The Art of Online Business
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The Art of Online Business
Signs That Your Business Could Be Ready To Run Meta Ads
My wife, Jamie, a fellow Facebook ad manager, joins me to explore whether your business should start using Meta ads. We talk about common questions about the ideal timing for initiating Meta ads and discuss the prerequisites for their effectiveness.
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If you've been wondering what are the potential signs that could be pointing you or telling you that you need to start your meta ads for your business, well, I have a guest. She is none other than my wife and Facebook ad manager, jamie, and she's going to be asking me the questions today, kind of like interview style, and we're just going to have a conversation between the two of us and you kind of podcast listener a conversation between the two of us and you kind of podcast listener, and so you'll walk away from this episode knowing if you should start Facebook ads for your business, because I can tell you right now they're not right for everyone and just because, like we're meta ads managers Facebook and Instagram ad managers like we don't preach Everyone needs to do ads right now, like it's the way to grow your business. Absolutely, absolutely not, and so I hope you enjoy this episode.
Speaker 2:Thanks for having me. And so this is a question we get all the time. From it's August, it is going into launch season, where lots of people are launching a new course or product, and so when is it a good time to start running meta ads? That's the main question of today, oh and I've given this talk to like.
Speaker 1:It's been cool speaking in a couple of groups for other online course creators or launch strategists, and I've gotten that question there too. It's like the trick is is that you have to. You can launch ads after your offer's been converting organically, Like I love to say. Like Jesus saves ads, do not, and so Okay, but what is?
Speaker 2:what does that mean? How do we know if it's been working? What kind of numbers should we be looking at?
Speaker 1:I'll get there in a moment. The first thing is is do you have an offer that sells, like? If the listener has an offer that sells, and like, what do I mean? Is it selling? It needs to sell. Well, too. Like when they are putting their offer up in their Instagram stories, you know, maybe they have mini chat linked up to Instagram reels or graphics posts, and then there's a call to action says DM me whatever phrase for this course you know, like. Is it selling a good amount that way? What about like? When an email is sent out to the email list? Like, are people buying? Remember, like? You know, I had even I was on a coaching call today and one of my clients is launching a new offer and I had to remind them. You know, 0.1%, maybe 0.2%, but 0.1% of an email list is going to buy the offer. Wow.
Speaker 1:Yeah, so keep that number in mind. Also, listener, like you know, level your expectations out. If you do, then you won't be so disappointed. But like, does the offer sell when you send an email like automated email sequence to it or when you're launching it? An email like automated email sequence to it, or when you're launching it, does offer sell? That's the first sign.
Speaker 2:So my next question is, speaking of email lists should you have a certain number of people on your email list in order to be able to launch effectively or in order to be able to run ads effectively? I know some people say they do really well even with a smaller email list. Can you give us maybe some generals of numbers? Email list numbers.
Speaker 1:So when I target, when I run ads for my clients, like one audience that I love to use, a cold audience, which is just an audience that hasn't yet entered into their business ecosphere. It's a lookalike of their email list.
Speaker 1:Because, we try to create these audiences in order of value or potential value, right, and then build lookalike lists inside of Facebook, and all lookalike audience is when you tell Facebook hey, I have this audience, go and show me 2 million more people that are very similar to the people in this core or custom audience and so which is still just crazy to me that million more people that are very similar to the people in this core or custom audience, and so which is still just crazy to me that it can do that.
Speaker 1:Well, they know, meta knows more about us than we know about ourselves.
Speaker 2:I know, I know we're in 2024 and it's all this information that's out there, but it still is kind of just crazy.
Speaker 1:I know that it can do that I mean quite honestly, like well, not honestly, a bit of an embellishment but it does cross my mind, like some mornings when I log into. So this is honest. Not every morning, but some mornings when I log into Facebook ad manager, they're like wait, you're lying to us. No, but the thought sometimes crosses my mind like will this keep working? Like, will this keep working? You know, like one client every morning I log in and I look at her SLO funnel because we're running ads directly to something that costs $67. And it's converting profitably for her. You know which is great. You know, like right now it's at like 1.76% return or 1.76 return on ad spend, as in, we give them a dollar and they give us back $1.
