Show Notes:
Stop panicking.
I had to get that out first because if you’re an entrepreneur, you’re probably getting anxious about increasing lead costs this Q4. And I’m here to tell you it’s okay. Here’s why.
- It’s seasonal and you’re bound to experience bumps up and down both with your lead costs and with your sales.
- It’s relative to what funnel you’re running and what industry you’re in or what niche you’re targeting.
- And probably the most important reason why it’s okay: lead costs don’t matter if you’re converting well because you’ll still profit in the end!
In this episode, I’m giving you a sneak peek into our agency’s current clients’ lead costs to webinars, challenges, and lead magnets that they are running right now. I’m also diving into what we are doing for our clients throughout the rest of December, plus I’m letting you know what to expect for the rest of Q4 with your ads.
Want to know more? Go ahead, grab your Starbucks toffee nut latte (heck, it’s Christmas!), and get ready for Episode 24 of the Ad Agency Secrets Podcast!
LOVE MY PODCAST?
Then please rate and review my show by clicking here!
My #1 goal is to help people like you build a profitable and sustainable business through marketing and paid ads! Tap to rate with five stars and select “Write a Review” and be sure to tell me what you love most about the podcast!
Share-worthy Quotes:
“If it’s not converting into sales in the backend, lead costs mean absolutely nothing.“
“If you’re running into some increased costs now, know that it’s normal for that to be happening. It doesn’t mean that you can’t be profitable. It just means you have to plan for those increased costs.“
“Do trial and error with your ads and lead budget to see what’s working. That one ad that was converting high might not be working now, but it might work really well in January. So test it again. It’s never just, “Oh, it didn’t work.” It depends on when you tested. It depends on the variables that are in place.“
Get the Transcript here:
Episode 24 – Is It Normal to Have High Lead Costs for End of Year?
Note: We use AI transcription so there may be some inaccuracies.
Jessica Walman: Hey, I’m Jess Walman, Facebook Ad and Digital Marketing Expert. Welcome to the Ad Agency Secrets Podcast, where I help you take the guesswork out of your ad spend and replace it with profitability. Now is your time. Revolutionize your life and create the impact you desire all while freeing up your precious time. How? By taking a sneak peek at the exact methods that our full-service ad agency uses for our A-list clients while managing over $1 million per month in ad spend. Learn what is and is not working from Facebook Ads to copy, to funnels into your overall marketing strategy. Implement these tips and strategies inside your business today, and get ready to explode. Grab your coffee and get ready for the Ad Agency Secrets Podcast. Hey guys, welcome back to the Ad Agency Secrets podcast. I’m pumped to be back on here and talking about current lead costs, Q4 lead costs, and what to expect. I’m getting this question, asked a lot: Jessica, what are lead costs looking like for your clients? What niches are they in? Have costs risen?
I know people have seen rising costs depending on the industry that they are in, and this is just a concern for people. So I wanted to come on and talk about current costs that are happening with our clients. I’ll give you a little bit more detail and feedback around those and what to expect for the rest of Q4, leading into Q1 of 2022, which is super exciting.
So guys, right now for, our clients, we’ve got some clients in the real estate niche in high ticket sales, coaching, business opportunities, spirituality, etc. And I’m gonna talk in detail a little bit about their costs, but also what those costs mean for them and what kind of funnel they’re running just real briefly.
And then we’ll talk again like I said, a little bit about Q4 and what to expect. So, if you’re running right now into some increased costs, know that it’s normal right now for some increased costs to be happening. It doesn’t mean that you can’t be profitable. It just means you have to plan for those increased costs.
And it’s not for everyone, but it is for quite a few clients of ours. And again, just preparing for that is going to be really helpful. So for example, we’ve got a real estate coaching client who does a challenge, and that challenge then leads into a high ticket offer that they sell. They have a call to action for applying to speak with them. And then people get to hop on the phone call and they sell them a, I want to say it’s a $5,000 offer. And so that is running around $12 to $17 on average right now. And some of you might think that’s really high, but I worked with real estate coaches for a few years. can be typical.
You can get it lower. We have been under the $10 mark. But, again, this is Q4 guys. So at the end of the day, as I always said, please keep in mind that lead costs only matter so much. My next example is going to showcase that really well. But the $12 to $17 cost right now is pretty decent.
It’s bringing in quality leads to the challenge. And we know this because the show-up rate to the challenge is great and the conversion rate to sales on the backend is doing well. So that means that even though it’s 12 to $17, they are quality leads, which, at the end of the day, is what matters. The next example is going to be really interesting because we just did this with a client.
I’m actually going to just tell you a little bit about how we did this last month and the shift we made this month and the difference, guys. And it’s okay. Because we tested, we trialed and things don’t always work out as you hope.
