Facebook Ads & Marketing Funnel Performance Revealed - How To Know Your Key Performance Indicators

Key Takeaways

hey miles Becker here miles Becker calm and in this video we're going to look at my new marketing funnel that's online that I'm running traffic to we're going to look at my kpi's we're going to talk more about KPIs and we're going to dig into funnel math right so once you get your funnel up and you're running traffic one of the big questions is am i profitable or what's my goal or how do I know when my funnel is working or when my ads are working and this is where KPIs come in they're key performance indicators and the KPIs can vary depending on the kind of funnel and your traffic and exactly what your goals are with your marketing for me my main goal when I run a funnel with pay-per-click Facebook Ads is to reach what I call a break-even point on the front end and that means I want to be advertising for opt-ins after the opt-ins they see some sort of offer or a series of offers and I want that process to be breakeven which means every dollar I spend I get that dollar back I don't really care if I'm profitable I just want to be break-even because I know I have a significant lifetime value of my customers once they're on my list and once they're on my customer list I know the odds of them purchasing more go up significantly in the coming weeks and months so if I can create a breakeven upfront funnel I can essentially go buy all the traffic I want I get every dollar I spend every day right back into my pocket that same day I'm net out-of-pocket zero and I'm growing my customer list and my prospect list and here in this Airbnb I'm at in New Zealand right now we've got this really cool sign behind me right there the best things in life are free how fitting in my little converted home office here in this Airbnb because ultimately if you have a breakeven funnel what you're doing is you're getting customers and you're getting leads for free and that's exactly what we're doing right now I just set this funnel up a couple of days ago I've been running Facebook traffic so I'm going to jump in we're going to show you kind of example using sketches from the slide show on the exact numbers that I'm getting from this exact funnel that I'm running right now it's still early I'm going to track these KPIs but I figured since I put all the work in to figure out what these numbers were you would be very interested in it so let's just jump in I'm gonna get myself out of the way here and this is the funnel so first let's cover and look at the funnel it's a really simple funnel that is an opt-in after they opt-in for a free item they get a product offer it is a $97 product retail price we're offering it to them for $27 then they go to checkout if they're interested after the checkout that transaction remains open and they get a one-time offer for yet another course this one being a $77 course for another 27 they either click yes or no and depending on that they go pick up what they purchased right so how is the funnel working and first thing what do we need to calculate so what I've noticed here in running this funnel with well over a thousand people coming through this is that I'm getting a 50% conversion rate on my second offer and again they're both $27 so what I'm looking for first is what's my average order value now this is simply for this funnel and I'm only talking about this front and order right so if I've got a $27 one-time offer here and I'm 50% of these people are purchasing another one what is the average order value and here's how you calculate it right so I've got $27 here plus 27 times 50% that's my average order value and that happens to be 27 plus 13 which is $40.50 so on this funnel that shows a $27 product on the front end the average person who checks out I'm going to make 40 dollars and 50 cents every time someone checks out right because every other person is going to take me up on this which is a bump in 1354 average order cool so now that i know i $40.50 average order value i move on to the next step now my one-time offer this first offer is converting at 2% which means two percent of the people who opt in and see my oto are purchasing right so the simple formula and yes I said we're doing math here this is simple funnel map but I'll show you this is super easy is I'm trying to figure out how many subscribers I need to get one customer right so n is my one n is the number of subscribers required two percent is my conversion rate n times two equals one customer so essentially I would just divide by 2 percent on both sides so N equals 1 divided by 0.02 which is 50 so let me let me just show you that real quick so literally it's super simple so we do 1 because that's how many customers I'm after divided by point zero two which is a decimal version of this percentage and I click enter at 50 so that's how I get it I literally divide number of customers one by my conversion rate and so it's 50 so now that I have this piece of information we go to the next level and this is where we actually get to put the numbers together so as I know at this point every time I get 50 opt-ins here on average I'm seeing one person purchase that's my 2% conversion rate and that is worth an average of 40 dollars and 50 cents so what is my break-even point right and the break-even point means I pay the exact amount for these to get these so how do I calculate that super simple so we do take this 40 50 which is our main number and we divide it by 50 right so I take my my average order