welcome to part 2 of my guarantee

profitability formula my lead generation example in this video I’m teaching you

how to guarantee that your facebook ads are profitable and know that before even

having to spend a penny you want to add so stay tuned because that’s coming up

right now what’s going on guys welcome back my name is Gabe Ekemezie with www.gabeekemezie.com I am your internet marketing guide and on my channel I

teach internet marketing as well as entrepreneurship to help you grow the

business and grant that you want and as you deserve and this is part 2 of my

guaranteed profitability formula video so if you haven’t seen part one yet

pause go back and watch part 1 it says there I cover the numbers I cover what

we’re gonna be going through and if you don’t understand that this part is gonna

be kind of confusing because you may not understand what I’m talking about or you

may I don’t know but better safe than sorry go back watch the first part if

you’re continuing and you just finish the first part welcome back

now we’re gonna be diving into my lead generation example where I’m gonna show

you how you can use your KPIs that we talked about and how you can create a

profitability formula to basically guarantee that your ads are profitable

before you even start running any ads at all so if this is your very first time

on my channel go ahead and feel free to subscribe to my channel hit the

Nullification button so that you can get notifications for upcoming videos so

let’s go ahead and dive right into this okay so for our lead generation model

the first thing we need is obviously our lead capture page which is gonna include

getting our name and email of our traffic or phone number whatever we’re

getting and then we have our ad it’s gonna send traffic to our lead capture

page and then go straight to a thank-you page but with a lead generation model we

are usually following up with emails or you send them to a webinar it’s some

kind of presentation so once they get once we get their name and email we’re

sending emails to them or you’re sending them to a webinar you know you gotta

kind of to fight for your particular business

model that you’re using and from there they go to a sales page where we offer

what we’re offering and then finally a thank-you page and if you’re

particularly contains upsells and all that kind of stuff you can kind of put

that in there but this is just kind of the general model that we’re going to be

using for this example okay so now that we’ve kind of drawn this out the next

thing we need to figure out is our kpi’s so I’m gonna kpi’s alright so similar to

