Sub Box Facebook Ads 101 - What to Do Before You Get Started

Preparing to run Facebook ads as a subscription box owner or business can be extremely intimidating – the potential of pouring tens of thousands of dollars into FB ads and burning tons of cash to see zero return on investment is terrifying. Even though you’re nervous about getting started, you still know that you need a consistent and scalable sales channel for your business in order to grow. Launching FB ads for your business doesn’t have to be as daunting as it seems, but only if you know how to properly prepare. Here’s three things to do before you launch your FB ad campaigns so that you can build a sales funnel that feeds your business new customers on a consistent basis.

Establish Product Market Fit

A lot of people go into FB ads with the wrong expectations. They think that they can just create a product and then because they launch a FB campaign their business will scale to seven or eight figures overnight. They look at FB ads as this magic bullet, but that’s just not the case. FB ads are really just a tool to drive traffic to your site. You will still need to follow fundamental business principles of having a great product and all of the other things that go into making a business successful. 

It’s not FB ads that are going to grow your business – it’s having a great product, providing great customer service, having great marketing, using the right channels, and more. What you need to do is grow organically first. Get some sales without paid advertising and see if people actually want your product. Find out if you’ve created something of value and once you have multiple happy customers, you’ll be able to see that your product is something that people actually want.

Knowing that your product is valuable to and wanted by your customers will allow you to go into FB ads with much more confidence. That is a much better strategy than taking a product you’re not even sure if people want and putting thousands of dollars in FB ads behind it, thinking that it will scale your business overnight. Validate your product market fit first and then get into FB ads when you’re confident that your product sells.

Know Your Numbers

If you’re a subscription box business, generally speaking what you want to be aiming for is a three to one lifetime value (LTV) to customer acquisition cost (CAC) ratio. What that means is that you want the amount of money that you make in profit over the lifetime value of your relationship with a customer to be three times greater than the amount that you pay to acquire that customer. This ratio will give you your customer acquisition cost targets when you’re going into FB advertising. 

If you’re following the first step and you’ve validated product market fit first first, then you’ve gotten some sales and hopefully have a good understanding or at least a projection of what your customer lifetime value is. If you make $150 over the lifetime of the relationship with a customer, and if you’re shooting for a three to one lifetime value at a customer acquisition cost ratio, then you should shoot for around a $50 customer acquisition cost or less.

When you know that number, then you have an idea of what success actually looks like with FB ads. If you don’t know these numbers, then you’re basically going to go into FB ads without understanding what you’re looking for. Maybe you launch your ads and you have that three to one LTV to CAC ratio but you think your numbers are high so you turn off your ads. Maybe you think that you’re crushing it but really you’re breaking even on LTV or you’re losing money, so knowing your three to one LTV to CAC ratio helps you to establish what success with FB ads looks like for your business.

Set Up Your Back End First

Some people get into FB ads thinking that just because you launch ads that the rest will take care of itself. Unfortunately that’s just not the way that it works. What you need to do is make sure that your website is well designed and has these things nailed down: 

  •  a high conversion rate,
  • a way to collect emails and phone numbers,
  • Email automation set up to convert the leads that come through to your site but don’t purchase the first time,
  • Have a good on-boarding series for when people do purchase, and
  • A well-established online presence.

Otherwise you are going to dump a ton of money into FB ads and spend thousands of dollars driving people to a website that doesn’t convert, and provides no way of following up with them because you haven’t set up email marketing or SMS. If your potential customers check you out online and they see that you’re not well established on social media, it will be really hard to be successful. 

Build your online ecosystem first, build your social media pages, make sure your website looks good and converts, and have email and SMS automations set up. All of these factors will make your launch of FB ads a whole lot easier and will significantly increase your likelihood of success.  Complete these steps first! Don’t ignore your back end – set all of this up and then get into FB ads.

To recap, make sure that you have your product market fit established first – that’s going to help you to go into FB ads with a lot more confidence. Instead of pouring tons of money into FB ads and hoping that people want your product without really knowing if your product sells, this will help you understand the value your product provides to your happy customers. 

Make sure that you have a firm understanding of what your profit LTV over the relationship with your customer is and then back that into what your CAC target should be. This will give you your benchmark for what success looks like with your FB ads. Finally, set up your back end first –  make sure that your social media pages are well developed, your website is well-designed and high converting, and that your email and SMS automation is set up. This will significantly increase your likelihood of success with FB ads, and give your business the right leg up to see conversions.

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