but you can still see success now the best Facebook advertisers are obviously going to work their way through this list and they're going to go about improving all the various elements so here's what I encourage you to do particularly if you're looking at numbers like we originally had where you're making a loss you run a Facebook

11:32ad campaign and it's not work for you go through these ten elements go through my videos I've got videos on every single one of these and go through them and go right I reckon my campaign setup I'm not so sure if that's the right way you know it's a fall right now how can I get that to be a seven plus and then go through the list of everything go through the targeting as I said to wage create some look-alikes do I need to do some more research and Facebook's audience insights let's improve my targeting which is do I just need to spend some more time testing different targeting

12:01options delivery which placement options perform best for my products or services have you been in to the breakdown data of your Facebook ad account and gone you know what actually it's the gram stories works really well for us let's remove some of the other placements that don't focus on the placements that work and get that up to an eight product is there anything you can do with the product sometimes yes sometimes no price is that the lowest price point you you are happy to offer your product that would you actually be willing to acquire customers with 20% lower pricing that can out-compete so your competitors potentially introductory offer what can

12:33you offer on the front end that really helps improve your campaign don't have to get it to a tent but if you get it to a seven and can really help things and creative do you need to hire someone do you need to hire photographer a videographer to create some really nice creative and you know do you need to just put some more time and effort into this thing or maybe a graphic designer to put some graphics together get that up to an 8 ad copy you know work with a professional agency or spend some real time and think about that going to the Facebook ad library take a look at you

13:00some air competitors get that up to maybe a seven landing pages are set maybe hire a designer like I have to do maybe hire a copywriter perhaps put some real time and effort it into it yourself if you don't have the finances and let's assume we've got the campaign set up to something like an 8 the higher you can get this total out of a hundred the lower this cost per purchase is going to be and perhaps with this sort of set up where everything is seven plus and you've got some tens and just the campaign is performing brilliantly you've put lots of time and effort into

13:30it you've got an 86 and that brings you across for purchase down to six dollars I have seen results like this and your profit on each new customer is eleven dollars fifty just to sort of demonstrate the advantages of this the difference between your cost per purchase being six dollars and you generating $11 55 at if an example the difference between your cost per purchase being fifteen dollars and you making two dollars fifty per purchase and your cost per purchase being twenty dollars and you losing it's made that rare to keep it consistent and you losing two dollars fifty per customer acquired is everything reducing that cost per purchase from just $20 $15

14:13which might only mean improving a couple of these elements over here on the left could be the difference between you not being able to run a Facebook ad campaign and you have in a business that does a million dollars a year or more because if you can acquire customers at even a small profit let's go make it green again like two dollars fifty means that you can acquire customers at massive scale build an enormous customer base then we target to those people market to them again via email and you can grow a very successful very large company so be patient be detail-oriented don't just think I've got a couple of

14:54these elements right it's going to work go through each element and improve them and if you can get this average down here to a glad of a hundred to be over seventy in my opinion you've got the one key to success with Facebook Ads you've taken care of all the individual elements which you have to take care of there's no getting around that and your campaign is very very likely to succeed and as I said you might think I'll watch the point in going through all that effort of getting my cost per purchase down from $20 to $15 the answer is everything that could change everything about your business if you

15:24can acquire customers at a profit even a small one versus making a loss okay so hopefully that video has been very useful I'm sure it's gonna have loads quite so pop those in the comments below let me know if you enjoyed this if you want me to create more stuff like this I'm a bit more numbers orientated than most people so I'm very happy to explain this stuff and if you enjoyed it let me know if you got questions I said I will get to them and please give a thumbs up please subscribe to my youtube channel tick the little Bell notification when you do subscribe and that way you'll be

15:51notified when I release more Facebook advertising digital marketing related videos one other thing I want to quickly mention before I go is our facebook advertising services so if you don't want to go through all of these talent ten elements and improve them yourself we can handle a lot of that for you so my company leader is a specialist Facebook advertising agency and if you're spending more than three thousand dollars a month that's our minimum budget to work with us or want to spend above that point then I'd love to have a chat with you there'll be a link in the video description below where you can

16:19book a free 30-minute strategy session with me and it's very informal and we can just discuss how our service works so you can find out more information I can find out more about your business and we can see if we will be a good fit for you we've probably worked with a business similar to yours we work in just about you know in most verticals I would say and so yeah so if you want us to take this off your hands and really help improve your Facebook advertising performance as I said I've already explained that if you can get your cost for purchase in this scenario down from

16:46$20 to $15 that means everything for your Facebook advertising efforts that's just a sort of thing that we will most likely be able to achieve for you and your company we've got a track record of delivering a fantastic results okay that's enough from me best of luck your Facebook ad campaigns guys and I will talk to you soon bye for now