Questions

Hi, Our startup company is in a very stable place, there are 70 paying customers for two years in a very crowded field. Our clients see amazing results and we have quite a few advantages over competitors. Now we are at the point that we want to invest in marketing and think if anyone managed to figure out the best marketing channel for them without wasting a lot of money on testings, we think Google or Facebook. What do you think? We can’t start with both.

The answer here depends on what resources you have, who your audience is and what you want to achieve.

Also people use Facebook differently in different countries and regions so there's a cultural influence here as well. Also you mention Google or Facebook but both offer a wide array of options for a campaign with different benefits and challenges.

The key question here though is which is most effective in reaching your particular audience and how much will it cost you to acquire a new customer. We call that the Cost of Customer Acquisition or CCA. So say for example you buy clicks on Google Ads and these cost you $1 per click (called the Cost per Click or CPC).

Then let's say your conversion rate to gain a customer was 2% (called the Conversion Rate or CR). This would mean that to gain each customer would cost you $50.

The question here is does that give you a profit and can you achieve better with another platform eg Facebook?

If you can only afford one platform, then try one and see what your Cost of Customer Acquisition is. Spend an amount you can afford for a limited period of time. Then test the other channel and do the same.

Then ask yourself two questions 1. Did I make a profit on both? 2. Which one made the most profit? Then go with the one that made you the most profit.

It is worth mentioning that due to something called Quality Score, your bid prices will be more efficient over time with Google Ads, therefore you will spend less to earn more.

But being on top of understanding what you're receiving for what you invest called the Return on Investment (ROI) or what you spend which is called the Return on Spend (ROS) is vital for all start-ups to survive and succeed.

I'm very new here on Clarity but check me out on LinkedIn to see what I do and who for https://www.linkedin.com/in/jeremyspiller/ and particularly the recommendations. I'd be happy to help you more and in much more detail.

Hope this helps and very best of luck to you with your business.


Answered 5 months ago

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