The $100 MBA Show: MBA2526 - How To Run Ads For Free with Self-Liquidating Offers

Release Date: September 27, 2024
Host: Omar Zenhom

Introduction to Self-Liquidating Offers

In episode MBA2526 of The $100 MBA Show, host Omar Zenhom delves into the concept of self-liquidating offers (SLOs) and how entrepreneurs can leverage them to run advertising campaigns without upfront costs. Drawing from his extensive experience in building multi-million dollar businesses, Omar provides a comprehensive guide on creating SLOs that not only cover advertising expenses but also generate ongoing leads and sales.

Notable Quote:
"Once you know how to do this, this is like being able to print money. It's about getting sales on demand." (00:37)

Understanding Self-Liquidating Offers

Self-Liquidating Offers are designed to recover the money spent on advertising by presenting a low-cost offer to everyone who opts into your ad. Omar emphasizes that this strategy enables businesses to sustain and scale their marketing efforts with minimal financial risk.

Key Points:

• Definition: Paying for ad spend through small, irresistible offers.
• Purpose: To generate leads and sales while covering advertising costs.

Step-by-Step Guide to Implementing SLOs

Omar breaks down the SLO strategy into three main steps, each critical to ensuring the effectiveness of the campaign.

Step 1: Running the Ad

Omar advises starting with user-friendly platforms like Facebook or Instagram (both under Meta) for ad campaigns. He outlines the essentials needed to create an effective ad:

1. Media: Use a single, compelling image or a simple video that represents your offer.
2. Copy: Craft persuasive text that clearly describes the offer.
3. Call to Action (CTA): Direct users to a specific landing page or opt-in form.

Notable Quote:
"Creating an ad requires three things: media, copy, and a call to action." (03:00)

Step 2: Building the Website Pages

Upon clicking the ad, users are directed to your website, which should consist of two crucial pages:

1. Opt-In (Squeeze) Page: A clean, distraction-free page where visitors enter their name and email in exchange for the free offer (e.g., a guide, checklist, or short video).

   Notable Quote:
   "The opt-in page is where they give their name and email address in exchange for something valuable." (07:00)

2. Thank You Page: Immediately after opting in, users see a one-time offer (OTO) presenting a low-cost product or service related to the initial free offer.

   Notable Quote:
   "The one-time offer is an opportunity to make an additional sale that can cover your initial ad spend." (08:52)

Step 3: Hosting a Webinar

The final step involves conducting a webinar to further engage your leads:

1. Invitation: Invite the leads gathered from the opt-in page to attend a webinar where you demonstrate your product or service.
2. Presentation: Use the webinar to build trust, showcase value, and address audience pain points.
3. Sales Pitch: Offer a higher-ticket product or service during the webinar, aiming for additional sales.

Notable Quote:
"Webinars are powerful because they allow you to demo your product, show value, and answer questions in real-time." (13:24)

Practical Example: Snowboard Instructor Scenario

To illustrate the SLO strategy, Omar uses the example of a snowboard instructor targeting beginners. He identifies the primary fear of beginners—embarrassment and injury on the first day—and creates a free one-page guide titled "How to Master Your First Day on a Snowboard."

1. Ad Creation: An ad featuring the guide with a strong CTA to download.
2. Opt-In Page: Visitors provide their email to receive the guide.
3. Thank You Page OTO: Offer a $49 crash course video series on snowboarding basics.

Notable Quote:
"If you're teaching beginners how to snowboard, address their biggest fear—hurting themselves or looking foolish on their first day." (05:40)

Financial Breakdown and Metrics

Omar provides a clear financial example to demonstrate the viability of SLOs:

• Ad Spend: $2,000
• Cost Per Lead (CPL): $5
• Leads Generated: 400
• One-Time Offer Conversion Rate: 10% (40 sales at $49 each)
• Revenue from OTO: $1,960

This example shows that the revenue from the OTO nearly covers the initial ad spend, making the campaign self-sustaining.

Notable Quote:
"With a $2,000 ad spend and a $5 CPL, you can generate 400 leads. Even at a 10% conversion rate on a $49 offer, you cover your ad costs." (10:31)

Optimizing the SLO System: Key Metrics and Levers

Omar discusses various metrics and strategies to optimize the SLO system:

1. Cost Per Lead (CPL): Aim to reduce CPL without sacrificing lead quality. Higher-quality leads often convert better, even at a higher CPL.

   Notable Quote:
   "It's better to have 100 quality leads than 1,000 poor-quality leads with low conversion rates." (17:45)

2. Conversion Rates: Improve conversion rates on both the OTO page and the webinar. This involves testing different copies, images, and offer presentations.

   Notable Quote:
   "You need to modify and test your OTO and webinar to ensure high conversion rates." (19:23)

3. Customer Acquisition Cost (CAC): Calculate CAC by dividing total ad spend by the number of customers acquired. Lowering CAC increases profitability and allows for reinvestment.

   Notable Quote:
   "A $50 CAC is very good. The goal is to keep this as low as possible to maximize profitability." (20:31)

Scaling and Reinvesting Profits

Once the SLO system is effectively covering ad expenses, Omar advises reinvesting profits to scale marketing efforts. By continuously optimizing and increasing conversion rates, businesses can exponentially grow their revenue.

Notable Quote:
"You take the money made from the OTO, reinvest it into ads, and scale your marketing exponentially." (24:00)

Conclusion and Implementation Tips

Omar wraps up the episode by reiterating the simplicity and effectiveness of the SLO strategy. He encourages listeners to start implementing the three-step process, emphasizing the importance of gradual learning and refinement.

Key Takeaways:

• Start Simple: Begin with straightforward ads and offers.
• Focus on Quality: Prioritize high-quality leads over quantity.
• Continuous Optimization: Regularly test and tweak your offers and sales funnels.
• Scale Strategically: Reinvest profits to grow marketing efforts sustainably.

Final Quote:
"When I learned this, it changed my world. It made it so simple for me to continue running ads over and over." (25:32)

Additional Resources

For more detailed lessons and business strategies, listeners are encouraged to visit 100mba.net, which hosts over 2,500 episodes covering various topics such as sales, marketing, finance, and team management.

Timestamps

• 00:00 - 00:20: Intro Advertisement
• 00:37: Introduction to Self-Liquidating Offers
• 03:00: Step 1: Running the Ad
• 05:40: Identifying Customer Pain Points
• 07:00: Opt-In Page Explanation
• 08:52: Thank You Page and One-Time Offer
• 10:31: Financial Breakdown Example
• 13:24: Importance of Webinars
• 17:45: Cost Per Lead and Lead Quality
• 19:23: Optimizing Conversion Rates
• 20:31: Understanding Customer Acquisition Cost
• 24:00: Scaling and Reinvesting Profits
• 25:32: Conclusion and Final Thoughts

Implementing self-liquidating offers can revolutionize your marketing strategy, making it cost-effective and scalable. By following Omar Zenhom's actionable steps, entrepreneurs can harness the power of SLOs to generate sustainable growth with minimal financial risk.