Scaling A Service-Based Business: When & How To Grow

Their question is, , how much can we scale and , when

does this CPA start to creep up?

We're not go doubling your budget overnight because the

algorithm doesn't know what to do with all that extra budget.

, so I can tell you that there's some indicators on when it's gonna be tough to

keep the CPA down where you need it to be

to scale or not to scale.

That is the question.

All right guys.

I'm Regina.

Today we're gonna be talking about a service-based, , company.

It's one of our clients at Starter ppc.

Starter ppc.

What's that?

I'm on the Solutions eight channel.

, that's what's going through your mind right now.

, so Starter PPC is a sister agency created by and run by Solutions eight.

, but the difference is, the main difference is we work with any businesses that

have a budget that's under 5,000.

So Solutions eight has, , some budget minimums.

We have a budget maximum.

So, and , if that applies to you, feel free to check us out

in the, , description below.

, and I'm gonna dive in.

I'm gonna start talking about one of my clients here.

I will make sure to blur out their names so that we can keep privacy going.

But this is, this is a service-based company and they're trying to decide

should they begin to scale their company.

And if so, what will that look like?

So, I'll just let you know, this is a plumbing business, so it's local

and , we've been working with them now for several months, maybe four months.

I have the last 30 days pulled up.

And what I wanna show you here, first of all is, , the cost per

acquisition per lead is, , $166 now.

Goal, the amount that they can pay for a lead is $200.

So in the last 30 days, the cost per acquisition is, , too low.

Basically, we're leaving leads on the table.

and so, , , this is especially, , there's lots of wiggle room, right?

And it's especially true because Google's, , ability to track and

attribute conversions is becoming.

Less and less and less like almost every quarter now, as they put more and

more privacy restrictions in place and, , aren't able to, , keep track of, of people

that are switching devices, switching IP addresses, clearing their cash and cookies

in between, , come into your website more than once, that type of thing.

So, probably this 166 isn't even, , accurate.

It's probably even lower in, in reality.

So definitely time to scale.

And if I go back, I won't bore you guys by changing the dates, but

if I go back in time, this 166.

stays about accurate.

So once you, kind of hitting your goal for a month or more, , it's time,

it's time to start to consider scaling.

I would not go doubling your budget overnight because the

algorithm doesn't know what to do with all that extra budget.

So my recommendation for scaling is to scale slowly, right?

Add about 20% to the budget.

, and if things go well after one to four weeks, depending on.

, depending on how often you get leads, you know, you need to make sure that

the average is still staying the same.

So it might be one week that you can see that, or it might be four

weeks that you can see that, but add 20% of the budget at a time.

Once everything looks good, add 20% more.

So, , their question is, how much can we scale and , when

does this CPA start to creep up?

So I can't tell you with certainty when the CPA will start to creep up.

, I do know that when you add budget, the CPA will temporarily, , you most

of the time will temporarily go up a little bit and then the algorithm

learns how to spend that extra money.

It learns who else they can target out in the world, , where they can

place the ads to, to do it, uh, efficiently, et cetera, et cetera.

And the CPA goes back down.

It should go back down to where it was before you added that 20% more.

, if it hasn't gone back down yet and you've surpassed your goal

in this case, that would be 200.

Then don't add more budget, right?

You've gotta figure something else out.

So if you're, a averaging your goal, or better, then keep adding budget.

And if it's not there yet, then wait, hold off.

And, , while you're waiting, you can come up with some other stuff to, to try.

, so I can tell you that there's some indicators on when it's gonna.

tough to keep the CPA down where you need it to be, and that's when you're

starting to run out of market size.

So I've pulled up these two columns, search, lost impression,

share due to budget and search, lost impression share due to rank.

So in the last 30 days, we've lost about 40% impression share due to budget.

So out of the total market size that we're targeting, right?

This is a service-based business.

So we're mostly, we're completely doing.

Inbound search campaigns except for the brand.

Well, even brand is inbound technically.

Um, so anyways, it's averaging 40% that we weren't able to hit due to the

fact that we have a limited budget.

So just right then and there, I know we can probably add budget until

this 40% gets down to like 20%.

Once it's 20%, it's gonna be hard to squeeze out the remaining 20.

You might be able to get it down to like 10%, but it's gonna

start to creep up in the cpa.

So we have some wiggle room, not a ton.

This is a geo-targeted, , account because it's a local

service-based plumbing company.

So, , we are kind of restricted geographically with a smaller market.

Okay.

There's also search lost impression share due to rank.

This is similar to budget.

, rank is kind of complicated because there's a.

things that go into how Google ranks the ads.

One of which is, , the main indicator is, , the bid that

you're willing to pay, right?

