It can be intimidating to sell advertising services. Here is the strategy I use to close new advertising contracts.
Determine Lifetime Value
When learning more about the company, your first role is to ask about how much a customer is worth to them.
Ask this question:
“How much is a customer worth to your company?”
They will answer probably around $200 to $2,000.
Follow up with: “How much is a repeat customer worth to your company?”
You will now have a solid range on the lifetime value for the company.
It benefits you most in this conversation to get the highest lifetime value you can get.
Determine Their Close Rate
Ask the following question:
“How many leads does it typically take you to close a deal? If I brought you 10 leads, how many would you be able to turn into customers?”
No one wants to say that they suck at sales so they will usually say something like 7 out of 10.
From there, you want to say, “Let’s be conservative. Let’s say you close 5 customers out of every 10 leads.”
You now have a close rate that will help you set a benchmark goal.
Set Your Price to Sell Advertising Services
You will want to set your prices early. I typically charge around $4,000 a month for paid advertising.
Since it is a round number with zeroes, it won’t make me look like I can do the math to the customer.
Don’t tell the client the number quite yet.
You may want to add your ad spend into this cost as well. Clients typically don’t worry as much about ad spend as much as what they’re paying you, but it helps you remember that you’re selling both those numbers together, not just your fee.
Typically, I recommend the same amount of ad spend a month as my charge. This brings us to $8,000 a month that I’m getting a commitment from my clients.
That being said, the ad spend would be spent no matter who ran the ads so I typically don’t include it in my calculation.
Multiply Your Fee by 3 to 5
You will then want to multiply your fee by 3 to 5. If someone is investing money in you for advertising, they’re expecting a 3 to 5 times return on investment.
We now have $12,000 a month to $20,000 a month return on investment.
Don’t be intimidated by that number. This is what an ideal situation looks like. It will take time to reach there.
Additionally, you are not building this on your own. You will be leveraging their customer support teams and sales teams to help you as well.
Calculate the Leads Needed
Now, we want to pull these together.
If a client said that a customer is worth $2,000 to them, then you will divide $20,000 a month by $2,000 to get 10 customers a month.
Next, you will take your close rate and divide your customer count by it.
You now need to commit to bringing in 20 leads a month.
Follow this script and have a calculator on hand if you need it.
You: “Alright, so you said a customer is worth $2,000 to you and a repeat customer is $4,000, right?”
Hold an awkward pause until the client has to say yes. Awkward silence makes people uncomfortable and will force them to respond.
Prospect: “Yes, that’s right.”
You: “Great, let’s average that out to be $2,500 a client. Does that seem fair?”
Remember your pauses. I won’t write it after each question, but it’s pivotal.
Prospect: “Yes, that’s fair.”
You: “Awesome, so with the close rate we came to, being conservative, you can close half of the leads I bring you?”
Prospect: “Yes, that sounds right.”
You: “Perfect, so if I was able to bring you 20 leads each month, that would close to 10 customers a month at $2,500 a pop. Does that sound right?”
You: “Sweet, so if I bring in 20 leads each month, we’ll be able to bring in $25,000 in new revenue a month. Does that sound right?”
Prospect: “Yeah the math on that checks out.”
You: “Great, now if I were able to bring in 20 leads each month and generated $25,000 in new revenue a month for you, would that be worth $4,000 a month to you as I manage the ads, continue to bring more leads, and ensure that you’re making a high return?”
Prospect: “Yes, that sounds reasonable.”
Notice that I ask a lot of questions that lead the client to say yes often. This is called a trial close which opens the client up and makes them more likely to agree to my final question.
Mention a 3 Month Commitment
Finally, you want to land the commitment so your client doesn’t give up in the first month.
You: “Sounds like we’re in agreement that 20 leads a month would make a massive difference for your business and lead to about $25,000 a month in new revenue. This usually takes our other clients up to 3 months to get up and running. I always say, if you’re serious about the success of your ads, you’ve got to try it for 3 months. Does that sound alright with you?”
This will give you time to grow trust and show results over time rather than rush to vanity metrics that don’t turn to revenue.
Close the Deal
Finally, you need to close the deal.
Simply ask: “When do you want to get started on this?”
Your prospect will give you an answer and if it is as fast as possible, you say this:
“Great, I will send you an invoice and statement of work, and as soon as the first payment is sent and the scope is signed, we can get started on those 20 leads a month!”
It is as simple as that. Don’t make it more complicated than it needs to be and always ask for payment.
Final Thoughts on How to Sell Advertising Services
Your next step is to build a process out to satisfy these advertising clients. This sales call will help you set up from success by having the following two assets:
- Clear expectations
- 3 Months to Ramp Up
Use these wisely and make sure you deliver on what you’ve committed to.
Good luck and have fun as you sell advertising services!
You can read this article if you need a tutorial on the types of advertising you can sell.