Are you on the brink of launching your home-based business, but you’re just not sure whether there is a market for your products or services? This is a genuine concern for any entrepreneur: even a home business requires some investments (legal fees and taxes, equipment, etc.) If you can’t find customers to market your products to, you’ll have lost valuable time and money.
In the past, we have discussed various ways in which you can validate your business idea, but today we will focus on one single aspect: using Facebook ads to see how many people are likely to at least connect with your business, and examining your offering, more closely.
The Advantages of Using Facebook to Validate Your Business Idea
Why Facebook? Without making false claims, Facebook is among the largest worldwide public forums where you can meet potential customers, if any. What sets it apart from any other online platforms to advertise your business is the fact that you can gain valuable insights into the demographics and behavioral characteristics of your target customers.
People willingly share lots of personal data with Facebook lots of personal data. This isn’t just how old they are, where they live, or what educational background and job they have, but also their marital status, whether they have children, have recently bought a house or a car, and so on. Apart from this demographic data, they share their hobbies and interests and their states of mind at various moments. All of this is invaluable to you, the online business operator.
How Do You Do It?
First of all, you should have at least a landing page in which you include an opt-in form for people who are interested in knowing more about your upcoming business. This is a small investment, certainly, but it it provides a less expensive option for testing out idea than to launch the business cold and see that no one buys your products.
This prerequisite being met, you should go to Facebook for Business and start creating your ads.
1. How to Create a Facebook Ad
The process itself is self-explanatory. For this reason alone, Facebook is a great option for small business owners: you don’t need any special technical or design skills to create a great ad. Just remember to stick to the rule of 20% words on the ad surface, and use either a short movie made with your phone, or a still image (you can use various free apps to edit it and apply filters to it).
2. How to Set Your Budget
If you are simply testing out your business idea, the best type of bidding is for the cost per click (CPC). Set a lifetime budget for your campaign of no more than $100 – $200. This is a simple way of making sure you do not spend too much on the campaign. Setting a lifetime budget means that the money is used up as people click on your ad, and the campaign stops running when there is no money left in the budget. Why do we recommend the CPC bidding format? Because you want to find out how many people are at least interested in what you have to offer. More on this in the next item.
3. What Metrics to Focus On
Facebook insights are among the most varied and in-depth metrics on offer from any social media platform offering advertising options. Once you set your advertising campaign, you can go to the Adverts Manager page (by clicking on the arrow in the top-right corner of your Facebook profile) and discover a detailed breakdown of your ad campaign performance, including: click-through rate (CTR), average cost per click, reach, impressions, cost per people reached, etc.
At this phase of testing out your business idea, the most important metrics to measure are impressions versus click-through rate. This will show you how many of the people who saw the ad were at least curious enough to find out more, and clicked it.
4. How to Corroborate with Insights on Your Landing Page
Of course, Facebook insights need to be tied with the traffic and CTA metrics on your landing page. Did people like what they saw once they reached it? What percentage of them agreed to share their email with you and receive more news about your upcoming products? By analyzing and corrolating Facebook CTR data and the CTA rate on your page, you can estimate whether you have a viable business idea or not.
5. Get the Most of Facebook Ad Insights
If your business idea looks like it could take off, it is time to go back to the Adverts Manager page on Facebook and download insights related to the people who clicked on your ad. From these details, you can build a profile of your potential customers, in terms of demographic and behavioral details. This profile will be extremely useful to you in creating marketing messages and targeting future Facebook ads at the right type of audience.