Speaker 1:Six but like last month it was above two, you know, and averages, and so it's like every morning I log in to play still working it's still working, all right yeah, but yeah, facebook meta knows more than we know about ourselves. Right, fifty two thousand data points actually is what they collect. That's incredible that's.
Speaker 1:I can't even think of 52,000 pieces of data on me, but suffice to say it's way past. Like what post do you like? What post do you not like? They know what percentage of time you spend on everything you look at as you're swiping through your feed. How much do you slow down by the look at stuff, even if you don't look at it, you know. And then what kind of content is that? They got it categorized. And then also, like what are your patterns? Like what are you looking at? Seven posts after you looked at one post you know. Like what statistically keeps you on Instagram the longest? Like we all, we like at least, at least maybe you don't.
Speaker 2:They know our vices, but like I have, it's not just that, but it's like what do you look?
Speaker 1:at you know Right All the posts after it's like and your longest sessions like what started those?
Speaker 2:Right Ended those like they know everything so yeah, it really is, the kids ended it usually for me Kind of crazy right.
Speaker 1:Hopefully they're not listening.
Speaker 1:Mom, mom, mom in the background, my gosh, where were we at so lookalike audiences? And I was. You asked me about email size, email size, but probably if you're going to run Facebook ads, you want an email list. Well, actually that's not true. You can run Facebook ads with no email list, just fine. You can run Facebook ads with no email list, just fine. Maybe you already have a built-up Instagram social media following or Facebook following and then you can just tell Facebook hey, showed my lead magnets to people who look like my Instagram followers or my Facebook followers. Or maybe you blog and you have a great readership built up, in which case you give Facebook an audience that is, the people who've looked at your website in the past 180 days and you show to that kind of audience. I think your email list question stems from like, if you're going to target a lookalike of your email list, what's the minimum email list size you need?
Speaker 2:Right.
Speaker 1:And that would be around 600 people.
Speaker 2:Okay. Yeah, I've always heard 500 or so minimum, yeah, so.
Speaker 1:It's because Facebook needs enough people in the custom audience, or how I like to call it, the core audience, to build a solid lookalike audience of that. Right Right know is that when you upload your email list to Facebook to make a lookalike audience, facebook is actually matching your email list to existing users on Facebook. So it's not like all 600 people on an email list are used to create a lookalike audience. Like maybe it's 60 to 40% of that 600. And because my calculator is not here, I'm not going to do math on that, but it's 40 to 60%, and so yeah.
Speaker 1:So that's one sign, though, that a business should be, or could be ready to run meta ads is does their offer sell organically? And so another sign and here's a sign Is there a funnel in place that converts at 2% or more? That's a really great sign. In fact, it's one of the signs that I have on my Facebook ads application.
Speaker 2:Okay, so for people who are newer and who are considering this and maybe you're just getting started in your business can you explain to us a little more in detail? What is that funnel? What does that mean? What does that look like?
Speaker 1:Break it down for us Conceptually. When I say funnel, I just mean like a way of converting leads into sales. Specifically, that funnel could be a launch that happens three times a year, four times well, four times would be a lot, three times a year, two times a year. Or it could be like a self-liquidating offer funnel I like to say SLO funnel or slow funnel. I think you had that question. You had that question for me when you just got started with ads.
Speaker 2:I was like what's this SLO thing? What does that mean?
Speaker 1:What did you?
Speaker 2:guess. It meant you had a funny guess. What did you guess it?
Speaker 1:meant you had a funny guess. Oh, I did have a funny guess. What was it?
Speaker 2:It was something about like I don't know something leads.
Speaker 1:I don't know, I was just guessing at that point. I basically was. I was making her sweat a little bit Because I'm like what does it mean, Jamie? You've taken an ads course, You've come into my office and picked my brain on running ads many times.
