How much should you charge for Facebook ads?
If you’re looking to start selling Facebook ads to your customers, or if you want a more clear and concise pricing method for your Facebook ads, in this video, I’m going to take you through my Facebook ads pricing formula and five tips on how to decide what you should charge customers for Facebook advertising.
If you know that you are confused about your pricing for Facebook ads, imagine how your customers feel. If you’re not clear on what you’re charging for your Facebook ad services, then your customers are gonna also really struggle with that.
The classic mistake that a lot of funnel builders make, especially when it comes to pricing their Facebook ads is trying to be cheap and affordable and undercut the competition and all that’s going to do is eat into your margin.
The funny thing is that you’re actually more likely to find a customer and certainly make more revenue if you have higher prices than everyone else in the market.
I’ve got seven sales strategies for selling all kinds of marketing funnel projects from Facebook ads to full-funnel builds and email marketing.
You can get my free seven sales strategies for selling marketing funnels for at least $25,000 here:
But in the meantime, let’s focus on the five things you need to price Facebook ads for your business.
1. What does your business need to make?
So the first thing that you need to do above and beyond anything else is figuring out what do you want and need to make per year?
Many businesses post the classic question of what should I be charging for my Facebook ads and what they really should be asking is themselves, how much do I want to make per year?
If you’ve ever seen something like Dragon’s Den or Shark Tank, one of the core numbers that the investors are looking for is revenue projections. That’s what you want to think about your revenue target.
What is your revenue projection for the year? If you want to make a hundred thousand dollars in a year, great, that’s awesome, and you’ve never sold marketing funnels or Facebook ads to another customer.
You then want to think, how many customers could I reasonably serve during that period of a year?
If you’re starting out, one customer per quarter is a pretty decent area to go after.
The crazy thing is that often, like in Dragon’s den and shark tank, they’ll look at the projections and it’ll be like, “We want to do 600,000 in year one and 1.2 million in year two.”
Then the investors look at the prices and the gross margin that they’ve got on their current products and the maths doesn’t work out.
If you are selling your Facebook ad services for a thousand dollars and your goal is to get to a hundred thousand dollars, that’s a hundred customers, or you could say I’m actually just going to charge 25 grand and I’m going to look for four customers.
That is finding one customer per three months.
I would rather have 99 rejections in order to find one customer who’s willing to pay 25 grand because it means that I only need to do it three more times and I’ve hit my six-figure target.
2. Are you doing the work or is someone else?
Point number two is that long term, you are going to need to think, are you going to do the work or is someone else going to do it?
I understand that when starting out you might not be comfortable doing that, but you have to start thinking as a business owner and you have to start realizing that you can’t be the only person who does the work.
Otherwise, all that happens is you own your job and your customers could just get rid of you.
But weirdly, hiring people actually makes you more likely to keep the customer because you know that you can focus on the customer relationship and someone else can deliver the work for you.
Start thinking about what you would be willing to pay someone in order to get them to do the work for you.
You don’t have to pay upfront. You not having to pay a full salary upfront.
Also, if you were to secure a $25,000 contract, you want to use the role of the third. So third, third, and third, roughly a third of that is going to go towards paying somebody else or could be used to pay somebody else.
If you’re serious about running a business, you need to think about scaling your business and making sure that you’re not the only person doing the work, which means potentially hiring someone in the future and getting them to do the work for you and taking a portion of that project and paying someone else to do the work.
3. Ignore what other people are charging
Point number three, ignore what other people are charging.
It’s a complete misnomer, absolute nonsense, that a middle of the market price exists.
If your idea is to undercut people, because you have a lack of experience, you are going to struggle.
No business in history ever has undercut the competition and said, we’re charging less because we haven’t got experience and live to tell the tale.
What you need to do is make sure that your prices are as sustainable for you as possible.
A lot of people are going to say you don’t have the experience and we’re not willing to work with you and you’re too expensive.
