196: The Simple Math Behind 6-Figure Facebook Ads

Foreign hi there.

Before we dive into today's episode, I want to ask you an important question. Are you wondering why your hard work isn't reflecting in your bank account? If so, I've got something that could change the game for you. With my Digital Product Accelerator one on one coaching program, I'm on a mission to help entrepreneurs like you bank consistent revenue without sacrificing your time, time or sanity. Imagine shifting from 90% client facing work to enjoying consistent revenue from your digital products, all while reclaiming your time. You already know that you don't need another course and a one size fits all approach isn't going to cut it. What you need is a strategic long term plan tailored just for you. So if you're ready to build the profitable, freedom giving business you've dreamed of, apply to work with me by going to destinycop.com apply I cannot wait to learn more about you and your business. Welcome to the Creators MBA Podcast, your go to resource for mastering the Art and science of Digital Product Entrepreneurship. My name is Dr. Destiny Kopp and I help business owners generate consistent revenue from their digital product business without the need to be glued to their desks, constantly live launching or worrying about the social media algorithms.

I hope you enjoy our episode today. My special guest today is Kwejo. Kwejo is an ads manager and strategy partner. He's the host of the Arc of Online business podcast with 849 episodes and 4.92 million downloads, and a meta ads manager and online business strategist who specializes in serving established online course creators. But I just want to go into a little bit more detail. Unlike most ad managers, he doesn't just bring in quality leads. He has over three years of experience and excels in optimizing funnels and providing marketing, sales, operations and hiring guidance. So Kwajo, I am super excited to dive into all of this with you. We chatted earlier this week because I'm on your podcast and I told you that in 2025 one of my goals for all three of my brands is to start using paid ads. So that's going to be something else that we're adding into our growth flywheel. I'm super excited about it, so I have a ton of questions for you. But before we get into all of that, can you tell the good audience just a little bit more about you and how you help people?

Well, about me, Imagine way back in 2018, I'm in Beijing, China now. Why am I there? Because I lived there for 12 years and I absolutely love learning Foreign languages. And I'm sitting in a cafe in the capital overlooking a shopping strip with my wife and these two Russian girls next to me. Notice that I'm that guy. What guy? I'll tell you in a second. And they come over and they want to take selfies with me. Burns out the reason. One of the reasons I love helping people run ads the right way and profitably to their offers, their programs, their memberships, their digital products, is because I did it the wrong way. In my previous business back in China, I had a business teaching folks how to learn Mandarin Chinese and I ran ads just by mostly boosting successful Instagram posts. And you know what? It got me recognized on the streets, so to speak. Conservatively. Like I call myself the Hollywood B lister of Chinese back then, like maybe three out of four people who were not Chinese would recognize me. But you know what? It didn't fill up my courses with people that I could serve. And so having got stuck outside of China on an unfortunately timed vacation to Mexico on January 13, 2020, right before the you know what broke out with my wife and my two kids, a three month old, a nine month old and a three year old, I had to pivot that previous big business failed. And then I ended up pivoting into coaching online course creators and helping them with their ads. And so that is a bit about me.

So they recognized you from a boosted post that you had done on Instagram. That is awesome. Oh, such a great story there. And I love kind of your passion, if you would, about learning other languages, getting to know other cultures. So that's a fun story there too. So part of I'm going to jump right in. I have a ton of questions for you and I know our audience is super interested in learning more about the possibility of doing Facebook and maybe even Instagram ads for their offers and lead generation and converting them into their paid offers. But walk us through. If we are, let's say we have like an online course or a membership, when would you say we were ready to start running paid ads in our business?

That's a good question. The straightforward answer is it's not related to how long we've been in business. Running paid traffic is related to whether or not there's already profit associated with whatever digital product we're selling. Like, I love to say, like Jesus saves Facebook ads. Do not. It's not a game of more eyeballs on a bad product means profit. And so the next question that people usually ask me is how do we calculate profit? And here, here's an easy way if you're selling a product via email, because you're emailing your list every month, or if you're doing it from Instagram stories, or if you launch every once in a while, every quarter. The thing we're going for here is how many leads, how many eyeballs, so to speak, did you have to get on that product in order to sell it? So I like to talk about launches because they're easy to conceptualize. I brought in 500 leads registered for that launch. I sold a certain amount of money. Let's call it $100,000. All I have to do is simply pull open my calculator on my phone and say, $100,000, all right? Divided by 500 leads. And now I have a earnings per lead of $200 per lead that registered. Okay? So from there, I'm just going to say, in this perfect world where everything goes right, that I can bring in leads for the launch, and I know they're going to be worth $200. That tells me, because the profit is huge there, that I can run Facebook and Instagram ads. And if I. Even if I have to pay an absurdly high price per lead of, say, $50, I'm still profiting $150 per lead. I mean, would you. If you had that kind of equation, would you turn on ads?

