What is the Maximum Should I Pay per Click?

About the HCA Industry PPC Calculator

The HCA Industry PPC Calculator helps house cleaning companies calculate how much they should be paying on a cost per click basis for their online ads. The calculator is based on a ROAS calculation (turned on its head) as it applies to house cleaning companies. ROAS refers to Return on Ad Spending, as opposed to ROI, which means Return on Investment. Google propaganda often refers to ROI, when in fact Google should be using the term ROAS. That's because Google would like advertisers to classify Adwords spending as an investment. While such a way of thinking is convenient for Google and any other advertising companies like the yellow pages, most business people understand that ad spending is generally like water under the bridge—you either win a client as the spending occurs or you’ve wasted your ad budget. This is particularly true for the house cleaning industry.

If you at least dabble in the stock market, then you’ve probably heard the saying, "There's a fool in every market, and if you can't identify him, then be careful, because maybe the fool is actually you. Adwords is a market – you're competing with other advertisers for click purchases. So if you're managing your Adwords account without any consideration for ROAS, then you may be paying more for your advertising than you can justify in economic terms, and that would be foolish. If up to this point, this is you, then there are two points of consolation: 1) you can wizen up and do the math today; and 2) as a fool in your market, it's likely that you're not alone. We manage or have managed Adwords for house cleaning companies across 20 to 30 metro areas, and in every metro area, we encounter one or more companies who are willing to pay absurd amounts for a click. For this reason, we seldom recommend that our clients target the number one ad spot.

Fools don't last long in Adwords, but during their one to three month ad spending spree, they contribute to spoiling the click market for the respective metro area. Part of the reason we are writing this article is to educate these gentle folks about the rational method of managing their Adwords spending, so as to reduce the costs for all advertisers. If you have already identified the fool in your market, then consider sending him or her a copy of this article.

Return on Ad Spending calculations depend on conversion rates, so each company must justify its own maximum cost per click, according to how adept each is at converting and retaining clients. If 1) your website is fantastically good at converting clicks to leads; 2) you are super disciplined about answering your phone and responding quickly to web form inquiries; 3) you are a super salesperson and convert every prospect to an initial clean; 4) your cleaners are the best in the city and everyone chooses you based on your fantastic work on the initial clean; and 5) your client retention rate is the best in your market - if all these rates are really super, then the fact is, you may be able to justify economically paying three times more per click than your competitors. All that notwithstanding, you still have to do the math to understand the rational maximum limit you should be paying per click to make Adwords work for your company.

You can use the HCA PPC Calculator to help you do the math. Following are explanations for each input value.