Jacob runs a pay-per-lead agency serving home service businesses including roofing, tree removal, gutters, and HVAC companies.
Clients pay $55 to $100 per lead with no setup fees, no monthly retainers, and no ad spend required.
The business is generating $120,000 to $150,000 per month, with roughly 70% gross margins.
Jacob came in believing his main constraint was ad fatigue and an inability to scale paid ad spend beyond $200 a day.
Ravi identified the real constraint as a combination of targeting too broad an avatar and dramatically underinvesting in ads despite having a 15x return on ad spend already in place.
Ravi pushed Jacob to define a specific ideal avatar built around home service companies doing at least $2 million a year, with a dedicated sales team, a sub-30-day sales cycle, and an existing habit of buying leads, while still accepting borderline clients who fall just below that threshold.
He recommended switching from CBO to ABO campaigns so each niche segment gets a guaranteed daily budget, then scaling toward $1,000 a day by setting max allowable KPIs rather than turning off ads the moment CPAs creep up.
Ravi also advised creating niche-specific landing pages for each avatar, adding social proof and testimonials that match each niche exactly, and refreshing ad creatives bi-weekly to scale both vertically and horizontally.
He suggested testing a $200 setup fee waived within 24 hours of the call to offset acquisition costs without hurting close rate.
Finally, Ravi told Jacob to pull his Stripe transaction history into Claude to calculate true LTV by customer, since the business decisions he is scared to make are based on ballpark numbers rather than actual data.
The overarching lesson: when you have a 15x ROAS, the only thing standing between you and $250,000 a month is the willingness to spend money and the discipline to stop taking on clients who will pause, complain, and drain your time.
Transcript
RAVI ABUVALA: Hello, hello, hello, everybody. Let me know if you can hear me.
All right, we got one person here. We’re about to go live on a Constraint Call.
How to close in the first call. Raul, my man, did you see the most recent YouTube video I did where I cover how to close on the first call? Have I got a gift for you, my friend. I put it in the chat.
We are about to go live here in a second. Live hits different, as one of you said. You’re not wrong. Let me bring our guest in and we will run our Constraint Call.
JACOB RAY: What’s going on, Ravi?
RAVI ABUVALA: Jacob, what’s up man, how are you doing?
JACOB RAY: I’m doing good. It looks like it’s a little laggy for me. When you spoke I felt like I heard it like five seconds later.
RAVI ABUVALA: Yeah, I also don’t have your video. I’m not sure if you’re on.
JACOB RAY: Really? I can see myself. You see me now or no?
RAVI ABUVALA: No. Oscar, hola senor, hope you’re doing well. Hope Gabby and the little baby are doing amazing.
JACOB RAY: So weird, you still can’t see me?
RAVI ABUVALA: No.
JACOB RAY: Huh, so weird. I can see myself.
RAVI ABUVALA: That’s strange. I’ll pull it up on the actual YouTube live. Anybody else see him? Maybe leave and rejoin real quick.
JACOB RAY: Can you see me now? Wait, there we go.
RAVI ABUVALA: There we go. I can see you now. Doing well, brother. How are you?
JACOB RAY: Very good.
RAVI ABUVALA: Cool. Let’s dive in. Welcome to the Constraint Call. I’m Ravi Abuvala. I’ve helped thousands of founders doing anywhere from $50,000 a month to $10 million a month find the single biggest constraint holding their business back. Every week I do this live with one founder on camera in real time. Jacob, in your own words, describe a little bit about what your business is, who you serve, and what you’re doing monthly.
JACOB RAY: Yeah, so I have a lead generation agency in the home service space. We work with roofing companies, solar companies, remodelers, tree removal, HVAC companies, you name it. We help them get more leads and more jobs, and we work on a pay-per-lead basis. No setup fees, no monthly fees, no ad spend. Get started for $1, $75 per lead, pay as you go.
Our biggest constraint right now is scaling paid ads to retention, and I think I know why that is, which we’ll talk about more. And then revenue: we do anywhere from $120 to $150 a month.
