TLDR;
- Your struggle with location data is a distraction. Focusing on location is often a trap that leads to high costs and low ROI. The most powerful targeting lever isn't where your customer is, but what their problem is.
- You need to define your Ideal Customer Profile (ICP) by their "nightmare"—the specific, urgent, expensive problem they're desperate to solve. This is the foundation for all effective advertising.
- Switch your strategy to intent-based targeting. On Google, this means bidding on keywords that show purchase intent. On Meta, it means targeting interests and behaviours that are proxies for your customer's pain point.
- Your offer is probably killing your ROI. Ditch low-value calls-to-action like "Request a Demo" and replace them with something that provides instant value, like a free tool, an automated audit, or a no-strings-attached trial.
- This letter includes an interactive calculator to help you figure out your true Lifetime Value (LTV) and what you can actually afford to pay for a lead, shifting your focus from cheap clicks to profitable growth.
Hi there,
Thanks for reaching out!
I'm happy to give you some of my initial thoughts on your situation. Honestly, I think the focus on lacking specific location data might be a bit of a red herring, and it's probably the reason you're finding it difficult to get a positive ROI. For most online campaigns, especially in B2B or for digital products, physical location is one of the weakest and most misleading signals you can possibly use. It feels concrete, so people cling to it, but it's often a fast track to burning your budget.
The real gold isn't in your customer's postcode; it's in understanding their intent, their pain, and the specific 'nightmare' scenario that keeps them up at night. That's what we need to uncover and target. Forget where they are, and lets focus on *who* they are and what they need. Once you nail that, you can achieve a positive ROI regardless of whether your customer is in London, New York, or a remote village in the Highlands.
We'll need to look at why location targeting is often a trap...
It's a common mistake, so don't worry. The logic seems sound on the surface: "My customers are in this city, so I'll target this city." The problem is, you're competing with every other business doing the exact same lazy targeting, from the local plumber to a global SaaS company. This drives up costs. Worse, you're making a huge assumption that everyone within those geographic boundaries is a potential customer, which is almost never true.
Think of it this way: trying to sell specialist financial software by targeting the City of London is like trying to fish with a giant net in the middle of the ocean. Sure, you might catch a few of the fish you want, but you'll also catch thousands you don't, along with a load of old boots and rubbish. It's inefficient and expensive. You're paying a premium for a massively diluted audience.
The algorithms on platforms like Google and Meta are already incredibly sophisticated. They use thousands of signals, including location, to find the right people. When you add a restrictive layer like "only show my ads in this small area," you're essentially tying one of the algorithm's hands behind its back. You shrink your potential audience so much that the platform has to force your ads on less relevant people within that area just to spend your budget, which paradoxically drives your cost per result *up*, not down.
I remember one B2B client in the environmental controls industry who came to us convinced they needed to target specific industrial hubs. Their Cost Per Lead (CPL) was through the roof. We stripped out the restrictive geographic targeting and instead focused on reaching decision-makers based on their professional roles and interests across the country, using platforms like LinkedIn and Meta. Their CPL dropped by 84% within a month, and the lead quality was much higher. The physical location was completely irrelevant; their professional 'location' was everything.
The truth is, a person's intent to solve a problem is a far, far better predictor of a purchase than their physical coordinates. Your job isn't to find people in a place; it's to find people in a specific *state of mind*. And that's what we'll get into next.
I'd say you need to define your Ideal Customer Profile (ICP) by their nightmare, not their demographic...
This is probably the single most important shift in thinking you need to make. Forget the sterile, demographic-based profile your last marketing hire might have put together. "Companies in the finance sector with 50-200 employees" or "Homeowners aged 35-55" tells you almost nothing of value. It leads to generic ads that speak to no one and get ignored.
To stop burning cash, you have to define your customer by their pain. You need to become an obsessive expert in their specific, urgent, expensive, and maybe even career-threatening nightmare. Your customer isn't just a job title; she's a leader terrified of her best developers quitting out of frustration with a broken workflow. He's not just a 'small business owner'; he's a founder staring at a cash flow crisis, wondering if he can make payroll next month.
Your ICP isn't a person; it's a problem state. Once you've truly isolated that nightmare, everything else falls into place. Your ad copy writes itself. Your targeting becomes laser-sharp. Your offer becomes irresistible. You stop selling a product or a service, and you start selling a solution to a painful, urgent problem. This is how you create demand instead of just hoping to find it.
So, how do you find this nightmare? You need to dig deep. Talk to your existing best customers. What was the exact moment they realised they needed a solution like yours? What were the exact words they used to describe the problem? What would have happened if they hadn't solved it? That's your goldmine.
Once you've done this work, you'll have a blueprint for your entire targeting strategy. You'll know which podcasts they listen to, which newsletters they read, which software they already use, and which online communities they belong to. That intelligence is infinitely more valuable than knowing what city they live in. Do this work first, or you really have no business spending another pound on ads.
