3 SECRETS To More REVENUE And SCALING FASTER With Facebook Ads

Rather than relying on “hacks” to try and manipulate your Facebook ads performance, I am going to share with you three secrets that will allow you to generate more revenue, get more consistency, and scale faster.

Well...to be honest, these aren’t technically “secrets” but something most eCommerce brand owners overlook.

If you are able to understand what I am about to tell you, analyze your business to find areas of improvement, and take action….this post will help grow your business.

The biggest determining factor in making more revenue is taking action. I can’t make you take action but I can give you information that will allow you to.

This isn’t another post you tuck away, read once, and never read again. Take what I am about to teach and afterward see how you can imply it for your unique situation.

To give you more insight, here are the three “secrets”:

1. Buy Till You Die
2. The Big One
3. A Percentage A Day Keeps The IRS Away

Let’s get to it, shall we?

// Buy Till You Die //

You are probably wondering what this is, it is…

Life Time Value Optimization

If you want to grow your eCommerce business to 7 figures and beyond, you HAVE TO understand what your customer lifetime value is.

For those who don't understand this term, it is the amount of money a customer spends while being acquainted with your brand.

A simple formula for calculating LTV is: Lifetime Value = Average Order Value * Average Number of Purchases From A Single Customer

I understand there are many other factors that can come into play but this is a great starting point. 

You can even break it down by specific time periods by calculating your LTV over 6 months, 12 months, 18 months, etc

Therefore, when buying traffic, you should not only look at how much you are making on a single purchase but how much you can expect to make once a person becomes a customer.

If you use Shopify as your storefront, you can easily find what your average customer lifetime value is. Simply look at your ‘Returning Customer’ report to see how much total money people spend on your brand.

To put things into perspective, if you are achieving a 2X return on your Facebook ads only taking into account the single purchase average order value, you are leaving a ton of money on the table.

A person isn’t only going to purchase once if your product, customer service, and customer experience are top-notch.

Therefore, the true return of your campaigns can be significantly higher because you will make more profit as new customers continue to buy. 

Additionally, since you already acquired the customers through cold traffic campaigns, any additional purchase is going to cost you pennies on the dollar because retargeting, emails and organic content is free or very inexpensive.

To put some numbers behind it:

You are currently acquiring 2000 customers a month and the average order value is $50. 

Without understanding your brands LTV, you make $100,000 in revenue

However, if the business owner above understands their LTV is, let's say, $300 then instead of seeing 2000 customers as $100,000, they see it as $600,000 in revenue.

This presents a couple of different scenarios:

1. Since the business owner understands their LTV, they now know they can pay more per customer. This will allow them to scale faster with looser constraints since their goal CPA would be higher.
2. If the business owner doesn’t want to scale based on LTV calculations then they still know they can expect to make more money over time as the customers they acquired in a given month purchase more.

If this doesn’t make sense, post below, I will try to explain it better.

The biggest brands in the world understand their LTV which allows them to outspend their competition and continue to grow. In a lot of cases, brands will LOSE money on the initial transaction because they understand that over time they will PROFIT.

Now you might be thinking, how do I increase my brand’s LTV?

I’ll give you three ways:

1. Paid Advertising
2. Email Marketing
3. Organic Content

Something that I see a majority of brands not doing is targeting their existing customers with Facebook ads.

Like I said above, remarketing to these customers is going to cost significantly less than cold traffic campaigns.

Here’s a basic setup you can test out:

• 7-day purchasers - Use a thank you video filmed by the founder thanking the customer for their purchase and ensure them their product will get to them asap.
• 14-day purchasers - Use another video ad, stating that they hope they received their product and are enjoying it. Ask them to leave a review or film a testimonial for a special gift.
• 30-day purchasers - DPA or still image (refill reminder) offering them a one-time special customer only discount.

For email marketing, try sending a weekly newsletter about 2-3 times a week. Give 2 pieces of valuable content per 1 sales email per week. Additionally, after about 30 days after their first purchase, you can send them an upsell email with a customer only discount.

Additionally, you want to have your standard thank you email that sends immediately after someone purchases.

Lastly, organic content is self-explanatory. Posting organic content regularly will keep your customers engaged plus it also has positive effects on your CPMs for Facebook ads.

I’ll even give you a bonus tip…

Something that has been working is sending a written thank you letter addressed to the new customer. You can even throw in a discount code too for their next purchase. Sometimes the biggest impact is on tedious tasks.

Moving on to the next ‘SECRET’...

// The Big One //

Have you guessed what this could be about?

If you said, Average Order Value, then you are right!

Another key element in any eCommerce business that I see is overlooked is increasing the Average Order Value or AOV of a customer.

Let’s start off with some simple math, going back from the previous example:

You are currently acquiring 2000 customers a month and the average order value is $50. 

Keeping your AOV constant, you are making $100,000 in revenue.

Now let's say you increase your AOV to $60 with methods I am about to share.

Instead of $100,000 in revenue, you are making $120,000 in revenue! That’s an EXTRA $20,000.

Similar to understanding your LTV, having a higher AOV will allow you to spend more per customer, scale faster, and combat rising ad costs.

When it comes to increasing your brand’s AOV, you can do 2 things:

1. Increase your prices
2. Increase the number of items a customer buys in a single transaction

From my experience, you can only increase your prices by so much before customers feel your products don’t provide enough value to justify the cost. Therefore, they don’t buy.

So, to increase your AOV, the easiest way is going to increase the number of items someone buys in a single transaction.