e-commerce we’re gonna need to figure out our cost per click we’re also gonna

need to figure out our click-through rate now now that we’re working with the

lead generation model we are going to have to figure out our cost per lead as

well as our conversion rate for our landing page and remember those are two

KPIs that we didn’t figure out in our e-commerce model but now that we’re

doing lead generation you’re gonna need to know those so our cost per lead also

your conversion rate for your lead capture page which is this right here

your conversion rate for your sales page which is this right here and then the

last two numbers which is the health of your biz business your CPA a cost per

acquisition and your Ald okay and similar to the last example we’re gonna

work backwards because it’s just the easiest thing to do alright so let’s say

for this particular example we want all our average order value remember that’s

the amount or average value of the product that we’re selling how much we

make from a sale is for this particular example like 100 bucks so that could be

coaching coaching services or it could be a course that you’re selling you know

whatever your particular product service is that’s the number you want to use

there okay I’m just using this as an example so what’s our CPA it gonna be an

our cost per acquisition remember our cost per acquisition we

want it we’re going for a two to one ratio meaning for every dollar we spend

on face book we want to get two dollars back in

it’s kind of a nice cool to have so if every so we get is gonna equal $100 then

how much we’re gonna spend per person to get a buyer it’s gonna be half of that

which is fifty bucks okay so those are the those are the numbers that were

working with here so now our conversion rate for our sales page which is this

right here two things happen here so if you know

your numbers for your sales page your conversion rate for your sales page

maybe you’ve been already running traffic or you already have a model or

business that you’ve been writing for a while then you’re gonna use that number

but if you don’t you if you have no idea what your conversion rate is for your

sales page just because you either a are starting a new marketing funnel or

you’ve just never done anything yet prior to this watching this Facebook ad

course then you’re going to want to use the ratio of 1 to 5% kind of like we did

in our e-commerce example now for this particular example I’m going to use 1%

because it’s it’s low and it’s very conservative and it gives us a little

bit of wiggle room to work with but um so that’s what we’re gonna use here 1%

for our conversion rate for our sales page now the conversion rate for our

landing page similar kind of idea if you know your numbers for your conversion

rate for your landing page that’s the number you’re going to want that you use

and put it here and if you don’t typically you want your conversion rate

for your landing page to be about 20 percent so 20 percent is what I’m gonna

use here and if it’s higher that’s good but 20 percent is usually your goal what

you want your conversion rate for your landing page to be and if it’s not there

yet if it’s lower let’s say you know your numbers that area at within your

marketing funnel you know you have to kind of work on and tweak in order to

try your best to improve so for this particular example we’re gonna use 20

percent okay so now we’re the cost of cost per lead now here’s what we’re

gonna against a little bit of math here so hold on with me for a second so with

our cost per lead there’s two things we need to figure out first we need to

figure out one how many leads do we need to generate in order to get this model

to work and two how much I’ll be paying per each one of those leads okay so

let’s figure out the first step first how many

do we need to figure out in this situation and to give you guys an

example here okay so our cost per lead I’ll do the math here first we need to

figure out how many leads do we need so let’s say we’re sitting

so this is where first what you want to do is kind of set a goal for yourself

well so let’s say I’m setting a goal of I want to get a hundred customers right

go bigger go home so I want a hundred people to pay me a hundred dollars for

my product service whatever so my goal is a hundred customers so that’s what

you’re gonna put here whatever your goal is okay and then in the bottom part here

you’re going to put the conversion rate for the sales page so the conversion

rate that were using for this sales page is one percent remember that’s a

conservative number but that’s what we’re using because for this example

because I don’t know what my conversion rate for my sales page is if you know

that you’re gonna use your numbers so the conversion rate for the sales page

zero point one I’m gonna say conversion for a sales page okay so and just to

kind of illustrate what’s going on here we’re trying to figure out how many

leads we need in order to make this work so we know that our conversion rate for

our sales page is one percent and we also know that we’re trying to get a

hundred customers is like our goal right so basically we’re trying to figure out

how many leads need to come through this system where one percent of that number

of leads equals one hundred customers so we’re trying to figure out this number

right here right because if we’re getting traffic coming here once they

come through our lead capture page they become a lead so what number what one

percent of this number equals one hundred that’s what we’re doing here

algebraically okay so if my math is right it’s going to be ten thousand all

right ten thousand leads is our goal for this particular model

okay so now we know this number here this number is 10,000 so out of the

10,000 leaves that are coming through this funnel one percent of these 10,000

leaves is going to equal our hundred customers so now that we know the first

part which is how many how many leaves we need now we need to figure out how

much are we paying per lead so in order to figure out how much we’re paying per

lead all that is is we just need to figure out how much are we going to pay

for this whole campaign right so if our goal is a hundred to customers for and

we are paying 50 bucks per customer then what we’re going to be spending put what

we’re predicting we’re gonna spend for this whole campaign is 50 times 100 so

100 customers are just gonna say Cu is what our goal is times our CPA which is

50 bucks because we’re paying 50 bucks for one person remember if we spend 50

bucks one person is gonna give us a hundred so if we want a hundred people

we need to spend 50 bucks for 100 people that’s what we’re doing here so that

equals $5,000 all right so that’s what we’re spending for this whole process

that’s what we’re spending to drive our traffic through to hopefully if all

these numbers dial out the way we want them to dial up get a hunted customers

okay so now all we have to do is figure out how much of that 5,000 dollars how

much we’re gonna pay per lead so if we have a budget of $5,000 for this entire

campaign and we have 10,000 leads that means that we’re gonna be spending 50

cents per lead okay so that makes sense you see what I kind of did there if this

is a little bit confusing posit go back kind of see what I’m doing here plug in

your numbers and figure out what your cost per lead is so that’s what our cost

per lead is for this particular scenario it’s gonna be 50 Cent’s all right so now

we need to figure out our click-through rate once again I’m gonna give you this

none and that’s gonna be the same number used

in a last example three percent it’s good and remember if you’re trying to

figure out where did I get three percent or whatever I’m giving you that number

there’s no fancy calculations for that it’s three percent is just that ideal

click-through rate that you just want to shoot for in order to keep your cost per

click down which is what we’re gonna figure out right now okay so far our

cost per click it’s the same method we need to figure out two things one how

many clicks do we need to get in order to get this model to work for us and

then two how much I’ll be spending per click okay so let’s do that math real

quick I’m gonna leave 10,000 needs up there cuz we’re gonna actually need that

so cost per click so first we need to figure out how many clicks do we need so

how many clicks do we need to get 10,000 leaves all right so we know we need

10,000 leads I’m gonna say alpha leads it’s not leaders for all my chemistry in

bio majors there so for 10,000 leads now what we need to put at the bottom number

here is the conversion rate for our a landing page and the conversion rate for

our landing page is right here which is 20% so that’s what we’re gonna put here

in decimal form it’s 0.2 0.4 and rate for our lead capture page right and the

reason why we use this number is because let’s think about it for it separate for

