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If you’ve ever wondered whether different audiences respond the same way to your Facebook and Instagram ads, the answer is—probably not.
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Let’s talk about why using just one audience can limit your results and share the exact order I test different lookalike audiences in to get the best leads at the lowest cost. I also break down how to figure out how much each lead is worth using a simple math example (with some help from ChatGPT).
Once you know your numbers, you’ll be able to make smarter decisions and get more out of every dollar you spend on ads.
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Speaker 1:
Do different audiences respond the same way to your Facebook ads and Instagram ads? Ie, can you just use one audience and expect to get the lowest cost per lead possible? Well, here’s the short answer no, probably not. The first audience that you use is probably not going to give you the lowest cost per lead, and it’s not a game of getting the lowest cost per lead. It’s getting the highest quality lead for the lowest cost possible. So in this episode, I’m going to share with you some of the pitfalls of only using one audience, plus the audiences in order of value, as in likelihood that they would yield the best kind of leads that I usually test first in client accounts. Let’s get into it so right away.
Speaker 1:
When I set up a client account, what I do is build look-alike audiences off of their custom or warm audiences. I do not do testing for a lead magnet ad with their warm audience. Why? Because the warm audience already knows you and likes you right. And warm audiences, by the way, would be your website visitors, your Instagram followers, your Facebook followers, your email list. They know you and likes you right. And warm audiences, by the way, would be your website visitors, your Instagram followers, your Facebook followers, your email list. They know you and like you. Therefore, more of your messaging is going to resonate with them and, of course, you’re going to get lower lead costs. So where does the good testing happen? It happens in cold audiences, because your cold audiences do not know you yet. Therefore, they are only seeing your lead magnet for the value that it provides, as in they only see the quality of messaging that you have produced thus far by the research that you’ve already done. So they are a much better measure of is your messaging on point and they’re not inside your business ecosphere. So it’s great to be able to help new strangers with your lead magnet. Cool, understanding the difference now, like we do, between warm and cold audiences.
Speaker 1:
I usually take these three warm audiences first because they’re usually the highest in value, and if you take that warm audience, that’s high value and then build a look-alike audience off of it, that look-alike audience, which is just a cold audience Meta calls them lookalike audiences, but it’s like look at this small email list, meta. How about? Since my email list is a thousand people, you give me a big old audience of like 2,500,000 people that share lots of similar attributes with my 1,000 person email list, because the logic would be that if these folks opted in for something and are on your email list somehow, then they are more valuable to your business, more likely to do business with you, than somebody who just follows you on Instagram but never has responded to a call to action to get something that you were doing, like a launch or a bootcamp or a lead magnet or a collaboration, anything like that Make sense. And so the most valuable audience I call them core audiences, meta you know Facebook and Instagram they call them custom audiences. Your most valuable would be an email list of purchasers, people that have bought something, right? I mean, wouldn’t you like to show your ads to like two and a half million more people that are very similar to the people who’ve already done business with you? I would. And then the next most valuable could be your entire email list. They all haven’t done or bought things or worked with you, but at least they’re on your email, being nurtured, right. And then the next one could be just your instagram followers. If, if you’re regularly publishing content on Instagram and say you have, like I don’t know, 800 to 1,000 folks following you at least, then yeah, that could be a very valuable audience you can build lookalike audiences of those three and test them in that order. Now, does this mean that the lookalike of your purchasers will perform better all the time than the lookalike of your Instagram followers? No, it does not. Yes, you can test in that order that I gave you purchasers, then email lists, then Instagram followers lookalikes, by the way but formats will vary, which is why you have to test and just find it out.
Speaker 1:
By the way, if you don’t know me yet, hi, I’m Quajo. I’ve been running Facebook and Instagram ads for the better part of six or seven years now, for my own business and for clients. You know, almost $4 million at the time of recording this video in ads management on behalf of other clients, and so I’ve also spent a good number of years coaching online course creators high earning ones, you know low end, like 300,000 gross annual revenue. High end, like $1.3 million, like directly coaching them and helping them with strategy on their funnels. That’s the experience from which I’m sharing this knowledge with you today. So thanks for following this podcast and thank you for subscribing if you’re already watching on YouTube, because both of those actions make sure that you get up to date information as soon as the videos drop or the audio podcast goes live, and also they help. They send the right signals to the channel gods, you know, or platform gods, if you will, and more people like you who need the help.
