This month we’re talking about how to create passive income for your online business! Each week, I will explain one step in the process and offer you some support in making it happen!
In this step-by-step Blog Series, I will teach you the key to creating passive income stream(s), the step-by-step process I use to create a passive income funnel, and insights around how I make $6K per month with my passive income streams.
(In Part 1, I explained the importance of determining your ideal client and the main problem you will help them solve. In Part 2, we talked about designing a free gift for your ideal client. In Part 3, I shared some ways you can begin to promote your free gift, organically. If you haven’t yet read the first parts in this series, head back a few steps and start there!)
Now, keep in mind: promoting your freebie ORGANICALLY can be really powerful! The downside is that most of this promotion has to happen manually.
You can absolutely outsource this work, maybe to your VA or an agency service. But at the end of the day, if you want your business to truly run without you always having to touch it, I want to encourage you to move toward paid advertising.
I’m talking about Facebook ads!
Basically, you can pay Facebook to work for you: they will put your content in front of your ideal client.
Now, I know what you’re thinking: Facebook ads are challenging to figure out, and they are *seemingly* expensive. (I know, because I thought that, too...at first).
I know you don’t have money to waste on something that doesn’t work, especially if you’re at the beginning of your business venture.
And honestly, Facebook ads can be expensive, if you don’t understand your ideal client or their pain point (that’s why I encourage you to START WITH MY STEP ONE!).
As challenging as they are, I can say that Facebook ads have been one of the main things that has pushed me (and even my clients!) to understand my ideal client even better, because I have to know how to target them, how to talk to them (with written words AND images), how to attract them, and which taglines draw them in.
It takes some research on your end, but that’s a good thing! This helps you better clarify WHO your ideal client is and WHAT entices them to your services.
And at the end of the day, as challenging as Facebook ads may be, they are your best ally.
And I’m going to show you what I mean by this. I’m going to show you how the power of Facebook ads can turn a simple $300 into $4,000. This happens over and over, with my own business as proof!
Let me break it down (and fare warning: this will literally blow your mind!).
I LOVE the power of online marketing and automation and how we have the opportunity to help people and make money while we’re spending more time with our families or out and about with our kids. This is an amazing opportunity, a beautiful blessing, for those of us with online businesses.
So let me break this down for you.
How is a Facebook ad going to turn $300 into $500, $1,000, or even $4,000?
Let’s start with some statistics.
When you first start running Facebook ads, you will typically spend about $1-5 per conversion.
This means that for every person who joins your email list (through a funnel like the one you’re creating!), you will spend about $1-5 per email address. You might be thinking, “Woah, $1-5 per person?! That sounds like way too much for me right now.” Keep listening (I promise you, this math will blow your mind!)!
Let’s assume you’re spending $3 per conversion and you want to get 100 new people on your list (the *magic* number for email marketing!).
$3/person x 100 = $300 on ads
(Side Note: obviously there is an upfront cost to running Facebook ads when you are in the testing phase, but you CAN budget for this start-up money, even if you need to ask me how!)
Some more statistics:
About 10-20 percent of people who sign up for your free gift will also buy your tripwire.
This means that after someone goes to your ad and gives you their email address, they will have the option to purchase one of your smaller products or services, something that costs $10-30. They can choose to purchase right then.. and 10-20 percent of people DO!
About 5-10 percent of people will buy your low cost offer.
This means that as you’re sharing free value with this new person, via your email list and social media accounts, if you have a lower cost offer (around $100-500), 5-10 percent of people will make that purchase!
About 1-3 percent of people who sign up for your free gift will also buy your signature offer.
This means that as you’re sharing free content with this new person, again via your email list and social media accounts, if you have a signature offer (like one-on-one coaching or an extensive online course, something that costs around $500-2000), 1-3 percent of these people will make that purchase, too!
So. Maybe after all these statistics, you’re not convinced. “Only one person will buy my signature program after I spend $300 on ads?! No way.”
Here’s where the CRAZY FUN math comes in!
Let’s start with your worst case scenario. We’ll assume the lowest conversion rates and the lowest prices for your services.
This is the WORST that can happen when you’re investing in Facebook ads...
You spend $500 to get 100 new people on your email list. Of those 100 people:
10 people buy your $10 tripwire (you make $100)
5 people buy your $100 low cost offer (you make $500)
1 person buys your $500 signature offer (you make $500)
YOU MAKE A TOTAL OF…$1,100!
Would you spend $500 on ads to make $1,100 from new people who will buy your services?
Of course you would! That’s a better return than with a mutual fund! You’re more than doubling your investment, with Facebook ads.
And remember, this is your worst case scenario...
Now let’s be more realistic. We’ll assume the exact average for everything.
You spend $300 to get 100 new people on your email list. Of those 100 people:
15 people buy your $20 tripwire (you make $300)
7 people buy your $250 low cost offer (you make $1,750)
2 people buy your $1,000 signature offer (you make $2,000)
YOU MAKE A TOTAL OF…$4,050!
Would you spend $300 on ads to make $4,050 from new people who buy your services?
Yes! Of course. Every single time.
And that’s the beauty of automation and Facebook ads.
Now, remember the foundation to functioning Facebook ads has to be that you understand your ideal client (check out Part 1 for more about that!).
This funnel doesn’t work like magic if you don’t have a solid foundation: you have to know your ideal client and have services she will purchase to solve her problem.
But when you have the foundation, this system works!
Now, what are some simple ways you can get started with Facebook ads?
Make a free opt-in that speaks to ONE of your ideal client’s pain points.
Make a $10-30 tripwire offer that directly relates to that same pain point.
Create a Facebook ad, landing page, and thank you page to automate this whole process!
(Remember, if this sounds overwhelming, you can OUTSOURCE some of the work to an agency service!)
And what’s my BEST TIP for success with Facebook ads?
If you want your tripwire to work effectively, make sure your free opt-in and low cost tripwire directly relate to each other.
For example, I have a free opt-in for entrepreneurs (Fitness Business Checklist), plus a low cost tripwire (Mastering Facebook Ads Workbook + Video Training). Within the Fitness Business Checklist, I talk about the importance of mastering Facebook ads, so the tripwire works perfectly with this and for my ideal client. (Facebook ads is also one of the modules inside my Fitness Business Academy, so both offers relate directly to my low cost and signature offers!)
Do need help brainstorming some ideas? Reach out to my team! We would LOVE to help you get moving in the right direction!