Well, yes, for that, I would happily pay $50 to make $100. Right.

All day long. And I know that's a very rosy example, but I do have clients right now that have those kind of margins. Now, for the, let's say, average digital product, maybe we're dealing with something slimmer like I'm paying $3 per lead because there's a cost for Facebook ads, leads, and I know that I can make $15 per lead. So I just want to make sure that I am profiting. And then I have to make sure that my messaging is good. But of course, if the product is already selling, then I know that my messaging is resonating somehow. And that's the kind of perspective that you want to take to starting Facebook ads. However you sell, is there a profit in what you're selling? And is there a profit per. Per lead or per person that you have to show it to? Or let's say you're posting on Instagram and selling directly in the DMs. Back up the money that you're making to how many DM conversations you had to have to how many Instagram posts you had to post in your stories to get those number of DMs and that you can come back to in earnings per lead, a cost per lead, and then play in that gap between cost per lead at the bottom and earnings per lead at the top. Here I am waving my hands around on screen but you can't see me. But that's how we do it.

So as you were thinking that or walking us through that, I was thinking, so like my newsletter, Profit Club, people who are listening, they might be familiar with. This is a membership that I have. It's a low cost membership, so it's not, you know, there's not a huge profit margin there. So it's only $19 a month or 57. What are you seeing in terms of cost per lead? I know there's different niches out there, but I'm just curious, could I make it work for something like that? Hey there, Destiny here and I'm the.

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Absolutely, yes you can. The trick here though is so you asked for cost per lead. It does depend on the niche and it does depend. There's so many different ones. However, usually when I run ads for a client, like I'm not really happy until I'm under $4 per lead. Depending on the niche, we can get as low as like a dollar fifty and even floating right around a dollar. You brought up a good point with something like a membership where it's $19 a month. The strategy here is to also know how long somebody stays in that membership on average and to be doing things in that membership to increase the length of time that somebody will on average stay in the membership and then also reduce what we call the churn rate, which is the percentage of people that don't renew from month to month. Because what happens with memberships is they are a bit harder to sell. Like we see the value, but somebody else who is joining might just see their card getting charged over and over, over again. However, as long as we look at how long somebody stays something called their lifetime value just for the membership, then we can calculate that maybe we lose a little bit of money to bring somebody into the membership, but as long as like we're profitable, hopefully we could be profitable that first month, but as long as we're profitable that second or third month, but we know that people stay in the membership for six months on average, then we can run that kind of ads game too. And there's other strategies that I'm sure you're aware of to help. Like if we're bringing somebody into a membership, like what can we do as far as maybe an order bump that's there? What can we do as far as offering somebody a discount to upgrade right away to annual? Like they join for the monthly rate, but then within that first two weeks they get a surprise. If you upgrade to annual, you get two months off right there. And that helps us bring in more cash up front and make the membership equation work better too. So many strategies.

Yeah. And I love that you added that lifetime value calculation in there because I think that's very important. So I'm going to throw something else at you. So a lot of people listening here, they might have what we call like a tripwire type funnel where somebody comes in like from a free lead magnet. They have the tripwire with the order bump and maybe even some upsells. Tell us a little bit about your strategy and recommendation there. Do you think people can make those type of funnels profitable or do they need other offers on the back end to make up the cost of bringing somebody in through a funnel like that?

Okay, so those funnels are wonderful. They're also the hardest type of Facebook ad to pull off. However, there's this quote by Thomas Edison, I believe, and it says that a lot of us miss out on opportunity because it's dressed in overalls and it looks like work. And here's the thing with what I would call a self liquidating offer funnel or direct to low ticket offer funnel. These are your typical. You're sending ads to A$27,37,$47 product, digital product, right. And then on that checkout page is an order bump that could be $17, $27. Right. And then on the next page, once somebody processes their payment information, there's this. Before you go. Or wait a moment, hey, do you need this thing there's an upsell and the upsells can range, you know, on the very low end, maybe 20ish dollars. Like that's a very low end upsell. Usually you see upsells that are somewhere around the 197, 297, 397 range. With a funnel like this that's built on products that are already selling, I. E. The creator, the listener knows who they serve, they have identified a problem that people are paying for and they've several problems. Right, because if you're going to run ads directly to a product, you should have an order bump and an upsell. Those are wonderful because they allow you to profit. Maybe your order bump. The stats are that like 15% to 20% of people that buy the first product should buy the order bump and then another 5 to 10% of those people will go on to buy the upsell. And so by having those aligned and serving the kind of audience that you serve, well, then you can profit and increase something that's called your average order value. And then the name of the game there is just making sure that my average order value is higher than my average cost per sell. If I'm running Facebook ads. Did I answer your question?