Speaker 1:
So what do you do? If one audience doesn’t work? Then you just test a different audience. How do you know if an audience is actually getting you a good cost per lead? You know what cost per lead works good for you, as in your target, your benchmark cost per lead, because you are looking at your funnel and estimating how much a lead is worth to you. A very, very, very simple example is let’s say, you do a webinar, a launch, four times a year, right, so every three months, and you know that in general, you bring in a certain number of leads.
Speaker 1:
You only show ads to people who are on your email list. So the only people who ever learn about your launch are the people who are already on your email list. And the folks who are on your email list that see an ad Cool, before I go with this example, you might be like Quajo. If they’re already on my email list, why would I show ads to them? Here’s a stat 2%, on the low end, 3% and you’re like knocking it out of the park of your organic email list will register for a launch. So if you have 10,000 people on your email list, what’s 10,000 times 3%? Here’s my calculator right here 10,000 people times 0.03 is 300 people.
Speaker 1:
Okay. Well, what do you do? If you want 500 people to join your launch? Then you show ads to the folks on your email list and get more of your email list, a higher percentage, to register. So let’s say I make 100 grand during my launch Wonderful. Let’s say I have 500 people registering for that launch Great. Then that means that each lead is worth $200. Ok, so in this example, if I have 10,000 people on my list and I do an okay job let’s see a great job of email marketing to my list I only get 300 people registering. That would be 3% of my organic list registered, right? So I need to show ads to get the other 200 people from my list to register.
Speaker 1:
Let’s say also that my cost per lead was $5. I’m just picking a round number. Okay, it means nothing, except for it’s just a number for this example. So then I know that I can get somebody to register for my email list for $5 and I make $200 for every lead. In that case, it’s all. It’s a profit of $195 per lead. This is an extremely and extremely rosy example.
Speaker 1:
However, the point here is is yes, it makes sense to run the ads, and my cost per lead would be $5, but I have a much bigger profit and I’m going to target my email list, because a very small percentage of my email list will register for the launch organically, and so you know that your lead cost is five dollars. You know how much you’re making per lead in your webinar, and so you can say then that your lead cost is much lower than what you’re making per lead. Great, so follow this concept to calculate how much your leads are worth than when you run a lead magnet to your email list, for example. Back up the math. And if it’s a little hard to your email list, for example, back up the math. And if it’s a little hard to do the math, just tell chat GPT. But you know that maybe only 3% of your entire email list registers for launch organically. Okay, and then, because let’s say you had 10,000 people on the email list, you know that 300 will register for your launch every three months organically, and then another 200 you have to run ads to, and that two hundred cost five dollars per lead. Right, and so then, as you build your email list with a lead magnet let’s say you’re getting two dollars and fifty cents per lead then you just need to run those numbers to see how much you’re in type. All the leads on your email list are worth. Yes, only some of those people on the email list will do business with you, but you need to know like, if I grow my email list and I’m paying $2.50 per lead to add somebody to my email list, how much is that email list lead worth? If this works, chatgpt will tell us. Here’s how you can do this calculation. I’m doing this on my phone. Can you help me calculate, dear chat GPT friend, how much a new lead to my email list is worth?
Speaker 1:
The context here is I’m an online course creator, I’m running a webinar every three months and I’m using Facebook and Instagram ads to drive traffic to my lead magnet and I’m paying $2 and 50 cents per lead to add to my email list. And so here’s the about three months from now, I’ll run a webinar. I know that 300 people from my 10,000 person organic email list will register for the webinar organically, and then I need to run ads to get another 200 people to register. And now the ads will be targeted at my email list and I can get those leads at five dollars per lead. And that’s the cost per lead, right? I know that typically I make a hundred thousand dollars for my webinar, and so that’s five cost per lead, right? I know that typically I make a hundred thousand dollars for my webinar, and so that’s five hundred leads who come into the webinar and watch it. And Well, just five hundred leads who registered for the webinar. I make a hundred thousand dollars. I believe that means that each lead is worth two hundred dollars.
Speaker 1:
But here the context is is this not my entire email list that’s registering for the webinar? It’s just, let’s say, five 500 people from my email list total registering for that webinar 300 organic for free because of my email marketing. 200 of the email list comes at a cost of $5 per and I run ads to them. And so I’m growing my email list from now until my webinar by using my lead magnet. Those leads are only $2 and 50 cents. So now you knowing the numbers of people who register for my email list organically and then in a paid way that I have to pay for, with ads for the webinar.