All that’s happening there is your feelings are getting hurt.
As a business owner, you should be able to rise above your feelings of getting hurt and think, “iI I had 99 people say to me, $25,000 is way too expensive, but one person bought from me then whose opinion do I really value?”
Middle of the market doesn’t exist.
Seth Godin said that pricing is the refuge of the marketer who doesn’t understand the value that they’re bringing.
If you’re struggling with your pricing and people say it’s too expensive, it’s probably because either:
- You’re talking to the wrong customers, or
- You don’t fully understand the value that you’re bringing to the market.
4. Costs x 3
Point number four, as I mentioned is taking costs by three or times in them by three.
If you know that it costs you eight grand to get someone to do the Facebook ads for you, times that by three, roughly speaking, that gives you a 25 grand price tag.
Let’s say that you found a partner who says, “Yeah, I can build all these kinds of products. I can build Facebook, advertising, and campaigns for you.”
Roughly speaking, this is what you’d get for six grand.
Say to them, “Great. If I passed work over to you, if we worked in a team or even if I hired you, how would you feel about making that kind of money?”
They go, “Yep. I’m sure that’d be absolutely fine.”
You then go out and add value through the sales process. You add value through the marketing process, and that’s why it’s $25,000.
If someone gave you 25 grand today, you could comfortably spread that out over a year.
The customer is paying two grand a year and give a third of that so roughly $700 to someone else every single month to take care of the Facebook ads for you.
That leaves you with profit, pay for yourself, and the ability to scale and grow and use part of that budget for marketing.
The reason that most people aren’t willing to increase their prices is that they’re afraid of their feelings getting hurt.
Basically, you can give all kinds of illogical, nonsense answers to me like, “No I’m testing the market. No, we don’t have the experience of a grown-up portfolio.”
It’s totally fine if you want to say that, but the real reason that you’re not increasing your prices is that you’re unwilling to have someone else tell you 99 times, “I can’t afford that.”
As I mentioned, you’re speaking to the wrong customers so start finding people who have got 25 grand and they are out there by the way.
They are out there, willing and ready to buy, regardless of how much experience you’ve got.
How much experience did Tesla have when they released their first Roadster car? None, but they still sold a ton of them.
Here’s the funny thing, that was the most expensive car. Their price has gone down for their cars since releasing their first model.
They didn’t come to the market going, “Oh, we were a bit inexperienced, so we’re underpricing our cars.”
No, they went, “If you’re an early adapter and you want to get the best possible electric car that’s available at the moment from an exciting new company, you want to buy it from us.”
In 10 years time, the price has dropped because then it becomes mass adopted.
5. Package the future, not the features
The fifth and final point is you should be selling futures, not features.
How often do I have to say this?
Package up the future, not the features.
If someone says 25 grand is a lot of money, they might be right. But you have to look at what have you tried to sell them.
If you’re just selling Facebook ads, I can see why someone wouldn’t want to buy from you.
Instead, if you looked at what it is they get when they get those Facebook ads, they get high turnover, they get higher conversions, more customers.
When in actual fact, maybe you could start thinking a bit bigger and start saying, CEOs are allowed to spend more time playing golf because they know that they’re leaving sales generation is taken care of.
That’s what you should be thinking about, the long-term future that you’re bringing to the customer.
Maybe you work with businesses you want to get into launching products.
Maybe you look at businesses who are afraid of getting into online advertising, because of what it means to their brand.
Maybe you want to work with businesses that are traditionally in manufacturing and want to start releasing online learning content.
You need to start thinking bigger than what it is that you’re delivering.
The feature is the Facebook ad. The future is the long-term desirable life that the customer wants and that’s what they’ll buy.
A CEO will gladly spend 25 grand a year to get them out of the office earlier and if your Facebook ads allow them to do that, that’s where the value lies, not in Facebook ads.
So, really the question you should be answering is not how much can I charge for Facebook ads? You should be asking, what do I need to deliver for $25,000?