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

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

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does this CPA start to creep up?

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We're not go doubling your budget overnight because the

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

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

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keep the CPA down where you need it to be

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to scale or not to scale.

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That is the question.

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All right guys.

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I'm Regina.

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

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It's one of our clients at Starter ppc.

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Starter ppc.

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What's that?

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I'm on the Solutions eight channel.

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

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

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

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have a budget that's under 5,000.

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So Solutions eight has, , some budget minimums.

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We have a budget maximum.

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

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in the, , description below.

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, and I'm gonna dive in.

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

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

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

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should they begin to scale their company.

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And if so, what will that look like?

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

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

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I have the last 30 days pulled up.

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

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acquisition per lead is, , $166 now.

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

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

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Basically, we're leaving leads on the table.

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

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

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attribute conversions is becoming.

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

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

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

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

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

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It's probably even lower in, in reality.

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So definitely time to scale.

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

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if I go back in time, this 166.

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stays about accurate.

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

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it's time to start to consider scaling.

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I would not go doubling your budget overnight because the

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

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

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Add about 20% to the budget.

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

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

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the average is still staying the same.

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

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

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Once everything looks good, add 20% more.

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

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does this CPA start to creep up?

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

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

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

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learns how to spend that extra money.

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

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

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And the CPA goes back down.

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

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

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in this case, that would be 200.

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Then don't add more budget, right?

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You've gotta figure something else out.

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

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

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

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

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

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starting to run out of market size.

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

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

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

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

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This is a service-based business.

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

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Inbound search campaigns except for the brand.

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Well, even brand is inbound technically.

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

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fact that we have a limited budget.

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

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this 40% gets down to like 20%.

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

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

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start to creep up in the cpa.

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So we have some wiggle room, not a ton.

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

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service-based plumbing company.

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

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Okay.

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

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This is similar to budget.

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

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things that go into how Google ranks the ads.

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

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you're willing to pay, right?

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

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

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

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, so that's the biggest indicator of rank.

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

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

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

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, but this is another indicator, right?

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We have 56% that we lost due to rank.

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

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Maybe it.

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wouldn't surpass 200.

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So it'd be okay with that.

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

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lost impression share due to rank.

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

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the remaining search impression share.

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

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shooting up when you run out of market.

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. Now you might be okay with that, right?

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

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

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

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

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

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

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So that's one way to scale.

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

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

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the word for service-based businesses.

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

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back for more, , raise your prices.

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

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of a customer, that automatically changes your cost per acquisition

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that you can afford, right?

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

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

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

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

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That's one way.

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

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columns, then add some more keywords.

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

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

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, Google's been, occasionally targeting.

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

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to go after that keyword more often.

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

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

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, you can also add a service.

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

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

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

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

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

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

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You get the point.

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

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your geos restrictions.

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

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

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

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

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

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

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, which is gonna keep the CPA from climbing.

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

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

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

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have to hold off until the CPA goes down.

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Okay.

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

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

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good at converting people.

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

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, edits that you've been considering.

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

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gonna actually increase conversion rate because now you can do some

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

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I don't know about in a plumbing company.

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

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I wouldn't make a video for those.

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

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, , that'll help increase conversion rate.

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

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

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who can take leads while you're out.

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, maybe you wanna upgrade your call answering service.

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

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

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

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

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

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on, on off hours or on the weekends.

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

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

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

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wiggle room, why the heck not right?

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Try to scale.

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, that's the time to scale.

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

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that you need, go for it.

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Add 20% budget and see what.

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