Today I’ll reveal the exact step-by-step strategy we use to increase the revenue of a small business by 200-300% in a matter of months! We’re going through the fundamentals of generating revenue, we’ll do the math to see how much we can make, then we’ll build a redeemable offer campaign together!
Note: We’re using a restaurant as an example throughout this article, but it works with any other product or service based business as well.
Short disclaimer: We’re a Facebook advertising agency in London. By copying the strategy below your results may vary. If you’re interested in building the presence of your business on Facebook and grow your revenue, contact us for a free consultation by clicking here.
Ready? Let’s start with the “How!?”.
How To Increase the Revenue of a Business
There are fundamentally 4 ways to make more revenue by using Facebook.
1, Create a “buzz” on your Facebook page with interesting content, which the customers can share, bring their friends, and your business can grow organically
- Pro: Organic posting is free, you don’t need to spend money on it, if you don’t want
- Con: Organic posts only reach 2-3% of your audience, which is not very effective on its own, plus it’s time-consuming to see results
2, Use Facebook ads to bring back the customers who’ve already been to your restaurant
- Pro: These group will very likely to come back, and they’re cost-effective to advertise to because you can show ads specifically to them on Facebook (how convenient!)
- Con: If you don’t get new customers constantly, the pool of these people will dry out
3, Advertise to people who’re “similar” to your customers with Facebook’s “Lookalike Audience” option
- Pro: This algorithm is very smart to find you customers who will likely come to your restaurant
- Con: Lookalike audience can’t target by location, so your adverts will be shown in the whole country not just in your city
4, Show ads to “cold audience” who don’t know about your restaurant yet, but their interest data suggest they will likely want to hear about you
- Pro: If you nail the targeting correctly (needs a lot of testing) you can find new customers hassle-free
- Con: The testing takes time and money if you don’t know how to do it properly
Do The Math
I know you probably wasn’t a fan of maths class, me neither. But when we’re talking revenue and profits… it get’s exciting!
Let’s start with some real examples (don’t be scared of this table, I’ll explain everything in detail).
|Avg. Price of Customer||£30||Avg. Spend of Customer||£30|
|Customers Brought in Per Day||4||Repetitions of Purchase||12|
|Customers Brought in Per Month||120||Customers Brought in Per Day||0,5|
|Revenue Brought In Per Month||£3 600||Lifetime Value of Customer||£360|
|Worth of Customers Per Month||£10 800|
Let’s assume the average price of your customer is £30. We can also assume that nobody goes to a restaurant alone, and our customer will bring another person with him or her.
So, if we can bring in just 2 customers per day who bring their couple as well, we’re looking at a 120 new paying customers/month, which equals a £3.600 extra revenue per month.
You’d be looking to pay at least a few hundred pounds to bring those customers in.
Meaning in total, you’d spend around £300/month on ads, and bring in £3.600 of revenue.
Leaving you with an attractive £3.300 profit per month (on just a minimum ad spent!).
But! And that is a big but, the value of a customer which is laid out on the second half of the table is much more than that. Let me explain…
Let’s say we have John, who spend £30 at your restaurant. He liked the food and wants to come back later. Let’s say John comes back once every second month, but he’s a lifetime single and he always eats alone.
He comes to the restaurant for 2 years, before he moves to the other side of London.
So John spends £30/visit, he comes back every second month for 2 years meaning he spends 12 times £30 during his lifecycle with your restaurant, adding up to a total of £360.
Let’s assume we can get 1 (only 1!) new client every day. What happens?
If we bring in 30 customers, worth of £360 (per lifecycle), that’s adding up to… grab your seat…
£10.800 worth of revenue per month!
Now, we have to understand something first.
This is not cash flow revenue for the month. Our Johns are spending this much under 2 years.
Meaning we have to supply new “Johns”, and the revenue will gradually add up.
Enough of maths, moving on the action…
Tools You Need
Before we dive into the waters of Facebook advertising, there are a few tools you have to have.
Pro tip: The bullets below are clickable, taking you to the page you need to visit.
4. Ad budget (I recommend a minimum of £125 ad spent/week to see decent results)
Facebook campaign has three elements.
The campaign with an objective (example: driving engagement to your page, traffic to your website, generating leads).
Inside the campaign, there are ad sets which define the different targeting options (example: audiences, demographics, budgets, scheduling, placement).
Last but not least ad sets have ads (the final product shown on your Facebook wall, which can differ by ad creative, sales copy etc.)
Creating an Offer in 6 Simple Steps
Today, we will create an offer for 20% off the bill if the customer brings one of his/her friends!
Open the Ads Manager (Go to your Business Manager » Click on the menu on the top left corner » Select Ads Manager)
You should see this:
Select the Traffic objective » Give a name to your campaign » Click continue
Pro tip: You can use the campaigns as “groups” for certain type of campaigns. So for traffic campaigns, you can name this one as “YourRestautant’sName | Traffic”. This way you’ll know that whenever you want to ads with the similar objective you can build it inside this campaign and you don’t need to create a new one. It makes your ad manager cleaner, more easy to understand, and it helps with analyzing results.
Name your ad set (example format: Offer’s Name | From & To Date Of The Offer , example: 20% Off | May 01-14).
Pro tip: If you’re more experienced you can try to split test various targeting options, age groups, placements, genders etc. For now, we’ll stick to the very basics.
When you’re done, click on the “OFF” next to the Offer to turn it on (a popup will show).
Select your page (if you have more than one) » Click “Create Offer”
Fill the following offer details:
- Offer’s name
- Details of the offer
- When does the campaign end
- How can people redeem the coupon
- Where can they redeem the code
- Create your custom code (or upload a list of unique codes)
- Enter the number of coupons you wish to release
It should be looking like this:
Once we’re done, we can click Create and move on to the next stage which is Audience!
This is a rather complicated and the most important step as well. I’m including a full-page picture with instructions below.
If you made it this far, you’re getting very close to launch your first ad! Now, on to…
Steps are described in the picture below.
Click confirm and your ad will soon be approved.
Congratulations! You just made your first step to attract more clients and increase your revenue, with a few simple steps!
Will this specific ad increase your revenue by 200% with a mere £10 daily budget? Probably not.
The reason I wanted to show you my ways is to see that it’s possible. Using this guide you can copy the technique I showed you and experiment with a small budget.
Is There Anything More
Of course, there is a hell of a lot more options to Facebook!
- Laser targeting
- Split testing
- Lookalike audiences
- Custom Audiences
So on and so forth… These, we’ll cover in an article later so don’t worry!
Where to go next?