When considering advertising for your holiday lighting company, you are aware that the season is short and you must maximize the impact of your marketing campaign. The winter holidays are a special time of year. Property owners want to decorate their homes and businesses with holiday décor and lights that illuminate their spaces, and you want to be the team that provides top-quality holiday lighting services for them. One of the most valuable things you can do to locate customers is advertise to the right people, and understanding the marketing system is one way to do that. Three important advertising metrics that will help your ads succeed include understanding the Cost Per Lead (CPL), Conversions, and the Return on Ad Spend (ROAS). 

Cost Per Lead (CPL)

A lead is a person who has seen your ad and shown interest in its contents, but has not yet committed to booking their service with you. Perhaps the lead has requested a complimentary quote from your company or signed up for contact information through your website. The CPL refers to the amount of money it takes to advertise and locate a lead. Ideally, you want to have a low CPL margin because that means you are spending a low amount of money in relation to the number of leads that are generated from the advertising campaign. If you have a high CPL margin, it means the amount of money you are spending is too high based on the number of conversions you are acquiring. 

Conversions

A conversion refers to the act of a lead becoming an actual customer. Perhaps the lead has now booked a holiday lighting service with your team, then that lead has now converted to being your customer. Conversions enhance your business and are a great indicator of your company’s success. It is valuable to understand your conversion rate so that you can determine if changes are needed to your marketing campaign. For example, if you record a high number of leads but a low number of conversions, you might need to make some adjustments. Ideally, you would like to have a high number of conversions per your number of leads. 

Return on Ad Spend (ROAS)

Return on Ad Spend is a formula that determines your revenue based on every advertising dollar you have spent. The formula is: ROAS = Revenue from Ads / Cost of Ads. 

ROAS is a key metric because it indicates the efficiency of your holiday lighting advertisements. If you have a high ROAS, then your advertising campaign is working and you are receiving the most benefit for your holiday lighting company. This rate is especially important because the holiday season is a short period, and you want to maximize the benefits from your ads for your business.

Bottom Line

Effective advertising is crucial for all companies, particularly holiday lighting companies that have a limited window of opportunity to reach and acquire customers. To achieve dynamic advertising for your holiday lighting company, it is essential to understand the three main metrics that impact your ads. Each metric is valuable on its own, and how they work together is even more impressive. 

In short, CPL informs you how much money you are spending to locate leads, Conversions show how many leads actually turn into paying customers, and ROAS details your profits based on the amount of money spent on advertising. Understanding these metrics and their interconnection is beneficial for your success.  

Frequently Asked Questions (FAQs)

What do CPL, Conversions, and ROAS tell me about my marketing strategy?
The three metrics identify whether your advertising campaign is effective for your company. CPL indicates the amount of money you spend based on the number of leads you generate. Conversions showcase the number of leads that convert into paying customers, and ROAS measures the amount of money spent on advertising versus the revenue generated from ads.

What can I do to improve my conversion rate?
You should reevaluate your website first; ensure that your services listed are clear and useful for your customers, and that your website is easy to navigate and user-friendly. You might consider offering special deals or discounts while focusing on providing excellent customer service and maintaining proactive communication with your customers. 

How are CPL, Conversions, and ROAS interconnected?
CPL shows how much money you are spending on advertising that attracts leads to your business, while Conversions indicate how many leads actually become paying customers. ROAS highlights how much revenue you make based on how much money you spend on advertising.