Here are three ways you can achieve that:

1. Bundling products
2. Quantity Breaks
3. Post-purchase upsells and downsells

Bundling products is pretty self-explanatory but typically, you want to bundle products that are related to each other and improve the overall customer experience.

Most of the time, a successful brand is going to have 1-2 hero products and other complementary products.

An example is selling a phone case and bundling it with a phone charger.

OR

Selling a winter coat and bundling it with a pair of warm winter pants.

When bundling, I find offering a slight discount on the second product works well.

If you are using the Shopify platform, there are many apps out there that allow you to bundle products together.

A great app to use is VITALS which can be found here: https://apps.shopify.com/vitals

Next are implementing Quantity Breaks.

Quantity breaks are offering a discount to customers that purchase more than one of the same products.

A LOT of supplement companies do this by giving a bigger discount for each bottle of vitamins a customer purchases.

You can also use VITALS for this.

Check out the following brand, Organixx, they sell health supplements.

They have an option to buy multiples of the same product but at a slight discount for each bottle, someone buys.

→ https://shop.organixx.com/collections/all-products/products/7m-plus

Lastly, the tactic that will probably have the greatest impact is post purchase upsells and downsells.

This is when you offer a discounted product directly after a customer purchases from you.

Typically, people are redirected to a separate landing page using tools such as One Click Upsell or Cart Hook.

These tools work amazing and in some cases, brands I have worked with have seen their AOV DOUBLE.

All we did to double the AOV was offer the same product again but at a discount. This might now work for all brands but in this case, a women’s swimwear brand, it worked great.

One Click Upsell and Cart Hook allow for what is known as a one click upsell. This means that all the customer has to do is click the “Add To Order” button and their card will be automatically charged.

Organixx does this as well. It’s a pretty sweet brand to see a bunch of the things you should be doing as a brand owner.

// A Percentage A Day Keeps The IRS Away //

The more money you make, the easier it is to pay your taxes lol (I hope)

Honestly, it’s the only catchy phrase I could come up with for what I am about to discuss.

For any non-US people, the IRS is the US tax department.

But anyway, this is all about website conversion rate.

Again, let’s start off with some numbers:

You are currently getting 100,000 website visitors per month, have a website conversion rate of 2%, and the average order value is $50. 

At a 2% conversion rate, you are acquiring 2,000 customers.

At a $50 AOV, your total revenue for the month is $100,000.

Now let’s say you are able to increase your conversion rate to 3%, which is completely doable. 

Instead of acquiring 2,000 customers on 100,000 website visitors, you now acquire 3,000 customers.

At the same $50 AOV, you now make $150,000 in revenue or $50,000 MORE.

Similar to understanding your LTV and increasing your AOV, having a higher conversion rate will allow you to spend more per customer, scale faster, and combat rising ad costs.

Do you see how all these three secrets I talked about can have a big impact on your eCommerce business?

Now you might be thinking, “Josh, how do I increase my website conversion rate?” and that’s a great question.

However, increasing your conversion rate isn’t as simple as changing one thing on your website and BOOM, you can make more money.

You have to take a full-funnel approach to increase your conversion rate.

A full-funnel approach looks at (all of these metrics can be found in ads manager):

• The conversion rate from outbound click to landing page view
• The conversion rate from landing page view to content view
• The conversion rate from content view to add to cart
• The conversion rate from add to cart to initiate checkout
• The conversion rate from initiate checkout to purchase

Each of the five steps above comprises the customer journey.

Each step is a piece within the whole puzzle of the website conversion rate.

If you can improve the conversion rate at one step of the funnel above while keeping all other steps consistent, you can increase your overall website conversion rate.

Even better is if you improve the conversion rate at multiple steps thus having a greater effect on your overall conversion rate.

So before you can increase your conversion rate, you must calculate the conversion rate for each step of the funnel.

For example, if you want to check the  conversion rate from outbound click to landing page view aka the number of people load your website, you follow this simple formula:

Conversion rate = Landing Page View / Outbound Click

So if you have 1000 outbound clicks and 800 views the landing page then you have an 80% conversion rate.

This number also allows you to calculate your bounce rate.

Simply take that number and subtract it by 1, like this:

Bounce Rate = 1 - 80% 

Bounce Rate = 20%

To get the other numbers, simply plug them into the formula in the same order as before.

Once you understand what your conversion rates are at each step of the funnel, you can compare them to baseline metrics to see how your website compares to industry averages.

Here are some baseline metrics from my experience working with brands (I am mainly dealing with US traffic & AOVs of $150 or less (on average $60 or less): 

• Outbound Click → Landing Page View: 80%+
• Landing Page View → Content View: 50%+
• Content View → Add To Cart: 10-15%+
• Add to Cart → Initiate Checkout: 25%+
• Initiate Checkout → Purchase: 50-75%+

Are your numbers beating the average? Great! It means your website is converting well but there still could be room for improvement.

Are your numbers below the average? It means you have a lot more room for improvement.

I have another post in this group that goes more in-depth on how you can improve each step of your funnel.

Let me know in the comments if you can’t find it and I will reply to your comment with the link but the post is titled “How Your Ecom Brand Can Make More Revenue From Facebook Ads”

Even the smallest percentage increase in conversion rate can have a great effect on your overall sales.

So yeah..that’s all I got for you guys.

Hopefully, this was helpful and you take what you learned and implement it into your business.

Zero change can happen if you don’t take action.

Thanks for reading.

-Josh