The next step is to make sure your campaign budget is going to result in profit and cash flow. If not, you’ll need to:
- Improve your margin
- Increase your website’s conversion rate
- Improve lead-to-customer conversion rate
Imagine your PPC budget is $4,000 with the goal to generate 48 new customers who, on average, each bought products worth $500. This generated $24,000 in sales revenue, resulting in a return on ad spend (ROAS) of 600%. But what about when you take into account the expenses associated with producing those sales? That’s when your PPC ROI comes in.
Let’s assume you have a 50% margin on $24,000 in sales, meaning it costs you $12,000 in labor or parts to produce those sales. Subtracting your campaign expenses of $4,000 from the gross profit of $12,000 leaves us with an ROI of 200% and $8,000 in cash flow.