Hi there,
Thanks for reaching out! I've had a look at your situation with the LinkedIn ads in Reading. It's a really common problem, probably one of the most frequent things I see. People think scaling is just about increasing the budget, but it's almost never that simple. When you just pump more money into the same setup, you often see diminishing returns, just like you are. Your cost per lead goes up, and the whole thing feels like its getting less effective, not more.
The good news is that this is usually fixable. It's not about the budget, its about the underlying strategy. The fix usually involves getting much, much sharper on who you're targeting, what you're offering them, and how your campaigns are actually structured to find new pockets of customers. I'm happy to give you some of my initial thoughts and guidance on how I'd approach this. Hopefully it'll give you a new way of looking at the problem.
TLDR;
- Your scaling problem isn't about budget; it's about hitting the limits of your current audience. Just increasing spend on a saturated audience leads to higher costs and lower returns.
- Stop defining your customer by demographics like 'businesses in Reading'. You need to define them by their specific, urgent, and expensive 'nightmare' problem that you solve. This is the foundation of effective targeting.
- Your offer (e.g., 'Request a Demo') is likely the biggest bottleneck. It's high-friction and low-value. You need to switch to an offer that provides instant value, like a free tool or a quick audit, to actually attract leads at scale.
- The most important piece of advice is to calculate your Customer Lifetime Value (LTV). This tells you how much you can truly afford to spend to acquire a customer, freeing you from chasing cheap, low-quality leads.
- This letter includes a fully interactive LTV & CAC calculator to help you understand your own business metrics, and a flowchart for defining your ideal customer profile based on their problems.
We'll need to look at who you're actually targeting... because your ICP is probably a nightmare, not a demographic
Right, let's get brutally honest first. The way most businesses define their Ideal Customer Profile (ICP) is completely useless for advertising. I see it all the time. "We target SMEs in the tech sector in the Thames Valley area" or "Companies with 50-200 employees". This tells you absolutely nothing of value. It's a sterile, demographic-based description that leads to generic ads that speak to precisely no one. This is likely the root cause of your scaling issue. You've found the small group of people in Reading who respond to your generic message, and now you've run out of them. Pouring more money in is just showing the same ad to the same tired people, or to a wider, less relevant audience who don't care.
You have to stop thinking in terms of demographics and start thinking in terms of pain. You need to become an obsessive expert in your customer's specific, urgent, expensive, career-threatening nightmare. Your customer isn't just a job title. They're a person with a problem that keeps them up at night.
For example, lets imagine you sell IT support services. Your old ICP might be "Head of Operations at a law firm in Reading". Useless. Your new ICP is "The Head of Ops at a 75-person law firm who is terrified of a critical system failure during a major case, leading to a malpractice suit that could destroy the firm's reputation and her career". See the difference? One is a job title; the other is a problem state. One is a demographic; the other is a nightmare.
When you define your customer by their nightmare, everything changes. Your ad copy changes. Your targeting changes. You're no longer just targeting 'Head of Operations'. You're targeting people with that title, who are members of 'Legal IT' groups on LinkedIn, who follow publications about cybersecurity, who have skills listed like 'Disaster Recovery'. You're looking for signals of their pain.
This work is not optional. It is the absolute foundation of any B2B ad campaign that hopes to scale profitably. If you haven't done this, you have no business spending another single pound on LinkedIn ads. You're just gambling. You need to get your team in a room and map this out. What is the single biggest, most expensive problem you solve? Who in the organisation feels that pain most acutely? What are the specific consequences of them NOT solving that problem? That's your ICP. Everything else is just noise.
Here's a simple flowchart to visualise the process. You need to move from the outside in, from the generic to the specific pain.
Step 1: Broad Demographics
e.g., SMEs in Reading, 50-200 employees, Tech Sector.
(This is where most people stop. It's too generic.)
Step 2: Specific Role
e.g., Chief Technology Officer (CTO).
(Getting warmer, but still not targeted enough.)
Step 3: Identify the "Nightmare"
e.g., Terrified of their best developers quitting due to a broken, inefficient workflow.
(Now we have emotion and urgency.)
Step 4: Targetable Signals
e.g., Skills: 'Agile Methodologies', 'Jira'. Interests: Follows 'Acquired' podcast, member of 'SaaS Growth' groups.
(This is how you find them on LinkedIn.)
I'd say you need to calculate what you can actually afford to pay...
The second massive mistake I see is an obsession with a low Cost Per Lead (CPL). Everyone wants cheaper leads. But the real question you should be asking isn't "How low can my CPL go?" but "How high a CPL can I afford to acquire a truly great customer?". The answer to that question is found in a metric that most small businesses never bother to calculate: Customer Lifetime Value (LTV).
