The tides have shifted making Facebook one of the most crucial places to ensure you have ads placed for your business. However, Facebook is making it increasingly difficult for your content to get in front of prospects organically. So in order for you to turn these prospects into leads, you have to spend money on Facebook ads. The question that we all ask as business owners is: How much ROI will I have when I invest in Facebook ads. That is a loaded question, however, today we will look at how to calculate your ROI.
Before we move on let’s take a closer look what a conversion can look like. A conversion can be different for everybody, boiling down what that means- it is the action that you want your customer to take. For an auto repair shop owner, a conversation would be having the potential customer scheduling an appointment online, make a phone call, or downloading a coupon. There are many other interactions that have value like someone seeing your ad and video views that build brand awareness and result in someone considering your business.Now, that you have a better understanding of what a conversion is- with this you will want to step up a tracking system. Inside of Facebook, that means setting up a Facebook Pixel on your website. I’m throwing a lot at you- I know. When you hear Facebook Pixel, think Facebook tracker. This will allow you to decide what you want to track. In our case you would want to point its sights on the “Thank You” page they see after the action you wanted them to take. Another tracking system is a call conversion, or tracking someone that clicks on your ad to the call they place.
With this, you can now start to calculate your ROI. Bare with me we have to do a little bit of math (Remember how we calculate Adwords ROI? Here’s the article). Here is what the equation looks like:
(Total Sales - (Total Product Cost + Facebook Cost)) / (Total Product Cost + Facebook Cost) = ROI
Let’s build a scenario to better understand the equation above. You have a service that costs your shop $100 that you then sell for $200. During your Facebook campaign, you were able to sell 6 services. Giving you a total sales of $1,200 and total Facebook costs of $200. Here is what your ROI would look like:
(1,200 - ($600 + 200)) / ($600 + 200) = 50%
Hands down the best way to increase your return is by hiring an agency whose sole focus is increasing the traffic to your website via inbound marketing and digital marketing efforts. This is because we are constantly optimizing your digital marketing campaigns making them more strategic and cost-effective while increasing your bottom line.
