In the world of digital marketing it’s a lot of different things, whether it’s physical product, digital product, whatever.

But, for a minute, let’s talk about whether you’re talking to a cold audience, warm audience, or hot audience.

Cold Audience = never heard of you.

Warm Audience = people who are thinking about purchasing but haven’t done

Hot Audience = people who are ready to buy now

People who’ve never heard of you really, they’re a prospecting audience. They’re a cold audience. You should be looking at a 2:1 return on ad spend. Every dollar you spend you get two dollars back. At that point in time you are paying for your advertising, your marketing campaign and you’re making a little bit. That’s okay because you’re going to get them with upsells. You’re going to get them with new product, with additional courses. They’re going to mean more to you over the lifetime. That lifetime value. You hear that term a lot.

With a warm audience, these are people who have added to cart but not purchased. They’ve heard of you but they just need something to push them over that edge. These kinds of people in your marketing campaign you should at a minimum be generating a 3:1, which for most business that’s their breakeven point. They have made enough money from the marketing efforts that they’ve paid for all their operating expenses and now they’re retaining a customer and they’ve made a little bit of money.

A hot audience, people who have already purchased from you and you’re marketing to them again. Buyers. You really should be looking at a 4:1 or 5:1…maybe even higher. For every dollar you spend to try to acquire that customer you should get five dollars back, six dollars back.

That’s the point where you really start making a lot of money and you can start scaling and building a profitable business. There’s a lot of other things that can go into that. That’s okay. But the main thing is define what your profitability is and start looking at your campaigns and how to scale to that, how to get to that.

If you’re already there, great, start looking at how to scale up. Increase your ad spend 25% or 35%. Let it run for two, three days. See how that happens. Then do so again and keep increasing. Keep going. Or if you start to see a decrease maybe you’ve hit that the law of diminishing returns. You start to hit that plateau. Start decreasing until you hit that profitability level that not only are you comfortable with but it is your goal that you want to do to be able to maintain and operate your business.