a second so this is our lead capture page we know that the conversion rate

for our lead capture page is 20% so whatever number whatever amount of

clicks we are sending to our lead capture page 20% is going to convert

into leads and we know that we have 10,000 needs that’s our goal is to get

10,000 leaves so 20% of what number equals 10,000 is what we’re trying to

figure out that’s what we’re doing here algebraically and that equals 50

thousand clicks alright so that’s the amount of clicks that we need in order

to get this model to work so we now know our mystery number here which is 50

and fifty thousand clicks okay so now how much are we spending per click now

we already know how much you’re spending for this entire added because we’re good

because remember we’re aiming for 100 customers we’re paying 50 / 50 bucks per

customer so 50 times 100 once again is 5000 is what we’re spending for this

entire thing so now we just need to figure out how much of this 5000 divided

into clicks now remember we’re not remember we’re this is the same budget

we’re using throughout the entire ad so we’re not using some of this for a leads

some of this for it clicks some of this for customers it’s all one and the same

if that makes sense we’re just we’re just figuring out out of this 5,000 how

much would that be for leads and how much would that be for clicks so 5,000

for our budget divided by the amount of clicks which is 50 thousand equals 10

cents per click okay so that is our CPC cost per click it’s

10 cents okay so you see how this kind of works and so now if we kind of walk

use these numbers to walk through our basically our story here we know that in

order to get this model to work for us our goal is to get 100 customers okay so

we know that we need to get 50,000 clicks now if we are spending 10 cents

for each click that means 10 cents times 50,000 equals 5,000 so we’re gonna spend

$5,000 to push our traffic through this particular marketing funnel so out of

the 5,000 dollars that were spending the 50,000 clicks

20% of the 50,000 Clips turns into 10,000 leads and then those 10,000 leads

as they go through our marketing funnel 1% of those 10 thousand leads equals 100

customers and we know that where our aim is where our average order value what

we’re selling is $100 so if we have a hundred customers and

we’re selling $100 product that means that

in total we are making $10,000 in total revenue but remember we’re spending five

thousand dollars to drive this traffic through this funnel so if we are making

ten thousand dollars and we’re spending five thousand dollars that means we are

making a profit of five thousand dollars okay so do you see that do you see how

by knowing our numbers in an understanding your funnel understanding

your KPIs you can to a certain extent almost predict your profitability for

your Facebook Ads if you get this down if you understand this and you figure

these numbers out for your particular business model for your particular

marketing funnel then you are putting the rightful forward to basically

guaranteeing your ads are profitable without having to even spent a dime yet

okay and I think it’s important to realize a couple things here one is that

this is not all black and white okay because if if it worked perfectly like

this every time everybody would be rich okay it sadly it doesn’t work perfectly

like this all the time remember how I said before 80% of your ads are not

gonna work the way you want them to work only you know a smaller amount is gonna

work just like this but you have control over creating or trying your best to get

your numbers to be dialed into your kpi’s by changing things in your

marketing funnel and I remember these two numbers once again these are for our

ad right and these two here are a conversion rate for our landing page and

for our sales page is for our funnel right and then these two are for our

business the health of our business and $0.10 for our cost per click it’s not

impossible it can be a little bit tough depending on how well your marketing is

but remember our conversion rates here are really low one percent twenty

percent we’re just working with conservative numbers here but if we want

to reduce our cost per click let’s say it’s a little bit higher we can do that

by changing things in our ad maybe and testing out different things to try and

get the cost right click down or try to increase our click-through rate because

the higher the click-through rate is on the lower the cost per click goes down

or let’s say our cost-per-click looks good are picked

through it looks good but our conversion rate for our landing page is not good

let’s say it’s half of this it’s 10% so we know now okay there’s an issue with

our landing page so we can test out different copy images maybe our offer

isn’t where it needs to be or maybe our sales page the conversion rate for our

sales page is low hopefully it’s not who were that 1% cuz

if it is then you definitely know you need to work on something with furrious

and your sales page and that could be a variety of different factors or the

issue might be here with your webinar with your emails with um this process

here driving these leads to convert that might be where the issue is that’s where

