Most important is Cost Per Result.
Value of Result has to be higher than the cost to deliver the result to be profitable.
Result = sale/purchase/etc
You have what they pay you at that moment, and what they pay you over time.
Is it a one time $10 e-book or a $5000 body transformation upgradeable to the $50K/year mastermind coaching?
For the ebook – your cost per purchase has to be $9.99 (assume no overhead for now) or less for you to “profit”. Be positive on your adspend.
For the $ 5000 program, your cost per purchase can be $4999.99 to be in “profit”.
Then you have your conversion rates at each step of the interactions/relationship/sales funnel
Let’s say to make one sale you had to speak too (show sales page) 10 people (10% close rate).
You needed 100 people to look at the sales page to get 10 interested parties.
So from here it’s a math problem.
To break even at $10, I can pay up to $1 for each of the 10 prospects or in total I can only pay 10 cents per landing page visitor.
To break even at $5000 I can pay $500 for each of the 10 prospects or $50 per page visitor.
From here you can start calculating what %s you need to have at each step.
– Audiences will have different prices based on competition and product value and a few other factors.
Think in terms of what it costs to get 1000 impressions.
Impressions are each time an ad shows. It may show to the same person more than once. It’s still an impression.
CPM – Cost per 1000 impressions
Reach – How many individual people see your ad.
CTR – Click through rate.
CTR # 1 is (ALL) how many people clicked on your ad, this includes likes, shares, video plays and link clicks
CTR #2 is (Link Clicks) This is actual clicks to a link off of Facebook -For conversion/sales and lead generation this is usually an important metric – How much it actually costs you to convince someone to visit you page.
CPC – Cost Per Click – this is the amount each click actually costs. see CTR.
– You may find that you CPC (ALL ) is 5 cents but your CPC (Link clicks) is 50 cents.
The higher your ad CTR is, usually helps lower the cost per click.
The more clicks you get for each dollar you spend, should mean that your cost per action (lead/Sale/etc) is correspondingly lower.
So the question of “Is it working” —
Take your lead cost and add up how many leads it takes to get one sale.
Is that number of dollars you spent to get the sale less than the dollars you get from the sale and any future value that customer might give you?
Here’s a major rub – You might not know for a while!
So – usually when you start you have no idea what your conversion number are or if a product is going to work or get any sales at all.