The problem with Facebook is reach.
If you have a 1,000 likes and post something, you might get 1-2% of your audience to see it when you post – that’s only 10-20 people.
If it’s eye catching and that small group of people likes, comments or shares, and then more people from your fan base will see it.
But if that 2% of your audience that sees it aren’t true fans, ignore it, or never like, comment or share anything… that’s usually where the story ends. Your post will be seen by very few people and it won’t lead to any sales for your business.
The alternative is to pay for your post to be seen by your fans and people similar to them. Not exactly the best way to make money though as even your fans seeing a random post will most likely not generate sales.
Facebook likes are great for bragging rights but they don’t make you money in the majority of cases.
Understanding Facebook Advertising
Here’s how to use Facebook to drive real dollars into your pocket.
The beauty of Facebook is that instead of targeting people actively looking for your product or service – we get to target them based on their interests, demographics and location.
While a plumber might not advertise their ‘emergency plumbing’ on Facebook, they can sure get a lot of interest with an annual membership that entitles members to 24 hour fixed prices, priority service and other benefits.
A good enough offer can grab your ideal prospects attention.
Like any marketing campaign though, we need to know the numbers. An unprofitable campaign is useless for your business.
Here’s what you need to figure out for your Facebook campaign:
- Revenue per transaction
- Target cost per acquisition
- Conversion rate
- Leads to make a sale
- MAX cost per lead
So for example… If we have a service that sells for $1,200 and it takes 100 people clicking your ad to make one sale then:
- $1,200 Revenue per transaction
- $400 Target cost per acquisition (3:1)
- 1% Conversion rate
- 100 Leads to make a sale
- $4 MAX cost per lead
This would be our baseline for a BREAKEVEN campaign. If we want profits, we need a better conversion rate, lower costs per lead or higher revenue per transaction.
Taking Facebook To The Next Level With Contests
While you can drive a lot of traffic to your offers through Facebook and generate a profit.
We all know that most people are not ready to buy straight away. Knowing this, let’s you take Facebook marketing to the next level.
Since people are not actively looking for your product or service on Facebook, it’s better to change the conversation from ‘Buy Me’ to ‘Are You Interested In X’. This is why Facebook contests are so powerful. You are finding people actually interested in your offer and getting them to promote you!
Facebook contests change how people engage with your paid advertising. This gives anyone interested in your offer a good reason to engage with you and let’s you capture their details.
Here’s how it works:
- Create a contest to win an offer related to your business
- Offer everyone that enters a special deal
- Capture everyones details and what they are interested in
- Encourage people that enter to refer their friends for a better chance to win
- Create communication specifically related to the offers they are interested in
- Make sales based on the special deal and follow up communication
That is probably a bit complex to follow… So here’s an example to make it clearer:
- Contest prize for winner: WIN 4 Free Tyres!
- Offer for everyone that enters: Buy 2 Tyres, Get 2 Free!
- Capture details: Name, email, phone number and what other services they are interested in – Wheel alignment? Alloy wheel refurbishment? New tyres?
- Encourage referrals: People most interested in winning refer their contacts to enter for a better chance to win
- Communication: Take advantage of your ‘Buy 2 Tyres, Get 2 Free’ before it expires! and information related to the other services they want from you
- Make sales: Book in people for their special offer over the phone and email
Now that we understand how it works a bit better. Let’s dive a little bit deeper.
Choosing Your Offer
Your offer is huge when it comes to Facebook contests.
A bad offer that nobody wants and you’ll get nowhere. While an offer unrelated to your business that is appealing means you’ll spend a whole lot of money for zero return.
Ideally you want an offer that appeals to your audience and gets them coming to your business to purchase from you.
Here are few offers that work:
- Personal training
- Spa package
- Dinner for two
- Teeth cleaning
- Hotel room
- Mobile website
- 1 hour consultation
All offers directly related to the business advertising. That means DO NOT give away iPads, an iPad has nothing to do with your business!
The Side Benefits Of Facebook Contests
When you do your Facebook contests properly there are a lot of benefits.
Instead of the typical Facebook contest of ‘Like’, ‘Share’ and ‘Comment’ on this post that fail miserably.
Facebook contests that get real traction result in:
- A list of people interested in your offer,
- The ability to nurture this list with specific offers they are interested in,
- People actively referring others to your contest,
- Brand exposure to tens of thousands, and
- A predictable campaign that you can use quarterly or annually to generate profits.
Realistic Expectations With Facebook Advertising
Depending on how your business operates – you might want to lose money or breakeven on the first transaction with leads you generate from Facebook. Why? Well, if it means you gain a customer that will bring in thousands of dollars over the coming months or years – then it’s a pretty good idea.
So you have to ask:
- What is the lifetime value of your customer?
- How much can you pay to acquire that customer?
- Do people actually want your offer?
- Is the audience large?
- Do the numbers work?
Without understanding these – you probably won’t get far with Facebook advertising.
So you really need to think about what campaigns have worked well for you in the past, what’s not working, who you are targeting, and what your target audience is interested in.
An offer that has worked for you offline will probably work on Facebook.
Realise, Facebook advertising isn’t magic though.
You should expect your Facebook advertising experience to be terrible for the first 30-90 days in most cases. Understanding how to manage your account, testing creative and letting Facebook optimise your campaign with data all take time…
To get the Facebook data you need, your advertising money needs to be spent (which is often 30-90 days of pain). This means small amounts of leads, investing small each day and then ramping up once the numbers make sense.
If you are going to be squeamish over not generating many leads or even no leads for a week or two while you spend your advertising budget, then Facebook advertising is not for you. Facebook advertising can mean a serious amount of time, money and optimisation to get the ball rolling.
Once you get that ball rolling though, the ROI you get from Facebook advertising is incredible and spending hundreds of dollars each day on Facebook will be second nature.
Have a few offer ideas that would work well for your business? Get in touch for a strategy session.