.Folks are familiar with ROI - Return on Investment, but ROAS - Return on Ad Spend - is a little more nuanced.
Emilio Yepez has spent years working with huge companies and huge marketing budgets (like 7 and 8 figure marketing budgets) and now works with small and medium-sized companies using those same insights.
And one of the things that makes him a true professional - being able and willing to say, "I don't know yet."
Specifically, that's the answer to, "What should my ad budget be?"
And that's because this man tests everything. Let's not throw your whole ad budget at some ads "we" think are nice.
Let's take a small fraction of that to test what's working, and then scale it up.
This is good practice for the "Big Boys," but absolutely crucial for small businesses.
But the real crux of our conversations was on the difference between ROI and ROAS.
ROI can be measured in the short term - You spent $100 on ads and generated $1000 in sales for example.
But ROAS goes a lot deeper:
What's the lifetime value of that client?
What are your margins?
How do you stack up against competitors?
How do you price to be sustainable long?
How can you survive short-term competitors that come into the space and undercut everybody, end up failing, but screw up the market perception of value and price?We get into what percentage of sales and margins should be dedicated to advertising, concentrating spend vs spreading it out, "theory" vs practice, and how to tell if you're talking to a true professional in this space vs somebody that just took an ads course online and is using their budget to test their ideas.
Truly one of the most value-packed episodes of the Pollinator Podcast we've had.
You can connect with Emilio here: https://www.linkedin.com/in/emilio-yepez-50a32612/
You can also send him an email to [email protected]
Visit his website here: http://www.lighthouseinternetmedia.com/
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