If you don't know your LTV, you're flying blind. You have no idea if that £100 lead from LinkedIn was a rip-off or an incredible bargain. Calculating it is simpler than you think. You just need three numbers:
- Average Revenue Per Account (ARPA): What's the average amount a customer pays you per month?
- Gross Margin %: What's your profit margin on that revenue? (Revenue - Cost of Goods Sold) / Revenue.
- Monthly Churn Rate %: What percentage of your customers do you lose each month?
The formula is straightforward: LTV = (ARPA * Gross Margin %) / Monthly Churn Rate
Let's run through a quick example. Say you're a B2B SaaS company. Your average customer pays you £300 a month (ARPA). Your gross margin is 85% because software is cheap to deliver. And you lose about 3% of your customers each month (Churn).
LTV = (£300 * 0.85) / 0.03
LTV = £255 / 0.03 = £8,500
So, each customer you acquire is worth £8,500 in gross margin to your business over their lifetime. Now we have some real data to work with. A healthy business model often aims for a 3:1 ratio of LTV to Customer Acquisition Cost (CAC). This means for an £8,500 LTV, you can afford to spend up to £2,833 to acquire a single new customer and still have a very profitable business.
Think about what that means. If your sales team closes 1 in 10 qualified leads they speak to, you can afford to pay up to £283 per qualified lead. Suddenly that £150 CPL on LinkedIn doesn't seem so bad, does it? It looks like a great deal. This simple bit of maths is what separates businesses that timidly dip their toes in advertising from those that scale aggressively and intelligently. It frees you from the tyranny of cheap, low-quality leads and allows you to focus on acquiring high-value customers, even if they cost more upfront.
I've built a little calculator for you below. Play around with your own numbers. This is probably the most important exercise you can do for your business this year. Understanding these economics is the key to unlocking scalable growth.
Customer Lifetime Value (LTV)
£8,500Max Affordable CAC (at 3:1 LTV:CAC)
£2,833You probably should delete the "Request a Demo" button
Now we get to the most common failure point in all of B2B advertising, and the place where most campaigns fall apart: the offer. I would bet a significant amount of money that your main call to action is something like "Request a Demo", "Book a Call", or "Contact Us". This is, without exaggeration, the most arrogant call to action ever conceived.
Think about it from your prospect's perspective. They are a busy, important person in Reading. They've just been interrupted by your ad. You are asking them to give up their valuable time to book a meeting where they know, with 100% certainty, they are going to be sold to. It's a high-friction, low-value proposition. It instantly positions you as just another vendor, a commodity. It's no wonder your conversion rates are low and you can't scale. You're asking for a commitment before you've provided any real value.
To scale on LinkedIn, or any platform, 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 talk about solving the whole thing.
What does this look like in practice? It depends on your business:
- 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 experience the transformation. When the product itself proves its value, the sale becomes a formality. For instance, we helped one B2B SaaS client generate 1,535 trials using Meta ads—a platform many think is only for B2C—demonstrating how powerful a compelling, low-friction offer can be.
- For an agency or consultancy: You must bottle your expertise. Instead of "Book a Call", offer a "Free, Automated SEO Audit" that shows them their top 3 keyword opportunities. Or a "Free LinkedIn Profile Grader" that gives them instant feedback. For us, it's a 20-minute strategy session where we audit failing ad campaigns for free. We provide immense value upfront, which builds trust and demonstrates our expertise far more effectively than any sales pitch could.
- For a high-ticket service: Offer a valuable piece of content that solves a specific problem. Not a fluffy ebook. A detailed guide, a checklist, a webinar replay that teaches them something they can implement immediately. For an accounting firm, it could be a "5-Point Checklist to Survive an HMRC Audit". You get their contact details in exchange for something genuinely useful.
The goal is to lower the friction and increase the value. A "Request a Demo" is all friction and no value. A "Free Data Health Check" is low friction and high value. This shift in mindset is non-negotiable if you want to generate leads at scale. You are no longer trying to get meetings; you are trying to provide value.
You'll need a better structure for your campaigns
Okay, so you've nailed your ICP's nightmare, you know your LTV, and you've created a genuinely valuable, low-friction offer. Now we can finally talk about the ads themselves. Your problem of not getting a 'proportional increase in leads' when you increase budget is a classic sign of audience saturation combined with a poor campaign structure. You're just hammering the same small audience over and over again.
To scale, you need a structure built for systematic testing and expansion. You don't just 'increase the budget'. You methodically test new audiences to find new, profitable pockets of customers. The principles are similar across platforms, but for LinkedIn, here’s how I’d approach it.
