Paid Ads for Small Businesses

The four numbers in order

Cost per enquiry is the total ad spend divided by the number of real enquiries it generated in the same period. Not clicks. Enquiries - someone who filled the form, called the number, started a chat, booked a call. Enquiry-to-customer rate is the share of those enquiries that became paying customers. Cost per customer is the first number divided by the second. Return on ad spend is the revenue from those customers divided by the ad spend that produced them. Every paid campaign for every small business eventually has to be judged by those four. Everything else is upstream of one of them or downstream of the decision they enable.

Cost per enquiry tells you whether the ad and the page are working together

If your cost per enquiry is high - say, over fifty pounds for most small businesses, well over for some - the problem is almost always upstream. The ad is reaching the wrong people, or the right people aren't interested in the offer, or the landing page is leaking visitors. Don't change the budget when this number is off. Change the audience, the angle or the page. The companion eBook Facebook and Instagram Ads for Small Businesses goes deeper on diagnosing audience and creative misses.

Enquiry-to-customer rate tells you whether the follow-up is working

If your cost per enquiry is healthy but your enquiry-to-customer rate is poor - say, under one in twelve enquiries becomes a customer for a service business - the problem is almost always downstream. Slow replies. Vague follow-up. The wrong customer being attracted by the wrong angle. A scope, price or timeline that surprises customers in the first reply. Don't change the ads when this number is off. Fix the conversation. The earlier eBook Sales Basics covers the small set of habits that consistently lift the rate.

Cost per customer is the number that decides whether to scale

Cost per customer is the headline number for any campaign. Compare it directly to the maximum cost per customer you wrote down in chapter three. If your campaign is delivering customers at half your maximum, you have room to scale and the campaign deserves more budget. If it's at your maximum, you're at break-even on the new customer's first sale and need repeat business or upsells to make money on the channel. If it's well above your maximum, the campaign is losing money and either needs major surgery or needs switching off.

Return on ad spend is the long-term picture

Return on ad spend - revenue produced divided by spend, usually expressed as a multiplier - is the longer-term version of cost per customer. For a one-off sale it equals cost per customer divided by sale value. For a repeat business it includes the lifetime value of the customers the ads brought in, which often makes a borderline campaign suddenly worthwhile. A bookkeeper paying three hundred pounds to win a customer who stays for fourteen months is making excellent return on ad spend even though the first invoice was a hundred and twenty pounds. A wedding photographer paying three hundred pounds to win a one-off booking worth one thousand five hundred pounds is also doing fine. A retailer paying thirty pounds to win a one-off twenty-five pound sale is losing money no matter how good the cost per click looked.

Vanity numbers to ignore

Impressions tell you how many times the platform showed your ad. They cost you nothing to generate and earn you nothing back. Click-through rate tells you the share of impressions that clicked - useful as a diagnostic for the ad itself, but irrelevant on its own. Engagement rate measures likes and comments, which on a small business ad correlate weakly with sales and sometimes inversely. Frequency tells you how often the same person saw your ad - worth glancing at if it's very high, otherwise a distraction. None of these numbers, on their own, tells you whether the ads are working. Don't make decisions on them.

The simplest measurement setup that works

You don't need an analytics consultant. You need three things. First, every enquiry route on your landing page needs to be trackable - a form submission that fires a confirmation, a phone number on a unique line you only use for ads, a chat or booking link with its own page. Second, you need a one-line spreadsheet for every enquiry: date, source, name, became a customer (yes/no), revenue (if yes). Third, you need a monthly slot - thirty minutes - where you sit down with the platform dashboard and the spreadsheet and update the four numbers. That's the whole system. It works on a small business budget. It scales as the business grows. It tells the truth.

What to do this week

Set up the spreadsheet today, even if you have no campaign live yet. Add columns for the four numbers and a row for each month of the next twelve. Block thirty minutes in your calendar for the last working day of every month and label it "Ad review." When the campaign goes live, this thirty-minute slot is your only obligation to the channel. The rest of the time, the campaign runs and you don't poke at it.

In the final chapter we cover the recurring mistakes that sink most small business paid ad accounts, with a fix beside each one. Review results and improve the system is the recurring principle - and chapter seven is where you turn that into a habit.