Straight from the desk of A Sherazi.
Oftentimes when I am talking to charities, they want to scale their campaigns quickly. By scaling, I mean they are seeing some results and want to spend more money right away.
Spending more money without building the right systems or processes or without a plan is a sure way to lose your money or make. Below I mention 5 things that you need to have before you scale your ad account.
1. Be Profitable: Are you profitable on your current campaigns? What is your Average Donation Value (ADV) (Total Donations/Donors)? How much do you spend to acquire a Donor (CPA) (Ad Spend/Donors)? If your CPA is higher than your ADV, you're not profitable yet. You must first be in a profitable state before you raise your budgets.
2. Lifetime Value: What is the average lifetime donor value (LDV)? How much does a paid advertising donor donate in his/her lifetime to your charity? Do you have a system for turning one-time donors into recurring donors who donate regularly? Do you have a system to turn these regular donors into loyal supporters who engage on your posts and support your projects? The higher the LTV, the higher you can spend and scale. If your LTV is high, you can spend high even if your CPA is greater than ADV because you will have a higher net income in the backend even if you lose in the frontend. A first time donor has an acquisition cost (CPA), but when he returns and donates for the second time, that has zero acquisition cost and its pure 100% income for the charity.
3. Creatives: Do you have a process of getting fresh creatives on a consistent basis? Creatives often face ad fatigue when scaling, that's why it's important to have a continuous supply of good creatives to scale effectively.
4. Ad Account Strategy: This is a very lengthy topic in its own right. Every account is different. Is your account structured right? How do you test creatives and audiences? How do you set up Automated Rules? Do you divide campaigns according to Cold, Warm and Hot audiences?
5. Overall Experience: How does your messaging look like in the Landing Page and Social Media in general? How does your checkout experience look like? Do you thank your donors? Do you reply to their comments? How does the receipt you send look like? Do you post updates on how their donation is creating a change in the world? Do your donors feel proud that they have donated to your cause? Do you provide an experience that makes them come back and donate for a second time?
These are the 5 basic points you need to set up before investing huge amounts in Ad Spend. If you try to scale with a shaky foundation, it will just fall.
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