No, you absolutely did answer my question. You actually motivated me because I have several of these, like, tripwire bundles. I'm like, I should be doing that. Why am I not doing that? I've been, I don't know, organically. And to your point, you were talking about some of the numbers. I'm like, well, my order bumps converting at 30%. I know my upsells converting at 20%. I'm like, I have the numbers there.

Let's go. Yeah, we should have a talk after this. Ask me a question though, about Tripwire. And I did forget to address that directly. Tripwire would be a offer. We say the word tripwire and I get hung up on that because it's like, are we trying to booby trap somebody or like trip them up, like. So I started calling them welcome offers, you know, but either way, I actually.

Like that much better. I just use Tripwire because that's what everybody in the industry uses. But I want to start using welcome offer. That's awesome.

It's okay. I use a tripwire terminology still. But so this would be that, that low ticket offer that's on the thank you page of a lead magnet. And here's the thing. Tripwires or a low ticket offer set up in a way that it's offered as a thing on the thank you Page of a lead magnet. Those conversions are usually lower. Like maybe 2% of folks who opt in for the free lead magnet will get the tripwire. Now that's okay. Tripwires can help us recoup or get back some of our ad spend. Like maybe if we had $3 cost per leads, like with a good tripwire, we could make back 30% of that, you know, because the tripwire should have an order bump and an upsell on the back of that. And then we can bring our lead cost, I don't know, down from $3 to whatever 30% of $3 is at 60 cents off $2 and 40 cents. Oh, do you like that math? It's almost seemed like I'm a math genius. I'm not, but. But I would encourage the listener who has a tripwire offer to at least test that offer as an SLO funnel or running ads directly to that low ticket offer just to see if it works. Because you can take a functioning self liquidating offer. You know, a $27 product. Like, I have a client right now, she's in the copywriting niche. So she has templates that sell for $37 and then subject lines that sell as an order bump for $27. And then she. Destiny has a membership. That's the upsell memberships can sell, but they're harder to sell in these self liquidating offer funnels. So usually we put them on the back end and then somebody to get there has already bought in something. Right. Her membership costs like $197 a month. But then for the upsell, she gives a one time not found anywhere else quarter discount. So for three months you get it for 1.97, which is a huge discount. Like for the.

That is a huge discount. Yes, for sure.

And so we run ads effectively and profitably to that. My point was if you were to take that same funnel and put it as a tripwire, it might not work as well. Probably wouldn't. Just because people are coming to a lead magnet for something for free and then they're not in the same mindset when they hit that thank you page to just go and buy. So I would say to the listener, if you already have a tripwire offer a welcome offer on the thank you page of a lead magnet and it has an order bump and an upsell, go ahead and try. As long as you have the available funds. Test some messaging, but run ads directly to it and see if it can be profitable for you. There might be like a beautifully functioning funnel just right there that's gonna change the trajectory of your and you never know. If you try and fail, that's okay. The road to success is paved with failure.

And I like what you're suggesting there because in the Facebook ad copy, you can go ahead and start kind of priming them up right for that offer before they even click to go to the sales page. So I think that's some good feedback. Now you have this special formula to lower Facebook ad costs. Can you tell us a little bit more about that?

