A lot of course creators rush into Facebook and Instagram ads before their business is actually ready, and that’s the fastest way to burn through your first $5K.
- Get the 48-Hour Ad Fix Audit
I walk through the real signs that your offer, messaging, and funnel are strong enough for paid traffic so you don’t end up paying for leads that won’t convert.
I also explain how I think about profit per lead, why “more eyeballs” isn’t the answer, and how to know whether DIY ads or hiring an ads manager makes sense for where your business is right now.
My goal here is simple—help you make smart decisions so your ads actually move your business forward instead of draining it.
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Kwadwo [QUĀY.jo] Sampany-Kessie’s Links:
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- Subscribe to The Art of Online Business’s YouTube Channel
SPEAKER_00:
Jesus saves. Facebook and Instagram ads do not. And just because you can run Facebook and Instagram ads doesn’t mean you should. Ads amplify what’s already working. And in this episode, I’m going to break down signs for you, dear course creator, so that you can understand if your business is actually ready for paid traffic and how to avoid wasting money on your first 5k of ad spend in meta ads. So I was just a guest on a podcast, and we were discussing well, this lady had hired an ads manager for her launch, spent quite a bit of money, and she made money on her launch, but at the end, it was very little money on her launch made. And then she had to look and say, well, the leads at least came in to the list. And although some sales happened, we, you know, barely broke even. But those leads would be worth money to the business further down the line. And indeed, months later, after going through her funnel, more of those leads ended up converting. But you don’t want to run ads prematurely, or especially go out there and just find a random ads manager and run ads to a launch or something that is not proven, or even to an offer that is not proven, or even to a lead magnet funnel that has not been proven yet. We don’t want more eyeballs on something that’s not working, okay? It needs to be a validated offer. Hmm. Way back when I first started ads, a good number of people would reach out to me. Folks still do, but I now kindly explain to them where the phase that they’re at in their business and then decide and let them know we’re not going to work together. I took on a lot more of these kind of clients way back in the beginning. And when you are in the phases, the beginning phases of validating your offer in your business for your online course, understand that proving that messaging is like the hardest phase of business. That’s not the time to spend ads money because you will spend a lot of ads money on messaging that may or may not convert. And here’s what I mean: you have a problem that you’re good at solving, that you’re passionate about solving, right? And I believe you want to continue going through the process of growing your business because you are meant to serve these folks that have that problem and effect that transformation in their lives. But testing out your messaging means figuring out from that problem that you solve, what are the frustrations that actually convert leads into sales, right? There might be five different kinds of frustrations stemming from that one problem, and not all of those resonate equally. And as you’re doing that message testing, if you will, this is not the time for you to run ads. So how can you tell if you are ready to run ads? Well, let’s look at a couple of very typical scenarios. When it comes down to it, you’re selling. Your offer is selling, your group coaching program is selling, and there is profit associated with how you’re launching it or how you’re selling it. So you could be posting Instagram stories and people could be, you know, following the call to action to DM you and you’re selling in the DMs. Or let’s say you have a reliable, repeatable launch mechanism that could be a webinar, a workshop, a boot camp, a challenge, but you run that, leads come in, and you make sales profitably into your offer. You need a good amount of profit there. And here’s how you calculate that. So I’m gonna take out my calculator and we’re just going to run some basic numbers, okay? Because ultimately when you run ads, you have to pay for those leads, and then you want to make or you have an earnings per lead. So I’m holding one hand down here at my chest height, and that’s what your cost per lead is. And the hand up here by my forehead is the earnings per lead, and that difference is your profit per lead. So we can calculate this out, but we can also go feelings-wise. So feelings-wise, a little more vague, but this is easy to understand. If your launch is profitable and you’re like 100%, I could show up better to the launch and serve the people who are there if I didn’t have to worry about managing like$15,000 of ad spend during my launch registration period for like two weeks. Well, then it probably means you could hire, you know, you could hire an ads manager. But you need to look at your profit per lead and decide if there’s room in there to handle an ads management fee. Okay. So I’m gonna run you through the numbers. Let’s go ahead and say that, and this is not gospel, but let’s just say your leads are costing five dollars per lead. If you’re under that, wonderful. If you’re not there, I’m not saying they should be costing that. Cost per lead differs from business to business, you know, depending on what kind of online course you teach, and also how good your messaging is and what niche you’re in, all right? But so let’s say that you bring in 500 leads to your launch in order to make this six figure, you know, exactly six figures from the launch, right? Okay, so if you’re bringing in 500 leads, my calculator right here on screen says