You probably should focus on intent-based targeting...
Right, so you've defined the nightmare. Now, how do you find the people living it? This is where you replace your flawed location-based strategy with a powerful intent-based one. This approach differs slightly depending on the platform.
On Google Ads: The Power of Keywords
Google is the king of intent. People literally type their problems into the search bar. Your job is to be the answer. The key is to target keywords that express specific, commercial intent, rather than broad, informational queries. You want to capture people who are actively looking for a solution, not those who are just doing research.
For example, let's say you sell an outreach tool like Apollo.io. Targeting a broad keyword like "what is lead generation" is a waste of money. You'll get students, researchers, and people who are years away from making a purchase. Instead, you need to focus on people who are "pre-qualified" by their search query. They are already looking for the exact kind of solution you offer.
Here’s how that looks in practice:
| Keyword Type | Example Keyword | User Intent | Why It Works (or Doesn't) |
|---|---|---|---|
| Low Intent (Avoid) | "how to find contact info" | Informational | This person is looking for a method, not necessarily a tool. They are at the top of the funnel and not ready to buy. Clicks will be cheap but conversions will be rare. |
| Low Intent (Avoid) | "sales outreach tips" | Informational | Again, they want advice, not software. Your ad will be an unwelcome interruption to their research. High bounce rate, low ROI. |
| High Intent (Target) | "contact info finding tool" | Commercial | The user has identified their problem and is now actively searching for a tool-based solution. They are problem-aware and solution-aware. This is your sweet spot. |
| High Intent (Target) | "apollo.io alternatives" | Commercial/Comparison | This is a goldmine. The user is familiar with your competition, understands the value proposition, and is actively looking to make a purchase decision. You're catching them at the final stage. |
By focusing your budget exclusively on these high-intent keywords, your ad spend becomes vastly more efficient. Every click comes from someone who is much closer to becoming a customer. Your location is irrelevant; their search query tells you everything you need to know.
On Meta Ads (Facebook/Instagram): The Power of Proxies
Meta is different. People aren't actively searching for solutions; they're scrolling through photos of their friends' holidays. You can't target keywords directly, so you need to find proxies for the "nightmare" you identified earlier. This means targeting interests, behaviors, and demographics that your ideal customer is highly likely to have.
This is where your ICP work pays dividends. Instead of targeting a broad demographic in Manchester, you target people across the entire UK who:
- -> Have an interest in "HubSpot" or "Salesforce" (they use B2B software).
- -> Follow industry leaders like Jason Lemkin or publications like Stratechery (they are serious about their industry).
- -> Are members of specific professional groups like "SaaS Growth Hacks" (they are actively trying to solve problems).
- -> Have job titles like "Head of Sales" or "CMO" (they are decision-makers).
You build a profile of your ideal customer based on their digital behaviour, not their physical location. Then, your ad appears in their feed. The ad doesn't say "Hey, you're in Manchester, buy my stuff!" It says, "Struggling with [the specific nightmare]? Here's the solution." The ad is relevant because it speaks to their problem, not their postcode. It feels personal and helpful, not intrusive. This is how you get quality clicks and conversions on social media.
The performance difference between these two approaches is stark. Generic location targeting leads to high costs and low engagement. Precise, problem-based targeting leads to lower costs and highly qualified leads.
You'll need an offer they can't ignore...
This brings us to the most common failure point in all advertising, and it's probably contributing to your poor ROI. Even with perfect, intent-based targeting, you will fail if your offer is weak. The "Request a Demo" or "Contact Us for a Quote" button is perhaps the most arrogant and ineffective Call to Action ever conceived.
It presumes your prospect, who is likely a busy, important person, has nothing better to do than book a meeting to be sold to. It's high-friction, it offers zero immediate value, and it instantly positions you as just another commodity vendor clamouring for their time. It's a massive barrier to conversion. You need to delete it.
Your offer’s only job is to deliver a moment of undeniable value—an "aha!" moment that makes the prospect sell themselves on your solution. You must solve a small, real problem for them for free to earn the right to solve their whole problem for a price.
What does this look like in the real world?
- For a SaaS company: The gold standard is a free trial or a freemium plan (with no credit card required). Let them use the actual product. Let them feel the transformation. I've worked on campaigns where switching from a "Book a Demo" CTA to a "Start Free Trial" CTA cut the Cost Per User Acquisition from £100 down to just £7. The product itself becomes your best salesperson.
- For a service business (like an agency or consultancy): You must bottle your expertise into a tool or asset. For us, it's a free 20-minute strategy session where we audit failing ad campaigns. For a marketing agency, it could be a free, automated SEO audit that finds their top 3 keyword opportunities. For a corporate training company, a free 15-minute interactive video module. You give them a taste of the result, which makes them want the whole meal.