Sure, I absolutely can. It's just my Olympic gold medal testing framework and I totally forgot to share the context. But when I got stuck outside of China, I spent geez, 2ish, 2 1/2 ish years coaching in a high level mastermind coaching program for online course creators. So that's like where I first learned all of the funnel stuff that I'm just trying to cram into this really short podcast episode. But I spent time coaching them and then consulting them because I had online course experience. And so I've just seen so many funnels like the, it's like behind the scenes pass to businesses that are like earning high six figures, low seven figures, and so. And then the rest is just experience of running ads for that same kind of client. You know, I used to have a job way back in the day inside of an ad agency, so I've seen a lot of things that work and don't work now. The testing framework, the Olympic gold medal testing framework is, is like what you can take, anyone can take. And if you apply it, you can expect to cut your lead costs by, you know, 30%, 40%. I've even had some students, because I teach this in a paid program, cut their lead costs by like up to 60%. And the beauty of it is, is it's nothing like mystical, it's nothing sexy. It's just testing. So envision the Olympics that we just had. I'm thinking of the track and field event. There were two men competing, one from the US and one from Jamaica, for the fastest man in the world. And then think about these athletics or track and field heats, right? Like you have eight folks, could be eight women, could be eight men, but they are going to race in a heat. And to oversimplify it, the two fastest move on to the next heat and then the semifinals and then the finals where there's eight folks running. So if we apply the same methodology to ads, what we can hope and expect to get, if we are faithful to do the testing, we can expect to that after we pit the ads and the various components of the ads together and let the best rise to the top that at the end we have like two or three ads that are giving us the lowest cost per lead. So would you like to know the stages of the testing?

Absolutely. Run, run through us.

All right. How I always start is ad copy. And all that is is the written word inside of the ad. And so I keep everything else the same, the visuals the same. The bold what I call headline that shows up next to that blue call to action. Learn more. That's the same, but I differ the ad copy. So three versions of ad copy, all of them have the same image and the same headline. Now, after I run those for a handful of days, then I know which ad copy is performing the best. Now, I'm talking about testing in a low stakes environment. So test with your lead magnet first, please. If you, if you're a beginner listening to this episode, this is a lot easier to do with a lead magnet. If you, you can do it with. If you're running like a sales campaign trying to sell something. But you have to be very quick and know how to read the signs because you don't want to burn through money and not make sales day after day after day while you're testing with a lead magnet. There's less at stake if I take too long or I can't quite understand the right signs to determine if my ad is performing well. Well, then my lead cost is just a little higher, but I'm still getting leads and I can nurture them later on. So back to the testing framework. Start with ad copy. After a handful of days, you know which ad copy is performing the best. Great. I have a winner in my first heat of this Olympic gold medal testing framework. Now I take that winning ad copy and then I say the next heat is going to be where all the visuals will compete against each other. So I'll keep that ad copy with the winning visual that it already was with, but I'll copy it, duplicate it, if you will, and take that same ad copy and pair it with another image or another graphic or another vertical video, AKA Instagram or Facebook reel. And then I'll wait and I'll see out of the next stage which of those rises to the top. Maybe I'll have two, like maybe a graphic plus the ad copy will win and a real plus the ad copy will win and their cost per lead will be decently low. Now I go to stage three and I take those two winners, if you will, and I test different Headlines. Headlines would be that bold text that shows up to the left of the blue call to action button. Usually learn more, could be download, could be book a call or book now. Or I could even test different targeting. Maybe up till now all I did was upload my email list, as long as it's 600 people or more to Facebook and say, please give me a bigger audience that shares a lot of similarities with this email list. That would be called a lookalike audience in meta ad manager terminology. And meta said, great, you gave us 1,000 people. Well, we're going to give you 2.5 million people that share most of the similar attributes with them. So maybe I was using that kind of audience all along, which is a good audience to start with. But now I'm going to try to test some different ones. Maybe I'll test a lookalike of my Instagram followers. Maybe I have a blog with a significant readership on my website. I'm going to try to test a lookalike of the people who have visited my website in the past 180 days. And that is the framework. If we make it through testing the ad copy to get the best one and testing the graph, the visuals to get the best several, and then testing maybe different audience targeting to see where our winners are producing the lowest cost per lead, we're going to end up saving a significant amount of money because our lead cost comes down. And then we know confidently that if our lead cost is much lower and we've spent time researching the audience that we're meant to serve with our passions and our skills and our gifts such that the ad copy is good and it's resonating with the right people and bringing them in as a lead, then we're confident that we can continue to scale those ads higher and then nurture those leads with our lead magnet email sequence, maybe sell something off the back of that or know that we are creating a very warm audience that is ready and wants whatever we have to serve them with during our next and upcoming launch. How are we doing?

I love it. So I love how you started with the ad copy. Kind of got that working the move to the images or reels or, you know, whatever you were doing there and then move to the audiences and Facebook. I like how you've laid that out for us. So let me ask you this, and I know that we are getting close to our time here. What mistakes do you see people like me making with our apps when we're just kind of starting out here? Or maybe we're trying to do a launch, what are you seeing out there?

Well, I mean, who are people like you? Break that down for me really quick.

Well, somebody who hasn't been doing ads but really wants to start dipping their toes in it and is a little scared, quite frankly.

