The Most Important Metric To Scale Your Low Ticket Funnels With Meta Ads - LowTicketBook.com

Yesterday I was talking to this student from my Low Ticket Accelerator. The Low Ticket Accelerator is a program where I help people launch their low ticket offer that actually gets them leads and sales from ads at breakeven or better. So it's pretty cool. And we were having this conversation because we have every week coaching calls, right? So they can come in, they ask questions, they crack open their ad account, we look at their funnels, we look at their metrics and all that good stuff. And, you know, I get— I have a lot of great people in the accelerator and in my community. And we were having this conversation about her funnel, her low-ticket offer funnel. And the conversation went something like this. A super smart entrepreneur, by the way. I love her. She's been, you know, working hard. She's been showing up. She's been doing basically everything that she needs to do to have success. All right. So I really respect that. Because as you know, a lot of people buy programs and they don't do anything with them. Well, I've been lucky enough to have a lot of people in the accelerator immediately taking action. So That's pretty cool. But the conversation that we had this week went something like this. She was like, Hernan, this is almost working. This is almost working. I'm almost breaking even. She was spending around $1,500 a week on her funnel and she was almost breaking even. What does that mean? That means that she had a 0.98 ROAS on her funnel. So she was almost at 1 ROAS. Now, why is this great news? Well, as I mentioned on my Low Ticket Profits book, which by the way you can get on Amazon, it's a simple booklet you can sit down and read in, you know, in a couple of hours. As I mentioned on my Low Ticket Profits book, low ticket offers are there to generate buyers, right? To generate leads and buyers completely for free or as close to free as possible. Some people are actually being profitable on these funnels. So you run ads to a funnel, to a low ticket offer, And you will see me running a lot of low-ticket offers, by the way. So you run ads to a funnel and then you try to get a buyer and then when your cart value, because not only you have a front-end offer but you have some bumps, you have some upsells and whatnot, then the cart value needs to be the same or over however much you're paying to acquire a customer. So let me put an example. Let's say that you're running ads to a $5 offer and you have a couple of order bumps and a couple of upsells. Some people will only take that front-end $5 offer. Some people will take the offer and some bumps. Some people will take everything on the funnel, right? Now when you average those things out, you have something called average order value or average cart value. That is how much money people are spending with you right away at the point of transaction, right? That's a really important metric. And the other really important metric that matters a lot when it comes to these low-ticket offers is something called CPA or CAC, cost to acquire a customer or cost per acquisition. In short, how much you're paying to get somebody to go through that funnel. All right, so those are the 2 metrics that we focus on a lot on the Low Ticket Accelerator because when your cost to acquire a customer and your average order value are the same, you're basically advertising for free. You can spend $100 today and make back $100 today. That means that you get buyer leads and sales for free, which is pretty cool, right? And by the way, that's not how 99% of businesses out there operate. Most businesses, they need to spend money on ads right now, and then after a while they make their money back, but they need to wait, right? I remember when I had my agency, we had this software company, VC-backed, deep pockets, and they were like, listen, dude, if you can make us break even in 2 years, We're fine, we're cruising. And I was like, dude, how is that possible, right? They could wait for 2 years to break even, which is what most big businesses do. They acquire a buyer today or a lead today, and then they need to wait to make their money back. Well, with low-ticket offers, we kind of flip the script. And I have students, you know, spending $1,000 a day, $3,000 a day, and they're breaking even or even profitable with all of those buyers. So imagine the possibilities. Anyways, going back to this conversation that I was having with my student, She was like, dude, I'm almost there. I'm at 0.98 ROAS, so I'm almost at breakeven, right? So we went through her funnel metrics and whatnot, but something that she said really stood out, and this is what most people focus on, right? This is what most advertisers focus on, which is she said something like this. She said, my costs are too high. My costs are too high, right? And then immediately I told her, again, super smart lady, I told her, listen, when you're focusing on costs, how much it costs you to acquire a buyer in your niche for this offer, you are literally competing against millions of other advertisers out there, like literally millions. There's a lot of other people targeting your same people, your same audience, with similar offers or even like different offers, right? And that gives you kind of what the market is telling you that you're going to pay for a buyer. Instead of focusing on that first metric, which is the CPA or the CAC, right, the cost to acquire a customer or the cost per acquisition, there's this other metric that