RAVI ABUVALA: Awesome. Thank you for sharing that, and congrats on the success so far. Just so I know, as far as margins are concerned, $75 you’re selling the lead for. What does it cost you on average to generate a lead?
JACOB RAY: Great question. It really depends on the industry. Tree removal companies we’ll charge anywhere from $45 to $55. Roofing and higher-ticket services can be $75 all the way up to $100. So typically we have about a 70% gross margin on the lead. It can be higher or lower in different markets, but the average is about that.
RAVI ABUVALA: Okay, cool. A 70% gross margin is a great place to start. I’ll definitely want to go deeper on the ads, but before we do that, talk to me a little bit about these avatars. I know you’re obviously serving a bunch of different people, and each one has a different price point and different gross margin. My first question is, is there any 80/20 split with a specific group or type of avatar that you’re serving? And second, is there also an 80/20 split as far as qualified people, the ideal people, the ones you make the most with, who close on the first call?
JACOB RAY: For sure. Right now it’s been mostly tree removal and roofing companies. What I love most about tree removal companies and why they’re staying longer is because by the time we send them a lead, they can get it within hours. We can send them a lead at 9am, they can get a booking by 5 o’clock, and close a deal at 6 o’clock. The time for them to get an ROI is just so much faster.
In 2024 we were in real estate, and you know how the real estate sales cycle is so long. That’s why I made the transition to home services, because it’s so much easier to get client results.
I think one of our biggest bottlenecks, going back to your other question, is that we bring on pretty much everybody, and I think that’s a big mistake. We start getting low-quality clients in the door and they start to poison our business. They complain about the service, and it’s so hard to know: is it my service, or is it the client not calling the leads on time, not following up properly?
I’ve done a deeper client avatar research on all of our best clients and they always tend to have at least a five-person business. They have somebody calling the leads, a dedicated person. So yeah, that’s what I’ve noticed, but it’s pretty evenly split through all of our clients.
RAVI ABUVALA: Got it. So even though tree removal is the ideal avatar, that’s not where the majority of your clients you’re enrolling right now are, correct?
JACOB RAY: No, it’s pretty split right now. The reason I haven’t gone all in on tree removal is just because the TAM is pretty small. That’s part of it too, and it’s part of a skill issue that I have, not being able to scale ads to the level I want.
RAVI ABUVALA: What is the TAM? Do you know what it is?
JACOB RAY: From Google’s research, it’s 50,000. And that’s where it comes down to it being harder to scale ads.
RAVI ABUVALA: Okay. And what is the price point per lead on tree removal? I think you said $55. And do you know what the lifetime value is, or what the monthly return is on the average tree removal business for you?
JACOB RAY: It was $55 right now.
I don’t know exactly where each niche’s revenue comes from. Like whether tree removal is $20 or $30 grand, I don’t really know if I broke it down.
RAVI ABUVALA: I was wondering how much on average you’re making per month per tree removal person.
JACOB RAY: Our CAC is $100 and our LTV is $1,500. Part of the problem is we have some structural churn where clients get booked out and they’ll pause their account for one, two, even three months. So we’re always constantly having to bring on more clients. One of the ways we’ve been able to combat that is giving them a 10 to 15% discount if they prepay for 50 to 60 leads up front because our margin is pretty good. I don’t think we’re doing a great job of that though.
RAVI ABUVALA: Yeah. That’s not even really the constraint. If your CAC is that low, the real constraint is the LTV. But like you said, it’s structural churn, and we’re going to go deeper into the marketing side. The offer and avatar is a big part of the marketing side.
I see a few different routes we can go. The people that are getting booked out, are they probably the sub-five-million-a-year people who don’t have the capacity for the services?
