Phase 0 of any business is always ripe with marketing offers to promote your product or service.
I know it well – there are automated systems to detect new businesses launches, new websites or the founding of new companies.
This is why during phase 0 of your project you receive several calls, emails and even walk-ins from people who want to offer you their advertising services (online, offline, etc.) to launch your product or service to the market.
You will hear strange words like awareness, branding, naming, impressions, etc. during these first encounters.
The truth is this: you are the person who knows your business best and the person who (I hope) knows your target market best.
It is essential to understand where to have a presence to attract new customers because you will quickly realise that fixed costs in phase 0 can put your business – and you – to the test.
I often meet with startups and new entrepreneurs who don't understand why there are no sales, no leads, no bookings, no one coming through the door.
Take a good look at these numbers:
80% of startups fail in their first year.
90% of companies close within their first 3 years.
The most common mistakes are:
1. Not doing market research
(this is a sad reality that includes people new to business and startups with rounds of funding).
2. Business plan problems
(I have seen very few well-done business plans – besides, in the last few decades, business has evolved so much that it is practically impossible to create a plan for more than 12 months ahead).
3. Too little financing
(it's true that there are some online businesses that need few resources to get started, but in the vast majority of cases, direct and indirect cost estimates are too low and sales/revenue forecasts are too high). You have to be optimistic to be an entrepreneur, of course – optimistic but realistic.
4. Bad location and marketing For some types of businesses the location is key, and for others, like mine, it doesn't matter. But I have seen businesses with a bad location have a good marketing strategy and do well, and others with a fantastic location and no marketing go bust. Because location and marketing often go hand in hand, especially online. The location of any website is the internet, so it's important to be present at the right time with the right person.
In phase 0 you have few resources for marketing, so it is essential to show your ads only to those who are looking for you.
Why? Because when they're looking for you, it's very likely that they need your service or product.
Google Ads search campaigns are the only tool in the world where it is the user that searches for your service, not your company that searches for users. Remember that phrase well.
In other types of campaigns – social media, mailings, radio, magazines, etc., it is your company looking for potential customers. (Yes, they'll tell you that it's important to have an online presence, to raise brand awareness, create a database – all of that is true. The only big problem is you don't have the time or resources to wait that long).
With Google Ads search campaigns, it's the customer who searches for you.
Let's take a look at an example:
John has just opened his small business as a gardener in Edinburgh, and of course, he needs to get the word out and gain new customers.
But why invest time and money in services with not-so-measurable results when a Google Ads campaign can put John right on the screens of people who are searching Google NOW, in Scotland, for a Gardener in Edinburgh. Take a look:
In Scotland alone, there are 1000 monthly searches for the keywords "Gardener Edinburgh" and 260 for "gardening services Edinburgh". That's about 40 searches a day, with searches all year round:
From various regions of Scotland:
A simple website for lead generation where clicks from Google Ads direct people straight there, had John generating leads from day one.
Some of our own real numbers:
When I first got into Google Ads professionally a decade ago (it was then called AdWords), 100% of my new clients reached me through Google Ads.
Over the years, customers from Google Ads who were satisfied with the results have recommended us to other companies, with a ratio of 50% Google Ads vs 50% customer recommendations.
Nowadays, we only run Google Ads campaigns at very specific times of the year and in very specific areas of the world based on conversion statistics.
I remember in 2014 a Google Ads click cost us €2.14, which generated us a client who is still with us 10 years later and has brought us 4 new clients and 2 Google Ads consultancy projects.
At the beginning, the average cost per click was around €2.50. We had a conversion rate of 10%: every 100 clicks generated 10 leads, between contact forms, emails and calls.
Of these 10 leads that went through my team's filter funnel, 4 had a meeting with me (online or face-to-face).
We had a closing rate of 50%: out of 4 meetings, 2 leads were converted into new customers. (Of the other leads that did not convert into customers, 20% called back after some time and others converted over the years when I sent them Google Ads-related mailings).
So, here's much we had to invest to get a new customer:
€2.50 X 100 Clicks: €250 = 10 Leads at €25/lead. Of the 10 leads, 4 had a first get-to-know-you meeting and 2 become customers.
Google Ads investment: €250.
New customers: 2
Cost per new customer (technically called CPA or cost per acquisition): €125.
This is why it is important to use Google Ads search campaigns for your business. You can:
1. Launch campaigns and get leads on the same day.
2. Have full control of the daily/monthly campaign budget.
3. Know exactly how many leads/sales Google Ads generates (we will connect it with your website's Google Tag Manager).
4. Know how many of these leads become new customers.
On to the next conversion with Google Ads for Startups and new Entrepreneurs Campaigns!
Dean.