A common questions I get from camp owners and camp marketing directors is this– how much should we be spending for Facebook Ads for our summer camp? This is a great question to be asking. The answer is fairly simply and involves a few different variables.
First of all, its important to know your numbers. If you are a Grow My Camp client, you’ve often heard us say, “You can’t manage what you can’t count.” This is definitely true when it comes to how much you’re spending on digital ads, like Facebook Ads or Google Adwords for your summer camp. You really do have to have a system in place (i.e sales funnel) to track what you’re spending and how successful those efforts are.
Secondly, you have to know how much revenue your efforts are generating, otherwise known as your return on investment (ROI). To find this out, you’ll need to know your tuition price, cost per lead, and cost per close. You’ll also need to know what the camper actually paid (including discounts). For example, if you know that you signed up a Facebook Ads camper lead for a session generating $3,000 (after a $200 discount) and it cost you $800 to generate that lead (it took you 400 leads at $2.00 a piece to close this one customer), your ROI would be 350%. In laymen’s terms, you spent $800 to generate $2,800 in revenue. When you divide $2,800 by the $800 you spent, you get 3.5, or 350%. That means for every $1 in online marketing dollars you spent, you generated $3.50.
But this isn’t the full picture when it comes to spending money on Google Adwords or Facebook Ads for your summer camp. The question we’re trying to answer is this– how much are you willing to pay to generate one new camper? You might say anything less than $2,800, assuming the scenario above. BUT, the one thing we forget as camp directors is that most of our campers come back for multiple summers. In fact, this is why our camper return ratio is so very crucial. Not only does it give us an opportunity to invest summer after summer in the life of a child, but it also has lasting value from a growth perspective.
Here’s an example. Let’s say on average your camper return ratio is 75%, meaning 75% (or 3 out of 4 campers) return summer after summer. Let’s also assume that the camper you just signed up for their first summer ends up loving camp and returns for at least 3 more summers. That said, if you paid $800 in Facebook Ads or Google Adwords to generate that one camper, the lifetime tuition value is not $3,000, but rather $12,000. Your lifetime ROI then skyrockets to 1500%! So, the question is, how much would you be willing to spend today to generate $12,000 over the next 4 years? $800, $1,500, $2,500? Yes.
In short, you should be spending less money on generating one new camper than the lifetime tuition value of that camper. Is that number usually higher than we realize? Yes! Likewise, your return ratio is everything. Are you giving campers an unbelievably rich experience that they can’t wait to get back to? If so, they will sign back up. And your return ratio, if high, should give you even more confidence to spend more money now to generate long-term revenue. Worried? Start small and experiment. And, as always, if you would love to learn more about how to build a lasting sales funnel that helps you easily keep track of all this stuff, shoot me an email at travis@growmycamp.co.
Cheers!
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Travis Adams
Travis@growmycamp.co
Director of New Client Relations