I’m seeing almost a trend. We even had a client who was in an agency in the home services space, and one of the ways we immediately started scaling was we just cut off anybody below $5 million a year. All the marketing, all the ads, all the headlines, the beginning of the VSL, the beginning of the ad, even in the application: are you doing more than five million a year? If they say no, immediately disqualify. He wasn’t even doing pay-per-lead, he was doing retainer, but it was obvious the easiest calls, easiest closes, highest ROI, and highest LTV were all with those people.
You’re in a little bit of a different situation because it’s PPL and it’s such a low barrier to entry. Are you doing national ads on the PPL level and just dishing them out, or are you launching campaigns per client?
JACOB RAY: We’re launching campaigns per client.
RAVI ABUVALA: Okay, so in a lot of ways you really are like an individual agency for each client.
JACOB RAY: Yeah. Every client gets their own. That’s just always how I had it set up. We take whatever their city, county, or state is and we advertise in there.
RAVI ABUVALA: And for your marketing, are you acquiring clients through ads right now or no?
JACOB RAY: So we actually did a lot of outbound. We used to get a list of contractors from various websites like Outscraper. We’d pull a list of tree removal companies, roofing companies, and reach out via text message. The problem there, and it was actually a blessing in disguise, is we ran out of data. We were just recycling, recycling, recycling. And then I was like, we have to run paid ads. And then we started noticing higher-quality clients coming in through the ads.
Because we were just grabbing phone numbers off Google Maps, any company owner who has their personal number on Google Maps is probably a small business owner. So yeah, and then obviously some clients do get booked out, but we also have churn where they’re just like, these leads suck, we can’t close them.
RAVI ABUVALA: And those people, I guess when we work with clients, we usually create three avatars. The first is the ideal avatar, which everybody already talks about. The second is the borderline avatar. For example, for us, 10 to 50K a month. We will get on calls with people at 10 to 50K a month, but they’re not our ideal avatar. Our ideal avatar is above 50K a month because they close easily, work longer, stay with us longer, and LTV is higher. But because of the very nature of paid ads, the total addressable market, and because I have to make the unit economics work, I have to have a borderline avatar that I will work with. I’m just not trying to market to those people. So a lot of our marketing messaging is toward 50K a month people, but we will allow 10 to 50K a month people to get on the calendar, and we will close them.
So in your example, it could even be that we are marketing toward $5 million-plus-a-year home services companies, but your borderline avatar could be something like they’re doing $2 million-plus a year. You’ll still take that call.
And then there’s the final one, which is the anti-avatar. These are people we absolutely don’t want to work with under any circumstance. For us, these are freebie seekers, guarantee seekers, people from zero to 10K a month. We automatically disqualify those people on the application and in the marketing messaging.
So for you, I think a good first exercise would be to look at this combination. You’re right, tree removal at 50,000 people is small. Already people doing seven figures, that’s 4% of all businesses in the United States. Out of 350 million businesses, 4% are doing a million dollars a year or more. And you’re talking about 50,000 inside of that. So you’re dealing with a very small percentage of people who are going to convert.
That’s why I think we need the borderline avatar. But I think a mistake I see a lot of people make is they’re either on one end of the spectrum: I service tree removals, I service roofers, I service X, Y, Z. Or they go all the way to the other end: I service home service people. The truth lies somewhere in the middle. It’s: I service home service businesses that number one have a sales team of at least two people who can call the leads we’re generating, number two have the capacity for at least ten new clients a month, and number three are currently paying for leads.
One of the things I noticed with my real estate agency was that if someone had never worked with cold leads before and was only working with referrals, those were our anti-avatar. If you’re used to a referral getting on a call and closing every single time, and then you get online Facebook leads and have to chase 50 down just to get one close, of course you’re going to complain about those leads. But if you’re already used to it, that changes things. Another element could be they’re already paying for leads from another source. That’s an easier way to justify them coming to you. You’re not selling them on why they need to buy leads. You’re selling them on why they need to take their spend from that service to your service, because you’re cheaper, faster, and better quality.
