"I have been tracking our Home Advisor leads compared to our Facebook Ad you setup...the bottom line is I cancelled my account with Home Advisor today. The Facebook ad is a lot cheaper and is converting to sales at a much higher rate! Keep it up." - Jack C., Water Damage/Mold Removal Service
Facebook Ads Work for Local Lead Generation
Situation when Client came to us: Client had been spending $1,000 to $2,000 monthly with Home Advisor. While getting a lot of leads he felt like he was doing too much quoting and not enough closing of these leads. So, we set out to find a cheaper and more targeted solution where he would have a higher probability of closing the lead. One key disadvantage to the lead service we mentioned is the leads he was getting were also going out to several other competitors in his area. This tended to make these leads price shoppers more than anything else.
Methods and Results: First, we discussed what his ideal customer "looked like" as we defined his target audience. A significant advantage of Facebook's ad targeting system is that there are literally hundreds of criteria you can select to ensure your ad is only shown to these potential customers.
In this case we decided to keep the audience fairly broad as to reach the most potential clients. I have outlined in light blue our selected criteria, which you can see in the image below:
So, we selected people living within a 25 mile radius of his locations city center, ages 27 to 65, and homeowners. This yielded a potential audience of 570,000 people in his target! Facebook also gives us a potential daily reach of 420 - 1000 people.
Think about that a minute...that is a lot of potential customers in his target market.
Next, and probably most importantly is identifying a service that this client offered that meets the following criteria:
- Widely needed by his target audience
- A lower cost option that would appeal to entry level customers giving us the greatest potential pool of people that could afford the service.
- A higher profit margin service or one that requires minimal investment of time and labor on his part.
The idea here is that this service should be structured to be a "foot in the door" type offering. Think about mass appeal here. While high end custom services can be advertised successfully on Facebook, the targeting would have to be much tighter. You would not want to show ads for $100,000 kitchen remodels to people with an annual income range of $25,000 - $50,000 as an example.
With this exercise completed we decided on mold remediation as the service to target. While these can be large jobs, often they are smaller and quicker for our client to perform and quite common in his area.
Now we moved to creating his AD. The key on Facebook is to find an image that will grab the readers attention. The ideal placement of these ads is in the news feed. So, remember that unlike Home Advisor, Angies List, etc. these customers did not come here to look for your service...they are looking at pictures of relatives, status updates, and so on.
Here is the first ad we created with this in mind:
We decided on the above image as we thought it to be quite common that home owners would be tempted to or have painted over a mold spot. I'm sure I have at some point! The red WRONG! with the universal "don't do this" symbol over the paint brush seemed to jump out at us. Our guess was right as you can see in the statistics for this ad below. Also notice that this advertisement also had 69 reactions, 21 comments, and 77 shares!
This Ad achieved 664 website clicks at a cost of 21 cents per click. Compare that to Google AdWords where the cost for a mold damage removal/remediation click can run $15 - $30 each in his market! This is a 30 day time frame...664 visitors to his mold removal landing page on his website for less than $142. In the image below you can see the complete statistics for this ad campaign since we have been running it for him.
Ongoing Strategy: So, we continue to run this ad as it has only reached 74,848 people of the 570,000 people in his target audience. Also, with 3,214 clicks to his landing page with an average overall cost of 34 cents per click it is extremely cost effective to continue to do so.
Not only that, the most important issue is that these client's are converting to sales. This client has averaged a $50 return for every dollar spent on this campaign month after month!
- Define your ideal client, choose criteria that sufficiently narrows your target audience while still leaving a significant pool of potential customers.
- Choose an Ad image that evokes emotion, curiosity, or just stands out to that target audience.
- Start with a small daily budget and monitor your results in terms of clicks and conversions! Clicks that ultimately do not take action and call you for your service are wasted money.
Advanced Strategy: Consider implementing a new call tracking technology, referred to as "dynamic phone number insertion" which would enable us to track inbound phone calls to their business and source them back to the exact ad that triggered the phone call.
Also, continually improve the landing page to increase conversions. Often it is easy to just point your ads at your home page or an interior page describing the service but these pages may not be setup to "funnel" the visitor into taking the action you want them to take, ie. phone call or fill out a lead request form.
About the Author - Tim Walker, Managing Partner
Tim has a passion for helping small and medium businesses grow and prosper. He has over 20 years in business development, marketing, sales, and digital marketing. He started Host Cloud Solutions, LLC in 2012 to address the growing complexity of marketing on the web and to provide a cost effective and reliable solution for local business across the United States and Canada. One key point he always insists on is that each client, regardless of their budget has direct access to him and his management team whenever needed.