Behind the scenes of a Facebook ad campaign that generated over 4100 online course & membership sales.
Selling memberships and online courses in the information industry is getting harder and more competitive each year. 2020 won’t be different.
The main reasons are:
- The cost of advertising is higher than it’s ever been
- The market has become extremely saturated with so-called experts promising overnight results which negatively affect consumer trust.
- There’s no real differentiation between offered products and services (no real USP)
If you were selling $47, $497, or $997 info-products or monthly memberships to the cold audience few years ago – you remember getting 2X, 3X or even 5X returns on day 1, without too much work.
That’s when CPC on Facebook was $0.20 or $0.40.
With average CPC approaching $2, that’s not the case anymore.
When you adapt and do things the right way (like it’s 2020) Facebook still works, big time.
We know that because we are the guys behind Facebook & Instagram campaigns for some of the world’s leading fitness experts like Christmas Abbott, Barstazz, and Al Kavadlo.
The specific campaign for Christmas Abbott we managed brought in over $1,000,000+ in revenue in 12 months.
We generated 4154 sales for the course ($27-47) on the front end. With all the upsells and downsells, the AOV (average order value) was around $87 which amounted to about $360,000 in front end revenue.
The average lifetime value of the membership ($20/month) was $160, which amounted to an additional $664,640 in revenue over the course of 12 months.
But before you can replicate the paid traffic strategies and tactics – you need to understand the fundamentals.
I’m not going to pretend that our Facebook campaigns are the main reason our clients have achieved the results I’m talking about.
They have a solid business foundation in place, and an audience to sell to (although 70% of sales came from new audiences.)
Here’s what our most successful clients’ businesses have in common, and what you need to have in order to win in 2020:
Their #1 Goal From Paid Advertising Is To Breakeven On The Front End
Dan Kennedy once said: “The business that can spend the most to acquire a customer wins.”
The goal has changed and your main goal with paid advertising, especially in the subscription business, should be to acquire as many customers/subscribers as possible early, and profit later.
Businesses that are charging high prices and trying to profit from day 1 will be left behind.
Optimizing your cost to acquire a customer (CPA) and increasing the customer lifetime value (CLV) is how you’re going to win.
When this is dialed in you can spend the most to acquire a customer, and get the money invested in ad spend back – right away.
How do we do that? By getting our cost per acquisition = average order value (AOV). (Or more, which was the case in this campaign).
Apart from that funnel, we used a lot of other funnels during testing, which accounted for the rest of the front end revenue.
They have one core funnel that enables them to acquire new customers at a breakeven
In order to get your CPA to match your AOV you need to do two things:
- Optimize your CPA by lowering your advertising cost, which I’m going to talk about later in the post.
- Increase your average order value by optimizing your customer acquisition/buying experience
To successfully execute #2, you need a working funnel in place. A funnel that’s able to convert customers at a high enough AOV. Increasing AOV is achieved through consistent testing of your upsells/ downsells.
All our most successful clients have a funnel that enables them (after optimizing the ads) to break even on traffic costs.
They take care of their community and are constantly working to increase their customer lifetime value
Now that you’ve acquired a customer, it’s time to actually make a profit.
It’s not hard to notice that our most successful clients are the ones that have higher customer lifetime values and are constantly working to improve them.
They work on their product, test new offers and approach customer service professionally.
They also work in managing their communities, which is (as is the case with this client) especially important if your subscription offer is information/expert-based.
It’s easier to sell to your existing customers, and if you’re constantly finding new ways to provide value to your customers, you’re doing it right.
Now that the foundations are out of the way, let’s get into the actual customer acquisition process.
Let’s go behind the scenes of a campaign that generated $1,000,000 in revenue through Facebook and Instagram.
Here’s what the actual numbers were:
That’s pretty badass, right?
Here’s what we’ve done (in this campaign, and in countless others for the world’s leading fitness experts) and what you should do to achieve the same:
1. Optimize the Funnel – #1 Goal On The Front End is To Build a Customer Base (Low Entry Point) And Breakeven
Average order value (AOV) is the most important metric to track when driving paid traffic to your subscription offer.
Optimizing your AOV in a way that it’s high enough to pay for your traffic costs, and acquire a recurring customer for $0 (breakeven) is crucial to this process. (In this actual campaign, we were actually profitable on the front end – which is always nice).
And your AOV has a lot to do with how your funnel is set up.
While this was not our task as we manage traffic campaigns, we’re highly involved in our clients’ funnel optimization processes as that directly affects the return on investment from paid advertising.
Here’s how the optimized funnel looked like for this campaign :
This was not how it started – we tested a lot of different offers and combinations until we got the AOV where it is now.
For example – we found that the best layout for the landing page (first page a person sees after clicking the ad) looks like this:
Here’s how the actual numbers for the funnel looked like:
In conclusion – optimizing your funnel is crucial as it will determine your AOV, and AOV is directly tied to achieving break-even on advertising – and that is what the main goal is.
Generally, this is an ongoing process and should continuously be worked on as there’s always room for improvement. Always try to improve the conversion rates for each step of the funnel.