So last month for this client, we have a high ticket sales coaching clients. They teach people how to sell high-ticket in the coaching space. So they run a challenge to usually a virtual event. It’s a five-day challenge. They go to a virtual event and, they do pretty well and they sell, I don’t know, $15K to $20K offers in the back. And I wanna say the $20K offers in the backend.
So the lead cost can usually run around $25 to $30. We run them to a landing page for people to opt into the challenge. It’s a pretty high lead cost. Don’t get me wrong, guys. However, they’re really qualified. And the conversion rate on the back end is really high. And so that means that this is very profitable.
Now, do we want a $25 to $30 lead cost? No, we’re definitely looking at bringing that down. So we have tested some lead forms recently, which should be a whole nother podcast episode, to be honest with you. And the lead form, lead forms, or something that, back in the day I was super against and I’m still not fully for them right now. So let’s just say that.
I was super against them back in the day because lead forms would bring in some cheap leads. so it would look really good on the front end with a lower cost per lead. However, they just did not convert on the backend. And at the end of the day, that’s what matters most now, since the iOS update has happened and shifts have happened with the Facebook algorithm, it seemed like Facebook leads are the way to go.
They have been doing well and they still do decently. So with a couple of others, actually we’re testing lead forms in addition, in conjunction with their landing page, we try not to go full lead form. However, sometimes we are trying to test that with a couple of clients. And we did that this month and there’s quite a few variables here.
We actually went from the five-day challenge last month to this month, kind of doing a shorter version of it. So a much shorter, like one, two day, thing. and we test the lead form as a lead form brought in a much cheaper cost. I’m talking like $10, $12 to maybe 10 to $15. Remember it was $25 to $30. Now we’re at $10, $15. Remember, this is high-ticket sales coaching. It’s pretty competitive – B2B. And we thought the leaf cost was amazing. So we’re excited about it. Now, the event has happened and the show-up rate was really low, doing all the same things we did before, them on their backend with texts and emails, and that’s on our front end with ads to remind people to show up However, this is Q4, this is a different time of the year.
They switched the way that they did the event, right, from a five-day to a shorter timeframe. And then we did go more into lead forms. And so that could have, all of those factors could attribute it to the fact that it didn’t convert as well. Now that being said, it actually converted well. Really well for how many people showed up.
That’s an amazing thing. We know that the offer converts, so that was amazing. They were still very profitable. However, it could have converted much higher potentially due to these other factors in place. And just know that yes, this client did go up in lead costs, but we have other clients who are not going up and lead costs.
We have a business opportunity, a client who has basically, hey, if you’re in your nine-to-five, I’ve got a business opportunity for you. You can work from home, from your laptop, from your phone and make your own money, work for yourself. If it’s a business opportunity, again, for those kinds of in the corporate world and they run a lead magnet. So it’s a downloadable guide. And so if you have a downloadable guide, these usually can do really well. And the lead cost right now is about $2 to $4 on average. Pretty insane, if you ask me, especially for a business opportunity. And it converts that into a $9.97 offer on the backend really well. And when I say converts in the backend, they don’t run a webinar or anything for that.
It literally goes from opt-in to a lead magnet. This is something that goes against all my principles, but going all for the $9.97 offer right away on the thank you page. Now, the take rate on that is not anywhere, to be talking about happiness, but we nurture them and then offer that offer to them again.
And then they buy, right. They gotta be nurtured a little bit and that’s all it is. And it’s $2 to $4. and even right now in the month of December, it is still converting that well. So again, Q4 didn’t seem to really, or Q4 December really didn’t seem to have any effect on that, industry, and on that client. We have another client in the spiritual coaching space. And, they work with, other business owners, in their spiritual alignment, with their business, with themselves. and they actually have less than $1 lead cost. It’s under a dollar for their leads and they’re just crushing it and they have like an ebook and then another upsell.
They’ve got tripwires and upsells along the way. And what they’re doing is their main goal is just to build their list and bring in qualified people, try to make back some of that, expense with, some revenue from those, upsells and tripwires, and then move in later in January into a launch. So that’s the goal behind this, and they’re getting less than $1 lead cost which is insane. The client just messaged us today. Like, oh my God, I didn’t expect those super exciting. We didn’t either. So that’s amazing. and then we have another client that’s in a more of a, definitely competitive, more on the course creation, launching, B2B space. And going after course creators and coaches and consultants and their lead cost can range anywhere from $8 to $15.
It depends, like, we have one lead magnet of theirs that just did not convert well. It was definitely too high. So we had to turn it off no matter what we did. And then we have two other ones that are converting, at a lower cost. So those are the ones that we’re sticking with.
So again, trial and error to see what’s working. And again, that one that was converting high might not be working now, but it might work really well in January. So we have to test it again. it’s never just, oh, it didn’t work. It depends on when you tested. It depends on the variables that are in place. Right guys.