So if you're willing to pay, , $7 for a click and your, and your competitors

are willing to pay $8, , then They're gonna capture more of that than you.

They're gonna, rank higher because they're willing to pay more.

, so that's the biggest indicator of rank.

And so, , a lot of this does, , tie into budget.

A lot of it also ties into what you're willing to spend on a customer,

which is on a lead, which is c p a.

, but this is another indicator, right?

We have 56% that we lost due to rank.

So if we were willing to pay $8, we would make our CPA go up.

Maybe it.

wouldn't surpass 200.

So it'd be okay with that.

And then we could add budget easily and take on more of this 56, percent

lost impression share due to rank.

But again, when you get down to like 20%, 10%, it becomes hard to squeeze out

the remaining search impression share.

, for some reason that just seems to happen every time the the CPA starts

shooting up when you run out of market.

. Now you might be okay with that, right?

So one option when that happens is to somehow be okay with a higher cpa.

Maybe you figure out that your lead quality is so high in Google that your

original, , assumption that you can only afford to pay $200 for a lead is

wrong, and you find that you can actually pay $220 for a lead on average, right?

When you get there, redo your math and see if you, , actually have

some remaining wiggle room and you can increase your CPA goal.

So that's one way to scale.

Another way to scale would be to, , increase your average.

Average order value or the amount, the, lifetime value of a customer is

the word for service-based businesses.

So if you're able to upsell, cross-sell, keep people coming

back for more, , raise your prices.

whatever it is that you can figure out how to increase the lifetime value

of a customer, that automatically changes your cost per acquisition

that you can afford, right?

Because now you're getting more for every, , dollar you spend.

So, , that'll increase your c p a goal as well.

, you also can focus on trying to increase market size.

So these numbers, you can, , change your targeting.

That's one way.

, so if you're down to like 20 10% in the, these two, 10% or 20% in these two

columns, then add some more keywords.

Maybe you can come up with, , some keywords that you weren't targeting.

You can, , deep dive into the search terms to see if there's anything that,

, Google's been, occasionally targeting.

And then choose that to actually target as a keyword and then force the algorithm

to go after that keyword more often.

That'll, , increase your, ,, the total impression.

, which will mean that the lost impression share amount will go up.

, you can also add a service.

, maybe there's a little side service that you tend to offer, but you really

haven't been promoting it because you know it's not your best selling product

or, you it doesn't have a big market.

But occasionally there's people that are looking for that soap.

Add a campaign for that, add an ad group for that.

, you know, maybe you can add a service to your repertoire.

You get the point.

Another way to increase your market size would be to, , rethink

your geos restrictions.

Maybe, , now that you've hired a couple of extra people, , you know, one of

them lives way over there and you realize that they can go do the jobs

way over there, and so you might want to add another ZIP code to your geo

targeting that's gonna increase the total impression share, which is going

to increase the impression share loss, which is going to give the algorithm more.

, more market size to work with and to try to get you the lowest CPA possible,

, which is gonna keep the CPA from climbing.

. , other ways that you can help to decrease the cpa.

, let's say you're trying to scale and you just, you keep hitting that $200 cpa,

which is your goal, and you're like, gosh, would really love to add budget, but I

have to hold off until the CPA goes down.

Okay.

So maybe what you need to focus on instead is your conversion rate.

So that would be things like, make sure the website is really

good at converting people.

Maybe you want to ab split test a couple of different home.

, edits that you've been considering.

Um, maybe you wanna add, , a couple of videos , , to your ads that's

gonna actually increase conversion rate because now you can do some

remarketing with those videos and get people back and, converting.

I don't know about in a plumbing company.

It depends on, obviously some of these services are emergency services, so

I wouldn't make a video for those.

I would make a video for the ones that people spend a few days thinking.

, , that'll help increase conversion rate.

You can also, if you haven't been answering calls, , on off hours on the

weekends, , maybe you wanna consider hiring a call, answering service

who can take leads while you're out.

, maybe you wanna upgrade your call answering service.

I know there's some really, , minimum call answering services out there

that simply just take down the leads information, which is fine.

It's better than nothing, but, maybe you're at a point where you're like, okay,

I need an actual call answering service that knows you know, how to answer some

of these questions about plumbing and maybe can do some selling for me, even

on, on off hours or on the weekends.

So, , all of these are ideas on how to scale and when to scale.

, so I hope that gives you guys some stuff to think about.

, my thought process is, hey, if you're hitting your CPA goal , and there's a

wiggle room, why the heck not right?

Try to scale.

, that's the time to scale.

So if it's been about 30 days and you're averaging the CPA

that you need, go for it.

Add 20% budget and see what.

And then you either need to focus on, , lowering your CPA or