2. Segment your audiences and adjust your approach to each segment
There are a lot of different stages of the buying cycle – a person who sees your ads for the first time is not in the same stage as a person who’s already on your email list.
Depending on the stage they’re at, you want to serve them different types of content and different types of creative.
To do that – you first need to segment your audience based on their familiarity with you or your product.
This is what Facebook ads platform is really, really good at.
You can micro-segment your audience using the Facebook pixel and Custom Audiences – and you should.
Here’s how that looked like in this campaign:
With audiences that were already familiar with the brand we were more direct and upfront with the actual offer.
With cold audiences, we adjusted the copy and the creatives to get people familiar with the brand first (social proof and the brand story worked really well).
Cold audiences are ALWAYS going to have a higher CPA, but they’re necessary to achieve scale (unless you have a huge brand/audience).
Combining both cold audiences and warm audiences with an optimized approach to each will allow you to achieve both scale and profitability (breakeven on the front-end in this case).
3. Optimize Your Creatives And Use Video Ads
While creatives (copy/images/video) were always super important, with Facebook’s ad algorithm changes and improvements, other parts of the campaign such as targeting are becoming less important as the algorithm will do a lot of the work for you.
Facebook’s algorithm prefers video to image creatives.
That means that on the video ad campaigns, the CPM (and consequently CPC) will be much lower – you’ll pay less to acquire a customer.
Here’s an example from this campaign:
Both ads ran to the same audience but the video ad was actually profitable (on the front end) which allowed us to scale the spend and actually reach 7 figures in revenue in the end. Cost per acquisition is one of the 2 important metrics and using video is a big part of why we managed to get the CPA where we needed it to be (and lower).
Video quality and structure are definitely important and we did a lot of testing – but even with a lower quality video (because Facebook’s algorithm prefers video) you’ll get much better results than with static creatives.
This is not an end-be-all solution – you have to split test relentlessly in order to find the best performing ads. In this campaign, the total number of variations was over 500.
4. Use Different Advertising Angles To Hit Different Pain Points
The concept of angles in advertising is something that a lot of people either don’t understand or don’t understand the potential and how powerful it is.
In order to convert the biggest percentage of your audience, you need to solve their problems.
The product we were selling was a fitness product, and essentially it was the same product for everyone who bought – but not everybody is going to buy for the same reason.
Not everybody in our target audience is experiencing problems in their fitness the same way, and not everybody wants the same outcome. Here are some examples:
- Some people want to lose weight to look better
- Some people want to be healthier
- Some people want to have more energy to work more efficiently
There are a lot more examples but you get the point.
The better you describe the problem your potential customer is having, and the better you describe how you’re going to solve that problem and get him/her the specific outcome he/she wants – the better your conversion rate will be. That’s what angles essentially are.
You need to have different angles that will speak to different segments of your target audience.
In fitness campaigns, like this one was there’s a high level of seasonality and you should definitely capitalize on that by creating angles specific to different seasons.
5. Use The Right Ad Placements And Ad Objectives To Achieve The Highest ROAS
This is one part of the technical part of the campaign, which is crucial to success on Facebook. In order to achieve the best results, you need to understand the platform.
Facebook (and Instagram) is fairly complex compared to other advertising platforms and you need to know what you’re doing (or hire somebody who does).
As far as the placement goes, the news feed is still the king. In this campaign, the mobile news feed was the best performing placement.
What’s generally happening with both ad placements and targeting is that the algorithm is getting smarter. Before you needed to micromanage both but as the algorithm improves it’s better to go wide and leave the optimization to Facebook. If you optimize for conversions (lowest cost) and select all the placements, the algorithm is going to actually determine which placement brings you the most conversions at the lowest cost.
What’s really important here is that you adjust your creatives for different placements as they look really different and format that works on one placement will not work on the other.
With Ad objectives, you should generally use the objective that you’re aiming for and that’s what we’re almost always doing. If you’re looking for traffic – use website clicks, if you’re looking for conversions (which in this case you will) – use conversions objective.
The Facebook advertising landscape is getting more complex every year, and you need to stay on top of your game to compete. You must stay up to date with all the changes to the platform and the actual ad algorithm in order to get the best results from your advertising efforts.
You also have to know your numbers – not just Facebook ad stats but your full-funnel metrics, in order to advertise profitably. Without knowing your customer LTV, you can’t know how much you can pay to acquire a customer.
On top of that, you have to understand that you’re marketing to people and that old-school marketing concepts and truths still apply – a lot of the times the changes that will bring you the best returns are changes in the way you speak about your products or services.
Growing your online course/membership business to 7-figures and beyond is possible. You just need to dive in the deep and find out your unique formula.
If you’re already advertising on Facebook/Instagram and want to scale your ads to $3k+/day, we can help.
We’re going to talk about your business, what you’re currently experiencing with your ad campaigns and how to improve them.
At the end of our 30 minutes together, if you meet the criteria we might offer you to work with us.
The call is 100% free and no strings attached.