One of the biggest problems with Facebook advertising is the cost. While Facebook advertising is less expensive than most alternative mediums, it’s still quite expensive if you don’t cover your costs. You have to generate a certain number of sales from your advertising to meet your KPIs and stay profitable, but you can lose profits if you lower your prices or spend more on your digital marketing.
But what if there were a way for your Facebook advertising to be cost-free? This is the idea behind self-liquidating offers (SLOs).
What Is Self-liquidating?
Self-liquidating, in a nutshell, means that the revenue made from an investment covers its costs. In the case of Facebook advertising, this means you create a break-even campaign that brings in as much as (or more) in sales than the expense of the advertising. So, if you spend $500 on Facebook ads that generate $500 in revenue, the ad campaign is self-liquidating.
What Is a Self-liquidating Offer (SLO)?
While the concept of breaking even may not sound very intriguing, remember that you haven’t tried selling any of your other products at this point. You sell something small first and that helps you identify people who may be interested in your other products as well.
For example, if you are selling items related to dogs, you know that someone who buys a low-cost dog-related item probably owns a dog and tends to purchase items for their dog online. You start with sales of your low-cost items and build a list of qualified leads that are completely paid for by the revenue from the initial purchase. Then you can move them through your value ladder to your other products or services at no further cost to you.
How to Create a Self-liquidating Funnel
The basic premise of self-liquidating funnels is to offer something low cost that has a great appeal to your target audience so you can promote your products and services to qualified leads. It takes some creativity and testing to know what to offer and at what price point to set it. For information products, for example, you can offer a scaled-down introductory version or a stand-alone piece of your flagship product. From there, you can make your funnel more complex by trying other variations to this approach.
For example, you can offer something for free in exchange for the person’s email address and build an email list. Once they have entered their email address on your landing page in exchange for your free offer, then you can make a one-time low-cost offer. If they make this initial purchase, you can also immediately offer an upsell. In fact, you might consider running the traffic directly to your sales page (SLO). Regardless of the approach, the goal is to have your initial sale pay for your advertising so that you can continue to repeat this process. Once you have qualified your leads with this initial purchase, you can directly offer them your higher-priced products and services.
Why Use Self-liquidating Funnels with Facebook Advertising
Not only do self-liquidating funnels create a system that covers the cost of advertising, but it also helps with cash flow. Rather than wait to find out what your advertising budget will be after your sales and expenses, you can sink the revenue you make from SLOs right back into your advertising. This revenue is earmarked for ads, so it creates immediate cash flow specifically for your digital marketing. After advertising is covered, your other sales will go toward other expenses and profits.
If you find the idea of cost-free Facebook advertising and generating qualified leads exciting, you should! Putting both to work for your business can help you skyrocket your sales and meet or, in fact, exceed your revenue goals.
Results-driven, dynamic Director of Sales & Marketing turned Certified Master Marketer, Tammy uses all of her digital marketing smarts for good…she has managed millions of dollars in top-line revenue and hundreds of thousands of dollars in advertising spend while consistently generating a 2:1 return inside the Facebook & Google Ad platforms. Follow Tammy on Facebook & Instagram.