You need to think in layers. Your goal is to find combinations of targeting attributes that isolate your ICP. Don't just target one thing. Layer them.
- Layer 1: The Basics (Geography & Company). This is your starting point. Reading, fine. Company Size: 50-200 employees. Industry: Software. This is your sandbox.
- Layer 2: The Person (Job Function & Seniority). Now you narrow it down. Job Seniority: 'Director', 'VP', 'C-Suite'. Job Function: 'Engineering', 'Operations'. This gets you to the right department and level.
- Layer 3: The Pain Signals (Skills & Groups). This is the secret sauce. This is where you use your 'nightmare' research. Add Member Groups: 'SaaS Development Leaders Forum'. Add Skills: 'Product Roadmapping', 'Agile Project Management'. Now you're not just targeting CTOs; you're targeting CTOs who are actively engaged in solving the exact problems your product addresses.
Your campaign structure should be built to test variations of these layers. You don't have one ad set. You have multiple, each testing a different hypothesis. For one of our B2B software clients on LinkedIn, we refined their audience targeting to achieve a cost per lead of just $22 for highly qualified decision-makers. It's the combination of targeting layers that often unlocks performance.
Here’s a simplified example of what a testing structure might look like:
| Campaign | Ad Set (Audience Test) | Targeting Layers | Hypothesis |
|---|---|---|---|
| Prospecting - UK - CTOs | 01 - Job Titles Only |
|
Broadest test. Will establish a baseline CPL but likely be expensive and low quality. |
| 02 - Titles + Industries |
|
Refining the audience to sectors where the 'nightmare' is most acute will improve lead quality and lower CPL. | |
| 03 - Titles + Industries + Skills |
|
This hyper-targeted audience will have the highest CPL but produce the most qualified, sales-ready leads. |
You start with a small, equal budget on each ad set. After a week or two, you analyse the data. Which one is bringing in the best leads at an acceptable CPL (based on your LTV calculation)? You then turn off the losers and reallocate the budget to the winner. Then you create a new test, perhaps trying different Member Groups or another set of Industries. This is how you scale. Not by blindly increasing spend, but by methodically finding new, effective targeting combinations and then funding them appropriately. It's more work, but it's the only way it works long-term.
I've detailed my main recommendations for you below:
This is a lot to take in, I know. It's a fundamental shift from 'running ads' to building a proper customer acquisition system. The table below summarises the core changes in approach you need to make. This is the main advice I have for you:
| Area of Focus | Your Current Approach (The Problem) | My Recommended Approach (The Solution) |
|---|---|---|
| 1. Scaling Method |
Increase BudgetPouring more money into the same ad sets, leading to audience fatigue, rising CPCs, and diminishing returns. |
Systematic TestingMethodically test new, layered audiences to find fresh pockets of customers. Scale by funding winning ad sets, not just the whole campaign. |
| 2. Customer Targeting |
DemographicsTargeting based on generic data like location (Reading), company size, and job title. Leads to generic messaging. |
Pain-Point / "Nightmare"Define your ICP by their most urgent, expensive problem. Target using signals of that pain (skills, groups, interests). |
| 3. Key Metric |
Cost Per Lead (CPL)Obsessing over getting the cheapest leads possible, which often results in low-quality prospects who never buy. |
LTV:CAC RatioUnderstanding your Lifetime Value to determine the maximum you can afford to pay for a high-quality customer. Focus on profitability, not cost. |
| 4. The Offer / CTA |
Request a Demo / Contact UsA high-friction, low-value ask that presumes interest and positions you as a commodity vendor. A major conversion bottleneck. |
Provide Value FirstOffer a free tool, a resource, an audit, or a free trial. Solve a small problem for free to earn trust and generate high-quality, qualified leads. |
Making these changes is a significant undertaking, and frankly, it's what seperates businesses that successfully use paid ads from those that just burn cash. It requires a level of strategic thinking, analysis, and constant testing that can be difficult to manage alongside running your actual business. This is why many companies decide to work with an expert or an agency.
It's not just about setting up the campaigns; it's about having the experience from running hundreds of them to know which hypotheses to test first, how to interpret the data correctly, and how to build the entire system from the pain-point research to the final conversion. We've seen these principles work time and time again, helping B2B clients significantly reduce their acquisition costs and find scalable growth where they thought none existed. For one client in environmental controls, for example, we applied these principles and managed to reduce their cost per lead by 84% on LinkedIn.
If you'd like to chat through your specific situation in more detail, I'd be happy to offer you a free, no-obligation 20-minute strategy session. We could look at your current campaigns together and I could give you some more tailored, actionable advice.
Hope this helps!
Regards,
Team @ Lukas Holschuh
