I will get right to the point here and give you the gold nugget right off the bat…
Winning does not happen by hitting world records with your Return On Ad Spend.
Winning comes from scaling as fast and as hard as you can with tolerable results.
Let me paint you a picture.
Pretend there are two brands competing for the same type of customer with similar products. One is testing extensively and going all-in to validate their results so that they come out comfortably profitable on their marketing efforts. They test and test and scale if they are hitting a 4-5X+ ROAS (Return On Ad Spend). They have done their math and determined that these are the numbers they need to hit in order to cover their Cost of Goods Sold and Ad Spend and still come out with some decent profit. They are patient and determined to hit these results before dumping money into their ads. No big deal right?
The problem is that the other brand, that is going after the same exact customers with comparable products, is scaling as fast and as hard as they can at a 2X ROAS. Their strategy is a lot less about making a ton of money on the first time purchase and a lot more about building long term relationships with their customers so that they come back and purchase over and over again. They have also done their math but their thought process doesn’t ask the question, “How good of results do I need to get to still be making money off of these purchases” but instead ask the question, “How much can I afford to spend to acquire a lifelong customer?”.
One brand is focused on making money on the front end through first time purchases. And the other is all about acquiring as many lifelong customers as possible.
I would encourage anybody who is looking at investing into FB/Insta Ads for their brand to strategize and set goals with the long game in mind. Don’t get caught up in the noise and think that you need a 10x Return On Ad Spend to generate true momentum in your business. Lastly, once you acquire a customer, don’t stop there – continue to provide them with value and keep them coming back for more and more. The difference is monumental and the compounding effect of acquiring a lot of customers (at tolerable results) is what will propel your business to new heights.