Introduction to the Marketing Lyfe Podcast Ep. 24
Episode 24 of the marketing life podcast. This is Taylor Timothy, your host. And today we’re going to go over some paid advertising Kpis, also known as key performance indicators. So what key performance indicators are our clicks, views, different things like that. So you know how to make adjustments to your ads. We’re also going to go over the lifetime value of your customer. We’re going to go over how to understand and target better on Facebook, understand the KPIs of your actual campaigns. So let’s not waste any more time and dive right in.
The Lifetime Value of Your Customer Examples
Okay? Going over the lifetime value of your customer. So what do I mean by this? What you need to know about your actual customers is how long the customer is going to stick around. So I’m going to give you guys three examples. We’re gonna do an example of a movie theater. We’re going to do an example of a treatment center, and we’re going to do an example of a real estate agent.
Movie Theater Example
So diving into the movie theater, I’m going to make assumptions about this particular client. I’m going to assume that this guy lives next to this movie theater. Uh, this guy goes to the movie once a month from 30 to 75. So he’ll see about 540 movies. So this person is going to buy a ticket. They’re going to buy a drink, they’re going to buy popcorn. So we’re just going to assume this person is going to spend $30 every time that they go to the movie. So in the lifetime of this customer, he’s going to spend 16 grand to go to the movie. So from an online marketing standpoint, I should be able to easily spend $1,000 on a a month on a campaign to obtain a customer. So movie theaters a little more tricky, obviously because it’s a fixed location and things like that. But if I can guarantee, if I spend $1,000 every month to get a new customer coming through the door, that’s going to stick around for that long. Why not spend 1000 bucks a month on online marketing? So that’s just the example of a movie theater. Obviously every business is going to vary, um, in these examples. But these are just some numbers that I’ve come up with.
Treatment Center Example
So the next thing we’re gonna go over is a treatment center. So I’m looking at like an addiction treatment center. Um, we’re just going to say the person’s going to stick around for nine months. So they’re going to come in, they’re going to get treatment and they’re going to leave after nine months. The treatment center on average for most treatment centers I’ve talked with, they charge anywhere from 5,000 and I’ve heard all the way up to $40,000 a month. So the lifetime value of this customer is $180,000. So from a paid advertising standpoint, we could easily 20 grand, we could spend 20 grand to obtain this client and break even on that first month and make eight months worth back. So I would recommend, you know, in this industry, you guys have got to be spending a lot of money. If you guys are in the addiction treatment center industry, you know, to obtain a client, you can spend a lot to easily make a lot of money. So that’s the addiction treatment center example.
Real Estate Example
We’ll do a real estate example now. So my assumptions here are the person’s going to buy one house in his lifetime, the cost or the average house. Um, I googled it across the United States, it’s 200 k and the agent across the board in most in the United States makes around 6% off every cell. So the lifetime value of this customer is $12,000. So he can go knock doors, whatever to get a cell, but he’s going to make $12,000 when he sells his house. So if I was a real estate agent, personally, I would be spending a thousand to $3,000 a month easily if I can guarantee you to get one customer from my paid advertising efforts. So knowing this about your business is super important.
Some ways that you can figure this out obviously is one, you have to figure out how much your product costs. And then two, you have to kind of figure out how many repeat buyers you have. Then you can go ahead and determine the lifetime value of your customer. So in the long run, I highly recommend if you don’t know these numbers, go figure ’em out for your business. If you’re an online marketer, go figure these numbers out for your clients because then it can help you scale your actual campaigns.
How to Target Your Audience on Facebook
So just to like a little review on, um, how to target on Facebook. You know, you can geotarget, age based target, gender, target language, target, relationship based target. You can educate based on that. You can target their work, their parents, if their parents, how many kids they have essentially not how many kids. But um, you can target age range is of those kids that the parents have. Um, you can do life events, you can do interest base. Honestly guys, this list is huge. You need to dive in there and go and go figure it out for you.
Um, but I’m going to give some advice, uh, for fix businesses. So if your fixed business location, one of the best ways obviously is you can geo, you know, you can slam a radius over the top of your business and figure out how, how wide of a radius he need to go to, you know, to get more deals. So a test you could run is 20% off to get more traffic to your business. And you can go ahead and test that. You can test with the coupon code or show the ad or a screenshot of the ad and you can track this for your fixed business. If your online store, something you guys can do obviously is your options are actually endless, you know, but I recommend that you keep running your ads with at least an audience of a brown 2 million. You got to give Facebook room to work with. Um, when targeting on Facebook. Um, you got to trust in the system. I don’t, I hate saying that because it’s a computer, but these APIs out there are just getting smarter and smarter and smarter. So trust in the system. Uh, but keep your audiences around 2 million. I’ve found that you get great results doing this.