value and I divide it by the number of subscribers required to get one order and I get 81 cents that's about that done there it is right that's my breakeven point so if I'm getting subscribers for 81 cents each or less I'm good that means I can put in $100 a day and get $100 out I can put in $1,000 a day and get $1,000 out a byproduct is just massive amounts of subscribers and massive amounts of customers so what is this working out to be in my current funnel well let's look and here's what you do with this number is you compare it to your campaign performance so now I've got my campaign showing here and I've got my ad set level showing here now I'm not running any split tests at the campaign level or at the ad set performance other than these two campaigns I'm running right and I'm going to do a separate video on these campaigns I'm going to show you inside of these and we'll go deeper into that I want to stick to these numbers but you can see over here I have a cost per conversion and this is my cost per email subscriber and you can see so I started running this visitors opt-in one first this is a retargeting audience I've had over a thousand customers or I mean excuse me a thousand subscribers come in and it's costing me 43 cents per subscriber well within my KPIs on this one you can see I've got 200 coming through and it's 87 cents per conversion which means I'm losing 6 cents per subscriber right now not a terrible deal for me right and so that's mirrored here in the ad set level if you had like three or four ad sets per campaign you would see more of them here and you'd be able to look at which ad set is giving you your KPI and which ad set isn't what I've been looking at here is my individual ad performance and this is where I've been mainly focused right and you can see I've circled this column and these are all my costs per conversions so I can go at line by line ad by ad and look 69 cents per conversion on that Ed that's good this one's good good this one's two cents out I'm willing to be a little risky little spendy I'm going to keep that alive same with these two here 72 cents per conversion but what's really cool is you get down here you notice that this one 412 conversions right that's for 12 subscribers at an average of 47 cents each 248 subscribers here at an average of 47 cents each these ones down here this is amazing like 32 cents per subscriber right there that's absolutely a brilliant and just real quick I want to point out my relevant score look how high these relevant scores are right eight nine and ten mostly nines this is why I'm getting a really good result here is because Facebook sees my ad is being highly relevant to my audience and they see my ad being highly relevant to the content I'm sending them to so I get a good relevant score which means I get a nice low-cost click cost and cost per conversion and that's it that's funnel math right that's the basics of it you know I went through this kind of one time we wanted to give it a quick clean lay over if you feel like you didn't get it or you want help with that math go back through watch it again take notes because the math and knowing your math and knowing your numbers is what ultimately will set you free right because that is how you know with statistical probability and again this is still new so I'm I'm monitoring these numbers very closely as I get to the 10,000 subscriber mark with each of these campaigns I can really really rely on that data and if I see 10,000 subscribers coming in an average of 40 or 50 cents per subscriber and my break-even point is 81 cents per subscriber I know that I'm net profitable on the front end plus everything I make down on the back end of my funnel and as you know we've covered in the past videos the back end of the funnel is where you make your money pros focus on the back end of the funnel rookies focus on the front end and I gotta focus on the front end here because I'm turning on this lead machine I'm bringing in a thousand leads a day right now from Facebook pay-per-click and I'm gonna ride this as long as my kpi's stay within my operating range I will be testing a few new audiences I will be testing a few new ad sets and obviously I'm running split tests on my opt-in page I'm running split tests on my advertisements already just to see you know keep refining what is that wording what are those those phrases that get my target market to take action and also what are those other target markets I can go after through look-alike audiences and through the interests that I can actually expand my audience so I can keep marketing at this aggressive pay for a long period of time this is the game right broken down to numbers super simple I hope you found this to be educational and informative if so give me a quick thumbs up here in the YouTube and also you have any questions about this math or how I came up with this stuff feel free to leave me a comment below here in YouTube I'd love to hear what your thoughts are or what your questions are I'd be happy to answer them and of course subscribe so you can get the next videos as they come out because I will be going deeper into the Facebook ad campaign here to look at how I set them up why I set them up the way I did why do I have two campaigns and to add sets and you'll get to really look kind of behind the scenes at the ad side of things now that you've seen behind the scenes of the funnel side of things so thanks again for your time I hope you enjoyed the video and I look forward to catching you on the next video