47- Can Your Offer Afford Ads? Here's How to Tell
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About this listen
Thanks for Listening! Send me your questions-maybe I'll do a special episode for you!
Hey friends! So last week I threw a LOT of numbers at you in part two of the SLO funnel series, and if your brain kind of glazed over? You're not alone, and honestly, same.
Today we're slowing it ALL the way down and making sure this one piece actually clicks. Because once you understand this, you will never look at ad spend the same way again.
The Goal Isn't What You Think It Is
Here's the thing: The goal of the SLO funnel isn't to profit on a $20 product.
That would be great though, right? But that's not what we're doing here.
The goal is to build a list of buyers—people who've already said yes with their money—and ideally, you're going to break even doing it.
If your ad brings in customers for free? You've already won. You're creating a list of warm, proven buyers you can invite into your higher-priced programs later.
Let's Make the Math Make Sense (It Really Isn't Hard)
Okay, deep breath. Here we go.
Let's say you spend $100 on ads.
- Your product is $20
- You sell 5 of them
- That equals $100
You made $100. You spent $100. You broke even.
You didn't lose money—you bought yourself five buyers.
But Wait, It Gets Better
Now, if a couple of those people add on a complimentary product (maybe a template or a quick training that helps them achieve their goal faster), you've now made MORE than you spent.
Let's say that additional product was $37 and two people grabbed it.
- $37 × 2 = $74 extra
- Your total revenue = $174
- Your ad spend = $100
Your average purchase just jumped from $20 to $34.
And THAT'S the number I was talking about a few episodes ago—your average order value (or average customer purchase value, same thing).
How Do You Find Your Average Order Value?
Here's the formula:
Add up your sales ÷ Number of buyers = Average Order Value
In our example: $174 ÷ 5 buyers = $34 average order value
If you've never sold anything in your business before, you won't know this number yet. But if you've been selling products or services for a while, you can go back and calculate it.
Why This Number Matters
Now that your average purchase is $34, you can afford to spend more on ads and still come out ahead. That's how you start scaling.
The Mindset Shift You Need to Make
Here's where many people get tripped up: they think, "If I'm not doubling my money right away, it's not working."
But that's not how ads work, especially with SLOs.
Breaking even on your ad spend is buying you buyers instead of freebie seekers.
And every buyer on your list is more likely to purchase your other products—and even your higher-ticket products—later. That's what this funnel is designed to do: fund your growth while creating customers who are already warmed up for your next offer.
What If You're Close to Break Even?
If you're running an SLO and you're close to break even, don't freak out. That's actually the goal.
You can test small tweaks:
- Add a mini bonus that raises the purchase value
- Adjust the price a bit
- Tighten how i
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