Have your Facebook ads stopped working? Wondering what needs to change?
To explore a new approach to Facebook ads strategy, I interview Nicholas Kusmich on the Social Media Marketing Podcast.
Nicholas is a Facebook ads strategist with H2H Media Group. He hosts the Accelerated Results podcast and is the author of Give: The Ultimate Guide to Using Facebook Advertising to Generate More Leads, More Clients, and Massive ROI.
You'll discover how Facebook ads have changed over the last few years and find tips to help you change your strategies to keep up.
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Shifting Facebook Landscape
The number-one frustration of Facebook advertisers across the board is that everything is always changing. Nicholas says we should focus less on what's changing on Facebook and more on changes to how users are experiencing the platform.
A few years ago, Facebook had a lot less traffic and a lot less going on. You could target someone to come to your website and buy something, and if the message-to-market match was good, you'd get a great result. Everyone was raving about how easy it was to make things happen on Facebook. But things have changed.
More people are using the platform, which means there's less real estate on the news feed. It's also getting busier, which makes it harder to capture attention as an advertiser and harder to consume information as a user. Mark Zuckerberg recently estimated there were about 7 million advertisers on Facebook, all competing for limited real estate. And most users consuming those ads are on mobile, not desktop, by the way.
Buyers are also less trusting. Before, if you were one of the top brands—or even if you were a less established up-and-comer—you could sell a lot very easily. Now, people don't trust anybody because they've been duped. Add to that Facebook's own issues with Cambridge Analytica, and the trust factor has gone way down.
Consumer behavior has also changed. If we rewind 5–7 years, an average consumer needed up to 16 touchpoints before making a buying decision. Those same studies are saying that a consumer now needs up to 33 touchpoints before making a buying decision.
So with the constant changes, increased competition, and consumers needing ever-increasing points of contact before saying yes, you have to stay sharp or get left behind as a business owner and advertiser.
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Evolving With Consumer Trends
The options you can choose for Facebook Advertising—as well as the limitations—can be overwhelming. The Stories platform on Facebook and Instagram has also changed the game because how one interacts with Stories is very different from how one interacts on the news feed. This, in turn, is very different from how one interacts on Instagram versus Facebook with Messenger ads.
Nicholas thinks this is a good thing because it means Facebook is always evolving. They understand user behavior.
A few years ago, Facebook noticed that images were popular so they placed their successful bid to buy Instagram. Then Facebook noticed that messaging was hot so they bought WhatsApp and doubled down on their own messenger platform, which has led to the advent of bots. It's encouraging from the perspective that Facebook is realizing that consumers behave in different ways, and they're not falling behind on those trends.
On the other hand, Nicholas warns that a business owner or an advertiser needs to avoid being distracted by all the new bells and whistles that come out with each new rendition of the ads platform.
Challenge Is Relative
An increased focus on privacy, not just for Facebook but for consumers, is going to make it a little harder for marketers to target and retarget people. But Nicholas wants to reframe this idea of “harder.” It might be harder for us who were born and raised in the Internet age when marketing was extremely easy, perhaps.
For the most part, when Facebook first came out years ago, there were no restrictions on what you could say or show. It was the wild west. Things went crazy and there was an explosion of Internet multi-millionaires.
Then came the advent of what Nicholas calls “the Teespring era,” where you could put a last name on a T-shirt, show that exact ad to people who had that last name, and they'd sell like wildfire.
Often, when Nicholas goes to his masterminds or other circles, he's reminded of what he calls “the OGs”: the old-school direct response marketers who were basically buying mailing lists and had no idea who was on them or where they went. They just had to lick a stamp and write a letter and hope that someone would read it.
So yes, Facebook is getting more difficult to operate on compared to the past. But from the perspective of those old-school marketers, we still have it a lot easier than it was not that long ago.