you kind of have to focus and change and alternate things in there in order to

get these numbers to look the way you want them to look and then obviously

your cost per acquisition and your average boredom value let’s say um you

know you can always raise their prices you know if you decided to charge $200

for your product or your service then you have a little bit of wiggle room

because if I’m charging $200 then my CPA is gonna be $100 so I can afford to

spend $100 for one person to buy right and and I can do that because if

somebody does buy and I spent $100 I’m getting $200 back two to one ratio is is

is a great goal to set you may not always hit that all the time and that’s

fine but as long as you’re profitable right guys as long as your CPA at the

end of the day is lower than your AOV right that’s really all that matters at

the end of the day because that means that you’re you’re gaining more and

profit than you are in spending because if you’re constantly spending more than

you’re making then you know obviously you’re just losing money well with that

being said like I said with the e-commerce example you may have a lower

CPA and have a lower price point for this funnel but you may have some

upsells afterwards you have to consider that into your equation so let’s say

you’re buying is like you know 20 bucks or 50 bucks you might just be breaking

even in terms of your ad flow but when you include your upsells and all that

kind of stuff that’s where you see the return on investment that’s what you

see the profitability so you have to remember to to incorporate your upsells

into your AOV okay guys so that’s it that is the profitability formula or

right there so as you can see it’s a lot of math it kind of looks all jumbled up

myself but I promise you if you take some time get a piece of paper out dry

out your final write out your kpi’s and go through step by step to try and

figure this stuff out for your particular business model once you have

this figure out you have a plan right and that’s the most important thing you

need a plan you need to know where you’re going you need to know what

you’re aiming for and I now know what I’m aiming for before I even spend a

dime on an ad and so once I begin running campaigns and I start testing

and I start optimizing I have a goal to hit these numbers because I know if I

can hit these numbers no matter what I’m gonna be profitable because math does

not lie it’s just going to work out and the way that you manipulate these

numbers and get them to work is by changing things in your funnel and and

with the optimizations and all that kind of stuff once you are actually

profitable then all your your number one goal is to scale you scale this whole

baby up and that’s what we’re gonna be talking about later on this course with

multiple different ways to scale your ads so that you will stay continue to

stay profitable even though you’re increasing the ad budget because

obviously if I’m spending 50 bucks and I’m making 100 bucks every time I do

that that’s where printing money comes in

okay and you might hear about gurus or people that are really successful online

printing money online this is where they get that from and if you dial this in

okay if you dial this in and it’s working for you man I’m selling my car

I’m borrowing money from family members friends I’m taking out bank locks I’m

pouring everything I can into this ad because I know for every dollar I spend

I’m getting $2 back so that’s the sweet spot that’s where you want to get to and

I hope this video was valuable for you guys I hope that it was helpful I know

it’s a lot of technical stuff and a lot of math but um this is this is the stuff

that a lot of people are missing this is the stuff that a lot of people don’t

teach okay and if you understand this process you are

well ahead of the competition you are well ahead of understanding what you

need to hit in your business in order to guarantee that your Facebook ads are

profitable so if you like this video if you got value from this video give it a

big thumbs up guys leave any comments that you may have down in the comment

section below if you have any questions about your particular business model and

you need help with this leave me a comment too as well I try my best to

help don’t just tell me your business and say figure out your kpi’s for me I

can’t do that for everybody guys like go through this figure it out yourself but

if you have an issue or you’re stuck or something let me know the Congress and

obviously I’d be happy to help also don’t forget to subscribe to my page hit

the notification button so that you can get updates for later videos that I’m

doing as well as you continue to follow along with my facebook ads course here

and last but not least if you would like my 10 Facebook ad copy cheat sheet where

I cover ten secrets of copy strategies and um things that you can include in

your ads in order to get them in order to write effective ads that actually

selling that actually work then click the link down below in the description

download that free pdf guys but until then y’all I appreciate you guys so much

for watching thanks for sticking in with me I know this was kind of a longer

video but we’re gonna be going along in the lesson here so if you’re following

along with the ultimate Facebook Ads course you can continue with the next

lesson and if not well I hope to catch you guys on another video go ahead and

engage share this video with other marketers or other people that would

benefit from understanding this if you have a agency or no agencies or if you

just know other people they’re trying to run Facebook Ads they need to know this

and this this can this can really save you a lot of headaches at the end of the

day all right guys I’m done rambling you guys have an amazing day and I’ll catch

you guys on the next video

Your vids should be in the ecom YouTube side as well your content and expression is top value and very transparent

Fascinating. Unbeatable free traffic & 6 buyers https://goo.gl/nm9RPW

Gabe, love the content man! Would it NOT make sense to run this process with a $7 product. It seems like you would need a product that cost a bit more, correct?

Wow Gabe! Yes, this video is technical and a lot of math! but you really broke it down and I know after watching it a few times, I will get it! Ty! 🙂