Realistic Cost Per Lead With Facebook Ads?

0:00hi guys it's ben heath from lead guru and in this video i'm going to talk about what a realistic cost per lead is when it comes to facebook advertising and instagram advertising what can you realistically expect to achieve now i get a lot of questions about this people want to know is you know my cost per lead good in comparison to the average is my cost per lead bad do i need to improve my campaigns what's possible will facebook advertising work for me because i need to achieve a certain cost per lead so i'm going to talk about all those sorts of things and what you can realistically expect when

0:29it comes to uh to a cost per lead in facebook advertising in a second before i do that trying to very quickly ask you to smash that like button that very much helped me out and of course subscribe to my channel if you haven't done so already okay so i'm actually on the um the home page of my website and you can see we are actually doing a bit of a website redesign right now by the way guys so when you if you check this out it's lead guru to credit uk you may well see that you know it looks differently um but right now we've got a screenshot

0:57of a facebook ad account showing some campaigns we ran for uh for one of our clients and you can see that in this case we spent just over a hundred thousand pounds um so that's going to be today's exchange rate 130 135 000 um us dollars if you're not in the uk you're not familiar with pounds generated 15 797 leads for a cost per lead of six pound 50 which you know you're gonna be talking 7.50 eight dollar cost per lead something on those lines now i'm going to get into that a second what the first thing you need to do when you are assessing lead cost through any advertising

1:34platform is what exactly are you counting as a lead because if you're counting let's say an email opt-in as a lead you're going to have a far far lower cost per lead than if for example you're directly advertising a service or perhaps you're advertising a free consultation for a service a free quote basically a full-fledged inquiry into your business into your services into wanting to work with you more not just an email opt-in or something along those lines in this scenario i'm counting the second option i'm counting the full-fledged inquiry and that's why i'm going to base these numbers and this realistic cost per lead around

2:12with email opt-ins you might get far far lower in terms of cost because it's a much simpler ask to get someone to sign up for a lead magnet as opposed to say actually yes i am interested in your accountancy services and would be interested in working with you so with that said that's what this is here by the way this is a full um inquiry via the website um into this businesses nationwide business obviously as you can probably imagine given that there's you know 16 000 leads a lot of small local service providers could not handle anything like that um but they were coming out at this sort

2:47of price now is are these results typical should you expect something like this no these results are absolutely fantastic this was this campaign was run over about a two-month period with these two campaigns so we're spending about 50 000 a month 60 65 000 something like that which relatively high budget the higher the budget you you spend usually the higher the cost per result is is going to be if you were to spend tiny little budgets that number would probably be even smaller so that just helps reinforce the fact that this cost per lead here of six pound fifty is absolutely fantastic by the way the

3:24average customer value for this business if they go on to that lead goes on to become a client is around about three thousand pounds so this campaign was i can't even work out the rares on that it'd be monstrous absolutely monstrous this is not typical this is particularly um particularly great set of facebook advertising campaigns so there's sort of two things that you should i think think about when it comes to what your cost per lead is a lot of people tend to think that facebook advertising is a sort of i tell you what i tell you people who talk about it it's when they talk

4:02about you being a media buyer or a facebook ad buyer as if like it's just this thing you go and purchase and that i think sort of insinuates that the cost you're likely to receive through your facebook ad campaigns is not tied to your skill as a facebook advertising which it absolutely is we could have run this exact same campaign with uh worst quality ad creative um with um poorer targeting options were set up and the cost per lead what could be five six ten times as much as it was so your skill as a facebook advertiser absolutely impacts what your cost per lead's like to be so how does that

4:42impact into what's a realistic cost per lead well how skilled are you how experienced are you as a facebook advertiser if you're just getting started don't expect to be able to produce incredible cost per leads let's say sub 10 cost per leads full of fully fledged inquiry um that's unlikely to happen it's possible but it's unlikely to happen just in the same way that you wouldn't pick up a tennis racket go to your local tennis club and start playing around and being like oh the pros make it look so easy you know they're they're hitting it in the lines every time with lots of speed they never make any

5:13mistakes well of course you're not going to be at that level you know you just got started why would you expect to be at the same pro level so just in the same way that these are campaigns created by my facebook ads agency we spend millions and millions of dollars and pounds and whatever on on facebook ads all the time we've got hundreds of campaigns running at any one time we're professionals we know how to get the best shots possible so that's the first thing is put this through a how skilled are you yet filter and know that if you are inexperienced if you don't have

5:44the you know the knowledge of how to get the best results possible yet your cost per lead is going to be higher as a result with that sort of aside because i think that's really important what would be an industry average for something like getting someone to inquire into services to sign up for a free consultation a free call or free quote something like that now i would say that in general if you're able to get a cost per lead of under thirty dollars you're doing pretty well if you consistently get a cost per lead of under twenty dollars you're doing very well there's some caveats here

6:21i'm assuming you're advertising in an expensive um usually english-speaking nation or you know include perhaps countries like japan and western europe and stuff and stuff like that expensive countries to advertise in if you're assessing cost per lead in other countries that we sometimes work in like india or philippines something like that well yes your cost per lead a good cost per lead is going to be significantly less because it costs a lot less to reach those people there i'm talking about countries like us uk canada australia so that's that's where that benchmark comes in cost per lead of under thirty dollars is decent cost per lead of under um twenty

6:56dollars is really very good i'm also assuming you've got a reasonable budget here if you're looking to spend two to three hundred dollars per month your cost per lead is likely to come in at quite a bit lower than that and you might be looking at a campaign spending 300 a month going this is amazing i've got cost per lead of 11 i'm doing really well in comparison to the benchmarks i provided and then you try and scale that campaign up to you know three thousand dollars a month and you see your cost per lead go up significantly so with those estimates i'm also assuming you're not just spending a

