Using Facebook advertising is a great way to sell a product or service. When you set this up right, you can be sure you will pay less for each click and you earn on average more from each visitor.
This means that your Facebook advertising campaign will increase you ROI. You can keep investing more into your daily advertising budget.
That is only one way to use Facebook Ads. Another example is to use Facebook advertising to build a mailing or subscriber list. This can work incredibly well when it comes to selling bigger ticket items (products or services).
Here’s how you use Facebook advertising to build a subscriber / email list:
- Work Out Your CLV (customer lifetime value)
The first thing to do, is to work out your CLV. Your Customer Lifetime Value and it basically tells you how much each lead that engages with your business is going to be worth to you.
The concept is someone who subscribes to your mailing list is likely to be a fan and therefore is likely to buy a product or service from you. They are likely to buy multiple products from you.
If you have a subscriber who buys 10 products from you over the course of 12 months, they are worth a lot more compared to one-time purchases.
In order to calculate how much your subscribers are worth to you then, you need to work out what the average amount each subscriber has spend with you. Add up the total spend and divide it by the number of subscribers. This is your CLV.
- Use CPA (cost per action)
Now comes the next acronym: CPA or Cost Per Action. This means you are paying for a specific action to be carried out, more than just a click.
You can choose from a variety of actions. The one we are interested in is people subscribing to your mailing list. Using CPA in this way, you now only pay for subscribers, rather than paying for people who click and then may or may not subscribe to your list.
If you have calculated your CLV this becomes a very simple formula for profiting from your mailing list. All you need to do is ensure you pay less for each subscriber than their CLV and that way, you will keep increasing your profit over time!