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May 18, 2020

5.38X ROI Online Ordering For Restaurants With Facebook Ads

Today I’m going to bring you inside my Facebook ads accounts for a restaurant that has been generating 5.38x roi from their online ordering site.

That’s right. For every dollar I spent on Facebook ads, we got a little more than $5 back in revenue for our restaurant online ordering site.

So let’s go inside one of my Facebook ads accounts and I can show you how many orders we’ve been getting, how much we’ve been spending, and most importantly, how much revenue we’ve gotten.

This is one of my Facebook ads accounts.

There are many successful campaigns that we’ve run in the past, such as getting people to claim a coupon and use it in the restaurant. This one did 807 coupon sign ups in one month.

When we were running that, the owner sent me a sales report from my ads alone.

And he was doing a gross revenue of over $2000 per week just from those coupons.

Just as we were about to scale this campaign, COVID happened.

Since then, we re-allocated our budget towards online ordering instead of coupon signups and were still able to get high ROI.

This is how we did it:

What It Takes To Run A High ROI Facebook Ad

To run Facebook ads with high ROI, you need as much customer data as possible. You may be thinking that I’m talking about customer data such as age, gender, location, etc.

Those pieces of data are helpful. You might be able to get 3x return on investment from those demographics alone. However, if you want to get an even high return on investment, you need even more data.

The data I am talking about is customer behaviors. 

Including customer behavior data in your ad targeting can be the difference between 3x ROI and 5x ROI. That difference in ROI can be your rent, payroll, and/or utilities.

These are the types of customer behavior data that we used for the ad that got 5.38x ROI:

  1. People who purchase online regularly
  2. People who like your specific menu item(s)
  3. A list of people that are nearby
  4. A list of people that started an online order on your website
  5. A list of people that completed an online order on your website 
  6. Your customer list including your email or phone number list
  7. People who have engaged with your brand online

Once we have these pieces of data, we can unlock a high level of targeting and in turn, achieve high return on investment.

To help you understand why we need these types of customer behavior data…

First you need to understand the concept of customer stages

Before you invest any money in Facebook ads, you first have to understand what the purpose of advertising is.

Yes, the ultimate goal of advertising is to get customers. However there is a process to get customers. Every customer goes through a journey.

Essentially, everyone in the world is in the process of buying from you. They are just in a different stage of buying from you.

All customers start out not knowing about you. Then as they walk past your restaurant or find you online, they start to gain awareness about you.

Some of them immediately visit your restaurant to try it out. Others wait to see what the initial reactions and reviews are until they go try it out.

Whoever likes your restaurant will return. And those who love your restaurant enough to bring in friends or family will bring people with them.

Some may not come back, for any possible reason including not liking some part of their experience at your restaurant or even their own personal reasons like travel, finance, etc.

So generally, your customer stages can be defined as follows:

  1. Unaware customer – someone who has never seen or engaged with your brand before
  2. Aware customer – someone who has seen or engaged with your brand before
  3. Interested customer – someone who has engaged with your brand with interest signals
  4. First time customer – someone who has purchased from your business once
  5. Repeat customer – someone who has purchased from your business multiple times
  6. Loyal customer – someone who has purchased from your business at least 7 times
  7. Win back customer – someone who hasn’t purchased from your business in the last x days, where x is the normal return rate of your customer

The reason for knowing these stages is because, while planning our ads, we need to clearly understand which customer stages we are targeting and which next stage we want them to get to.

Basically, whichever stage each customer is in, the ad’s job to get them to the next stage.

The customer behavior data we listed in the last section is exactly the pieces of data we need to figure out which customer is in which stage.

For example, people who started an order but might have gotten distracted for any reason and not completed their order are defined as interested customers.

These are interested customers who were on the cusp of being a first time customer. We can target these exact people to get them to complete their order.

So when we get the customer to click on our ad, we want to make sure they go to the exact place they left off on.

Final Destination: Where You Run Your Ads To Is Very Important

One thing to note is that this restaurant uses a 3rd party online ordering company to handle their online orders.

However if you run an ad to a 3rd party platform, you can’t track metrics from specific traffic sources (including Facebook ads) such as:

  1. How many people added an item to their order
  2. How many people initiated checkout
  3. How many people completed their purchase
  4. How much their order amount was

In fact, your Facebook ads report will only show clicks and not Purchases.

If your Facebook ads report doesn’t show the number of Purchases and Purchase amount, you can only measure ROI by correlating sales growth with ad spend.

For example, if you didn’t spend any money on ads in one month and did $20,000 in online sales. Then in the next month, you spend $1000 on ads and did $25,000 in online sales, you might conclude that your $1000 ad spend generated $5000 more in sales.

However that would just be an assumption, because the growth in sales could have been because of any other variable such as seasonality and organic word of mouth. Without a direct attribution, it wouldn’t be safe to say your $1000 in ad spend generated $5000 in sales.

Advertising this way is like putting up a magazine, newspaper, tv, etc ad, then looking at the traffic numbers and trying to correlate it to your sales. Not likely to be accurate, and the only accurate part of it would be your best guess.

To reduce guessing and variables, instead of sending ad traffic to the 3rd party platform, we decided to go the safer route and used an online ordering site that could give us all the metrics with Facebook ads.

You can do this with Shopify, Wix, Squarespace or any other website creator.

In our case, we used WordPress with WooCommerce because the restaurant was already using WordPress for their website. The process is very similar no matter which one of these platforms you use.

So that’s how we were able to calculate our concrete ROI – because we had a site that could sync all the metrics with Facebook ads.

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Wilson Muh

Wilson Muh

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