7:26couple hundred dollars a month or less i'm assuming you're spending thousands maybe even tens of thousands um because that has a significant impact as i said this camp these campaigns were operating at about 50 000 pounds per month um and we had a cost per lead of six pound 50 on average if we were to see uh if we were to be only spending ten percent of that say five thousand pounds a month that cost penny would come down and then ten percent of that again 500 pounds that cost per lead will come down again okay so that's um that's a very important thing to uh to

7:54take into account the other thing to think about is what your cost per lead is likely to do over time so there's also there's your skill as a facebook advertiser right which i've already discussed you wouldn't start playing tennis and expect to be as good as the pros so don't do it with facebook advertising um there's also the optimization that takes place in your facebook ad account so if you first launch a campaign and given the benchmarks i've just given you see a cost per lead of 45 and you're really annoyed at that you think oh that's rubbish i really wanted to be in that under 30

8:23range it may well be that your campaign will get there it just needs two weeks a month two months of not only your skill development i mean it could need six months you know your skill development is called but also facebook's actual optimization process itself we've got lots of campaigns we've been running that have spent hundreds of thousands of dollars on them over you know let's say six to 12 months period and we almost sort of seem to reach an optimization level we've generated thousands of conversions and then we see like a real nice improvement in results at a certain stage after we got there okay and and that's

8:57an important thing to think about don't be disheartened if your cost per lead is really high at the beginning i've just got a few notes here which i keep glassing down so you want to make sure i've got i'm gonna um mention everything i want to mention yeah the other thing i want to uh to talk about is everyone wants to know what a good cost per lead is but all that really matters is what that means for your business so when you're assessing any sort of marketing channel like a facebook ad campaign something like that you need to assess it in terms of the profitability

9:32and the results it drives for your business there are many businesses that we've worked with where a sub 30 lead is absolutely impossible to achieve no chance no way not going to happen with businesses like that perhaps uh we're happy with a sub 80 lead or a sub 100 lead which sounds really expensive but if that business is super niche super luxury and they're only looking to work with a handful of clients every year that are worth an enormous sum to them classic example being like a luxury home builder you know we worked with a luxury home builder they wanted to generate four or five clients per year

10:09each client would be worth in excess of a million dollars um each and often many times that because they're building super luxury homes from scratch and so if they you know for them 100 cost per lead is nothing absolutely nothing they're going after a very small percentage of very high net worth individuals that cost a lot to reach they only want four or five customers a year so you know if they have a couple leads a week they're very happy um so i hope that helps put it in perspective now there are other businesses of course that need to generate a cost per lead of 20

10:42or less in order to function and therefore your math looks very different so always go through and calculate what your cost per lead needs to be for your business and work backwards so you go you can go okay each customer is worth two thousand dollars to my business i'm willing to pay 20 of the value of that customer to acquire uh the customer so i'm willing to pay 400 to acquire a customer um i know that i convert one in five leads okay 400 um dollars to acquire a customer i need to generate five leads for four hundred dollars therefore each lead is going to cost you a maximum

11:17of eighty dollars is your acceptable cost so then when you run your facebook campaign and you hear me say a good cost per lead is thirty dollars and a great cost per lead is under twenty dollars and you're generating cost per lead of 50 but you can afford to pay 80 to acquire a lead don't worry about it okay i want to want to make that um make that that also very clear because it still is profitable for you now of course there are things you can do and i talk about this all the time to help improve performance so you can create better ad creative you can

11:46improve your targeting options you can develop your skills as a facebook advertiser but um but there's no reason to turn off the campaigns at that point if that makes sense okay so hopefully that's uh shed some light on that for you guys and hopefully that's that's pretty useful before you go a couple of things i want to mention the first is our facebook advertising services so as i mentioned we are able to produce much better results and the vast majority of people can by themselves because we aren't professionals and we do spend millions on the platform and we run hundreds of campaigns in every industry imaginable

12:11and if you would like us to create manage and optimize your facebook ad campaigns for you that is something we can most likely do so we do have a minimum budget requirement of 3k per month you need to have that budget in order to be able to uh to work with us but if you do have that budget and you are interested in working with us would like to find out a bit more the best thing to do is go to the video description below find the link where i talk all about a strategy session basically you can click on that link go through to a patreon

12:39website and you can book a free 30-minute call with one of my team members that will explain exactly how our service works he'll get some more information about um your business and what it is you do we can let you know if we've worked with a company like yours previously if we produce great results for them you know we most likely have we've worked with hundreds and hundreds of clients um at this point and um and yeah we can basically informal chat just to see if we feel like you know we benefit from from working with each other and helping you get great results so i said link is in the video

13:09description below go ahead and click on that and book that free call um if i was gonna say if you don't have that budget but even if you do have that budget but you'd like to continue up managing your your facebook ad campaigns yourself you can also check out free webinar i've created now this is a free webinar called three killer facebook ads strategies to double or more your revenue and in this webinar i break down three different sales funnels that we use for our clients all the time they deliver fantastic results and i i show you how to choose the right sales funnel depending on your particular

13:39products and services which is very very important a lot of people running ads on facebook whether you're looking to generate leads might be doing it with the wrong setup and if you do that your facebook ad campaigns are not gonna work this webinar i'll show you how to get that right so go ahead and check that out completely free link again is in the video description below and um and yeah i hope that this has been useful if it has please comment below to let me know comment below if you've got any questions i try to get to as many as i can um please uh subscribe to my channel if

14:05you haven't done so already and of course click that thumbs up button and yeah best like your facebook ad campaigns guys hopefully you can go about generating a whole bunch of leads and know what to benchmark off now hopefully that's been useful and i'll talk to you soon bye for now