is much easier, like a million times easier to move, which is your average order value. Some other people will call it lifetime value, right? But that implies over the lifetime of the customer, which sometimes is a little bit harder to calculate. But your average order value is a lot easier to move. Why? Because you're only competing against yourself. You're only competing against, you know, your own metrics. What other offers can we put in the funnel? How we can increase the cart value on this funnel? And you're only competing against yourself. So the first thing that I told her was like, listen, Let's stop focusing on costs. The costs are the costs are the costs. And yes, I'll show you something real quick right now on how you can lower your costs to acquire a customer. But that's not the main point. The question that you need to ask yourself, especially with low-ticket offers, but in any market for any kind of marketing for that matter, is how can I make it work with these costs? In other words, how can I make costs irrelevant? So it doesn't matter if I'm paying $20 per buyer, $30, $50, $100 per buyer like I am paying on some of my funnels. It does not matter. What matters is how much that customer is worth to you. I always put this analogy, right? A lot of people invest in real estate because they want an asset that appreciates through time and generates cash flow. If you think about it, when you're buying buyers, because that's what we're doing, we're acquiring buyers, we're buying buyers with advertising, what we're doing is we're buying these tiny houses, okay? We're buying these tiny houses that if you do a good job, will give you cash flow, right? People will buy more stuff from you if you keep on offering stuff. And then that buyer that you acquire today should— again, if you do things right— should increase their value through time. So we're buying these little tiny houses, right? And then those are assets that compound their value through time. So that's the whole game of advertising— acquiring a buyer today at a certain cost, which is dictated by the marketplace, Right? Of course, you can negotiate some things as you would with a house or with an investment property and whatnot, but you cannot go to Tesla and tell them, hey, I know— excuse me— I know that your offer or that your stock is like $500 right now. Can you give it to me for $250? They're gonna, you know, tell you go pound sand. And that's exactly what's happening when we're focusing on cost. So let me actually share my screen because I have a slideshow that really illustrates this. Regarding what happens when you start advertising and what happens to your ads. So here it is, what you can expect when you're running ads. And I show this to all of my students, right? I show them this because when you launch a new campaign, when you launch a new low-ticket offer or any kind of campaign, but let's focus on low-ticket offers for now. Here's what you can expect, right? At the beginning, this is the timeline and this is the CPA, or again, your cost per acquisition, your cost to acquire a customer. So at the beginning, when you just launch a new campaign, you don't know if the offer is going to work, right? And I share with my students a process to, you know, to actually know if an offer is going to work. And I'm going to leave a link somewhere around here. It's called my validation method, okay, that will show you if an offer has legs or not. And it's really simple to know, by the way. But, you know, when you start a campaign, your costs and your results are generally the worst possible results that you're ever going to get. Why, you might ask? Well, at the beginning, there's 2 things that are kind of unknowns. Number one, is the offer going to work? Which again, if you implement my validation workshop, you can kind of go through this really, really fast. That's number one. You don't know if the offer is going to work or not. But the other thing which is also important is that your pixel and your ads are new, right? They're new. So what happens when you launch a new campaign and you have no pixel data, which is, by the way, a lot of my students, they come to me and they are maybe launching their first campaign or something like that, and they've been doing really well with organic, but now, you know, they need to, um, they need to advertise. So they don't have a lot of pixel data. They don't know what ads are going to work, right? So at the beginning, you launch and your CPA is going to look horrible, like horrible. Let's say that you're selling a $5 thing or you're selling a book like mine, right? And then what's going to happen is that your CPA, it's going to be through the roof. Why? Because Facebook doesn't really know who to show your ads to unless you have a lot of pixel data already. Generally, 9 times out of 10, when you launch a first campaign, you're going to have the worst possible results. Now what's going to happen is that you're going to get 2 things out of running the campaigns. Well, actually 3 things. Number one, you're going to figure out if your offer works or not, right? And we have some benchmarks and metrics that you need to hit to actually know if your offer is going to work or not. The other 2 things that happen is that number one, your pixel starts learning, right? Your pixel starts understanding who your buyers are, who's actually, you know, clicking on these ads and who's actually going through the funnel and buying and all of that. And then your pixel starts learning. That's number one. But