If your paid traffic isn’t working or if you feel like you’ve been burned by your agency – have you considered it may be you?

To give yourself the best chance of success start by getting a great grip on your numbers!

(00:01):
Hi there.  This is Peter O’Donoghue.

We have a client at the moment that is doing fantastically well and it’s not like they’re feeling burned by their agency, which at the moment is us, but they did feel that were being burned by their agency previously.

But they have an internal limiter in an internal blockage.  So one thing that they didn’t have a 100% grasp on when we started working with them is their acceptable cost of acquisition.

We spent some time, we worked that out with them and we determined that I was around say the £30 pound mark. We’re getting them clients around about £10 so a third of their acceptable cost of acquisition and they want to scale up. However, the advertising budget was set in stone about 12 months ago.

(00:55):
So there in lies the problem. They have a monthly cap, potentially , on how much they can advertise, yet they’re acquiring clients, customers, [It’s a product based organisatio], at a third of their acceptable cost of acquisition. So what does that mean?

They have the ability, because the campaigns can handle probably four, five or 10 times the amount of customers that they’re acquiring. They’re acquiring them at third of their cost of acquisition.

Yet their internal culture, mindset systems are capping them on the acquisition of customers. And there’s not even a cash flow issue.

So within this business they can cash flow sales  is and there’s a couple of other things we’re working on with them to enable them to cash flow that even better actually in terms of front ending some of the cash that they’re bringing in into their business.

(01:54):
So the moral of the story here is if you’re running paid traffic, if you feel like you’ve been burned by an agency before, getting an absolute clear number in mind of what you’re paid for acquisition. If you need to go into an advertising relationship with a budget, great.

Start off with a budget, one thousand two thousand ten thousand pounds, whatever it is that you’re comfortable as a the size of your business, but then move from budgetary based decisions to cost of acquisition based decisions.

So what I mean by that is you can even have step changes. So for this client, for example, they could say, so between zero and £10 acquire as many customers as you can, as the campaigns will allow. So you as an agency have an uncapped spend limits between £10 and £20 then acquire up to X amount per month between £20 and £30 X amount per month, or spend X amount per month. Then you have very strict delineation every single month on what is expected from you as a business, what is expected from your agency that’s running paid traffic for you.

That helps set a very clear cost of acquisition and sets very clear guidelines of what your agency can and cannot do to acquire your customers and don’t be limited by an internal budgeting system, culture, systems, beliefs about how you can do that.

Peter O'Donoghue

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