5 Secrets that Experienced Startups Often Learn the Hard Way about Facebook Advertising

Posted on Posted in Advertising, E-Commerce, Entrepreneurship, Facebook Advertising, Social Media Lead Generation, Social Media ROI

Nobody wants to learn the hard way.

You want to get customers and prospects. Facebook ads is a very affordable, targeted, powerful way to do that.

But you don’t want to waste your ad budget, right?

Here are 5 things I’ve learned that most start-ups don’t understand before they starting Facebook advertising… 5 things that can waste your money.

#1 Great Ad Performance Requires Testing. And Testing Costs Money

It takes money to test ads to find the profitable ads. You have to spend money to make money.

The simple fact of digital advertising is that there are a lot of ad settings and a ton of ways to write an ad. That’s true whether it’s AdWords or Facebook or whatever.

And only about 5% of the ad ideas you come up with will be profitable. That’s true even for advertising experts with a decade of experience. Research bears that out.

You must write 10-20 ads to find one outstanding ad. And outstanding ads are what we need to win this game.

Here are some of the decisions you have to make, and each variation costs money to test:

  • What image will you use? Positive or negative? People or objects? Problem or solution?
  • What will headline be? Calling out who they are? Asking a question? Making a bold statement?
  • What will the ad copy say? Gosh there are so many things we could say…
  • Who will you target and how? You can often target the same people with several different targeting options. We won’t know which targeting method is cheapest until we test it.

At the beginning of the testing process, we know the least. The more winning ads we find, the smarter our following tests are. But the first month is the worst. As we learn from those ad test results, profitability increases. But that learning process involves spending money on ads.

#2 Successful Companies INVEST in Their First Three Months with Facebook Ads

We’ve managed Facebook ads for dozens of clients- over $2 million spent on ads. They’ve spent anywhere from $33 a day to $1,000 a day; that’s from $1,000 a month to $30,000 a month.

That budget fuels testing and leads to profitability. We often find the first couple weeks is all learning. We start to see promising ads. By the end of month two, we should have some strong ads that reliably get leads or sales. By the end of month three, we’ve reached. Our goal is to cut the initial cost per lead or cost per sale by 50%.

How much does $1,000 spend in a month, for example, get you? Let’s do some math:

  • If you’re looking for leads, hopefully your opt-in page converts at 20%; if your cost per click is $0.50, then a lead is $2.50. If your lead gen page is not very effective and converts at 5%, that lead would cost $10. If the niche is competitive and the cost per click is more like $1.50, then that 5% conversion page makes your leads $30 each. That’s how the math works.We’ve seen lead gen costs as low as 12 cents and as high as $78. It depends on the niche, the competition, and how efficiently the lead gen page converts. That’s why we need to split-test landing pages and find out which one converts best.If you can split-test and take your conversion rate from 10% to 20%, you cut your lead gen cost in half. You double how many leads you can get from the same spend.At the same time, we’re testing ad creative and targeting to multiply that improvement.

    Doing a little math ahead of time helps you have more realistic expectations and be prepared to implement the strategies that work. Going in blind usually results in wasted money and unsatisfactory results.

  • If you’re doing e-commerce, the baseline is a site that converts at at least 1%. Sometimes a new site has problems and only converts at 0.5%. Amazing sites can do 2-4%, but that can take years of evolution to reach.If your cost per click is $0.50, a passable 1% converting ecommerce site has a cost per sale of $50.What is your profit margin? Is it more than that?Some products will kill your business, because their profit margin is too low for digital advertising.If your cost per click is $1 and you have a conversion problem and only get 0.5%, then each sale costs $200.

We’ve seen e-commerce cost per sales of $5 to $500. Again, it varies with the niche, competition, and your website’s conversion efficiency.

This is just the math of pay-per-click profitability.

#3 WHY Would People Want to Buy What You’re Selling? 

This is the most basic lesson of marketing.

And it’s critical to ask if no one ever has bought what you’re selling yet. Or if no one has ever bought it online.

If you have no marketing experience, 99% of the things you think are awesome about what you’re selling are likely features, not benefits:

  • Plush seats.
  • Moon roof.
  • 24-hour customer service.

Those are features.

The customer says, “Who cares? Why should I care? What’s in it for me?” So, yeah, really, you have to spell out what the benefit is to them.