When advertising first started on Facebook, it was a direct-to-sale play for most people. Facebook was a channel for direct response ads that encouraged people to take a very specific, trackable action such as purchasing. For the most part, this worked very well. You could acquire a customer at 25% to 50% the value of that customer, and people would do that all day long.
But now we need to reevaluate the purpose of Facebook in our overall advertising or marketing strategy.
Lead Generation: Nicholas emphasizes that Facebook advertising isn't just a channel to generate sales; it's also a channel to generate leads.
If you can generate a lead—at minimum, a name and an email address—you've acquired someone who's raised their hand and shown that they're interested in a particular topic. Once you've generated that lead, you now have multiple channels on which to continue to correspond with that person, moving toward those desired 16, 22, and now 33 touchpoints.
According to Dean Jackson, a lead is an appreciating asset over time. A lead who comes into your world today isn't going to be worth as much as a lead who's been in your world for a year. Their worth to you will keep growing if you keep nurturing that lead and providing value to them.
Bringing Them Into Your Ecosystem: Nicholas knows people may say that email isn't the best channel. There's no “best channel,” but there are multiple channels.
If you can get someone onto an email list, you can send them high-value emails regularly. In those emails, you can encourage them to listen to your podcast. Then on the podcast, you can encourage them to subscribe to your YouTube channel. Once they've subscribed to the YouTube channel, you can encourage them to attend your live event.
We shouldn't focus on just one channel of communication. We can bring people off the Facebook platform, and through multiple channels, we can have more than 33 touchpoints to eventually warm that person up to a sale whenever they're ready.
We were in a Facebook-first, Facebook-only world until just a few years ago—and rightfully so because it worked and everyone loved it. So people figured, why do email? Why do YouTube ads? Why do anything else? Let's make this “the thing.”
What marketers are starting to realize now is that while Facebook is a great, cost-effective way to get the right message in front of the right person at the right time and bring them into your ecosystem, that ecosystem isn't just Facebook or email. It's every social channel you have. People consume content in different ways at different times of the day and in different capacities.
Now we can put people on our list, generate an email, and then bounce them around our ecosystem so we're constantly in front of them providing value in different ways on many channels. Facebook is a great complement to other channels we use to generate sales.
Supplement Emails With Facebook Ads: Anyone in the lead generation world used to run an ad, get someone onto an email list, and then use email to distribute whatever information they wanted.
Now, email open rates are at an all-time low, and click-through rates are even lower than that. If you've spent all this time, money, energy, and effort to generate the lead itself, and then you rely on just one very poor channel to nurture them from lead to customer or client, it seems a little bit irresponsible. But you can use Facebook to supplement email.
Mirror campaigns are a great example of this. A mirror campaign is when you take the core piece of content that you've distributed via email and also put it in a Facebook ad to show to a custom audience of your email list.
You're not relying just on email to deliver that content, hoping your prospect consumes it. Now you have two channels through which you can deliver that content to those people. Invariably, email open rates go up, presumably because they saw the ad and it reminded them to open the email. The consumption rate goes up because now you're not just relying on email that sometimes misses an inbox, gets lost in spam, or possibly doesn't get delivered because of technical issues. Now, they're seeing it in their news feed. They're getting the information.
The point here is that we need to see Facebook as not just a top-of-funnel tool but also a middle-of-funnel and bottom-of-funnel tool. When we're promoting sales messages to our lists, why not use Facebook to do the same thing? When we're trying to “push” someone through the various stages of a funnel, why just rely on email when we can actually use Facebook to do the same thing?
Focus on Lifetime Value: We see more people talk about abandoning Facebook as a platform, claiming it just doesn't work for them.
This is because a few years ago, if they were selling a $100 widget, they could acquire a customer for $50. That math worked out for them all day long. But then, over the years, $51 went to $75, and $75 went to $90, and $90 went to $100, and $100 went to $110. If they acquire a customer worth $100 to them short-term and it's costing $110 to acquire that customer, they rightfully want to move platforms.
