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Lesson 6: Customer Value & How Much to Spend on Ads
Manage episode 438702460 series 2853608
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One of the most popular questions I get asked about Facebook & Google ads is how much should I spend to get results?
I want to help you to determine what is a good budget but I also want to educate you on how to think this through properly.
Determining how much to spend on advertising is NOT a guess.
There IS math involved.
In order to figure out how much you should spend on advertising there are a few questions that need to be answered.
In this episode I will go through a few business model examples to give you an idea on how much you should be spending in order to bring new customers effectively into your business.
Here are your 4 variables for advertising budget consideration we will be discussing:
- ATV: Average Transaction Value (Average Sale)
- ACV: Average Customer Value
- CLV: Customer Lifetime Value
- CPC: Cost Per Conversion
You may be thinking I have this ITTY BITTY business - this does not apply to me.
But OH it does! Not having this knowledge and mindset is how your business stays itty-bitty.
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