heya,

Students complain to me always they’re unable to get clicks at a low enough cost and conversions at a high enough rate to recover their ad spend.

They refuse to scale their Google Ads campaign before they break even on the frontend product. Even if they have other products being upsold in their funnel.

When i was pioneering PPC, I subscribed to this view too. Today, my priorities have shifted and i give very little importance to breaking even or even frontend profitability. I’m much more concerned with customer acquisition. And what’s more is, i do not take so seriously any of the fine-grained measurements of performance and instead prefer to focus on overall, big picture, business numbers.

In today’s lesson, i’ll show you the flaws of the old way and how the new “Yaghi Way” makes your ad campaign management simpler and gets you to your business goals LIGHTNING fast.

Suppose one of the big goals for your online business is that it becomes financially successful, so it can support itself as well as the extravagant spending habits of your kids, spouse, and yourself.

Which of the following, would you rather make?

   a) $5 profit / customer, from 10 customers

   b) $1.50 profit / customer, from 10,000 customers
 
 
I’ll save you the multiplication. The total profit is (a) $50 and (b) $15,000. So you’re choosing (b) because you’re a playa.

Let me get this straight…

Despite (a) being the more profitable choice, you’re going with (b), the less profitable per customer?

As it turns out, you don’t care about “profitability per customer” anywhere near as much as you do the FREQUENCY and SPEED with which you’re acquiring customers. When not distracted by the detail of profitability per customer, you saw the big picture; total profit is a more useful and desirable measure of performance.

So the fine-grained measurements of profitability serve no more than to distract you from your real goal.

But this isn’t the only issue.

See, the problem with trying to make a campaign run as efficiently as possible is you end up aggressively trimming the fat and in the process, you trim away much of the available traffic volume.

The technique, generally looks like this:

You study which keywords and ads are converting below a certain threshold and killing everything else that doesn’t. This aggressive fat trimming strategy requires a fair bit of micromanagement and long, tedious, boring hours pouring through keyword and placement reports. It’s worth it too.

It WILL lower your cost per acquisition, it WILL increase your ROI…

But at what cost?

You reduced the overall traffic volume available to you.

WHY? Because it does not convert?

NO…not really. It would convert if you let it. But it’s because it’s not converting at a low enough cost to give you the profitability per customer you’re desiring. In other words, you’re killing traffic that does not convert at a “cheap enough” price for your CHEAP frontend product to recover.

This is silly.

What if YOU priced your product too cheaply for the cost of traffic in this market?

And who says the frontend product HAS TO single-handedly recover all your advertising cost? This idea of a “self liquidating offer” is one of the dumbest notions to deliberately try and implement. It was a marketing ploy used to position PPC as a “free” traffic method when selling you PPC training by early marketers in the space. In reality, it’s a similar concept to the age old “loss leader” in retail sales–which basically is a product you sell at a loss just to get customers in the door and then you make back what you lost by selling other things less cheaply.

In fact, it is not the purpose of a single product to make up all your advertising cost…but the purpose of your ENTIRE business, and everything you sell, to recover your advertising, production, etc costs (and profit).

There’s no law that says you can’t do this by selling one product, two, or 100. You can do it with 1 customer / month, 100, or a million. It all depends on your business, your competition, and your market.

Besides, cheap traffic is scarce and it’s cheap for a reason. It doesn’t convert very well or there isn’t enough of it, so there’s little demand, which means less competition, so you can have it for next to nothing. But it won’t do you much good. Unless you’re willing to micromanage the fuck out of your campaign.

This means, when you make your priority to lower “cost per acquisition”, or to “break even” on the frontend, or to make your funnel “self liquidating”…

…these are all fine-grained measurements of performance. They do not look at the BIG PICTURE. You’re zoomed in, micromanaging tiny details, and losing sight of the ultimate goal of maximising overall earnings from your business.

Overall earnings are about VOLUME.

Volume is a function of FREQUENCY and SPEED of transactions. Meaning, more customers, buying more quickly, more often is how you get your goal.

This is why it’s really misleading when someone posts on Facebook a heavily truncated screenshot, with redacted details, just to show you:

“LOOK! I’m getting 30 cent leads!”

        — or —

“WOW, i’m getting $1 CUSTOMER leads!”

