Let’s talk about minimum viable ad spend. How much do you need to spend on ads with your limo business?

It depends on your business. You may focus on:

• Airport transportation
• Charter buses
• Party buses
• Other transport services

The question is: how much do you need to spend each day to get decent results? Decent results for ad spend = at least one job a day. Or, at least a job every other day. 

This is easier in some business than others. For instance, if you focus on charter buses, you may not get the frequency of jobs as someone who focuses on airport or car services. Some businesses are a lower volume search, in general, and won’t get as many leads and bookings.

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How do we compute minimum viable spend?

First, you need to know what are you shooting for? In this scenario, we’ll imagine we’re going for the quality goal of one job a day. 

In order to begin computing, you need to understand how many leads you need to get per day. Some businesses close better than others. That said, with our goal in mind, let’s pretend that you need to get five leads a day to get one job a day.

This number means that you close 20% of your leads. We’ll say this imaginary business does party bus rentals. It’s important to identify the nature of the business because that will help us understand the range of lead cost in each industry.

FIRST, Compute how much you pay per lead

This depends on:

1. How much you pay per click
2. What the conversation rate is on your website or landing page

SECOND, calculate your conversion rate

How many people turn into leads divided by the number of people that visit your site. This will tell you, of the people who interact with your brand, which of them actually become customers.

If you have a really good website that is built to convert, you could get 25 leads for every 100 visitors. This would equal a 25% conversion rate.

25/100 = 25%

That means that, for every four people that visit your site, one of them becomes a lead.

THIRD, determine needed site visitors

If you get five leads a day and it takes four visitors to get a lead, how many visitors to your site do you need a day?

If ¼ converts, you need 5 x 4, or 20 visitors a day. A visitor is a click. We call them clicks but you could call them visitors. The idea is an interaction.

For this party bus rental in New York, we know this isn’t a cheap market. You’ll probably pay $3-$4/click in New York, depending on your positioning.

FOURTH, final calculations to determine needed ad spend

So, in this scenario, the party bus company will have to pay $3/visitor. You need 20 visitors a day to get the right number for your conversion and job goals. 

20 visitors at $3 each = $60

If this business wants to get one customer per day on average, their monthly spend needs to be:

$60/day x 30 = $1800

This company needs to spend $1800 a month on ad spend.

The calculation needs to be applied to a monthly spend, because each month has fluctuations. One day, you’ll get 10-12 leads, the next day you’ll get 0, that’s just the nature of web traffic. The trends change, the specifics change, but these processes are the same and can be applied to any company.

Two Conversation Rates for Ad Spend

There are two conversation rates you need to calculate for ad spend, as we’ve seen above. These are:

1. Visitors (or clicks) to leads: how many visitors do you need to get leads
2. Leads to sales: how many leads do you need to get sales

Let’s reimagine this scenario with different numbers. In this case, let’s take an airport car service. Typically, airport leads convert higher. This may be because the dollar amount is lower, so people don’t get as many quotes.

This would change the numbers. Let’s say the landing page or website converts at 33%. 

The sales conversion rate is higher as well. Let’s say the lead:jobs ratio is 3:1, meaning for every three leads you get a job.

You need:

• One job a day
• You need three leads a day
• ⅓ visitors converts to a lead

How many visitors do you need?

(wish you’d paid attention in math?)

It means that you need nine leads a day. Let’s say each of those leads costs $5.

The math:

9 visitors X $5/each = $45/day to get one job a day.

That acquisition cost for the airport service client is a little lower than the party bus scenario (but not much!). That’s why larger vehicles, for either paid advertising or SEO, give you a faster ROI and more cash flow. Airport car service and other services like that can be a longer play. There’s more recurring business and referrals that slowly grow your business.

The total calculation would be $45 client acquisition cost times 30 days means your minimum viable monthly spend should be $1350/month.

Calculating Ad Spend for Success

Following this basic math is how you will determine exactly how much you need to spend—at a minimum—to get leads online for your limo company. Limo Marketer provides expert guidance that can help you understand the trends and optimal spend for this industry. Whether you’re in the bus business, car service or any other kind of transport work, we understand this field in and out. 

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