We have to reframe our perspective and realize that our front-end offer to our marketplace or industry isn't actually a profit generator but is what some might call a self-liquidator. The idea is if we don't make a profit on the front-end sale that's okay, because as a business owner we have an LTV (lifetime value) of that customer, not just the single transaction value of that customer.
If we know that the lifetime value of a customer is $700 over 3–5 years, then spending $110 to acquire that customer is actually great profit. We just have to exercise patience. As business owners, we have to think beyond that single transaction and be prepared to treat customers well, to cross-sell and upsell, and to have them stay in our world as a continuous customer.
Ryan Deiss said that in the game of advertising, he who can afford to pay the most to acquire a customer wins. But when most people approach advertising, they're wondering how they can acquire a customer for the cheapest amount possible.
Both are true. Of course, we don't want to overspend to acquire a customer, but due to all the changes in Facebook—where competition is high, trust level is low, and consumers need up to 33 touchpoints before making a buying transaction—we do need to realize that profit doesn't need to be made on the initial transaction.
We as business owners need to start to think post-transaction—and that could be right in the midst of the transaction. Once they buy with things like order bumps and upsells and downsells and cross-sells as they're going through a checkout process, that's great, but what are you also doing as a business owner to increase the lifetime value of that customer?
That's where people are really going to win on Facebook: when they reframe and think about lifetime value rather than immediate transactional value.
Resistance to Change: It's been difficult to get people to reframe that thinking because we're trained—especially in the direct response world—to think we need to create a profitable transaction immediately.
At one of Nicholas's 2-day intensives, a participant had a primary product that was a $7 offer for a 7-day trial of a sleep supplement. In the old-school world of direct response, that meant they would need to acquire each new customer for less than $7. What came out of his mouth that blew everybody away is that every time they acquired one of those $7 customers for the trial, they were losing $5.23.
This was an eight-figure business; they were doing very, very well. They were gaining new customers by the thousands each week. But every time they acquired a new customer, they were losing $5.23.
But they knew that their 1-year value of a customer—not even the lifetime value of a customer—was approximately $40 for their product. So they were spending $12 to acquire a $40 customer, and even though they didn't see that $40 immediately, they knew they would see it over the course of a few months.
Of course, you have to make sure your business has enough cash flow to pay for the ads to acquire the customer and lose $5 every time. Nicholas helped this business add a simple order bump to their checkout process, which now has them breaking even on every transaction. With their order volume, this meant millions of extra dollars.
Hearing this company's mentality of losing money every time they brought on a customer was eye-opening for everybody else in the room. But when they broke it down, it made sense. Until you start thinking about the bigger picture of things, it'll be hard to grasp. But once you do, then it starts to make complete sense.
Fast, Medium, and Slow Prospects
Every prospect can be placed into one of three categories: fast, medium, and slow. A small percentage of prospects will transact very quickly, within the first couple of touchpoints. Some prospects will need a few more touchpoints before they make a buying decision (this is for whom the traditional Internet marketing funnel was invented). Other prospects may need up to 2 years of nurturing before they transact.
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Knowing the three reframes we just talked about, and knowing that every prospect falls into one of three categories, Nicholas has a strategy he calls Capture, Consume, and Convert.
Rather than trying to get them to pull the trigger right away and purchase something, Nicholas follows Robert Cialdini's influence idea of micro-commitments: How do we get them to say yes to something small to gain their trust, provide value, and earn the right even to ask for a transaction?
It's a lead generation play through what the industry calls a lead magnet: a one- to three-page downloadable PDF that delivers exceptional value and offers insight over information. What that means is that it's not just a bunch of information they could have gotten on Google. Insight is strategic and applicable content that someone can execute to get one step closer to their desired outcome.
This offer allows people to stick their toe in the water before diving in. If you try to go too fast, it could end up with a slap in the face and a ruined reputation. And that's not what we want in the Internet world. We want people to appreciate and value us and speak highly of us, rather than the opposite.