Speaker 1:
Can you tell me, like for each new lead, magnet lead that I add to my email list between webinars, how much is that lead worth? Let’s see what chat g does. I’m going to record my screen now, and now you can see what I see, as ChatGPT tells me what each new lead added to my email list is worth and ChatGPT says each new lead is worth $6. Hey, chatgpt, can you show me the math that you use to figure this out, just so I can make sure you understood me. Let’s clarify. I always like to clarify, but that’s great If I know that I can add leads for $2 and 50 cents and each one’s worth $6 all day long. Let’s grow that list right. So it told me I make a hundred grand for my webinar 500 people. People register 300 organically, plus 200 via paid ads, and so it gave me this equation right here. That is, revenue per webinar registrant equals total webinar webinar revenue divided by the registrants. So far, so good. So that would be a hundred grand divided by 500 registrants, which equals 200 per lead. So each registrant is worth 200 per lead.
Speaker 1:
Step two it determined the organic conversion rate. I’m helping you audio podcast listener. Maybe you should just click down in the show notes below, though, to go to the youtube channel so you can see the screen recording. That’s there. But basically it said, out of a 10 000 person email list, it calculated the organic conversion rate, which would be the organic webinar registrants divided by the total email list size. So 3% of email list subscribers register for my webinar organically.
Speaker 1:
It says each new email subscriber that I add through my lead magnet has a 3% probability of becoming a webinar registrant organically, and since I know that each registrant is worth $200, we can calculate the expected value of a new lead as. And then they take 3% multiplied by $200, which equals $6. So each new lead is worth approximately $6. So then the profit per lead. If I’m paying $2.50 per lead with my lead magnet, that profit would be $3.50. Hey, ChatGPT, how does your equation change knowing that I also get from my, let’s say, my 10,000 person email list? I do get another 200 people to register for the webinar, but those are with paid ads and those usually cost me $5 per lead for the webinar. But those are with paid ads and those usually cost me five dollars per lead for the webinar registration.
Speaker 1:
So now, how much would you say each new lead magnet lead that I’m using to grow my email list is worth, and chat GPT told me really easily with the cost of running ads to get 200 webinar registrants at $5 per lead. The adjusted value of each new lead magnet lead is $5.94 instead of $6. So almost there, and you can see on the screen because math. So this is a quick way to use. I hope that was valuable for you. That’s how you use AI to help you calculate how much your leads are worth, to help you calculate how much your leads are worth, and that means you have a benchmark which means when you turn on your lead magnet leads or your lead magnet ads on Facebook and Instagram, you know what kind of lead costs you need to get to, and, of course, your numbers will be different for your launches.
Speaker 1:
So use your actual email list numbers and your projected revenue numbers, or the average revenue that you made in your past three numbers, or the average revenue that you made in your past three launches or two launches, and AI can figure out the math. If you’re not sure that its math is right, ask it to show you how it calculated, or ask it to walk you through the steps that it did to calculate. And if it seems too complicated, all good. I tell chat GPT all the time I’m not the best at math, you’re going to need to walk me through this like I was, like a fourth grader. And then it kind of simplifies, explaining to me the calculations it did so that I can see if it’s taking the right inputs and thinking the right way, because AI will crunch numbers but it might be thinking a different way.
Speaker 1:
Numbers but it might be thinking a different way. And that’s it. Know your benchmarks. And then, once you get through, using my framework, which is the olympic gold medal framework, which is just my tried and true way to lower lead cost, which is first testing different ad copy variations and then testing different ad visual variations and then testing different headlines, so that I have, say, two or three ads that I know are combinations of all the best ad components. By the way, if that is like you want the details on how to do that, plus seeing me do that in client accounts, there’s a $37 course called the ad testing cheat code that is in the show notes and below a discounted to you or $17.
Speaker 1:
Go get that because you deserve to have a high quality lead at the lowest cost possible. But once you do that, then you can determine are you hitting the milestone? How far do you need to go to hit that milestone so that you make profit for every lead? And then it’s just a data game, because you know what your lead costs are, you know what your profit per lead is and you are doing the work to make the equation work out in your favor so that you can serve more people who you were meant to serve. Dm me, let me know how valuable you found this episode. I really do care. Until the next time you see from me or hear from me, take care, be blessed, see each other in the next one. Bye.
