• In this video, we walked about setting a sustainable cost target. How much is the most you're willing to spend on a lead, an application, a call, a purchase, someone who buys an up, sell someone who buys a high ticket program? This is important to have before you ever start the campaign, or maybe even it's something that you consider before you scale, because a lot of you when you were collecting that data and you are running ads, you don't have this number set whatsoever.

• If you're in e-commerce, you can figure your cost target out pretty quickly because you know, how much are you charging for the product. You also need to keep in mind, what is my cost of goods? How much am I willing to lose while acquiring data? And then where am I willing to spend up to so that I'm not losing any money at all?

• When advertising that product, especially if you're getting upsells and down sells in your funnel, generating physical product sales, your average order value is going to be much higher. So you can afford to spend more to acquire a customer. In some industries, you can overspend and you'll lose money in the first month, but you'll make it all back in a month or two. So make sure you figure out these numbers before you scale. And if you don't have them before even starting ads, you need to figure out what's the most you're willing to spend. 

• You also need to look at how much you're charging for something on the backend. Am I charging $300, $5,000? The higher the cost is for the service or product the more leeway you have with the leads or the phone calls or the applications being generated. You can always adjust it later, but it's something that you need before truly taking your ads to the next level. So make sure you come up with that cost target. So you can be as effective as you need to be.

David (00:01):

Setting a sustainable cost target in this video. We're going to be talking about just that. And a lot of you, when you go into campaigns, you're not thinking about what your baseline number is going to be, whether it's a lead or a purchase or an application or a phone call. And the base is simply the most that you're willing to spend to acquire this specific action, right? How much is the most you're willing to spend on a lead, an application, a call, a purchase, someone who buys an up, sell someone who buys a high ticket program. What's the most you're willing to spend. This is important to have before you ever start the campaign, or maybe even it's something that you consider before you scale, because a lot of you, when you were collecting that data and you are running ads, you don't have this number set whatsoever. For example, when I first ran ads for webinar, I would oftentimes

David (00:52):

Try to go for the cheapest leads. I need a dollar, I need $2, $5, But I never realized that some of the people I were running ads for could afford up to $15 a lead and still be profitable, very profitable. And I left a lot of money on the table by not running ads that were at seven, eight, $10 a lead because they were audiences. I thought that weren't going to work when in reality, they were still within the line of where the client could afford those leads in order to obtain some purchases and a lot can be done even with your own advertising. So make sure you have in mind, what's the most you're willing to spend. And of course, if you're in e-commerce, you could figure that out pretty quickly because you know, how much am I charging for this product? What is my cost of goods? How much am I willing to lose while acquiring data? And then where am I willing to spend up to so that I'm not losing any money at all.

David (01:42):

When advertising that product, especially if you're getting upsells and down sells in your funnel, generating physical product sales, your average order value is going to be much higher. So you can afford to spend more to acquire a customer. Some industries you can overspend and you'll lose money in the first month, but you'll make it all back in month, two and beyond. So make sure you figure out these numbers before you scale. And if you don't have them prior to even starting ads, you need to figure out what's the most you're willing to spend. And keep in mind when it's coming to lead. Gen various industries have different numbers and most cases going to be five to $10 a lead, some industries can be upwards of 20 to $40. And then you look at how much you're charging for something on the backend. Am I charging $300, $5,000? The higher the cost is for the service or product. The more leeway you have with the leads or the phone calls or the applications being generated. So when you were doing so when you're figuring out this metric stick to it, if a baseline, it doesn't mean you have to keep it. You can always adjust it later, but it's something that you need before truly taking your ads to the next level. So make sure you come up with that cost target. So you can be as effective as you need to be.