How We Scaled From $29K/mo Revenue @ 1.8 ROAS To $221K/mo Revenue @ 2.02 ROAS
The following case study is for a low ticket digital product in the coaching/consulting space.
To respect our client’s confidentiality request, we’re unable to reveal the brand name and adverts. Unfortunately, we’ve had many competitors copy our ads and funnel.
Winners innovate and losers imitate.
So aside from processing fees/refunds, and our commission – the profit is simply revenue minus ad spend.
Before us the account was only spending around $500/day at 1.8 ROAS, so I’ll explain what we did to scale it to over $200K/mo revenue at 2 ROAS.
1) Setting clear ROAS targets
The first step to scaling Facebook ads and growing your sales is to do some initial groundwork and goal setting.
After crunching our client’s numbers and analyzing previous attribution lift on the account, we came up with the following targets.
Target ROAS: 2.0
Breakeven ROAS: 1.21
Minimum acceptable ROAS: 1.5
1 day to 7 day % ROAS lift = 12%
1 day to 28 day % ROAS lift = 16%
That means if we hit 1.73 ROAS across the account today, it’s very likely if we look back at the same day in a month, we’ll hit 2 ROAS account-wide. Facebook is the primary driver of sales, so we report off a 28-day click 1-day attribution window.
Getting clear on your ROAS targets allowed us to scale faster as we’ve reversed engineered the numbers to know exactly when to step on the gas and spend, and when not to, rather than just waiting around to hit our account-wide ROAS before scaling.
In the spreadsheet screenshot provided, I’ve shown how we work out our targets based on different campaigns and time frames. We just slot these numbers into our automated rules to ensure unprofitable ads never overspend and profitable ones are scaled to increase our overall profit.
Since we’re selling a digital product and it’s just one offer + upsells, we can use a single account ROAS target to base our decisions off. We have different ROAS targets set for different campaigns & timeframes, so we know when not to pause ads prematurely, but also know when we can scale hard and bank on sales coming in beyond day 1.
On the other hand, it’s important to know your day 1 ROAS. When working with smaller bootstrapped companies, we want to ensure we’re profitable on day 1 – for cash flow purposes but also to ensure we’re not wasting too much time and ad spend before knowing if a strategy is working or not.
Therefore it’s important not to have all your ads meet a single ROAS target, but have different targets based on different products, time frame, campaigns & budget splits.
2) Account Structure
Previously this account was just running prospecting ads. When we took over, we implemented a full-funnel account structure, meaning we also run ads to convert engagers and site visitors – whilst also adding in creative testing campaigns. This ensured we were able to maximize sales from all visitors at different stages of the customer journey.
3) Creative Testing
4 months into running this account, we tested 131 individual creatives. That’s around 8 per week. They vary from:
- Images with clear value propositions on them.
- Videos showing inside the course, and what customers will get.
- Reviews from customers, taking their feedback and using the screenshots of the review on the creative.
Through our testing and scaling, despite testing lots of different creative concepts, we found that what performed best were image creatives that were straight forward and clearly showed the value proposition and modules of the entire course.
Because we tested many creatives and found a bunch of winners, we could scale aggressively as soon as we were hitting our account-wide target ROAS. We were able to maintain our target ROAS up to $5800 per day of spend.
If you’d like to scale to $10K+/day in revenue, you need to ensure you implement a systematic and frequent creative testing process.
4) LTV Adjusted and Broad Audiences
Our best audience was an LTV adjusted audience. It’s a bit of a hacky tactic, but it worked wonders. Essentially, we took the customer list from the client and blew out the LTV values.
So for our top 10% customers, we increased their LTV by a factor of 10. For the bottom 10%, we decreased it by a factor of 10.
For example, if a high-value customer spent $100 in its lifetime, we edited the list to show their value is $1K. If a low-value customer spent only $49, we marked their value at $4.9.
We prefer to focus on marketing fundamentals as opposed to tactics, but we gave this a shot and it turned out to be our best audience on the account. The theory behind it is Facebook is going to prioritize delivering ads to audiences similar to your best customers who buy upsells/repeat buy.
Our second best audience was a broad audience (18-65+ MF, no lookalikes or interests). We just let the creative, angle and Facebook’s algorithm pick out people who are most likely to purchase.
5) Be proactive in comments
Our client is very proactive at answering questions in detail on the ads and handling objections in the comments section of the ads, so we were able to convert customers who were on the fence / had a couple of specific queries that needed addressing.
We noticed a lot of previous happy customers, started to leave positive reviews on the ads. So we relaxed the purchase exclusions from lifetime to customers in the last 60 days. That way, happy customers would continue to leave positive feedback to keep building more trust when new potential customers saw the ad.
Some of the best hooks, headlines and messaging on the creative were common quotes/objections that customers had before buying the coaching product. We have the creative showing the value of the product, but the copy to hook readers in, eliminate objections, paint a picture of what could happen to their business if they bought the product, and then anchor the low price to the value.
If we could boil it down to just a few needle movers that turned the account around, it would be having a systematic creative testing process, proactive focused account management and having a team working on the account who are experienced in scaling.
Previously our client was running the ads herself, and she ran into a bottleneck where managing her ads was taking time away from developing and improving her products and building her business.
If you’re running your ads in-house or having to spend valuable time managing an underperforming agency, now may be the time to remove this blockage to focus on building your brand, whilst you have a team of experts working on growing your sales. We are expensive to work with, but the opportunity cost of not working on your business can be greater than our expense.
If this sounds like you, feel free to book a non-obligation discovery call with us and we’ll see if we can help grow your business today.