How Local Businesses Can Still Profit from Facebook in 2018 — Without a Big Budget
This article lays out a strategy aimed at local businesses with repeat business potential. Meaning, you can sell to customers multiple times per year, month or week. It will give you a low cost method for making your already existing customers highly accessible, by turning them into fans. But efficiently, without expensive Like Campaigns or similar gimmicks. Which usually deliver mostly low value prospects to you anyway.
The core premise of what makes this strategy one of the most profitable ones you can currently deploy if you want to use Facebook to boost your revenue:
Your existing customers — if utilized correctly — can be your single most profitable asset when working with Facebook
Why? Because, depending on which study you trust, it is between five and 25 times more expensive to acquire a new customer versus getting an existing one to purchase again. The reasons for this are obvious: You've already established a relationship with them. They trust you, know what you have to offer, proved they like it by having been with you for a while, and probably even know the most convenient place to park their car when they pay you a visit.
Neglecting this in your marketing efforts can be the difference between paying $50 versus $250 to $1250 on Facebook — for the exact same amount of store traffic.
Of course this does not mean you should stop running campaigns aimed at acquiring new customers altogether.
But, if you focus on your existing ones more and therefore increase their purchase frequency, the revenue boost that will come from that will allow you to pursue “the more expensive ones" with much more peace of mind. If you reach a point where you have figured out the right split of budget for your business, this can become a self-sustaining growth cycle.
The strategy in a nutshell
- Turn existing customers into page fans (highly efficient, low cost method below)
- Increase their purchase frequency by frequently running ad campaigns aimed at them
- Reinvest a portion of the generated extra profit into acquiring new customers
Yes, you will have to spend some money to make this work... but not much, really.
If you have a Facebook page already, there is no need to say that organic posts are close to useless nowadays. With an average organic reach of 2 percent, they hardly reach enough of your fans to bring anyone through the doors at all (— assuming you currently have less than 2.000 people who follow you on Facebook.)
So, one thing you will need to spend some money on, is having your promotions reach your fans by boosting posts. The second is, getting your customers to become fans in the first place. And there's a well-tested, inexpensive method for achieving that.
How to make customers become fans, efficiently
Let’s call it an 'In-Store Like Campaign':
Each month, you host a small raffle. If you are a restaurant owner, it could be a free dinner for two. If you run a shoe store, it could be getting back the full amount of what was spent on the winning purchase. Car dealers can go for incentives like Amazon vouchers, all the way to discounts on future purchases. It has to be something attractive enough to make people like your page. Test different incentives.
The obvious catch is, they have to like your page to take part in the raffle and that you will reveal the winner there.
It sounds simple and probably isn’t all that new at all, but:
It usually generates page likes for as low as 4 cent per like. And these are not your everyday likes you get from $4-per-fan Like Campaigns. From people who might never visit your store at all. These are proven customers.
In the 4-cent-per-fan example, our client raised the effectiveness of this approach by...
- Handing out out a flyer after every purchase and verbally making customers aware of the raffle, and what they have to do to take part. (It included a 3-step how-to and a shortlink to the Facebook page.)
- A physical bowl where the customers could drop their name into. Which not only adds social proof, by making people see that others are already taking part. But it also increases the perceived chance to win, if it's not filled up all the way to the top. So get a big one.
Within 2 weeks, our client (a shoe store owner) collected over 150 new page fans. Run this campaign for a year and you will end up with more than 3.000 proven customers you can activate for extra revenue for as little as $30, at any time you like. (If you want all of them to see your ad at least twice.)
Organic reach might be close to death, and regular Like Campaigns in turn even more inefficient for local businesses than ever... but with the approach laid out above, there are still some handsome profits to be made from your Facebook Page.
Making your advertising pay
Just keep in mind: To reach the same 3.000 people twice using a postcard mailing, you would probably spend ten times of what you have to spend on Facebook. If you consider this, being forced to spend money on Facebook at all nowadays might not look too cruel after all. Because the chances of not making a return on such a small investment are close to zero from the get go.
Especially if you know at least a little bit about how to create an effective ad campaign.
If you don’t feel completely confident with that yet, there’s really no better recommendation than to get back to the basics. Meaning the basics of classic, direct-response advertising.
David Ogilvy, who built the at one point in time largest ad agency in the world, once called direct-response advertising his his secret weapon. A solid start in getting familiar with direct-response principles would be reading Scientific Advertising, written by Claude Hopkins.
Even though it was written in 1923, many of the worlds greatest marketers claim that it was one of the central building blocks of their success. David Ogilvy went as far as to say:
"Nobody should be allowed to have anything to do with advertising until he has read this book seven times. It changed the course of my life."
Highly recommended. Facebook is inefficient as long as you can’t use your very best audience, which is your existing customers. So build your fan base. And advertising usually is inefficient if it’s not based on direct-response principles. Getting familiar with these will be a hugely profitable investment of your time.
If you’d like to find out how we can help your locations to gain more cost-efficient traffic, contact us!