  • Plush seats? “Experience luxury driving.” That’s a benefit. And, bonus: we get them to imagine having it, which makes them more likely to buy. But let’s be honest… plush seat luxury is only appealing to people who love 1984 IROC-Z Camaros. Look at this fine specimen:
  • Moon roof? Great for werewolves. Ability to look up when you should be looking at the road. Just kidding. “Your passenger can look out your moon roof and (s)he will be impressed. With YOU.” That’s a benefit that makes them visualize the experience of the solution. By the way, your 1985 Camaro is awesome. IROC you say? Yes, U really do ROC.
  • 24-hour customer service? “We’re there to help you fix it when everything goes wrong at 3:00AM. We’ll save the day, any time of day. If you have a huge everything-grinds-to-a-halt problem, you won’t have to wait. We’ll fix it now. Relax, you can rely on us.”  That’s a benefit that makes them visualize the experience of the solution.

Those are the benefits of your features. That’s the most BASIC level of copywriting you need to be able to do. They sell much more effectively than features.

Getting them to imagine experiencing the benefit will get you even bigger results. So do both.

#4 You need to know WHO would want to buy from you.

It’s easy to have the wrong idea of who your customers are, or a very vague idea. Some companies even achieve a level of success without an accurate picture of who their best customers are.

Digital marketing teaches you about them. Many of our clients find out their customers are only SORT OF who they thought. But there’s often something surprising…

  • “Oh, wow, people over 50 years old DO buy this. Interesting…”
  • “Our customers are mostly single? Weird!”
  • “Our customers like George Takei? Who the heck is is George Takei?”

That kind of stuff- which by the way, can dramatically lower your Facebook ad costs- can also be applied to all your other marketing. When you discover who they are, you may look at your email marketing or your print ads or radio or TV ads and realize you’ve pitched them to the wrong person. Changing that will improve your results. And since many types of offline marketing can’t be tracked- what worked or didn’t- this information from digital marketing is super valuable if you’re doing offline marketing.

And, by the way, there’s a ton of free market research inside the Facebook ad interface. Enough to put some market research companies out of business. It’s called Facebook Audience Insights.

#5 Your website has to be really efficient at converting your Facebook ad visitors.

You saw it in the math. If you can double your conversion rate, you cut your costs in half.

That sounds like a bonus. But if your conversion rate is sub-standard, your costs can be through the roof. So you might need to improve your website, or take the more modern approach of using squeeze page platforms that can split-test.

The most vulnerable people to mistakes here are web designers. Anyone who thinks they have a new way to design your website. A more aesthetic way. Lots of ideas about impressive designs.

If that gets in the way of usability, you’re done.

  • Sure, your web visitor may think it’s a beautiful website, but it’s so beautiful that they forget to buy.
  • Or can’t figure out how to buy because the navigation elements were too ugly for your web designer.

If you’re interviewing web designers, ask them what they do for split-testing and conversion optimization. The ones that trip over the answer? Move on  to another. The next evolution is using services like unbounce, clickfunnels, leadpages and optimizely.

If you want to run a profitable business, you need to strike a balance between form and function- between branding and conversion optimization.

That’s it- if you’ve grappled with these five issues, then relax- you can advertise on Facebook confidently, and look forward to great results!

If not, we can help with services or my online course, Social Marketing Profit System.

The Top 2 Causes of New Business Failure And How To Beat Them

Posted on Posted in Entrepreneurship, Internet Marketing Strategy, Social Media Strategy, Thought Leadership

invisible400The Top 2 Causes of Failure for Entrepreneurs Are…

  1. Lack Of Funding: If you don’t have enough running capital for 3-6 months of startup, you’ll probably go out of business before you’re profitable.
  2. Lack Of Sales: If not enough people are buying from you to keep going, you’ll have to shut down.

You need money, honey. A Lack of Sales typically is caused by one of two problems:

  1. No One Knows You Exist: A lot of businesses feel invisible. You can’t sell if you’re invisible. You need more awareness- more publicity- more buzz! And of course, maybe we’re exaggerating. Some people know about you, but not enough.
  2. Product/Service No One Wants: You can’t put lipstick on a pig. No way to fix this except move on to a better idea. It’s better to test the market before committing a ton of time and money to what could be a BIG OL’ DUD.