Key Performance Indicators for Your Business
So diving into this next section of your KPIs for your business, this is one thing that is super important that you also know. So things you guys need to take into consideration when doing paid advertising is you have to ask yourself, is your list actually growing? And what I mean by this is your email list actually growing because if your email list is growing, one of the big things is your list generates cells. The more the bigger the list, the more sales you’re going to generate. I guarantee this.
Key Performance Indicators Example
So one client I’ve worked with, we’ve grown their list from just 500 cells to a thousand cells and we will, it’s happening is we’re starting to create loyal fans. So make sure guys that your list is growing. That’s one thing you need to take into consideration when doing paid advertising. The other thing you need to take into consideration is our cells coming in. So the reason why I bring this up is unfortunately Facebook can’t track every little thing yet. I, I’m guessing here soon it will be able to track everything. But one thing, sometime from my understanding, what can’t happen is let’s say your wife sees or husband sees an ad on their phone and then they go over to the computer where the kids logged into Facebook and purchase the ticket by just entering the URL. The thing is, from my understanding, Facebook can’t fully track this yet, or if they see the ad, they don’t click on it, they pull it up on their phone and then purchase.
They might not be able to fully track that. Yes. So realize that you know, traffic can’t fully be tracked yet. So you have to kind of take into consideration, take your ad, spend as a whole and then figure out and crunch your numbers. So make sure that you’re actually taking all cells into consideration with your paid advertising efforts. So that’s one thing I recommend is our cells coming in. Is Your Business growing? You know, if your business continues to grow, spend a little more and see if it continues to grow. Because sometimes you can’t fully track things. Just remember that guys, you can’t track everything. It can track a lot but not everything. And then the other thing you need to take into consideration is are you creating conversations? Are People Commenting, commenting? Are People sharing? Are they clicking on your content? If people are engaging with your content, you know, obviously things are happening. You’re doing something right. Are you getting reviews? Are people reviewing your product after they’ve purchased? Again, you’re doing something right. So those are some KPIs that obviously you need to take into consideration when doing paid advertising.
Key Performance Indicator: Cost Per Click on Social Media and Social Media Ads
These next KPIs I’m going to talk about are actually ones that for me, they work across the board. So we’re going to talk about cost per click. So costs per click on Google, on Facebook, it’s obviously going to Penn to depend on your actual industry. If you’re a lawyer, you’re going to be spending like anywhere from 50 bucks to 250 bucks a click over on Google. Now, on Facebook, you might be able to get a lot less cost per click down. You might be spending like one buck to maybe 10 bucks, um, for those particular ads. But for your industry, with cost per click, it honestly depends for your business.
But this next one, your click through rate. Now I’m not talking about like click through rate all on Facebook. I’m talking about click through rate, actually clicking on your ad and then I’m also going to give you guys a metric for Google paid ads as well.
Click Through Rate with Facebook
So click through rates on Facebook. They need to be higher than 1.56% or higher. If they’re lower, you’re going to notice that your relevant scores are getting lower on Facebook, so the higher click through rate, I recommend 1.56 or higher. If it’s lower, I recommend you change the copy, change the messaging, you change the targeting essentially each you’re going to change a lot of things to try and figure out how to get that cost per click higher. So I’ll repeat that one. Facebook 1.56% or higher,
Click Through Rate with Google Paid Ads
Google paid, I recommend that your click through rate should be at around 6% if it’s not higher than 6% there’s a couple things you might want to change and that might be the copy or you actually might need to increase your bids. And the reason why is you’re going to need to boost up your, your quality scores. So you’re popping up higher in the ranking system. So Google paid, I recommend 6% or higher across the board. If you’re not getting this high, then figure something out how to get your click through rate higher. More than likely you need to change your copy.
Facebook Delivery Ads
The next thing I want to talk about is delivery. And this goes for Facebook only, but if your delivery is above four, you need to change out all your ads because your audience is senior adds way too many times. And so how you see this inside of your ads manager, you hit the dropdown on the right hand side where it says performance and you can go to delivery and it will show you how many times your ads have been seen by that person. So if your delivery is for, it means that that person inside of that targeting metric has actually seen one of your ads four times. So I highly recommend going in and changing out ad copy imagery if you’re above a four.
Facebook and Google Paid Ads
So conversion rate, we’re going to talk about Facebook and Google paid. So if your ads are not converting around four to 6% you need to change him. You needed to do something different, you need to change your messaging, your landing page, like you’ve got to change a lot of things. So I recommend that your ads are converting around four to 6% if you’re doing that, you’re doing a great job. You know, talking other ad placements, depending on your placements as well, that can determine what they should be converting at, you know, display ads, right hand column ads in story ads, your conversion rates might be a little bit lower, but I recommend being around one to 2% that should be your goal.So again, four to 6% for, you know, search for in the news feed, other placements, you know, it can be lower like one to 2%. It should kind of be your guys’ goal. So your cost per conversion for cold traffic.