Okay, all right. Well, if your product is profitable, then that is a mistake of just starting too late. But let's dive into some of these mistakes that we can see inside of Ad Manager. Unfortunately, Meta Ad Manager is like a minefield of mistakes waiting to happen because there's a bunch of things to toggle on, toggle off, a bunch of options. Plus they're making you suggestions. I'll tell you one mistake that I do see though, is not reading the right metrics and so not knowing when your ads are performing well and to scale them up and also not knowing when they're performing like, poorly and to stop spending on ads and then go back to the drawing board and redo your ad copy. That's one mistake that I see often. Here's another mistake that's very easy. It's a lack of good targeting because I do one on one like Meta Ads coaching, right? And I looked into an account of a client, a brand new client. He and his wife were a team and they had a launch coming up. And, and this, it didn't just happen to these two. I saw their ads really cheap cost per leads. We're talking like below a dollar. And instantly my red flag goes up and says, how can they be so cheap? Something's wrong here. Well, I start poking around and what happened was, is he had subscribed to this thought of maybe a wide open target audience or broad targeting. But what he had done is he didn't choose a country to show his ads to. And so Meta, being meta and just looking for cheap leads, was showing his ads to people in like Afghanistan and India and Sri Lanka and you know, and like I lived in China for 12 years and the majority of foreign students are like from Southeast Asia, the Middle East, East, North Africa region, wonderful people. And I always say that because it seems like when we say don't target countries from there we're like, don't target because like they're less than. No, but what happens is, is if you're targeting ads for a launch to any country, usually your ads are being shown to somebody who maybe in a year or two or year or half a year of their income, like they can afford to buy your program. It just doesn't make sense. Dollar for dollar or whatever currency they're earning in. And so this was one mistake is not targeting the right country that you know your clients come from. Not choosing the age like meta will let you have a wide age range, but why not pick the age based on like a survey of your. Well, you could go into more mistakes, but that's an easy one to avoid. If you do good research into your targeting or use what I had talked about a moment ago, a lookalike audience of people who are already on your email list. Provided your email list is responsive, that's a better way to start off your ads.

So Quadro, thank you so much for joining us today and sharing all of your wonderful knowledge with us.

You're welcome.

You let the folks know where they can find you and also you have a free gift for them.

Sure. So I am the host of the Art of Online Business podcast where we interview gifted and talented individuals like yourself who serve the online course creator niches. And then I also share tips and tricks and strategies and behind the scenes peeks at Facebook ads. If you're listening right now and you have a business, let's say that's making mid four figures a month and you would love to be making high six figure years, I'm continually bringing on experts. We're talking about messaging strategists, copywriters. Right. Like folks who know what they're talking about, have a proven track record and you can glean the wisdom and advice that they're showing sharing. Including yours, Jeff Destiny. I had a great time my wife and I recording with you and so this is that podcast and you can find me at the Art of Online Business on Apple Podcast or YouTube. Also, if you're wondering should I run ads right now or should I hire an ads manager right now, why don't you just say hi to me on Instagram, slip slide into my DMs. I'll listen to what's going on with your business and I'll give you straightforward advice like it might be time for you to run ads. Maybe it was time for you to run ads three months ago. Maybe it makes sense to hire an ad manager. Or maybe you can run your own ads and I'll just teach you how to do it. But we can have that conversation. It's been an honor being here.

Yeah, definitely reach out and let you know. Just ask the questions. Don't be like me and wait too long because I feel like I've waited way too long to get started there. And check out Quadrang's free gift. It is the seven big biggest Facebook ad mistakes. Course creators make that burn through money and kill results. And I'm going to put the link for that free gift in our show notes here, so make sure that you grab that also before you go away, please.

How did I forget to mention that? But yeah, I do coach folks one on one and I see the same mistakes over and over and over again. So I made a tutorial. And it's not just like fluff seven items on a PDF. This is me doing a screen share inside of ad manager, pointing out the mistakes and providing the solution right there. So anyone watching who's running their own ads can just apply the knowledge and save money. Because these mistakes, they bite. They take your money. So I'm happy for you to download that.

Yeah, as you were going through the mistakes and talking through them just a second ago, I'm like, I could see people making those. I could see me making some of those mistakes. So I'm going to definitely check that out. And thank you so much for joining me. I love chatting with you and getting to know you and your business better.

It's been an honor being here, Dr. Destiny.

Thanks for listening all the way to the end. I hope you enjoyed this episode today. If you love the show, I'd appreciate a review on Apple Podcast or your favorite podcast platform.

Have a great rest of your day.

And bye for now.