And then the final element, which might be one of the most important ones, is the sales cycle. How long does it take from when you get them a lead to when they’re able to see a return on investment? If you could get someone with a sub-30-day sales cycle, now you’re in the money. If you could say, I only want people doing at least $2 million a year, with a sales team of at least two people, who are currently paying for leads, and have a sales cycle of less than 30 days, and you build your marketing message, your application, and your sales call scripts around that, I bet you could start getting some really solid people and have the ad spend scale because you’re not being so narrow on tree removal that you can’t make the economics work, and you’re getting people with a high enough lifetime value.
JACOB RAY: Got it, okay, cool. And I guess my concern, and it’s always been something I’ve been scared to do, is I feel like I’m going to have fewer booked calls, the cost is going to go through the roof. It’s a little bit scary, honestly.
RAVI ABUVALA: What costs would be going through the roof, your acquisition costs or your fulfillment costs? So your acquisition cost. And didn’t you say your cost per acquisition was $103?
JACOB RAY: It’s $103, and that might be a problem too because we just take on anyone who has a pulse.
RAVI ABUVALA: Yeah. This isn’t going to be a knee-jerk reaction where you change everything tomorrow. This should be a gradual thing. And I’ll be transparent. This morning I had a call on my calendar and the person was kind of borderline, but probably more of an anti-avatar for us. I was thinking I should take it, it would be nice to just close a deal and get the cash in, it seemed like a laydown deal. But I eventually emailed the person and said look, it’s not a good fit, sorry, and I canceled the call.
I say that to let you know that even I still have a hard time saying no to money, because it feels like free money. But that is short-term thinking. You’re saying no to the Stripe notification now, which feels good at the moment. But the problem is, especially in your setup where you’re not running a true national PPL campaign dishing out leads to people, you’re essentially running an agency. You’re doing a specific city, a specific county per client. So you’re setting up for every single one of these people.
The question you have to ask yourself is: what is the opportunity cost of managing a person here who’s going to make me $1,500 versus this other person who could make me $3,000 or $4,000 or $5,000? Do you have any clients with a high LTV right now? What is that LTV roughly?
JACOB RAY: Yeah, for sure. Some clients have been with me since the beginning. They haven’t even churned. Maybe they’ll pause for a month here and there. Our highest LTV client has been about $100,000.
RAVI ABUVALA: How much easier would your life be if every client was like that?
JACOB RAY: Yeah. I just had a little belief that they’re not out there and I got lucky. But I have a—
RAVI ABUVALA: Let’s break that down. How large is that team? Do they fall in the category of what I was talking about, like above $2 million a year?
JACOB RAY: They cover pretty much all of the East Coast. Whenever there’s an area, they’re so knowledgeable. They’re like, hey, North Carolina is not producing the best results, let’s try Florida for this time of year. So they’re all over the place.
RAVI ABUVALA: So that’s another interesting thing to look at. Your ideal avatar could also be a multi-city, multi-state operation.
And one thing I wrote down: in between my advertising agency and Scaling With Systems, I actually launched a pay-per-lead agency. I was working with Angie’s List, one of the largest real estate brokers in the United States, and a personal injury insurer. Instead of doing individual clients, I was doing lead aggregates, $100,000 a month per client. That’s a sexy number, but you have to keep in mind my margin on those people is way lower than going direct to consumer. I might be generating the lead for $8 and selling it for $13 or $14, and then they’re selling it for $22 or $23. We’re each making a little cut.
I had done the hundreds-of-real-estate-clients thing and wanted to simplify. I’m not saying you need to go all the way there, but how amazing would it be if you were able to chunk up a little bit?
And I know the concern that you’re going to say no to business. The truth is, you will. But what we really should be doing is creating marketing and sales messaging and applications toward the ideal avatar. You still take the borderline ones. And the nice thing is you have good margins and not a lot of overhead. Now is the time to make this move versus when you start hiring a leadership team and directors and you have overhead that makes it scarier to make that call.
JACOB RAY: Got it. I definitely need to implement those changes because I’ve noticed it’s starting to slowly go down and I know we’re on a downward trajectory if we don’t make a change now.