A lot of entrepreneurs make the mistake of selling something people don’t want. They’re selling [what they think people need], not [what people want]. Don’t do that! Experts make that mistake a lot. I’ve been guilty of it myself! We do it because we think as experts we know exactly what these poor people need… But they don’t care. They want what they want. Even if we’re right, people don’t want to eat their vegetables. Don’t treat your customers like you’re their mom and they’re bratty kids. Do this instead: SELL people what they WANT… GIVE them what they want AND what they need. This makes it easy to over-deliver, which is a good way to keep customers happy. “Wow, they gave me a ton!” For example, Flintstone Vitamins: Kids want cartoons and sweets. Moms want kids to take vitamins. They each delicious-tasting Flintstones vitamins, and everybody wins. FREEDOMVITAMINS

How To Use Facebook To Ensure Entrepreneurial Success

There are five things you can do that will help a great deal- not only to avoid a lemon but to help you succeed with your marketing from the start.

  1. Identify Your Potential Buyers
  2. Research & Understand Them With Facebook Audience Insights (you need a Facebook ad account for that)
  3. Test Your Product/Service Ideas And Throw Out The Bad Ideas
  4. Test Your Slogans And Find Most Effective Ones
  5. Test Your Unique Selling Proposition

testbusinessideas

You’ll Live Or Die According To Your U.S.P.

Do you have a Unique Selling Proposition (USP) for your new company or service? Here’s how to create one. Tell us in 20 words, how is your company, product or service different from and better than the competition? What does it do for me? What’s the primary benefit? Is it for me or someone else? Here’s the formula: “[Company] is the [superlative:only/first/premier/best/fastest/biggest] [what] that delivers [what benefit] to [which people]?” For example, Brian Carter is the only social media speaker who delivers practical digital marketing takeaways, comedy-club level entertainment and inspiring motivation to marketers and business owners. Isn’t he amazing?

3 Things To Test With Facebook Ads BEFORE Going To Market

  • Test Your Product/Service Ideas: Do people really want it, not just need it? The ultimate test is to sell it, but if you can get clicks on an ad, that’s a good indicator. If you can get them to opt into something (to qualify for the beta when it’s ready, for example) that’s even better. And my favorite is Kickstarter, because you get paid for something before you’re ready to sell it.
  • Test Your Slogans: Which ones really resonate with your market? Finding out what works here will help you write your marketing copy later, and may help you prioritize how your develop your product or service now. What features or options do people care about? Getting verification on this increases your chance of success.
  • Test Your Unique Selling Proposition: Is your USP working as well as you expected? Try three different versions.

You can also survey your market with surveymonkey. Here’s one I did while working on new online course ideas: survey1 Good thing I did it, because some of the things I thought would be number one weren’t at the top of anyone’s priority list. survey2 I used the results to come up with some course ideas, and then I tested some potential course names with Facebook ads. I’m not going to show you the best ones, because I don’t want anybody creating a similar idea until mine’s ready! But I’ll show you some of the worst results: fbad2

Find Out The Demographics Of The Most Interested People

You can even use Facebook ad tests like this to find out which demographics respond best to your ideas. Whether you use that targeting later on, or just use that intel in developing your product or service, it’s supervaluable to know the age, gender and location of your best potential buyers. For example, from a tests we did a couple years ago for a financial-niche Facebook app: demographics What could you have tested about your current company? What can you test about your next project to avoid wasting time and money and start off on a stronger footing? Ok, so go do it!

Business Building Live Interview with Jay Baer

Posted on Posted in Entrepreneurship, Social Media, Social Media Strategy, Thought Leadership

In this second episode of my series interviewing entrepreneurs, I am very excited to present Jay Baer. You probably have heard of him. He’s super smart and does everything with the highest quality and taste. Jay started five multi-million dollar businesses from scratch. He’s an acclaimed keynote speaker, entrepreneur, technology investor, social media and digital marketing consultant and author. He’s consulted for 29 of the Fortune 500. Author of two best-selling business books. Named one of America’s top 3 social media consultants. Runs the world’s #1 content marketing blog. Has given speeches to hundreds of organizations, including the US State Department and the US Olympic Committee.

Learn how Jay grew his business and what principles guide him today.

Business Building Video Interview with Michael Stelzner of Social Media Examiner

Posted on Posted in Entrepreneurship, Thought Leadership

You’ve heard of Social Media Examiner and the Social Media Marketing World conference?

Michael Stelzner launched Social Media Examiner in October of 2009 and it has exploded. Last year more than 7.5 million visited the site, and they email tips daily to more than 230,000 people. Mike is also the author of two books (Launch & Writing White Papers) and is host of the Social Media Marketing Podcast. He also founded the parenting blog My Kids’ Adventures.

I interviewed him on the topic of Business Building: starting from scratch or how to grow an existing business, specifically in the digital age. Great answers. If you run a business or are thinking about starting one, watch this now!