There’s really a variety of reasons why it is difficult for local business marketing to make a profit on social platforms. The biggest thing that I’ve seen over the last eight years in my work with local businesses is, “number one they have a more limited budget. Even the larger local companies tend to just spend a little less than a similar-sized”.
Online business in terms of their Facebook and Instagram ads, you need to make sure that every single dollar being put into your marketing is producing a Return On Investment. This gives people the confidence to spend more and increase the budget typically. There’s also a little bit less in terms of support staff.
You really have to work extra hard to make yourself stand out.
Show them why they should come to you or buy from you especially when they may be able to do it a little bit easier with an online company. There is also definitely a lack of training in the online marketing space that’s really specific to local businesses. That’s obviously what I hope to talk to you about today.
One of the biggest problems that I see is the disconnect between sales that are actually happening in the business and the online marketing statistics. Most people could not tell you, “Hey let’s take a look at our ads manager account.” Okay, how did that translate into real sales?
Most likely they would have no idea and that’s what we really want to overcome. Hopefully, all of you guys will have a much clearer understanding of how you can close the loop on your advertising.
What Determines Return On Investment?
The first thing is to have a plan that actually maximizes your potential for profits. Thus, having an offer that is focused on growing the revenue, not just putting something out that you think looks cool.
We also want to make sure that you have a really easy way to produce content and creativity.
Return On Investment is not just based on the dollars you’re putting into your ad. Spend it based on your time or the time of those that work for you.
Time is money!
Somebody’s putting their effort into these things. If they’re taking way too long, if there’s an easier and faster way to do something; you’re not going to see as strong of a return as you could if you were able to do that same thing a little bit faster and a little bit better.
Finally, we want to get more conversions from our paid ad leads.
Again this is a really big problem marketers are often talking about; the low-cost per leads that they’re getting business owners. Maybe they’re talking about that but sometimes they don’t even know what the cost per lead would be for them. However, that is not what matters.
The only thing that matters is, sales are revenue, is the return on investment.
So if you don’t know how much money was produced from those groups of low-cost leads, you’re missing out on a lot of important data. You could have invested a lot of money into something that produced no real tangible results at all sometimes. This is going to give you the ability to say, “Okay we’ve got a lot of leads but none of them are converting. What’s going wrong here and how can I fix this?”
Different Ways That Can Maximize The Return On Investment:
You need to know your numbers!
This is often overlooked by really everyone that I speak to, but this is going to be the basis of your entire online marketing strategy. You do need that profit.
You also want to have a really effective ad strategy that works, that’s why we’re here to talk about Facebook and Instagram ads.
You want to have a really effective and easy to create content, creative, and conversion as well as a solid tracking method. Hence, knowing your numbers, things like:
Must have a set budget
Should have a cost per lead goal,
Have a cost per acquisition
All of these things are going to be crucial to establishing how much you can actually pay for a lead.
If your cost per acquisition is going to allow your business to grow then make sure that you’re focusing on the right number. Facebook likes do not pay the bills. There is a place for engagement and engagement style ads but keep these things in mind:
Stop looking at reach
Avoid looking at impressions
Don’t focus on the likes
Start looking at the numbers that will actually help you grow your business.
These are the things that you really want to focus on. Too many people have no idea what they’re even looking at or what they’re looking for. They don’t even know if their ads are working or if they’re failing and that’s not a good place to be regardless!
If you are the business owner or the marketer, I see this problem in both spaces. There is a set of formulas that you guys are going to want to use to calculate the numbers for your business or for the business of your clients. These are all very important in terms of understanding.
What Strategy Do you Specifically Need to Reach Your Financial Goals?
Hopefully, everybody’s got a snapshot. This is going to be a real-life example of those formulas. If you want to see how that breaks down, definitely take a photo of them. This is the first thing that I would do anytime.
When I am working with our agency clients in my training program, I go through all of these numbers with the students because if you know what it takes to actually acquire a customer, what their lifetime value is going to be for you, you will have a very clear set of guidelines.
This is when my ads stop being profitable for me. If you don’t have this you’re essentially guessing. Maybe you’re asking friends “Hey, do you know what is a good cost per lead in this industry?” Just because they think it’s good doesn’t actually mean it’s good!
Again, it doesn’t actually mean that any of your ads are converting. So, stop pulling numbers out of thin air and really get specific in terms of what a business can afford to pay.
What you should be paying, and if you get X amount of leads for X amount of dollars.
This is the revenue that should be produced based on lifetime value and conversion rates. So, spending very smartly is really important in achieving that maximum ROI.
Have a dedicated marketing budget that can be anywhere between 5% and 12% of your overall revenue. It really depends on how aggressive you want to be.
You also want to make sure that you’re dividing your budget between the three different traffic temperatures and the different types of ads.
You also want to make sure you actually put enough money towards your advertising to see real results.
Too many people want to get into this space. They’re just underspending, and when you do this, you prevent real testing from being done, which is what is really going to allow you to find those winners much sooner. They’re also shutting things off way too quickly because again, they don’t understand the numbers.
Give things enough money
Give things enough time
… and when you have the foundation of your financial numbers behind you you’re going to know a lot more of what you should be doing. You will know with 100% certainty when it’s time to throw in the towel on a certain campaign.
Have questions? Drop them below. Want to talk about working together? Visit alliebloydmedia.com/book to schedule a time to talk!