I guess my other question in terms of marketing: everything is super simple to get clients. We just run a straight image ad to a funnel with an offer, a calendar page, and a thank you page video.
RAVI ABUVALA: Is there a video sales letter on the funnel or no? Okay. Do you have ads live right now?
JACOB RAY: Yeah, I do.
RAVI ABUVALA: What’s the name of the page?
JACOB RAY: Home service leads.
RAVI ABUVALA: I’ll pull it up and audit it here. Why don’t you keep going with what you were going to say.
JACOB RAY: Let me make sure that’s the right page. Yeah, home service leads dot something. Yeah.
RAVI ABUVALA: Yeah, I see the image. Is it like “looking for a roofing partner”?
JACOB RAY: It is. We have tree removal, gutters, and roofing going on right now.
RAVI ABUVALA: You know what’s funny? Let me actually share my screen and show you this, because somebody’s kind of figured this out.
JACOB RAY: Yeah, we definitely have some competition. I’ve seen it grow over time.
RAVI ABUVALA: I mean, you’re not going to enter an industry today where you don’t have competition. I like competition. It lets me know I’m in an industry where there’s money worth going after.
I was typing in “home service leads,” but look at this one: “Attention roofing contractors doing 1.5 million a year.” They are doing exactly what I was just telling you. They are calling out the ideal avatar.
And let me see what their application process looks like. Wow, that’s terrible. Okay, let’s go to yours.
Go ahead with your question. I’ll audit this.
JACOB RAY: Essentially the biggest problem I’m having is just scaling ads. We’re only spending about $250 a day. Every time I try to increase it, it just fatigues. It completely falls apart.
RAVI ABUVALA: Talk to me about your metrics first. Daily ad spend, cost per click, cost per lead, cost per call, cost per show. Walk me through all of that.
JACOB RAY: Let me pull up my spreadsheet.
So right now, one thing I’m terrible at is tracking metrics. The ads manager isn’t really accurate. It says our cost per appointment is $17 when it’s really $37. But I just built a spreadsheet that I fill out every morning from the day report our closers send over.
In the last three weeks: $1,500 spent, $37 cost per demo, $101.34 cost per acquisition, 60% show-up rate, 60% close rate as of right now.
RAVI ABUVALA: Okay. And $37 cost per call. So $1,500 is the last three weeks, not 30 days.
JACOB RAY: Last three weeks, yeah. We just started scaling and it’s going okay, but it just starts to fatigue really quickly.
RAVI ABUVALA: Talk to me a little bit about how you’re structuring the campaigns before I go deeper on this.
JACOB RAY: We’ve always run outbound, so I’m not the greatest at ads. I might not be explaining this the best way. We run a simple CBO campaign. Every niche has their own ad set and their own ads. Tree removal has their own ad set, roofing has their own, gutters has their own.
RAVI ABUVALA: And the CBO has $70 a day?
JACOB RAY: Well, I haven’t fully updated it. One thing I’m terrible at is tracking metrics. I look at the P&L and I know I shouldn’t be doing that. We’re definitely spending more than $70 a day. We’re at $200 a day right now.
RAVI ABUVALA: Okay. And you’re optimizing for scheduled appointments?
JACOB RAY: Schedules, yeah.
RAVI ABUVALA: Did you know you have two pixels on your page right now?
JACOB RAY: I do not.
RAVI ABUVALA: Yeah, you have two pixels on here, which I would look at. Let me actually book this and just make sure your thank you page pixel is firing correctly.
Yeah, you do have it. Okay.
So I think on the ad side, out of the $37 cost per call and the $101 CPA, you said you’re running three different groups: roofers, gutters, and tree service. Is there any one that’s obviously the most closes or the lowest cost per call?
JACOB RAY: Yeah. Tree removal, for sure.
RAVI ABUVALA: And for the tree removal campaigns, have you tried to scale just those?
JACOB RAY: I have not, no.
