You are running a business in your local area and want to ads your business on Facebook so that many local people know about it. However, the promotion is facing difficulty as you have no experience, and your Facebook ad campaigns do not bring conversions. This blog post is for you because it will help you generate high sales and help your business go from a loss to fully booked in just one week. Alright, it is time for us to share a case study that helps a Local business’s Facebook Ads to increase revenue.
First, we will start by providing a little context about this business so you can understand the details and why the changes we made were effective.
The business in our case study has been a family-owned chain of restaurants for over 15 years. They have developed slowly but effectively to 11 branches, all located in the Southwestern United States, like a regional restaurant chain. Most of the customers at these 11 branches came from word-of-mouth referrals. Many branches are quite close to each other, so when one branch reached maximum capacity, they would open a new branch not too far away. Some current customers will automatically switch to the new branch because it is closer and more convenient. This is how they have developed naturally and slowly. Their previous growth strategy took more than 15 years to build. In recent years, when the business was taken over by the younger generations of the family, they wanted to grow faster and more aggressively than previous generations. So how can they promote the family’s brand locally in a fast and highly effective way?
Advertising a local business on Facebook
In the process of developing their chain of stores, they often encountered problems with customers. With their previous restaurants, they didn’t need to advertise too aggressively. However, with the two new establishments in a new location, the number of customers who knew about them was often not high.
They used advertising for their brand on Meta social networks (Facebook, Instagram). They realized that many users spend hours on Facebook and Instagram and that this was the easiest place to promote their brand. In the first 6 months, the young people learned how to promote the brand on Facebook by themselves from YouTube and other social media sites. They then ran the ads themselves, but they did not bring results. They turned to the Optimal Agency team for advice on solutions to help their business attract customers when advertising on Facebook. Now we will go deeper and explain why running Facebook ads for many months did not bring results, and provide solutions for them.
Therefore, for local businesses, the ‘offer’ is extremely important. However, it’s not just having an offer that will make customers interested, as they have become bored with many impractical offers. To attract a large number of customers to the store, I needed to create offers so that customers would not come alone.
For example, I created ad templates for the store, like buy one get one free, or book a table of 5 or more people, and they will get all drinks for free and a 50% discount on the total bill. Normally, these strategies are applied for 3-5 days. It can be said that this is a strategy that attracts many customers to come and try the restaurant’s food.
Depending on the specific field of each business, there will be different strategies. However, this can be considered a mindset that will help improve Facebook Ads for local businesses.
Evaluating the business’s service
After attracting a large number of customers to the restaurant, we have created reviews of the services we provide.. This was extremely necessary because it helped the restaurant identify specific issues and address them immediately. From this customer feedback, we learned what customers needed and developed a new strategy to retain them. Here’s a specific example:
Customers who experienced the food were very satisfied with the taste, but found the prices too high once the promotion ended. Most customers want quality products at a low price. Understanding this customer psychology, we implemented strategies to encourage them to return, such as a 10-20% discount on the total bill for returning customers, or a complimentary dish or beer for groups of 5 or more. For large groups, we also waived the fee for private rooms. After applying our strategies, the business reported that many customers had returned, and the restaurants were becoming increasingly crowded.
These were highly effective strategies for attracting customer interest. Now, I want to shift your focus to the technical side of Facebook advertising. I’ll walk you through costs and how to create images and content to attract the most interested customers.
Improve a Local Business’s Facebook Ads
First, I want to introduce you to ad funnels for attracting customers. We created banners, animated images, and carousels to promote the offers. Below are some examples of the templates we created to promote the client’s restaurant services.
Not only that, but to ensure customers don’t forget you and want to keep returning, you should create video ads that feature customer testimonials about their experience. I want to show you a method that few experts will tell you: using videos from influencers (KOLs) for your promotional campaigns. That’s right, you heard correctly. People place a lot of trust in social media influencers. When their videos appear in your ads, customers are more likely to trust you and will take the time to come and try the food at your restaurant. For those with little experience in this area, the easiest way is to spy on Facebook ads of your competitors. I have a detailed article that provides instructions on this topic.
Now, I want to discuss the advertising costs for a local business. This can be an extremely important issue as it can either make or break a restaurant. Let’s dive into the details.
Advertising costs for local businesses
Let’s analyze the advertising costs for a new restaurant. Initially, it might seem strange that the cost to acquire a new customer for their first booking is up to £40. Meanwhile, the revenue from that first meal, which includes a starter and a drink, is only around £20. At first glance, it appears the restaurant is losing money.
However, we need to consider the full Customer Lifetime Value. The data shows that for every two customers who book a first meal, one will return and become a regular customer, visiting approximately 6 times per year. This is a very good conversion rate, and the restaurant can improve it.
To calculate the Customer Acquisition Cost (CAC) for a loyal customer, we take £40 multiplied by 2 (because it takes 2 initial customers to get 1 loyal customer), and then subtract the initial revenue generated (£20 x 2).
So, the actual cost to acquire one loyal customer is £40. The average value this loyal customer brings is about £1,000 per year. This customer is also likely to refer friends, which helps the restaurant gain new customers at no cost.
Although we still need to factor in the cost of ingredients and labor for the initial meals, you can see that this is a very profitable business model. The Return on Ad Spend (ROAS) reaches up to 25 times. Even after accounting for all incurred costs, the profit still exceeds 15 times the ad spend—an impressive and highly scalable number.
Thanks to this strategy, the restaurant was quickly at full capacity at both branches in just 90 days. This is a major advantage for local businesses: when you find an effective formula, you can quickly expand and fill your schedule.
For a restaurant, the need for an advertising budget is often very high in the initial phase. When a new branch opens, you need a large budget to attract customers. But once you acquire a loyal customer base, they will return and refer others. At that point, the need for advertising will decrease significantly.
This doesn’t mean you will completely turn off your ads after 90 days. However, ad spending will gradually decrease over time, as long as you consistently maintain the quality of your service and food. Word-of-mouth can be a double-edged sword: if the service is poor, bad reviews will spread quickly, and you will have to spend more to acquire new customers.
Conversely, if you provide an excellent experience, as this restaurant did, you can reduce your ad spend over time and invest in opening new branches.
Final words
Facebook advertising can be an effective way to help local businesses reach more customers within a specific area. To create ads that reach hundreds of people locally, you must provide surprising offers in addition to high-quality images and content. The true success of your business’s ad campaign is whether it encourages customers to return and continue using your products or services. If you are also struggling with Facebook advertising, feel free to contact us directly for support.
At Optimal, we are experts in Meta and Google advertising. We’ll directly create, manage, and optimize your campaigns, helping you reduce your workload and deliver significantly better results. Let Optimal help you turn your ad budget into a powerful growth engine.Ready to discover how Optimal can help your business thrive on Facebook? Contact us for a consultation.