multiply that by$5 per lead, and you’re spending$2,500 on ads. Okay, cool. So you have to pay five dollars per lead. You need as much profit per lead as possible, and specifically for your business, you need to know if you can afford ads management and still be profitable with the launch. Okay, cool. So your leads cost five dollars per lead. Now let’s say that you made exactly, you know, on the past two launches, each launch$100,000, exactly six figures per launch, right? Well, then I would take that a hundred thousand dollars and I would divide that across the 500 leads that I brought into my launch, and that would tell me that each lead is worth 200. This is an extremely rosy scenario. However, follow the math. So I only had to pay$5 per lead with ads, and those leads are worth$200. That means I had a profit of$195 per lead. Okay, cool. Now, does it make sense to hire an ads manager? Just looking at the numbers, okay. Let’s take a typical ads management fee. It’s not my ads management fee, but we’ll just take a very easy to understand number:$2,000 per month ads management. Okay, so if your cost per lead was$5 per lead and you had 500 leads, well, adding in the ads management fee on top of that, I’m just gonna take$2,000 a month, ads management retainer fee, and divide that by 500 leads. And now I know that each lead cost$4 as far as the ads management fee, right? And then I add$4 plus$5 because I already had to pay five dollars per lead of ad spend, and I get now nine dollars per lead. Now I know how much a lead costs with the ads management fee broken down per lead, baked in. Okay, so the question becomes for your business then, if you’re paying$9 a lead, and this is just a theoretical, hypothetical scenario, you have to run the numbers for yourself. But is there still on top of that cost per lead enough profit per lead? And is it a lot of profit or is it only a little profit? And you get there by figuring out what your earnings per lead is. Now, in our scenario, with a hundred thousand dollar launch, we were making$200 per lead. So there’s still tons of profit, even with ads management baked in, because nine dollars per lead, you know, I’m still making$191 per lead of profit. Great. So if you have a ton of profit, then it definitely makes sense. Hire an ads manager because professionally, an ads manager, hopefully it’s me, but any ads manager should be able to manage a higher budget and bring in more leads efficiently without the cost per lead going too far high. An ads manager can go through all the testing that’s required. And most importantly, an ads manager can report to you results and you don’t have to worry about, you know, you don’t have to check in two hours a day and worry about this big launch budget and have that detract from, you know, how you show up to your launch. You could be taking that saved brain power and applying it to leading your team, making sure all the things for launch are prepared quality to serve the folks who show up for the launch, making sure that your launch runway of content is on point and lined up and posted on the social medias that matter for your business. And of course, showing up to that launch and serving folks in a very quality way and guiding them into your paid offer. So, yeah, that’s the conversation that needs to happen internally. Is there profit to an afford an ads manager? And what would you do with that freed up brain space to make your business grow? Conceptually, there are only things that not even conceptually, as you grew your business and I grew mine. In the beginning, we started off doing all the things in our business, and that worked. But as our businesses grew, it became evident and clear that there were certain things that we could do that would grow our business way faster than those other things, right? Those would be high return on investment activities, okay? And there’s certain things that only we can do that are really high return on investment. Things like planning out our business strategy, creating a new strategically placed offer, working on developing those strategic partnerships, working on refining our webinars or our launches, you know, working on new email sequences. We can’t or probably should not hire those out. But we spend too much time if even if we, you know, if we’re a solopreneur or if you have a small team, for example, you might be spending too much time doing things that just don’t really move the needle in your business. We should be selling, but instead we are making 20 replies to folks inside of our Facebook community. While it’s good to respond to them, do we need to be making those replies? Do we need to be engaging directly 20 times a day? Or could we be placing our time elsewhere? That’s the mindset to focus on here because as we’re growing, let’s just say we hit that six-figure annual revenue milestone that everyone talks about. As we’re growing, we become the bottleneck. You do, I have, I still am the bottleneck of growth in my business, and I bet you are too. And so focus on removing yourself from the bottleneck and placing yourself into the area of business that will grow your business the fastest within Facebook and Instagram ads, this context that we’re discussing for this episode, that is how you can decide one, is your business ready for ads? And also, should you be hiring an ads manager versus running those ads yourself? If you want me to look at your ads that are already running and point out one or two things that you can improve to increase that ads performance, click on the link below. There is a very quick, simple paid audit that you can sign up for, and I will do exactly that. You’ll give me all the things that I request, and I’ll look and crunch numbers on your ads and actually look at your ads and tell you what you could do next. Until the next time we meet, be blessed, take care, and we’ll see you in the next one. Goodbye.