Speaker 2:I just didn't remember in the moment what SLO stood for.
Speaker 1:There's so much jargon and all the lingo and trying to keep these things straight, so the blessing of running ads with my wife is that I get to help her out as she learns. And I mean you already have a couple of your own clients that you run ads for and you do quite a good job. Yeah. So the funnel you're welcome.
Speaker 1:So the funnel. Another funnel would be the SLO funnel, self-liquidating offer that just means you're running ads to. Usually a low ticket offer could range from like $17 on the low end to say $67 on the high end. And when I say 2% conversion rate, I'm just talking about 2% of the leads that you run through the funnel convert to sales. So if you're launching and you sign up 500 people for the launch, then 2% of them convert into sales.
Speaker 2:Okay. Yeah. So that leads me to my next question, then, for if you are considering, should you start running meta ads?
Speaker 1:Wait, we're going to give you numbers. By the way, you're going to get numbers about how to tell if you do have a converting launch, if you have enough profit per generated by your launch to start running ads. But before we get to those numbers, Okay, back to my question then.
Speaker 2:So maybe your business has kind of what what Quajo was just talking about more of a low ticket offer anywhere between I don't know $10 up to a hundred dollars. Maybe you have something smaller.
Speaker 1:Well, not a hundred, maybe 67. 60 something.
Speaker 2:Okay. Or perhaps you have a really high ticket item a course or product that you are selling, a membership. Even so, Can you run ads even if you have more of a low ticket item, so to speak. That's maybe $70 or less.
Speaker 1:Well, sure, yeah, it all comes down to can you run ads? You can run ads to anything.
Speaker 2:Right, right.
Speaker 1:Can you run ads profitably and the profitability of ads really doesn't have to do with the ads Like, yes, we ad managers have our ad management tricks. You know, like what differentiates a good ad manager from like a bad one, like a good ad? Well, one is a lot of communication with the client. And two, it's like the number of tools you have in your ads management toolbox to correct ads when things go wrong. Because it's kind of like surfing you set up your ads in a good standard way and then you start to ride that wave and once the wave peters out, then you've got to start going through your ads management tricks to find the next wave.
Speaker 2:You know, Right, and so what was the question? We were just talking about how much, like, if you have a low ticket offer versus a higher ticket, oh yeah, you can run ads, yeah, you can run ads to low ticket or high ticket.
Speaker 1:It all comes down to how good that offer is.
Speaker 2:Right.
Speaker 1:How desirable is it? And then also you could have a stellar offer but just crappy messaging which really affects how your ads will work. And, like you know, I might as well say this right now people will come to the ad manager and often the ad manager like gets the blame, like when an offer is not selling, but it's like the ad manager isn't responsible for your messaging, your market research into the people who do business with you and could do business with you and come to you to learn from, like the passion and the gift that you have, that's responsible for messaging Right.
Speaker 1:And not to pass the blame off, but the messaging is really, really important. In fact, like when ads aren't working as well as they should be because you know an ad is going into decline, you know like we will refresh the ad copy. Right and what are we doing? We're refreshing it according to the frustrations that the client has, like gathered from their customers and potential customers, based on, like, the core problem that their offer solves.
Speaker 2:So Right, it's very important to find that ideal customer avatar and, yeah, hit those, hit those pain points, or what are they desiring? What is this person looking for, right, yeah?
Speaker 1:And maybe so. Maybe here's another thing, though, jamie Maybe the listener is like okay, but if they want to run ads to a self-liquidating offer, maybe they're asking like what's the highest price point they can do which I have not successfully done it to want an offer that costs more than like $97. I did have a client that had like $127 offer. But in general, to make these things work, you're showing like these ads for like an SLO funnel to a cold audience, right, because if you just show it to your warm audience, yes, you will make sales, but a warm audience is really small and rather limited, and so somebody who doesn't know the listener and their offer and sees an ad first time ever from them to buy something, the lower the price, the better. And so like that.