This seems REALLY exciting. But don’t rush to hire them to manage your campaign, because this is a telltale sign of an amateur. I’d go so far as to include anyone who’s boasting about making $x per lead or per customer, or 400% ROI or whatever.

Because these bullshit numbers are STILL focused on profitability metrics without saying a darn thing about volume.

What use is all of this if they can’t repeat it 10, 100, 1,000 times every day?

What you want to ask these screenshot guys is:

“How many of those leads/customers do you get per day?”

                    — or — 

“Great ROI bro…how many customers per day are you generating at that ROI?”

If you’re with me so far, i’m gonna fuck your head just a little bit more.

To be completely fair, i should have included an option (c) above, that shows you a negative profit (ie, a loss). So here goes.

Which would you rather make:

  a) $5 profit from 10 customers

  b) $1.50 profit from 10,000 customers

  c) $15 LOSS (-$15 profit) from 100,000 customers
 
 
I’ll save you the multiplication, option (c) = $1.5 Million in LOSS.

Would you change your answer?

Would you take (c) over (b)?

Probably not. And i was like you for most of my career as a traffic guy. But today, after nearly two decades doing this, i’d pick (c) EVERY TIME.

Bear with me though, hang on. You have 100,000 customers, right?

Suppose, you created a “high” ticket product or service, say for $500, and you offered it to this list of 100,000 people.

These are 100,000 people who have paid money already. This demonstrates they’re not ONLY interested in the category of products you’re selling, but they’re interested AND willing to pay for solutions to their problems. They have already trusted you once to buy from you before. If you were conscientious enough to sell a good product in the first place and you used email follow-up to remain in contact with your customer leads…

What stops them from buying more solutions from you?

The only limitation of who will take you up on this new offer is who can or cannot afford the amount right now.

Suppose only 10% took you up on it. This is realistic, remember they’re customer leads, not freebie seekers or whatever.

Option (c)– means 10% of 100,000 is 10,000 buyers, paying $500 each giving you 5 million dollars in revenue. You get this with a SINGLE product launched to this list.

Now compare to (a)– where 10% of 10 people is 1 buyer and $500+$50 (from earlier) = $550 total profit.

And (b)– where 10% of 10,000 customers is 1,000 customers, giving you $500,000 + $15,000 (from earlier) = $515,000 total profit.

Option (c) gets you $5,000,000 – $1,500,000 (the loss from before) = $3,500,000 total profit!!!

You did this with ONE product launch.

Imagine you generated the same traffic monthly and sold the same things, then these would be monthly profit figures.

Now, would you rather be doing (a), (b), or (c)?

Yeah, i thought so. (c) is the right answer, even when you’re losing $15 for every customer you acquire.

Even if i’m being overly optimistic with the 10% conversion (i might be), your chances of finding more customers willing to spend more money in 100,000 monthly customers is certainly higher than it would be in 10 or 10,000.

If you have volume, you can always, very easily turn it profitable by selling more products to current buyers.

Bottom line is, get your nose out of the data and look at the big picture. Obviously, i’m not suggesting everyone has the balls of steel to pull off a 1.5 million dollar monthly loss without batting an eyelid. This was simply an example to show you how much more important scale is than tweaking and fine-tuning profitability m etrics. I certainly am not suggesting anyone should run a campaign so recklessly either.

I certainly don’t.

But the moment i have an ad campaign that’s generating customers in volume, at a halfway decent cost, i’m slowly raising the budget to see how much potential the campaign has for scale. What i am definitely NOT doing is going in and micromanaging the campaign for tiny reductions in cost so i can break even on the front-end.

Simultaneously, i’m scrambling to put together offers to make on the backend. Because once there’s volume, even if you’re losing, turning it around to a MASSIVE profit can happen in the blink of an eye.

I hope you enjoyed this little lesson here on my campaign management strategy.

I know it’s unorthodox, but it’s fucking brilliant, and you love it. If you want to know more about the “Yaghi Way” of traffic management, aside from this killer series you’ve been enjoying, there’s the Super Traffic Machine. It’s a fully structured course with precise step by step instructions with screenshots and worksheets to plan, produce, and orchestrate an online business that scales with minimal traffic management.

Read all about it at the link below…

~jim