RAVI ABUVALA: Okay. And what is this website built on that you’re sending people to? Go High Level?
JACOB RAY: Yeah.
RAVI ABUVALA: Okay. So here’s my thought on the ad side. If I was personally doing this, here’s what I would very likely do.
I like the specific call-outs for tree service. I like the images because that’s what the algorithm wants. And I’m assuming you’re making those with AI?
JACOB RAY: For sure, yeah.
RAVI ABUVALA: Here’s what I would likely do for campaign structure. I think one of the biggest issues with your inability to scale ad spend is that you’re not spending enough for enough conversion events to happen for Meta to really stabilize the ads. And I think, this is funny because I see this a lot, right now you have a roughly 15x return on ad spend.
Just being really transparent with you, Jacob, there’s really no reason why you shouldn’t be spending $30,000 a month on ads right now. One of the biggest constraints I see when I get on calls with people running ads is they say, I need to fix this before I scale the ads. The truth is you can do both things concurrently. You should be scaling ads and fixing things at the exact same time, because every single day you’re not spending $30,000 a month, which would be $30 times 15 = $450,000 a month in revenue, you’re losing $450,000 a month in revenue. You’re letting more competitors into the market. You’re losing market share.
So in your scenario, one of the things we do with people like you is instead of saying this is the max we’re willing to spend, we actually set a minimum ad spend that we’re trying to hit every single day. That’s a really common thing for someone in a scenario like yours who’s just getting started with scaling ads. You’re used to cold outbound where your cost is so low and it’s so easy. Here you have to spend a little money, but you have such a clear open road ahead of you.
I would try to say, I have to spend $1,000 a day in ads. Let’s say your CPA goes up to $200. It literally doubles. Your lifetime value is still $1,500. So you’re still at a 7.5x return on ad spend, still very much in the green. Does that make sense?
JACOB RAY: Yeah, 100%. Keep going.
RAVI ABUVALA: And I’m not saying to do this right away, but since we just have one Constraint Call together, another thing I’d really be curious about is if you were able to charge a setup fee. Even if it was just $100 or $200, you could literally offset the CPA. Just imagine if you could get paid same day or next day from your ad spend and break even on it. Now you’re at infinite scale, bottlenecked only on the fulfillment side, with pure profit on the backend.
The only question mark there is obviously your close rate. So this isn’t something I would test right away. But when I do test it, here’s my recommendation: set it up so there’s a $200 setup fee, but if they move forward today or within the next 24 hours, that setup fee gets waived.
You’ll still likely retain that high close rate. And then if somebody moves forward in a week or two, you’re making that additional $200, which out of $1,500 is an additional 13% going straight to your bottom line.
JACOB RAY: Yeah. Okay, cool.
And just curious, what are your thoughts on the model? When I first started, I hated doing sales. So I was like, dude, it’s literally just a dollar to get started. Boom, boom, boom, boom. And I’ve heard so many people tell me I should start collecting the first 20, 30, 40 leads up front. It might be a limiting belief, but what enables me to separate from the market is: just try it out, if you like it you like it, if you don’t you don’t. And then on the back end is when we start collecting more money up front, because we just do daily billing every single day. At the end of each day, whatever their daily cap is, let’s say one or two or three leads, assuming we get that, we bill them.
RAVI ABUVALA: Who manages the billing?
JACOB RAY: Our client success manager.
RAVI ABUVALA: Okay. So Jacob, here’s the thing. You’re in a really good scenario right now. You have high gross margins, a 15x return on ad spend, and a TAM that’s pretty large across all the home services niches. You’re in a good scenario.
What will kill your business more than anything else is trying all this different stuff and listening to everybody else. I only say that out of my own experience doing this and working with thousands of businesses. You literally need to do the same thing you’ve been doing and just do more of it right now.