Nicholas says he doesn't love Facebook lead ads, where prospects can fill out a form to request information right there in the ad. While the cost per lead is extremely low, so are conversions. There's just not enough buy-in; people may not necessarily be thinking through what they're doing, they may just be pushing a button.
Sometimes Nicholas has even had people on the tail end of the lead ad claim they didn't ask for the lead magnet. They did, but they didn't even know it because they were just pushing buttons. He prefers directing leads to a separate landing page that requires them to fill out their information there and hit a button to have it delivered via email. And even if they don't fill out the form, he can remarket to them because he's got a pixel on that landing page.
These days, Nicholas feels a good opt-in rate is approximately 33%—but that also means 66% aren't taking the action. They're clearly interested because if they weren't, they wouldn't have clicked on the ad. There was intent but maybe they just didn't like something about the page or offer. Nicholas recommends retargeting them as very hot prospects because they made the effort to read the ad, click the ad, and come over to the page. They just didn't take that next step.
A Good Landing Page: Nicholas recommends that a landing page contain a simple headline, a great image, a few bullet points, and ultimately a form. A simple headline formula Nicholas likes is, “How to X without Y so you can Z.” X is what they want, without Y (the thing they're trying to avoid) so that they can Z, the ultimate benefit.
Another important element is an image of the thing they're getting—the cover page of your PDF, for instance. There's something that happens in the consumer's mind when they can get a visual of that thing, even though they're never going to get the thing in that way. If you can throw in some social proof and some extra, that helps. But that's just a bonus.
If you make a very light, non-aggressive offer to people who've just opted into something, a small percentage who are ready to take action right now will say yes to it, which is a great thing. But the reality is that the majority won't want to take action right away.
Here's where we enter into the Consume phase, which involves providing valuable, insightful content. Nicholas calls this “milestone content.” Picture your prospect at the base of a mountain and the peak of the mountain is where they want to go, their overall dream goal. As they begin to climb, there are certain milestones, landmarks that make them feel good about their progress.
As a business owner, think through the milestones that someone needs to hit en route to their journey of accomplishing X. Whatever that is should be the framework of the content you now produce.
The strategy is to help people hit milestones without charging them, just because this is the value that you provide to people on your list. Then, with every milestone they hit, psychologically that person is thinking a) that you're great, and b) that nobody else was able to help them. So when they're thinking about their next steps, they're coming to you and asking you what's next.
The Consume phase is about how we use ads, email, podcasts, books, and other channels we're on to deliver milestone content to this new lead, without being aggressive or heavy with our sales.
You can think about this in the form of a funnel. Maybe there are webinars that you want to put people into; maybe there's a three-part video series; maybe it's bringing them to an event. Whatever it is, think about what milestone content you can get in front of your ideal prospect, and get them to consume that content.
This is also a great time to use the Facebook mirror ad strategy. Anytime an email goes out, use Facebook ads to get that same content out to the prospect so they can consume it and build trust in you. More importantly, they build trust in themselves so when they're ready to make a buying decision, there's much less resistance. You've done the hard work of providing value; overcoming objections; and building trust, authority, and credibility along the way.
Overcoming Objections: With any big decision someone makes in their life, there are some smaller decisions they have to make before they step into that big decision. Amy Porterfield does this well. She's figured out what all of those objections are, and she's created a lot of free content that addresses these objections so people are prepared to buy the big product.
One of Nicholas's favorite ways to overcome objections is case study-based narratives of people who once had the major objection that you're overcoming. This way, you don't have to address the objection directly. If you go deep into telling someone's story from a case study perspective, anybody who has doubts can overcome those doubts not because you told them to, but because you told them someone else's story.
The Long Game: Nicholas says that the Consume phase can last anywhere from 1 hour to 2 years.
There is a consumer study right now that says 50% of the people who inquire about a product end up buying that product within 2 years. If 100 couples go to a store to look at a washer and dryer, 50 of those couples will actually end up buying a washer and dryer within 2 years. It doesn't mean they'll buy it from the original source they inquired from, but it means they'll buy that very thing.