Taylor Timothy: “At this point, you should be seeing results.”
One thing that you guys need to realize. If you’re running ads to new people that have never seen your company in their entire life, if you can spend let’s say 20 bucks to get them in break completely, even in that first month, that is a huge win and success. A lot of companies go into the hole to get a buyer for the first time and then they’re hoping to make money back in the long run. So for cold traffic, what I mean by cold traffic is completely new audiences. Again, if you can break even that first month, that is a huge win and a huge success for remarketing.
Your cost per conversion, you should start making be making a little bit of money off of these ads at this point. If it’s a small profit, in my opinion, it’s a huge win. So let’s say our products, 40 bucks, we get a conversion at 20 the actual product costs us $10 to manufacturer. You know, we’re making a little bit of money up front with remarketing. So cold traffic, cost per conversion. If you can break even huge win remarketing, you should be making a little bit of money. If you’re breaking even, it could possibly still be a huge win. So quality score and relevance score. So with Facebook, I recommend your quality or relevance score needs to be six plus. If not, you need to go back to your image. You got to go back to testing and figuring out how you can boost that relevance score up.
It can be changing out your audiences, it could be changing out your headlines, your copy, the list goes on and on with Facebook, with Google paid, and we’re going to be talking about the search placement only.
Target Your Audience with Better Search Placement
If your quality score is above a six then again, you’re doing something right, your bids or right your placements. I mean your key words are right, you’re doing right, things on paid. If you’re below a six you need to maybe adjust your bids or you need to change out your ad copy or even possibly change it, changing out your keywords. So go in, figure out. But again, with Google paid, make sure it’s above a six. So next thing I want to talk about his view rate. So obviously we’re gonna be talking youtube here a little bit and Facebook here from my experience, if it’s above 10%, you’re doing something good.
Um, some things that you can do to obviously catch their attention with view rate is obviously catching their attention, like immediately waving at the camera. I’m having quick transitions at the beginning, adding captions as the video’s playing. These are some things that can help, uh, increase your view rate by recommend. If it’s not above a 10, probably go back to the drawing board.
Landing Pages for Your Website and KPI’s
So now we’re gonna talk of landing pages, some key KPIs for landing pages. So one thing you need to take into consideration is page duration. So on any page, if your duration isn’t above a minute, and my opinion, opinion, you got some serious problems, but you could essentially have two. One, your ad isn’t relevant to your landing page. So maybe your ad, you’re offering a free training and they go to a landing page and it’s your homepage and you’re asking them to call now.
So not making those things congruent. This can essentially cause problems with your, your landing page doesn’t have the info they are looking for. So kind of going back to that again, you told them they’re getting a free training, but now you’re asking them to call. Now you got some serious problems here. So page duration, I recommend above a minute.
Landing Page Bounce Rate
Um, the next one’s a bounce rate. So your bounce rate, you know, shouldn’t be higher than 75%. So what the bounce rate is is someone goes to your landing page and now they go to another page. So if they’re hitting your landing page, filling out a form and then going to your training or something on your website, your bounce rate is going to be lower, which is good if they go to your homepage, well, if they go to your landing page and then they leave, your bounce rates going to go up. So bounce rate means they’re looking at more pay. The lower it is, the more pages they’re looking at, the higher it is, the less pages they are actually looking at. So make sure your bounce rate is lower than 75%. Again, going back to your conversion rate on your landing pages, they should be converting around four to 6% that should be your target goal. And if you’re doing that, you’re crushing it.
So the one thing to wrap up this podcast, one of the big things you guys need to realize with Kpis is it could vary with your actual industry that you’re in. ECOMMERCE lead Gen type stuff across the board. In my opinion, everything should be converting around four to 6%. So again, just a reminder, take into consideration all of your KPIs such as email lists. You know, make sure the cells are coming in, take into consideration this podcast. Go back, take notes and if you have any questions about Kpis, feel free to reach out to me.
But that’s going to end episode number 24 so guys, thanks for listening. I hope those those KPIs help you guys. For me, I’ve been doing this for quite some time now and across the board, these are some KPIs that have helped me, you know, scale campaigns and know where am I, how I’m performing across the board. It doesn’t matter what industry. These KPIs for me have been very applicable across the board. So one of the things I want to tell you, you guys, again, my course is finally almost done though. I have one last section guys. I’m finishing up ad words. So everything else has done, the website is building out your website from start to finish is done. You know, Facebook ads, the creation, the whole thing with Facebook ads is done. The whole concept of everything else is in place. I just have to finish up ad words. I’m super excited. So if you guys have any questions, feel free to reach out to me. Hope you guys are crushing it. Go check out your KPIs and peace.