Having One Advertising Goal For Your Business May Be Destroying It’s Growth Potential

If your company only has one return on ad spend (ROAS) or cost per order (CPO) goal for Facebook ads, you’re most likely doing a tremendous disservice to the growth of your business.

Consider this real scenario we encountered with a potential client after auditing their business:

You task your agency with hitting a 5X return on ad spend.

At the end of the month, the agency spent $20,000 and say they’ve generated you $100,000 in revenue according to Facebook reporting. Right on target!

However, when you look at the revenue numbers in your sales system, you don’t see a $100K increase. You barely see a $20K increase.

You also don’t see meaningful growth in new visitor traffic or email addresses. Instead, it’s mostly the same people you’ve always serviced coming back.

What’s happening here?

In order to hit a 5X ROAS goal, the agency focused on reaching the lowest hanging fruit instead of trying to drive new customers for your business.

These low hanging fruit are the the existing customers and website visitors who might have bought anyways regardless of seeing ads.

This 5X ROAS goal didn’t actually achieve it’s job in growing your business as much as hitting vanity ad metrics.

So why can’t the agency just take those dollars and go after new customers instead?

The challenge is it generally costs 5 times as much to acquire a new customer as it does to reacquire an existing one. That means it’s near impossible to acquire a new customer at your desired 5X ROAS and will most likely cost you a 1X ROAS to do so.

The agency has no incentive to go after new customers on your behalf because it wouldn’t be considered successful.

Instead of having one higher ROAS/CPO goal for your business, consider having a higher ROAS goal for existing customers and a lower goal for new customers.

Having separate goals will allow you to continue to scale your business while also profitably retaining your existing customers.