Solved: High Customer Acquisition Costs on Facebook & Instagram

Hi there,

Thanks for reaching out! Happy to give you some initial thoughts and guidance on scaling your electric bike business through paid advertising.

Right off the bat, the electric bike market is pretty competitive, so nailing your advertising strategy is super important. Getting your costs down from the get-go will be crucial for profitability and growth.

We'll need to look at Meta Ads...

Firstly, you mentioned that you're running Facebook and Instagram ads and that your cost per acquisition (CPA) is too high. Meta Ads can be great for e-commerce, but only when the campaigns are set up correctly. I'd start with a deep dive into your current campaigns. Are you targeting the right audience? What are your ads actually saying? Are they compelling?

Sometimes it's worth taking a step back and refining your audience targeting, ad creative, and even your bidding strategy. It could be that your targeting is too broad, or your ad copy isn't resonating with your audience. Maybe your images aren't of high-quality, or your value proposition isn't crystal clear. I've seen e-bike companies struggle with high CPA on Meta simply because their ads weren't visually appealing or didn't highlight the key benefits of their bikes.

Consider these things: are you using retargeting ads? Are you reaching out to people who have already visited your website or shown interest in your products? Retargeting can be a super effective way to lower your CPA, as you're targeting people who are already warm leads.

You probably should use Google Ads...

Next, you asked about the average cost to convert a lead into a new customer across other paid channels like Google and programmatic. Let's start with Google Ads. Google can be a goldmine for e-bike sales, especially if people are actively searching for "electric bikes" or "best e-bikes" in their area. But it can also be a money pit if you don't know what you're doing. I remember one campaign we ran for a software company using Google Ads, where we managed to acquire 3,543 users at a cost of just £0.96 per user. We achieved this by using highly specific keywords and ad copy to improve conversion rates.

With Google Ads, you can also run Shopping campaigns, which display your e-bikes directly in the search results with images and prices. This can be a great way to grab attention and drive traffic to your website. However, to make Shopping campaigns work, you'll need to have a well-optimised product feed and high-quality product images.

As with Meta, look at the search terms to make sure your ads are not bidding for the wrong keywords. I know one client who sells camping equipment and their Google Ads were costing them a fortune because they were bidding on things like "tents" and "sleeping bags" without really refining their targeting. We had to really narrow things down to more specific, long-tail keywords before we started seeing a decent ROI.

You'll also need to think about your landing pages. Are they optimised for conversions? Is it easy for people to find the information they're looking for and make a purchase? If your landing pages aren't up to scratch, you'll be wasting money on clicks that don't convert.

You'll need a programmatic approach...

Then there's programmatic advertising. Programmatic can be a good option for reaching a wider audience and building brand awareness, but it's not always the best for direct sales. With programmatic, you're essentially buying ad space across a network of websites and apps, and you can target people based on their demographics, interests, and behaviour.

It's important to get the targeting right. You can easily burn through your budget if you're not careful. I'd suggest focusing on retargeting ads or targeting people who have shown a strong interest in cycling, outdoor activities, or electric vehicles. Make sure you have a detailed plan. I've seen some good results with programmatic when it's used to retarget people who have already visited your website or engaged with your content.

I'd say you need to consider this...

I reckon you will probably want to think about your wider funnel. Have you validated product-market fit, which is great. So what do you want people to do to become a qualified lead that you can turn into a customer? Usually, the first step is to either fill out a lead form or to schedule an intro meeting or consultation. You could also offer a free audit or strategy review.

Depending on what the first step is that people need to take, this is what your website's start page should lead people to. Optimise this page with sales copy, make it really persuasive to take the first step - some professional copy could really go a long way.

You probably should use analytics...

On the store side: Look at your analytics. Where do people drop off?

- Do you get visitors to your start page but only a small percentage of product page views? - You're either getting the wrong type of traffic (look at your ad targeting/keywords) or maybe the products features aren't a good fit.

- Do you get lots of product page views but no adds to cart? - Likely your product photos, product descriptions, or pricing needs work. Maybe a special offer could help. Maybe people aren't ready to buy now and need long-term retargeting.

I'm giving you some initial ideas here of course, but in general, I would say average cost per lead (CPL) can vary massively depending on the niche, target audience, ad platform, and campaign setup. However, it's not unusual to see CPLs ranging from $10 to $50 on Meta and Google, and even higher on LinkedIn. Cost per acquisitions range from $50 to $500. Of course, some niches are cheaper, some are more expensive.

Tbh scaling an e-bike business through paid advertising can be complex, and there are lots of moving parts to consider. If you're feeling overwhelmed or not sure where to start, you might want to consider getting some expert help. Agencies like ours can provide you with the strategy, expertise, and resources you need to succeed. I'd suggest booking in a free initial consultation or just have a chat with an expert to see whether they know what they are doing.

Hope this helps!

Regards,
Team @ Lukas Holschuh