number 2, which is also super important, is that you start finding winning ads, right? You start finding winning ads, you start finding winners, right? So initially, I told— I show my ads, or sorry, my students my 2-campaign method, which is one campaign where we just test creatives, and then another campaign where we scale what wins, right? I'm going to leave a link somewhere on here so that you can get the 2-campaign method as well. But that's exactly what's happening when you're launching new ads, right? The pixel doesn't know. So Facebook Meta doesn't know who to show your ads to. But then you don't, you don't have a lot of creatives that work, right? And that's the whole point of the beginning of a campaign. So if you do what a lot of people do, which is you run some ads to an offer that's an unknown, right? So it's a question mark. And then you run ads to this offer, and you don't really know if it's going to work or not, right? So what most people do is that they run ads for a week, and then they say, oh my God, I cannot afford to pay $200 per buyer or $50 per buyer or whatever. They just stop their ads and they just go back to, you know, uploading 7 reels a day or whatever, right? But if you stick to it, something really interesting happens. The first thing is that the pixel starts learning. So Facebook starts understanding who you show, who show your ads to. That's the first thing that happens, which is super cool. And then the other thing that happens is that you start finding winners. And if you follow my 2 campaign method, you will graduate those winners to winning ads. And then all of a sudden now you have winning ads with a learning pixel and then your cost per purchase starts going down. And your CPA starts going down and down and down and down, right? Which is super cool to see. I see that all the time with my students, right? But here's another thing that will happen. At some point you have pixel data, right? You have been running, let's say this, for a month or something. Now you have pixel data. Hopefully you have some buyers, right? And then hopefully you have some winner ads as well. But at some point you will hit a floor when it comes to your CPA, your cost to acquire a customer. So this is the stabilization or stabilization. I don't know how to say this word. That's the part where things stabilize, right? And when things stabilize, it's really, really hard to pierce these barriers. There's some things that you can do. You can split test your funnels, you can launch new ads, new creatives, and sometimes you will get a couple winners that will slash your cost to acquire a customer in half. And those are great, but those are rare. So generally what you want to do is you want to focus after, let's say, a month or two of running these ads, you want to focus on, okay, how much am I paying Per lead, per buyer, per scheduled call, whatever your funnel is, right? On low-ticket offers, we'd focus on cost per buyer. What's my cost per buyer? And then once you stabilize that, it's really hard to go lower than that. Why? Because again, you're competing against all of these advertisers, but your average order value, which is the other metric, can go up virtually forever, right? There's no ceiling as to how much your lifetime value of a customer could be, right? Because again, you're only competing against yourself, putting together new offers, better offers, become a better marketer, better salesperson, right? There's no ceiling as to that. So I always tell my students, listen, the costs are the costs are the cost. And for this lady, I— we immediately swapped the view, right? She was focusing on this column on her spreadsheet on how can I make this cheaper? And that was not the answer. The answer is how can you make it work with those costs? So we immediately swapped to average order value and I gave her some pointers onto how to increase that average order value. So that's the whole deal right there. That's how you can scale your low-ticket offers or any funnel for that matter, right? And it all comes down to how you can make things work with the costs that you have now on advertising. All right, I mentioned a couple of resources. We have the Low-Ticket Profits book, which you can get on Amazon. I'm also going to leave a link somewhere around here so that you can get it from me directly, but it's also on Amazon or I think Kindle or Audible or whatever. So you can go and get it from Amazon. And also I'm gonna put a couple of additional resources for you. Number one is my 2 Campaign Method, which is the method that we use, that I use to scale my campaigns, client campaigns. I show my students and they have really, really good results. We actually had a student hit $1,000 a day in revenue for the first time ever in his entire career. And that was pretty cool, right? He's super excited about that. And also we have a community. We have a free community that you're welcome to join. There's going to be a link somewhere around here. So that you can come join the community and have a lot of fun there. I'm there doing weekly, sorry, monthly calls. We have a couple of team members answering questions, so it's really, really cool and we have a lot of resources. So I hope that this is helpful. If it is helpful, I don't know, hit the like button whenever you're seeing this, share this with somebody that needs to see this, give me a comment, like if you have any questions, I always read all of the comments. I hope that this was helpful and I'll see you really, really soon. Take it easy, bye-bye.