Speaker 1:Sweet spots generally right around $27, $37,. The higher you go in price, the better your messaging must be. The better your sales page must be, the better your offer must be period you know so.
Speaker 2:Makes sense.
Speaker 1:Yep, yep.
Speaker 2:All right, so my next question.
Speaker 1:Your next question.
Speaker 2:How do you know if you're ready to run meta ads? Because I know that people are thinking, okay, but what if I don't have that much to spend? Let's talk budget, okay, because this is always. You know, it can be a tricky, a tricky point, right of well, how much do I spend on? Maybe I'm a smaller business, this is maybe my first time running ads, so what if I'm not comfortable spending a lot? Or I know there's some businesses that spend thousands and thousands a day, you know, and they're like I just don't have that right now. So can I still be profitable? Or would it still make sense for me to run meta ads, even if I can't spend that much?
Speaker 1:Well, the context here is that, like the business already has a converting offer, Right, right.
Speaker 1:So I'm thinking back to one of my clients that I had for a time. They were spending quite a bit of ads money every month, but they knew for their lead costs that if they could bring in leads at a certain amount, then those leads would be profitable, right? So I guess what I'm saying is they knew their numbers at a certain amount, then those leads would be profitable. So I guess what I'm saying is they knew their numbers and so they knew also, predictably, because they had done it enough, that when they had because they had several different kinds of products for sale that they launched they knew when they launched their membership, that what percentage of leads came from their email list you know that were already on their email list. They knew what those leads would be worth, as in the percentage of the leads that converted into the membership and so thus bought, like the first month of the membership, right? They also knew then, like, what those leads were worth, and then they also knew the lifetime value of those leads.
Speaker 1:And so they were able to start from revenue generated from their launch mechanism, and they calculated how much the leads were worth. Who signed up for that launch. When.
Speaker 1:I say launch mechanism, I just mean like is it a challenge, is it a bootcamp, is it a workshop, is it a webinar like the light, right? Okay, so they knew how much their needs were worth. And that's the thing like if the listener, you are doing your ads the first time Ever, then it's what can you afford to lose? And that sounds harsh, but it's true. And that's the thing like if the listener you are doing your ads the first time ever, then it's what can you afford to lose? And that sounds harsh.
Speaker 1:But it's true if you haven't run ads before then don't start out with an amount that you can't afford to lose. It is very much I do not recommend if you're like, especially if you don't have a proven product. Please don't run like five thousand dollars, like on a prayer, like Like we believe in prayer not for ads. That is not a valid Facebook ad strategy.
Speaker 2:Well, you also. You want to use wisdom right? Yes, Prayer plus wisdom.
Speaker 1:What makes sense. And so yeah, what can you lose For some people? So yeah, what can you lose, you know, for some people they can afford to lose like $300. If they're going to venture into Facebook ads manager world for themselves, like, okay, they can afford to lose $300. They can afford to lose $500. Like I had one client who he came to me because I do the, you know, I do the monthly or the three Facebook ads calls one-on-one coaching with me over the course of a month where I get people's ads set up successfully, right.
Speaker 1:And this guy wanted to run ads and we did run ads to an offer a paid offer, you know. And one of the first questions I asked after I told him look, self-liquidating offers are quite difficult. I'll tell you everything. I know. You know we'll look at your sales page, we'll look at the ads, like I'll review your ad copy and your graphics or your videos. But you have to understand like this is difficult. So what is the amount of money that you can afford to lose? And he was like I can invest like a thousand into these ads. Great, remember that, because we're going to do all the testing things that we need to do. But once we get there, if it's not successful, you need to seriously reevaluate. Right, because I think that's a mindset that a lot of people also don't have which is they assume that Facebook ads works 100% of the time, and it doesn't.