So, this one’s about $8 to $15. And is that worth it? Can they be profitable with it? Are the questions you need to ask yourself. And this is what our clients have to determine and what we help them determine by figuring out: what are you selling? How much can you spend on ads? Do you make the profitability on the backend that you need?
And so $8 to $50 for this client is reasonable for them. And it allows them to hit their goals that they need to hit on the back end with our program and their offer. so hopefully this gives you an idea of some of the costs that are happening right now. It’s not across the board, really high costs.
And then if they are high costs, it can be okay because it’s so profitable, depending on how well your backend is converting. So our client that was doing the $2 to $4 cost per lead in the business opportunity space. great. The two to $4 lead cost. But it doesn’t matter if it doesn’t convert and theirs was converting. Right. But if it didn’t convert, then that low lead cost means absolutely nothing. Like my team doesn’t go around boasting about a low lead cost, unless we know that it’s turning into sales. Because if we have a low lead cost, we might get excited for a moment, and then we’re like, “but how is it converting to sales in the backend?” Because that really is all that matters. And if it’s not converting into sales in the backend, lead costs mean absolutely nothing. we don’t really care anymore. All that really matters is what’s your cost per acquisition on the backend. What’s your profitability and ROAS – that is what’s most important. So, guys, those are some examples to give you an idea of what is happening right now with literally current clients that we’re running ads for.
The same thing to expect for Q4 guys is a few weeks left in Q4. And yes, costs can be rising, what we normally see with clients. And again, depends on the niche, depends on what they’re selling. People right now are buying they’re in a buying frenzy. They are holiday shopping for themselves for loved ones.
And so everyone’s just going through Facebook and going online and just buying, right? Whether it’s through Amazon really quick, through an ad, whatever it might be. when it comes to maybe a couple of days before Christmas, that’s going to die down. People are going to stop buying so much and just kind of be preparing to, spend time with their family.
And then once Christmas hits, usually, it’s very slow between Christmas and new year’s it doesn’t mean you can’t lead gen and build your list during them. But as far as sales go, usually, it can be low, but it just depends on the client and what they’re selling and the space that they’re in. So if you know from experience and you have past data, which is super important to be looking at, if you have past data to look at, and you know that it goes a little forward, but it’s nothing overly crazy, then just push through that because you know, right at the end of that, when January hits, that it’s going to go full force again. And, you don’t want to hinder or, create any hiccups in your current ads that are running that are doing well. if you know that it tends to be quite a dip during that time, you have a couple of options.
Well, A, if you know that it’s, like, completely dead for you, then just turn them off. if it’s going to be that dead and you’re spending quite a bit of money a day, you don’t want to go on a hole that big when you know it’s not going to convert. Now, if you’re not spending too much, then, it’s up to you.
If you want to continue that course, and just maybe lower your spend. We have some clients where during December 25th and January 1st, or maybe January 3rd, we are lowering by about 20%. And then we usually start that maybe a day or two before Christmas. And then a couple of days or three days later, we don’t do any three days a week, three days, and then we will do another 20% decrease and then kind of keep it there.
We don’t want to turn them off. We don’t want to do any hiccups on the algorithm too, too much. Sometimes we’ll just do the first initial 20% and that’s it. But we feel like we have to do more, then we’ll put it down another 20%, and then that’s it. And again, let it stabilize for a few days and not touching it.
And then on January 1st or January 3rd, just depends, comes around. Then we can start increasing by 20%, wait a good three days or more, and then increase again by 20% and get back to our original starting spend or starting budget. That’s something that we can do. Again, we don’t want to turn things off if we don’t have to, unless, like I said, it’s just going to blow through your budget and you’ve got a lot of budget going on and, you know, it’s not going to cover it at all, then really what’s the point in spending it, right.
So it’s just really knowing a little more about your avatar and your ideal client. If they’re going to buy. What do they do during that timeframe? And having any past data to go off of is going to be really powerful for you. So, those are my suggestions for Q4. That’s what we’re taking into consideration with our clients in our agency.
And, you just got to take into consideration for yourself so that you can end Q4 strong and then start Q1 of 2022 extremely strong because it’s going to be an amazing month in January. I’m super excited. I’m excited for us for December too, because some of our clients are still going to be crushing it. They still have things that they’re launching, right. And depending on their niche, they’re going to do well. But January is gonna be amazing, which we’ll talk about in a different episode and how to prepare for that. So, that’s it guys, hopefully, you found this helpful and I will see you guys in the next episode.
Bye.
Looking to partner with a leading marketing agency to scale your ads and increase profitability? Our team of experts at the JW Agency, from copy to design, to media buying to funnels, and to your overall marketing strategy, can help you cut through the noise, make your competition irrelevant and help you impact thousands of lives with your product. So if you want help navigating your marketing to increase profits, then apply with us today to see if you’re a good fit at gpsmyads.com. Again, that’s gpsmyads.com.
LISTEN AND SUBSCRIBE!