Normally, in order to get low cost leads from Facebook ads there are a number of factors that come into play. These factors will likely determine your average cost per lead. Cheap lead costs means more leads.
The most important factors that we have found were, Click-Through-Rates, Competition, and your Facebook Appropriate Offer.
High Click-Through-Rate (CTR)
Click-Through-Rate or CTR is the average percentage of clicks you are getting on your ad out of 100 impressions. So for example if you have shown your ad to about 100 people, then if you get 4 people to click, that would be 4% CTR.
Above, you can see that this client's CTR is roughly about 9%. Which is extremely good. By having a high CTR her Cost Per Click (CPC) is roughly only .02 cents per click. This allows her to have much more leverage and acquire leads at an incredible cost.
See on the far right her Cost Per Conversion (Cost Per Leads) results in about .28 cents per lead.
With only a small budget of about $5/day she can get roughly 17 leads a day.
Low Click-Through-Rate (CTR)
If your CTR is very low. That means nobody hardly is clicking your ad must less signing up. This will result in a very expensive Cost Per Click, which results also in a high Cost Per Lead.
In the image above this client had a CTR of about 1% to 6%. However 6% is pretty good that 1% needed some work. Thus, it gave this client a 0.39 cent cost per click.
This higher cost per click resulted in a much more expensive cost per lead. The lead cost were .58 cents per lead.
Still pretty good because it hit under the $1 mark, however we still like to maximize the best results out of a campaign and try to get those lead costs down quite a bit.
What Determines Click-Through-Rate
With Facebook, there are so many things that come into play but the biggest results of a bad performance of an ad campaign is Click-Through-Rate. If no one is clicking the ad, how can you expect them to sign up?
What determines a good Click-Through-Rate 80% of the time is the image. The image plays the biggest part in why people will click or even notice your ad. 9/10 people won't even read your ad, they will scan it, and look at the picture. That is the reason video ads are working extremely well with Facebook now.
Notice how Ad# 2 was a much more better CTR than Ad# 1. So what Facebook did was show Ad# 2 more to the crowd. Facebook tends to cater to the better performing ad, so it kinda helps us get more cheaper clicks. In most cases they do a good job but there are sometimes they may cater to the wrong ad because the first 1,000 impressions that gave us our first lead can sometimes be bad click to a bad sign up.
It is important to test several ad images, and designs to see which creative would perform the best to your individual market.
Now, when we talk about competition we are not talking about the gym down the street from you, or the next PT offering the same services. We are talking about the pizza shop, the video store, the Burger King, the hotels in your area.
Anyone who is competing for the news feed placement with Facebook ads is considered your competition. Therefore you guys are fighting over the bid price for top placement on Facebook.
So with that being said...
If you have a ton of competition doing Facebook ads in your area, you can expect your lead costs to be a little expensive.
A Great Way To See If You Have A Ton of Competition on Facebook
- Select an audience in your area, and do not select any interest, just select age group and gender.
- Scroll down to Optimization & Bidding.
- Select Link Clicks to Your Website
- Then click Manual
- Suggested bid: says $1.06 (see below)
- Now select the next gender, & age group (female for example)
- Select Link Clicks to Your Website
- Then click Manual
- Suggested bid: says $.92 (see below)
So what that means is it is cheaper to target females than males because the competition is less. The suggested bid decreased therefore lesser competition fighting for placement on the newsfeed.
You can't really make any changes to your competition but in order to be on top and relevant to your users, you are going to have to give them an awesome image with an awesome offer.
What we mean when we say Facebook offer is, 28 Day Kickstart, or 12 Week Fit & Lean Transformation Program. These are one of many Facebook appropriate offers. You are promising the users that they will get a specific result in a specific timeframe.
Be careful with that word... Promise...
But likely an appropriate offer would be lose "up to" 10 pounds in the next 12 weeks while feeling great. This would be a basic appropriate offer. You are not promising they will lose that much but you are stating that they can lose up to that much if they strictly follow your system.
Likely we have seen on Facebook and managing hundreds of ad campaigns with our clients that your Facebook appropriate offer is IMPORTANT!
The two most important key things we have found that have worked best for our clients in the fitness industry is:
1. A Specific Result (Lose 10 pounds, drop a dress size, Blitz Fat)
2. A Specific Timeframe (28 Days, 12 Weeks, 8 Weeks, 90 Days, etc.)
The timeframe gives the users a sense of accomplishment. One of my friends, Bree from the Betty Rocker, stated to me that "when she started posting images and videos of her with the calendar, they were the ones that got the most hits, and engagement.
People want to know what they can accomplish in a specific timeframe, so however our ultimate goal may be to upsale them to a 6 month or 12 month commitment.
It is important to understand that we need to offer them a "micro-commitment" first, then upsale them to a macro-commitment on the front end, and back end of the program...
Putting It All Together
If you put together the perfect offer, and hit your ideal targeted audience 9/10 you will be hitting that nail on the head!
Then the other factors include a good image, the right offer, the right targeted audience, and the amount of competition bidding on the newsfeed.
Build Trust First!
If you have one of those non responsive markets, and the competition is quite high. Likely no matter what your click costs are going to be expensive following high Cost Per Leads. If this happens the best thing for you to do is to follow our AIDA formula. This formula will build trust through giving content, and engaging the audience with your brand. They will start to trust you and read more of your content and watch more of your videos.
After the correct amount of social proof, and testimonials from previous clients, that CTR would likely increase therefore Lead Costs will be a lot more cheaper due to the fact that the audience is more familiar with your brand!
A More Simple Way To Put It
Here is a more simple way to put it...
- If you are not getting any clicks on the ad, then your offer, audience and/or image could play a factor.
- If you are getting a ton of clicks but no one is signing up, then your Landing Page could be the issue.
There are other things that could affect your Lead Costs but these are the most common that we have seen...