If you’re involved in drumming up new business for your limo company or transportation service, you’re probably familiar with the importance of Google Ads. Done right, it seems like magic: you put a dollar in and you get two dollars out.
Unfortunately, nailing your Google Ads strategy isn’t quite that simple, especially if you’re trying to scale your business up and attract more bookings. Google isn’t like Costco. Spending more money and buying in bulk doesn’t get you a discount on the leads that you buy. If anything, the opposite is true.
But why is that the case? And what can you, as a marketer, do to overcome these challenges and get more leads for your executive transportation business while keeping your customer acquisition costs down?
Today, we’re answering those questions. Read on for a breakdown of how Google Ads works, complete with an illustrated real-world example for limo businesses.
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Why Don’t My Leads Increase Proportionally With My Spend?
If you’re the ambitious owner of a limo business, it’s natural to want to scale up fast. To achieve your goals, you might kick off a comprehensive marketing strategy that features everything from Facebook Ads to optimizing your local SEO.
You run a small fleet of cars, employ a couple of drivers, and spend around $100 on Google Search Ads every day. Business is profitable, but still kind of small. You want to scale up to 50 leads a day, instead of the 10 that you get now. How do you do that?
It’s natural to think that the answer lies in spending more money on Google Ads. Let’s say you spend $10 per lead right now for your 10 daily leads: $100 per day. If you want 50 leads, wouldn’t you just increase your ad spend from $100 to $500?
It’s easy to see why you’d think things work that way, but the reality is a little more complicated. The number of leads you get doesn’t increase proportionally with your ad spend. In fact, your returns actually diminish as you spend more on advertising.
For the first $100 you spend, you might get those 10 leads. But for the next $100 you spend, it might only be 8 or 9. The next $100? 6 or 7 leads.
Why do leads cost more, the more you buy? It’s a great question. Let’s unpack the answer with a worked example.
The Real Value of Showing Up in the Top Position on Google
On Google Ads, you’re bidding on certain keywords. You might bid on your local equivalent of keywords like “Los Angeles limo service” or “LAX car service” – search terms that are relevant to your business. You specify the amount you’re willing to pay for a click, and every time someone clicks on your ad, you’re charged.
Unsurprisingly, everyone wants their limo service to show up as the top-ranked result on Google. It’s competitive, and for good reason: the car service that secures that number one spot gets the most clicks, and usually the most leads and customers too, provided their website is set up correctly.
But landing that number one position on Google is never cheap, particularly for keywords with high levels of competition; keywords like “Los Angeles limo service”. To secure that spot, you have to pay a premium, but sometimes, that premium might not be worth it for your business.
Depending on your budget and your business goals, you might not want to be number one. Let’s look at a worked example of why that could be the case.
Limo Service Google Ads: A Working Example
Imagine you’re in the business of providing luxury airport transportation in Los Angeles. You’d like to bid on the Google Ads keyword “LAX luxury car service”. You have several competitors who also run Google Ads campaigns.
Let’s say it costs $10 per click to get the number one spot, $7 to be number two, $5 for number three, $3 for number four, and so on. In real life, it’s not quite that simple, but for this example, these numbers will help you get the picture.
Now, a click does not equal a lead. It just means a potential customer visited your website, not that they called you or reached out for a quote. If your website is set up according to best practices, you can expect around one out of every four clicks to become a lead.
Of course, not every lead turns into a sale either. Let’s say you convert 25% of your leads––not a bad return in a business as competitive as this.
Now, let’s look at how much it costs to acquire a new customer, based on whether you’re ranked in the first position or the fourth position.
Ranking in the First Position
When you rank in the top position for this search, you pay an average of $10 per click.
For every four clicks, you get one lead. That’s $40.
For every four leads, you get one sale. That’s $160.
Congrats! You got a sale. It cost you $160. Is that a good deal? Well, let’s compare this to the competitor who only bid $3 per click to be in fourth position.
Ranking in a Lower Position
Your competitor, who has a lower budget than you, only wants to spend $3 per click. This means that they end up in fourth position, but they might be okay with that. Here’s why:
For every four clicks, they got one lead. That’s $12.
For every four leads, they got one sale. That’s $48.
They paid 70% less than you! You paid $160 for a new customer, whereas they only paid $48.
Striking the Balance Between Clicks and Spend
In this scenario, who wins? Well, it depends.
Your competitor, who ranked in fourth place, will get fewer customers than you. People click on the fourth result far less often than they click on the top result. Besides, what’s to say someone clicking on the fourth result hasn’t already requested a quote from the companies that are in the first three positions?
If you have the number one spot, you might get 100 clicks each day. You’ll spend around $1,000 each day, get around 25 leads, and ultimately convert around six of these to paying customers.
On the other hand, your competitor in the number four spot only gets 35 clicks a day. They spend far less (only around $100), but only get eight or nine leads, and probably a maximum of two new customers most days.
That’s not a lot of sales. If you’re in this position, what can you do to grow your business?
There are a few steps you could take. The first, and most obvious, is to increase your bids. The more you bid, the higher your position, and the more clicks, leads, and sales you’ll get.
The second option is to extend the focus of your campaign. You probably already bid for specific keywords like “LAX car service” and “LAX limo service”, and so do your competitors. By branching out and identifying keywords with less competition, you can lower your cost per click. Try bidding on keywords like “LAX transportation”. That’s much less specific, and it’s likely you’ll pay less per click. But proceed with caution; you might be showing your ads to people who aren’t in the market for your services.
You could also consider expanding the geographical area of your business or adding new services. Perhaps you expand to a neighboring city: if you’re in Los Angeles, you could add keywords for Burbank and Orange County airports. Or perhaps you invest in a new vehicle and start to offer a stretch limousine service.
Master Google Ads with Limo Marketer
If you’re serious about using Google Ads to turbocharge the growth of your business, having the support of an experienced limo marketer can make a huge difference in driving the success of your business.
Limo Marketer is here to help. We specialize exclusively in marketing for transportation providers and have a strong track record of helping transportation operators in local markets all over the U.S. grow their business.