47- Can Your Offer Afford Ads? Here's How to Tell

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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Transcript

Hello friends, welcome back or welcome first timers to the Facebook ads quick tips podcast. My name is Stacy Covitz, your host. And today we are rolling into part three of the SLO Fun All series. And it's all about

building smart sales campaigns that can actually pay for themselves. I know, last week I threw a lot of numbers at you and I probably was a little bit confusing. ⁓

We talked about spending $100 and selling $20 products. And if your brain glazed over a little bit, you're not alone. Let's slow it down today and make sure that it actually clicks. Because once you understand this one piece, you will never look at ad spend the same way again. Let's start with the goal. The goal of the SLO funnel isn't to

profit on a $20 product. That would be great though, right? 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. So 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 high price programs later. So here's where we're gonna make the math make sense, because it really isn't hard. Let's say you spend $100 on ads. Your product is $20 and you sell five. That equals $100. So you made $100, you spent $100. You broke even. You didn't lose money.

you bought yourself five buyers. 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. That additional product was $37 and you times that times two.

And so you made $74 extra. Your total was $174 and your ad spend was only $100. So your average purchase jumps from 20 to 34. And that's the number a few episodes ago I was talking about. You want to know your average value.

of each purchase. So if you've never sold anything in your business before, then you won't know that. But if you've been selling products for a while or services, you can go back and find this number and you find out the average. It's called a few different things. Average order value or average customer purchase value. It's the same thing. So let's go over this.

average order value being $34. Where did I get that number? The whole formula is add up your sales. That's $174 and divide by how many buyers you have. And that's your average. And in this case, in our example, that is $34 is your average order value. So now your average purchase is $34.

And that's how you start scaling because now you can afford to spend more on ads and still come out ahead. This is 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. So 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, or tighten how it connects to your main offer. You're not failing, you're building momentum. And you're thinking, now I actually get what breaking even means. I'm ready to build this right. That's exactly what I do inside of my SLO six week ad intensive funnel build.

This isn't a course or a group membership. This is a one-on-one, one-to-one that we would do together. We map out your offer, we build the funnel, we run ads, and we bring in buyers. But again, before you decide that you want this and you apply, make sure you take the ad readiness quiz. It's free. It takes five minutes, and it'll show you whether your business is ready for sales ads or needs a little bit of warming up.

You'll find the link in the show notes. And next week, we will talk about why your ad probably isn't the problem. It's your funnel. And that one's going to be good. I hope you got some more clarification on the value of an SLO funnel. And I thank you for listening. I will see you next week.