Of that 50% who end up buying the thing, 15% of the 50% end up transacting between day 0 and day 90, and 85% end up transacting between day 91 and 2 years. Most people are abandoned by marketers by day 8. Marketers think that if a customer didn't convert in their 4-day funnel, it must be a dead lead. But they haven't even gotten started.
How much is being left on the table by marketers who've abandoned “dead leads” who are now just buying from competitors? It's not that they never would have bought, they're just buying from someone else because we give up on them. We need to think much longer-term.
In the Consumption phase, people can buy within an hour but other people will buy in up to 2 years. Anything over 2 years may be a dead lead. But Nicholas says that when he's speaking in front of a group or holding a mastermind, he asks his newest members, “How long have you been in my world before you made this buying decision?” On average, he finds it's 2–3 years.
At some point, we need to make offers. Obviously—no offer, no sale. But how do we do it in a way that isn't too aggressive and doesn't put anybody off? There are a few ways to convert.
Promotions: There's a reason why Black Friday is the highest transactional economic movement in retail ever. Everybody knows that on Black Friday or Cyber Monday, things go on sale. In fact, depending on what time of year that you're listening to this conversation, you should be planning 3 months out what naturally tends to happen on the Facebook platform.
Approximately 8–12 weeks before Black Friday, buying behavior goes down and ads stop working. Why? Because they're adding items to their cart but they know 2 months from now they're going to be able to get it all on sale.
The mindset is converting into this idea of not buying yet because a sale is about to come. Don't worry about your ads if they're not converting as well. There's a reason you push hard on your prospecting ads right now: because when you start getting close to Black Friday, you switch that over into your retargeting ads and stay in front of all of those people who had been waiting to buy.
Super Signature: Another way Nicholas likes to convert is by using what Dean Jackson calls a “super signature.” Essentially, on every correspondence that goes out throughout the year—non-sales times, non-event times, just during the everyday flow of your business—you end by saying, “P.S. Whenever you're ready, these are the one, two, or three ways that I can best help you.” In Dean's case, resource one is a free thing, resource two is a low-ticket thing, and resource three is a high-ticket thing.
Now, every time Nicholas sends his weekly email, he makes sales because whenever they're ready—and it just so happened that when they read that email, they were ready—they've decided to transact with him. Some of these people have been on Nicholas's list for years, some only months or days. But as Dean Jackson also says, there are only two times that people transact: now and not now.
If they're not transacting now, it just means they're “not now”—but now will eventually come. So we want to constantly present a very light, non-aggressive message of, “Hey, whenever you're ready, this is the best way I can help you.”
Nicholas takes the Super Signature concept farther than just email. Anytime he does a video, a blog post, or anything else, he always ends the same way: “Whenever you're ready, this is the best way I can help you.” That begins to drive sales from people who were “not now” but have converted into “now,” and are ready to transact. It's another simple way to create conversions without being overly aggressive with hard sales.
Discovery of the Week
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Key Takeaways From This Episode:
- Find out more about Nicholas on his website.
- Follow Nicholas on Facebook, Twitter, and LinkedIn.
- Read Nicholas's book, Give: The Ultimate Guide to Using Facebook Advertising to Generate More Leads, More Clients, and Massive ROI.
- Listen to Nicholas's Accelerated Results podcast.
- Join Nicholas's membership community, The Council.
- Learn more about Dean Jackson, Ryan Deiss, Robert Cialdini, and Amy Porterfield.
- Check out descript.com.
- Check out Social Media Marketing World 2020.
- Watch exclusive content and original videos from Social Media Examiner on YouTube.
- Watch our weekly Social Media Marketing Talk Show on Fridays at 10 AM Pacific on Crowdcast.
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What do you think? What are your thoughts on adjusting strategies to generate more leads with Facebook ads? Please share your comments below.
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