- For an eCommerce business: This could be a compelling discount on the first order, a free gift with purchase, or access to an exclusive product guide. It's something that lowers the risk and increases the perceived value of making that first purchase.
This shift from a high-friction ask to a high-value give is transformative. It aligns your marketing with the way people actually buy things in the modern world. They want to try before they buy. They want value upfront. Give it to them, and your conversion rates will improve dramatically. This is just as important, if not more important, than your targeting.
To really understand how this impacts your bottom line, you first need to understand what a customer is actually worth to you. And that brings us to a crucial calculation that most businesses completely ignore.
And then you must measure what actually matters...
You started out by saying you were struggling to achieve a positive ROI. This is the final piece of the puzzle. The real question isn't "How low can my Cost Per Lead go?" but "How high a CPL can I afford to acquire a truly great customer?" The calculator above gives you the answer. It all comes down to the relationship between your Customer Lifetime Value (LTV) and your Customer Acquisition Cost (CAC).
Let's walk through the logic. In the example in the calculator, each customer is worth £10,000 in gross margin to your business over their lifetime. A healthy, sustainable business model typically aims for an LTV:CAC ratio of at least 3:1. This means you can afford to spend up to £3,333 to acquire a single £10,000 customer.
Now, if your sales process converts 1 in 10 qualified leads into a customer (a 10% conversion rate), you can afford to pay up to £333 per qualified lead (£3,333 / 10). Suddenly, that £85 CPL from your failed location-based campaign doesn't just look expensive; it looks disastrous if the leads don't convert. But a £250 CPL from a highly-targeted LinkedIn campaign that brings in a CTO who becomes a long-term customer? That's not an expense; it's an incredible bargain. It's a profitable investment.
This is the maths that unlocks aggressive, intelligent growth. It frees you from the tyranny of chasing cheap, low-quality leads and allows you to focus on acquiring high-value customers, profitably. Your ROI isn't determined by the cost of a click or a lead in isolation. It's determined by the entire funnel, from the initial ad impression right through to the lifetime value of the customer you acquire. Stop optimising for vanity metrics and start optimising for profit.
Once you understand this, your entire approach to budget allocation changes. You stop spreading your budget thin and start concentrating it where it has the most impact: on the audiences and channels that deliver high-LTV customers, even if the upfront cost per lead seems higher.
This all might seem like a lot to take in, and it represents a significant shift from where you are now. But it's the proven path to building a scalable, profitable customer acquisition engine. Below, I've summarised the main action points for you in a table.
This is the main advice I have for you:
| Step | Actionable Recommendation | Why It's a Priority for Your ROI |
|---|---|---|
| 1. Abandon Location Focus | Immediately pause any campaigns that rely heavily on narrow geographic targeting. Re-allocate that budget to the strategies below. | This is the source of your high costs and poor performance. It's an inefficient and outdated way to find customers online. |
| 2. Define the 'Nightmare' ICP | Interview your 5 best customers. Pinpoint the exact, urgent, and expensive problem you solved for them. Use their exact language to describe it. | This creates advertising messages that resonate deeply and provides the blueprint for effective intent-based targeting. |
| 3. Implement Intent Targeting | On Google, build campaigns around high-intent, commercial keywords. On Meta, target interests, job titles, and behaviours that are proxies for your ICP's pain point. | This ensures your ads are only shown to people who are actively looking for a solution or are highly likely to need one, dramatically improving lead quality. |
| 4. Create a High-Value Offer | Replace your "Contact Us" or "Request Demo" CTA with a low-friction, high-value offer. This could be a free trial, a freemium plan, an automated audit, or a valuable content asset. | This removes the biggest barrier to conversion, delivers value upfront, and significantly increases the number of leads you generate from your traffic. |
| 5. Measure for Profit, Not Clicks | Use the provided calculator to determine your LTV and what you can afford to pay for a customer (CAC) and a lead (CPL). Make all optimisation decisions based on the LTV:CAC ratio. | This shifts your focus from chasing cheap, low-quality leads to making profitable investments in acquiring high-value customers, which is the only sustainable way to grow. |
I know this is a fundamental change in strategy, and executing it perfectly requires experience. Getting the ICP definition right, finding the correct targeting proxies on Meta, structuring the Google Ads account correctly, and writing copy that speaks to the 'nightmare' is part science, part art. While you can definitly implement this yourself, working with an expert can massively accelerate the process and help you avoid costly mistakes along the way.
If you'd like to chat through how we could apply this framework specifically to your business, we offer a completely free, no-obligation 20-minute strategy consultation. We could take a look at your current setup together and identify the biggest opportunities for immediate improvement.
Hope this helps!
Regards,
Team @ Lukas Holschuh
