hey everyone welcome to another episode of my
podcast today we're going to talk about how to select a smart budget for your paid ads now look
budget is something that I get asked about a lot and I feel as though when people ask a question
about budget how much should I spend on my ads they're looking for some kind of just flat blanket
answer like $500 $1,000 um and that that can be okay um you could work with the amount of budget
that you have spare uh in your earnings that you'd like to re
invest into ads but there's actually a
more deeper way there's a more in tune way to do this that is in tune with the cost of selling your
product or your course and I'm going to break down how you can use your stati statistics the data
the numbers about how your course is selling in order to actually work on a paid ads budget that
works so much better and makes more sense for the cost of your program so the first and probably one
of the most important numbers to look at is your conversion
rate now if you haven't heard of this
before your conversion rate is the percentage of people who actually visit your website and go on
to make a purchase or opt into your lead Magnet or sign up for your course so the the rate is
a percentage out of 100 people so if five out of 100 website visitors um make a purchase or
grab your freebie the conversion rate would be 5% your conversion rate with Organic sales can
help inform the conversion rate for your ads it can also act as a warning telli
ng you that maybe
it's not a good time to run ads at the moment a healthy conversion rate should be at least 2% or
above preferably above if your conversion rate for sales for signups is way under 2% I would
consider that a warning sign and I would check on some other things before you decide to run paid
ads for instance I would consider maybe seeing if there's something funky going on with your website
maybe uh it looks fine for you on your computer but you've got traffic coming from mobil
e phones
and the people using their mobile phones may be may be struggling to uh get the gist of your
page and actually find what they're supposed to do if it's not the website and you're pretty sure
that your website's working fine something that could be influencing your conversion rate is uh
actually Market fit uh if you have got something that you're really gung-ho about selling um but
you're not sure if people want it and you've put some offers out there and you've done it for a
very
long time and you swear that you've got a good website and your conversion rate is still
below what it should be then yeah I'd probably take a step back and re-evaluate uh the market
and the product that you're selling um or it might not be that bad it might just be as simp as the
the value that you're communicating through your marketing materials and your website that you know
a few simple word changes could make or break uh a person's realization that what you're offering is
actually the
thing that they want to buy and are ready to buy right now now there are some other
important considerations that we need to look at when we're determining a budget for our ad spend
now one thing that is really good to have is a goal a revenue goal if you know how much revenue
you'd like to make this can help so much when it comes deciding when it comes to deciding how much
to spend on ads if you've also already got a good idea of what quantity you can sell in a certain
time period um and
you sort of got a feel for the revenue you can make per each item sold or per
each course sold that can sort of help us figure out how much you'd like to spend to capture
a lead and a cost per lead is something else that could actually help us determine how much
to spend on ads for instance in a lot of cases uh many companies will spend uh a few dollars just
to get somebody to sign up into their email list their email sequence and get them into the lead
pipeline for a lot of businesses this
cost could be something like $2 per lead that's actually
pretty reasonable if you spend $2 in ad spend to get somebody into your email pipeline your email
funnel that's pretty brilliant otherwise depending on how much revenue is made per item sold um you
could certainly reach for a slightly higher cost per lead especially if it's one that sort of
also takes a bit more time and consideration um certainly uh things like Commodities um and
novelties are very easy to sell and you really don't
need to put people in a funnel for that but
when it comes to uh hight touch things such as uh courses group programs uh Professional Services
where you need someone to work with your money or your life um those sorts of things it can be
you know obviously you charge more cuz you've got more skill and expertise but also um it does make
sense to invest a little more uh to get a lead in your pipeline uh because you will need multiple
touch points as we say multiple um contacts with them they'l
l need to see your ads several times
they'll need to see your content several times um before they feel confident and ready to take the
next step with you so I'm really sorry that this isn't quite the blanket answer you were looking
for Like O just spend $100 a day or $5,000 a month like really I can't like just give you a answer
off the bat without knowing more about uh your revenue and your conversion rates and that data
if you can collect that data first if you can get a good conversion
rate if you can start measuring
those things then we'll get a better idea of how much money to actually invest in your paid ads now
I'd also like to tack on a little side note here as well if you're looking at getting somebody
to manage your ads for you that is also a cost to consider um when it comes to your monthly
investment in ads and look these can sort of average in the you know $1,500 to $2,000 to start
with just to get somebody to manage your ads so I would strongly advise that you
be spending more
on your monthly ad budget than than what you are uh in having that person manage it for you if you
feel as though you can't manage a $1,000 a month management fee uh for somebody to help manage your
ads then you're uh probably not ready to have that sort of help besides which once you start sort of
spending a lot more money in your ads it does kind of make sense to have extra help there uh managing
things keeping an eye on stats making sure that the tech is working Etc and
so forth but yeah
coming back to the previous point and the thing that I really want to drive home is here is that
you really need to be in tune with your numbers uh what the revenue is um per item sold how many uh
items you can sell in in a in the time span in the life cycle in your funnel um in a month you really
need to be in touch with those numbers because if you're not in touch with your conversion rate
or your cost per lead or things like that um yeah we're going to have a difficult
time figuring
out how much to invest in your ads but on the flip side if you at least know your conversion rate
and have a number in mind that you're happy to spend in order to acquire a new customer or get a
new lead into your funnel then yeah that actually goes a long way in determining how much to spend
on your ads anyway I hope this information was useful and if you've got any questions to do with
paid ads please don't hesitate to reach out to me this is what I do for a living and I rea
lly enjoy
helping business owners grow and succeed online
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