How to build a funnel that allows you to pay more for each customer

Paid social is quite literally a competition

Your paid social ads don’t exist in a vacuum. They live in a feed, above and below some of the most engaging content on the internet. What else is in this feed? Your competitors ads. And by competitors, I don’t just mean businesses in your industry. Your paid social competitors include any business vying for the same customers attention. If you’re selling activewear, you may be competing against brands in beauty, fashion, cookware, home, and so on.

Every brand that sells products your customers is your competitor. Why? There are a finite number of in-market customers and we’re all competing for their attention. Luckily, paid social is quite literally an auction, and the highest bidder win an auction. Let’s revisit a famous advertising quote:

How can you ensure that you’re the business who can spend the most to acquire a customer and thereby win the paid social auction?

Your funnel needs to maximise first-order AoV and profit

It’s simple. To spend more to acquire a customer, you need to make more from each customer. Without relying on LTV and hypothetical future profits, here’s how to build a paid social funnel that maximise first-order AoV and profit:

1. Test acquisition offers and bundles

2. Test viral ad concepts (not scripted UGC)

3. Build an ad account that facilitates profitable scale

4. Test landing pages that promote your offer/bundle

5. Test email capture popups

6. Create SKU-specific acquisition email flows

7. Test checkout upsells

8. Test post-purchase upsells

How to create and test acquisition offers/bundles

First, brainstorm offers and bundles. A few ideas are:

1. Buy X, get X (Buy 3, get 1 free)

2. Spend and save

3. Free gift with purchase

4. Free shipping

5. Free personalisation

6. A flat dollar or percent discount

7. An acquisition mega-bundle

My personal favourite is #7. An example of a mega-bundle is:

1. Buy 3, get 1 free (and save a huge $X)

2. AND get a free (product) with purchase

3. AND get free shipping

4. AND get a free (digital download)

5. If you purchase today

While this is my favourite type of acquisition offer, it’s important to test as many as possible. You never know which will resonate and convert best.

Lastly, you need to ensure that your offers are set up for profitability and success. In a spreadsheet, analyse each offer using RRP, COGS, variable costs and projected CPA. By evaluating these metrics, you should be able to determine whether the offer, and all that it includes, will allow you to pay a higher CPA in the auction while maintaining (or improving) first-order profitability.

In future posts, I’ll share the exact processes and templates we use at Factor to execute on each additional step of the funnel.

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