Local Service Business Achieved 3464% ROI With Facebook Lead Generation
For this local service-based business, I’ll need to keep their name anonymous due to the local competitors in the space. That said, this can be repeatable and highly applicable to lash salons, hair salons, gyms, fitness trainers, monthly home services, or any local business that has a customer retention of 12 months+ at $100+ per month (or similar) in revenue per client. It’s important to note that this service is a monthly membership-type business with packages between $100/mo and $397/mo, with the average customer coming in at $297/mo.
Humble beginnings for this one-man service
After starting from scratch in 2016, this business was a one-man service. The client was an expert in his field and had a strong background in sales, so both the service and signing on new customers was no problem for him. But his biggest hurdle had to do with marketing; it was simply not his forte. That’s where we came in.
From $0 in profit to 6-figures in only 2 years
After Tintle Digital Marketing (TDM) developed and began running a lead generation campaign, this zero profit business turned into a now six-figures thriving business! The owner was doing this on the side for a year and was able to quit his full-time job in 2017 so that he could grow this business even further. So, how did we bring in these leads to enable this incredible growth?
The right lead magnet to attract the right client
We first started with crafting the perfect the lead magnet for the business. It was originally a free, no commitment 1st service offer to get people in the door. A lead magnet must be irresistible, a no-brainer, and does not need to bring in a profit from the get go. In fact, if you focus on profit immediately, you’re less likely to create a successful campaign.
Why? On Facebook, people are not searching for your service actively. So in order to capture their attention effectively, you must offer an irresistible offer that they would have a hard time refusing. Even with luxury items and services, people love freebies and bonus! For this service, and for many monthly membership or subscription services, a free offer can do very well. As long as your retention is great, it should become profitable and you can do that by calculating the lifetime value of a customer.
For this client, the lifetime value of one of their clients is $3564 (1 year of the $297 service).
Audiences that will take action
After working out the appropriate lead magnet, we had to find the right audience. This involved having the client fill out a client avatar sheet in order to learn all about their target client. In-depth audience analysis, which involves client avatars like this, is an essential step in any ad campaign. This helps us determine the ideal audiences to begin targeting with Facebook ads, such as with interest, behaviors and business following. We spend considerable time researching what will be the best audiences who will take action.
The secret to capturing leads
So, how did we use this information to capture leads? We crafted an opt-in form directly on Facebook that asked just enough questions to elicit a full form completion. Many businesses make the mistake of filtering too much at this step and thus severely limit both their prospects and ROI. With this business, we asked only 3 questions in order to get them to complete the form, and then set up automatic notifications for the client to contact the lead as soon as possible.
Beyond that, the client called the lead on the phone and screened them from there. If they fit the bill, the client would schedule the free session. At the free session, the client would further screen the lead and if it was a good fit, would sell them on the monthly service.
Ensuring it’s profitable
We spent approximately $500 per month on advertising for this client in the beginning. Leads came in generally around $5-$15. As long as the client landed 1 of the month’s leads as a new client, the campaign was profitable, however this small amount of leads to new clients has been rare. On a good month where the lead generation yielded 5 new clients, the ROI has been 3464%!
If you remember reading the client’s pricing at the beginning, the most popular service at $297 is less than the cost of the ad spend. It’s very important to note that this is actually a good thing! You shouldn’t expect to be profitable from the start; it can mean you break even or even take a loss. We brought in the new client with a freebie offer that was irresistible, and since their LTV (lifetime value) is $3564, they’ve essentially just brought in $3064 over the next year.
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