Speaker 1:It works if you test and test, and test and test right like I would say the actually the majority of facebook ads don't work. It's that you test through a lot of different ads and you find the ones that do work. Somehow you have clients who your ads just like are great. When I say don't work, like if it's a magnet ad, like how can a lead magnet ad not work? Of course it works, but you do have to test to get the lead costs down and find the right kind of customer. Anyway, I'm getting off track.
Speaker 2:Can I add something on that? Sure, yeah. So you said what you can. You have to spend, what you can afford to lose, but also what you feel comfortable with. Yeah.
Speaker 2:Right and so that I mean those kind of go hand in hand Right, but they're sort of like, well, even if I could spend you know X amount, but I don't actually even feel comfortable with that amount. Like you have to know for you what feels right. And, for example, one of my clients, when she first started running ads, I mean it's not, it's not a launch yet, she's just doing lead generation and it was her first time running ads and she's like, oh, this feels a little scary to be spending $20 or so a day, but just remembering that right now her goal is to increase her reach and to grow her email list and all those things, those things, so that when it's time to actually launch, you know her membership or your course or whatever that you have that bigger audience to you know to work off of Right and so yeah, so it's, it's, it's a whole, it's a whole process, but yeah.
Speaker 1:And like we're not going to spell out the exact calculation here, but if you look at your launch and you say my launch generates this much revenue, great, how many leads side dump for that launch? Because in those leads, if you take the launch revenue and divide it by the leads, you know how much those leads are worth. Great, okay.
Speaker 1:Well, going off of like this stat which is like 1% to 3%, maybe, if you're super good at email, 4% or 5%, but 1% to 3%, let's call it 2% or 3% of somebody's email list will ever sign up for a launch organically Right. So remember that number. Okay, your launch registrants are worth, because you back to that number down from or up from the revenue, then you can come up with a number how much each lead is worth on your email list and then from there if you're running lead magnet ads then and I actually did this on a coaching call for a client in chat GBT.
Speaker 1:It was pretty cool. But then you can come up with a number like, okay, this is about like what a lead who gets my lead magnet is worth. And then there you go. When you're running Facebook ads, is your cost per lead lower than what that lead is worth to your business? And this is how businesses know what kind of lead costs they need to get Right. So, yeah, you can run Facebook ads to anything, but to do it profitably, you need to know your numbers.
Speaker 2:Right, right. And just remember just because you get leads doesn't always mean that is a good lead, right, just getting random followers or people like that's why we do the detailed targeting and all of those kinds of things.
Speaker 1:So yeah, research goes into ad copy and things like this.
Speaker 1:Okay, I said I would explain some numbers that will help you decide if you can run Facebook ads, and the two numbers that I want to explain are called earnings per lead and cost per lead. And so, first, like earnings per lead we did talk about it briefly which is if you have a launch or if you are already running. This is going to be a different episode, but how do you know when it's time to scale your ads and by how much and how do you scale them?
Speaker 1:But, let's say you have a launch right and you take your total launch revenue generated and then you divide that revenue by the number of leads. That is your earnings per lead. Like, I believe, if you have $100,000 launch, six-figure launch, six figure launch textbook right and you had 500 leads, then, because math that would be like $200 per lead is your earnings per lead. Are you happy?
Speaker 2:Are you proud of me? Nice, yeah, that's good.
Speaker 1:It's because I did it yesterday for another episode that I recorded. So that number is fresh in my mind mind. I wish I could crunch numbers like that but yeah $200 per lead great, okay.
Speaker 1:So what that means, then, is you can pay with Facebook Ads a good amount mm-hmm you know, if you have $10, if you have a $10 lead cost for every launch registrant for your Facebook ads, then great. I paid $10 per lead and I make $200 per lead. That would be. That's a fantastical scenario that may have existed for some well put together businesses seven years ago, like I don't have any clients. I don't have any clients who are making $190 per lead. I did have a client, though, who was making. She had a paid launch and her leads were worth like 120 something dollars.
