Service-based advertisers, like (Web-Design agency, Digital marketing agency) achieve their best CAC (Customer Acquisition Cost) by turning their direct advertisement system to a multi-step funnel.
Article Includes
What is CAC in Advertising?
It mean Customer Acquision Cost. I.E, It Refers to an avg. cost to achieve a customer throw advertising. Here are some example math:
CAC = Total marketing Spend ÷ Total Number of Customers
Let’s say, an advertiser spend 1000$ and get 7 Customers.
So, his CAC is 1000 ÷ 7 = 143
If You Spend 500$ and achieve 5 customer, you acquisition cost will be 100$, if you get 2 customers, your per one customer aquisition cost will be 250$.
How much CAC is good?
Well. It depends on product or service value and sometimes its about the lifetime value.
Industry avg. is:
If the service is a one time purchase (Like website redesign or advertisement setup), then customer acquistion should be 30-40% of product value.
Or
If the service is going to be recuirring (like website maintainence or advertisement campaign), then 60-100% is quite normal. Because its about the lifetime value not the first month.
The lower customers you achieve with the same amount, the higher your aqcuistion cost is.
So, as an advertiser, your goal should be minimising the cac and maximizing the ads spend.
How service businesses maximise their Ads?
Service based businesses are mostly medium to high ticket sales. And for those kind of sales, Customers requires trust + hot connection.
The reality in service business is, No Customer never buy something by watching a good ads. No matter, How good the ad copy is!
Because trust is not built in a single time or a single video or a single ad.
Also, advertisement platforms has a barrier which is you have to pay money for every time you show the ads to your impressions.
And an analysis says that, most of the time in service based businesses, users customer acquisition cost might reach 90-300% if they try to sell something in the ads. Which is absolutely the baddest result
Question: how can service-based advertisers actually reduce their CAC without cutting ad spend?
Answer: A Multi-Step Funnel.
Focus on the Image:
The image shows the actual real most successfull campaigns workflows for especially service based businesses. Which could make atleast a warm even, even if the connection dosen’t convert into a sales in the campaign. But, this is still a warm connection. In this stage, he knows you, you knows him.
This strategy includes Ads Copy → Landing page → Value with email → Trust Building → Call or meeting
While this funnel seems obious which actually is. But in the detailed context we would know its not.
Funnel for service businesses
A funnel is an artifact which bridges the gap between Ads to sales. For product based businesses, its comparatively shorter which is actually reasonable, but in service based businesses. This artifact is bit longer. As we have already mentioned, to maximise the customer acquistion cost, We need this.
Because customers don’t buy anything in the first moment especially if this is some sort of service like Web design, marketing, consultation, automation, done for you service
So, why this is an artifact?
Because, Every funnels don’t work. It requires hand made strategy.
Our funnel: Ads Copy → Landing page → Value with email → Call or meeting → Sales
Here is our specefic working funnel with detailed ideology and practicals:
1. Ads Copy for the free value
A good ads copy is the first step of a funnel. To succeed on the campaign It requires service business answers of some questions without doubt and hestitation:
- Who are you (ex. Web developer, Seo Expert, Digital marketer)?
- What is your service?
- Who are your ideal customer and predict their persona
- What exact result they get by taking your service?
- How the result of your service looks like in their own language?
- What you can give them for free (not a call) regarding your service?
It is very important for the upcoming step. - Whats your budget for 1 client acquistion?
for example answering them:
I am a web developer, my service is website redesign, My ideal customers are local cleaning businesses, Its a website redesign service, but for them its a conversion growth + trust building, I can give a free pdf about “How to optimise growth by simplifying the website”. And my budget is 70-100$ per customer.
Everything is clear, but in this strategy, the catch is you don’t create ads copy for your service, but for your free value. Yes, you have to lose money on giving free value to your users.
But you shouldn’t just burn the ads, you should consider some scracity + value in the copy.
It could be anything, Video or Image, but a video is much preferred for clarity and tone.
Just look at the copy, Simple but beautiful enough to grab some users. Actually you should specefy more within the ads. Just Use your best creativity to optimise the ads for the free value you can give.
Think of it like a magnet to grab some leads, You though it exactly right. It is the lead magnet.
2. Landing page specefied to the free lead magnet
In your ads copy buttons or link places, Attach a link of the landing page specefically build and designed for the book with some more details, some facts, infographics, offers, videos, and scarcity absolutely about the free avability.
Its not appropriate to bloat your page with texts that user confuse and don’t understand this within 3-5 second.
So, You should keep it clean, Simple, Organised, Structured.
Actually a landing page for specefically service based businesses requires a lot of strategy, which is not possible to cover in this short tutorial.
But you should optimise the landing page with an email form to let users get the book. Thats the final thing. If you can do this even with a very simple page, thats ok. But it’s not that easier.
PageQube is one of the most affordable and easy to integrate landing page builder from ads copy to email sequences and booking. You could consider PageQube.
But there are some other platforms just like ConvertKit.
When user gives their email, these platforms especially PageQube Helps you automate the delivery of the free lead magnet.
The biggest value from a landing page is its remove very unqualified leads who barely shows interest, just click to explore. That way only semi warm connections are there.
3. Nurthering the semi-warm connection by Email
With the ads copy and landing page optimisation, the thing you got is just some users emails.
Even in the sequence, You can’t just talk about the sales. From the value you given him, Within every 2 days, Send him a sequence email with some facts.
Track the email open rate and if there was link, the links open rate.
You just started nurthering your semi warm lead.
If you see the open rate seems quite interesting. Hell yeah!
Your service based business build the trust in the user’s mind you always wanted to build.
They are now your warm connections, but not hot.
To make the connection hottest, we need one more step.
4. Book meeting with your warm lead
In this stage, he believes you as a hell expert in your service or topic. When you send your lead a personalised meeting link with a problem solving quote. just like:
Hi Name, Saw your cleaning business showing interest in growth with website. Also checked your website, Let’s discuss your problems personally 1-1.
Here is the meeting link, https://meeting.link Or
Which time slot is great to you, Sunday 5 PM or Monday 12 PM
The chance of attending the meeting is more than 34% which is a lot.
But, everyone accepted the meeting will not attend. Consider a meeting alert or rescheduling.
And you can do all of the things within Calendly or Cal.com.
In the meeting, most important part is let your potencial client tell his problem.
and then show the solution in his language which is not beautiful website, its client and growth.
In the meeting, show some real of made up case studies and demos and growth dashboards.
Manipulate with your words within the meeting, not directly, but strategically.
Ask him if he needs now or he needs some time to decide, mostly if he is interested and your communication is master level. You could see some positive signs.
Don’t negociate too much, it reduces the value of your expertise. There are some wordings in client communication helps a lot. You need to find them out
5. Sales and Follow up
If he agree, then make the sale proffessionally. Take upfront as you need, keep contracts and accept payment and keep invoices for the risk of chargebacks.
If he don’t agree or show some lower interest. Follow him up with a great offer. Continue the connection.
The hottest connection is a value even there is no sale.
Conclusion
To minimise the CAC (Customer Acquistion Cost) in your service-based business advertisements, using this kind of strategic long term funnels are important.
And never try to sell directly in the ads, it will make you CAC more than service price most of the time. But, yeah! you could actually implement your creativity in your business funnels.