In case you haven’t heard by now, Facebook is a pretty useful tool if you want to generate revenue for your business.
But what if you didn’t have a product or service yet? Could Facebook ads work for a business that was just an idea and not even launched yet?
It wasn’t a question we put much thought in to at that current time. That was until a late Tuesday afternoon phone call with a referral from an agency partner of ours. Then the client said this:
“We have an idea for a boutique service. We think it is a winner and we want to test it. But even though we are a world-renowned brand, we don’t want our competitors to steal our idea before we can be first-to-market with it. So, we will be creating an entirely new brand to test this service. Oh and one more thing, we don’t know how we are going to fulfill yet, but we should have it done in the next few weeks. When can we get started?”
After we picked our jaws up from the floor and continued our conversation, we learned the new service would be a monthly headphone subscription. Customers would pay a monthly fee and have access to 10+ headphones they could exchange for another brand-new pair at any time.
Now that we understood what the service would be, we identified three pain-points they needed our help with:
For the skimmers, I’m about to share the exact ads, images, and copy that we used to show you:
BLOCKQUOTE: But what if you didn’t have a product or service? Could Facebook ads work for a business that was just an idea and not even launched yet?
Finally, these results were only for the state of California, so imagine what they would be when we run this in all 50 states.
Since this was a new product, we didn’t have any clear-cut goals other than to figure out whether or not the service was viable. So, what we had in front of us was a series of tests.
The first test was to figure out which price point to offer the service. Our choices were $19.99 and $24.99 per month, and we were going to focus this initial test on people who live within 25 miles of San Francisco, CA.
For this test, we created three saved audiences:
We decided to test the more expensive offer first ($24.99/month) because we wanted to figure out quickly if the higher-price-point would work.
Over 21 days, we spent $869.08 we were able to generate 549 clicks on our ad, 456 landing page views, and 70 leads with costs of $1.58, $1.91, and $12.42 respectively. Considering the estimated lifetime value of a subscriber is $240, we were very excited at the early returns of sub-$13 leads.
Here are the ad details:
Amount Spent: $869.08
Total Clicks: 579
Total Landing Page Views: 456
Total Leads: 70
Also, here are the top 3 ad sets from this first test:
Surprisingly, the biggest objection we ran into was people thinking it wasn’t a real service or that they would be receiving used headphones.
We took these data points and incorporated them into our next test.
Now that we knew people responded positively to the $24.99/month price tag, we wanted to see if a lower price would have an impact.
Our other goals were to create lookalike audiences of people that became leads, test new ad copy and creative, add a survey to our Thank You page to gather data, and launch a new campaign in Los Angeles.
We ran this test for 60 days.
Here are the results:
Amount Spent: $4,691.96
Total Clicks: 3,038
Total Leads: 362
Cost Per Lead: $12.96
Total Survey Responses: 345
Cost Per Survey Response: $16.12
Now that we have generated all of these leads and analyzed the survey data, it was time to confirm the viability of the product.
We launched an email campaign to all of our leads to let them know about the launch of the initial pilot program. That campaign had a 38% open rate with a 19.5% click-through rate to the website from the email and generated 23 new subscribers at $19.99 per month.
That’s $459.77 in new monthly recurring revenue.
So, with just one email, we were able to confirm this was a service that was in demand and needed to be rolled out to the entire state of California.
We decided to roll out the campaign for a full 30-day test for the month of December and created new ad copy and a new 10-image carousel ad (pictured below):
During this period, we were able to generate 39 subscriptions at the cost of $69.36 per subscription. Since we were still operating under the $240 LTV of a customer, the client was thrilled because we had just generated them another $779.61 in monthly recurring revenue!
When you combine that with the pre-launch that’s $1,239.38 in monthly recurring revenue in ONE state.
If they rolled this out nationally and we can get just 40 out of 50 states to perform like California, that would be $49,575 in monthly recurring revenue!
However, our campaign was also able to generate 33 additional purchases on the client’s website. It turns out some people want to buy the headphones right away!
Learning what has worked is just the first step. However, if you want to maximize your potential on Facebook, you need to understand the powerful tools that you have at your fingertips…That’s why my partner put together this bonus, on-demand video that you can get access to below.
Here’s what we’re going to cover:
If you want to grow your existing business or launch a new product, schedule your free consultation here!