Speaker 1:But to get them, though, I think they were somewhere north of $75 per lead Wow. Yeah, actually, no, I have another client too, who were going into launch season actually, and we don't say names, but you know who. I'm talking about, Because we just signed up for launch ads actually today, and her leads cost a good amount too, but they're highly profitable to her. Usually that happens in a paid launch situation. Right. Where, because it's a paid launch, you have to pay more to get those leads.
Speaker 2:So that's earnings per lead, earnings per lead, earnings per lead, and then what's the other, and then you have to know your cost per lead, cost per lead.
Speaker 1:Yeah, and that comes from Facebook ads, like what is your cost per launch registrant or your cost per lead? And then you just look at the gap Is there a healthy profit margin between the amount that I'm paying for a lead and the amount that a lead is worth and is worth? And if there's not, then it's probably not a good idea. Like if you're paying like $5 per lead but you're only making $6.50 per lead, like I mean that's cool that you made a profit per lead, but how are you going to scale that?
Speaker 1:You know like you're going to bring in 6,000 leads to your launch. That's a lot on the line, like at $5 a pop. First of all, who has that kind of ad budget? And then, if they, well, plenty of people do. But if you're only making such a narrow margin per lead, then you need to look at your offer. Maybe increase the price of your offer, see how that sells, or work on your ad copy, or work on your sales page anything you can do to get leads for cheaper, you know and increase that gap between your cost per lead in your and your earnings per lead. You know that's where you work on your funnel right.
Speaker 1:You get more people showing up to your webinar, you make your webinar better, so it converts better, and all these things right, yeah.
Speaker 2:so what is a good cost per lead? I can't do that you can't do that Okay.
Speaker 1:We're not falling into that trap. Okay, that's a trap, that's a trap. Well, when somebody asked me this on a discovery call, like I'm always like, fine.
Speaker 2:There are a lot of factors that can wait.
Speaker 1:It's just a trap, you don't get fixated on a good cost per lead, because it varies per business, right, and it varies per niche. Like you know, when I run ads for folks who are in like a performing arts, not a performing arts, like an art, like they're artists, or photographers like, yes, I expect their leads to be cheaper, less expensive or more inexpensive. Which one is it? Less expensive or more inexpensive?
Speaker 2:I think you could say either, but less expensive, less confusing it's less confusing because Less expensive or more inexpensive. I think you could say either, but less expensive is less confusing.
Speaker 1:It's less confusing because less expensive is more, not confusing.
Speaker 2:Oh, goodness Okay.
Speaker 1:But yeah, those leads for like an artist, which I've had, like you know, or like somebody who teaches jazz, are going to be cheaper than leads for somebody who's in the online business niche or who is like a launch strategist or who teaches copywriting, these sort of heavily marketed to niches. So it really depends.
Speaker 2:Yeah, well, I asked it for you, okay so in case you were like well, what is, what should it be? Then I asked it for you.
Speaker 1:There was your answer Right, so you got to lower your cost per lead, make sure that you're testing ads and testing ads very well, and also make sure that you're not making just some of the very easily rudimentary Facebook ad mistakes inside of Facebook ad manager. And you can also hop on a call with me. It's a one-on-one coaching call. It happened over 28 days. There's actually three calls where we'll look at your ads. We'll look at your funnel, identify the spots in your funnel where they can improve, where your funnel can improve the best you know. So you'll work on that. And then in between the calls, you get unlimited access to me so you can record your screen and show me your ads and say, quaja, what would you do in this case? And I'll be like I would do exactly this. And then you have successful ads and you're able to run your lead magnet ads successfully from the get go.
Speaker 2:Yeah, and he's good. I hear him on these calls as I'm walking by and he's walking people through step by step and they're like, oh, this is so good, I could have never done this by myself.
Speaker 1:I'm like she's supposed to say that.
Speaker 2:I know I'm not just saying that she's my wife, but it's all of you on Instagram.
Speaker 1:You probably have seen testimonials from people who have coached and the coaching calls. They are really fun it.
