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3 reasons breaking even on your ad spend isn't a bad thing
Whenever a person is running ads for themselves or a client, they will usually target a positive ROI every time, and this is because they want the best results possible. This is pretty common when running a business since not many people are in this game to spend $100 and pull in $80 worth of sales. Losing money on your advertising campaigns isn't exactly what we are trying to do, but it's not always a bad thing if you start to look a little more into the details.
One of the main things people forget to factor in when spending money on advertising is their client retention rates. You could have a membership site that breaks even on its campaigns, but you're extremely profitable after a few months. How you ask? Think about all the people that stick with you for 6+ months and keep paying for their memberships. You're breaking even when you bring in NEW clients, and you don't factor in the returning ones when crunching most of the numbers related to ad spend. If you spend $1,000 to get 100 members to sign up at $10 each, you'll break even. If you keep about 80% of those members into month two and you're still getting the same conversions with your ads, you're not at 180 members, but you're still spending $1,000, but now you're profiting $800 that month. Your sales per customer will drop over time, but you should never forget to factor in returning buyers when determining if an ad is working or not.
Below are three more reasons you shouldn't worry about breaking, even when spending money on advertising.
You're Always Branding
When you are paying to send people to your website, you're getting them to notice you, and that's great branding if you can get them to come back and also if you retarget them. People don't always purchase from a business or website on their first visit; it usually takes a few times before they're comfortable with you, so don't worry if you're losing a little money on your ad spend. Get those people to keep coming back, and they will likely buy after they notice you're an authority.
You're Adding Client Emails to Your Lists
When you get a client's email added to your list by either getting them to purchase or having the sign up to your newsletter, they're giving you permission to remind them of who you are through their email.
There are companies that spend thousands each day to capture emails and start their advertising routine afterward. If you're getting emails added to your list, that's not a bad thing, and that's because you can get those people to come back from time to time and we all know that's golden
You're Still Getting Positive Reviews
If you haven't figured it out yet, reviews will boost your sales exponentially, and paying for advertising will get you in front of targeted people who are looking to buy. Encourage happy customers to leave you a review on the product they purchased or to leave a review on a directory somewhere online that always pops up when you type in "(business name here) review" so you're sure to get five-star quality words in front of potential buyers when they look you up
Whenever I'm running an ad, I will usually track everything I possibly can. I will watch to see which keywords are converting the best, what is getting people to sign up to my newsletters, and the paths people are taking before they make a purchase. I never worry about my ad spend, unless I spend a lot and make absolutely nothing, and that's because I can always market to the buyers as well as the people who are simply landing on my pages lol.
Thanks for reading