I know this sounds Hormozi-esque, but it’s true. Yes, there are benefits to the agency model or charging upfront. But that’s going to have so many repercussions. You’d have to change your ads, your marketing message, your sales script, and it would affect your close rate. And if I’m being frank with you: if you can make the unit economics work, it’s almost the best of both worlds. It’s a low cost to get started, so you’ll have high velocity of deals. And most PPLs either sell to aggregators or do a national campaign, which would be a dream scenario, but you get to run it yourself.
Are you actually setting it up on their Facebook ad account and their page? Okay, so you run it on yours. Okay. Then the second part doesn’t apply.
But I would say: you can definitely make this work and scale. What’s your next goal? Half a million a month? Is that where you’re trying to get to?
JACOB RAY: Ideally yes, but I want to hit my first $250,000 a month. We’ve been so plateaued for the last two years. It’s been pulling hair.
RAVI ABUVALA: Yeah. Okay.
I think what you need right now is just to stay focused and accountable. Honestly, for a lot of our clients, once we get the system running, half of our work is just telling them: no, that’s a bad idea, no, that’s a bad idea. Just do more of it.
And I think you’re close to getting to that point. All the changes I’m talking about here are essentially making what you have a little bit better. Speaking to a better avatar, but even then I said let’s make a borderline case and still take those people. So we’re not knee-jerking anything.
The only thing I’d be willing to test immediately is a one-time offer on the call. If you move forward in the next 24 hours, we will waive the $200 setup fee. So it’s exactly like the ad says: no setup fee, no ad spend. And if you move forward today, or within the next 24 hours, we’ll waive the $200. They’ll feel comfortable with that. And if someone moves forward in three, four, or five days, you get a little cash upfront, which helps offset the cost per acquisition.
JACOB RAY: Got it. Okay, cool. So really the number one thing is I need to change who I’m targeting. Home service companies making at least $5 million a year, qualifying based on: do you have two sales reps, X, Y, Z, all of the…
RAVI ABUVALA: Yes. And just to be clear, I was throwing those attributes out there, but you really need to do the deep dive. The first thing we do with clients is review their sales calls. You need to review yours and really identify what those attributes actually are.
And I don’t know if you’ve heard me talk about it, but I like to group up. Some specific attributes might only apply to a couple clients, like having a chief marketing officer. Not enough people have that. So you want to group up and find: what is the common trait of all these qualified people? And obviously the larger the group you can define, the more ad spend you can do and the more you can scale. But you have to be careful not to go so broad that you’re just back to saying “all home service businesses” and you’re right back where you started.
JACOB RAY: Got it. Okay, cool. And then my other concern is the cost per acquisition to LTV ratio. The percentage rate is amazing, but the $1,500 LTV, we get that $1,500 in like three weeks. So it’s like.
RAVI ABUVALA: Over a couple months? Wait, so is LTV $1,500 or is monthly revenue from them $1,500?
JACOB RAY: No, LTV is $1,500.
RAVI ABUVALA: So the average person stays with you for three weeks? Wow.
JACOB RAY: Yeah, and then they’re not canceled, but they’re paused for a month, two months. And it’s so hard to track LTV precisely. I’m just kind of throwing out a ballpark from what I’ve seen. I can’t track every single client.
RAVI ABUVALA: Honestly, you actually could. Claude, you could do an API with Stripe and probably figure it out in 20 minutes if you connect Stripe’s API to Claude.
JACOB RAY: Yeah, okay, cool. I look at the margins and I obviously have the margin to spend more on ads. Some clients definitely do stay longer, but it’s like we’re turning through, not churning, these people are just pausing, right?
RAVI ABUVALA: And I think that’s because of the type of people you’re working with right now. I think if you go to people who are hungry for leads, genuinely desperate for leads, you’ll be totally fine.
And one exercise, since they now have the Stripe AI API, you might be able to do this easily with Claude Code. You can go to Stripe, download all transactions from last year, and it’ll give you a Google Sheet by customer email. Then you can upload that to Claude and say: by customer, what is the average lifetime value? You’d be able to get that number because you really do need it.
I can tell you’re a little bit concerned with cash flow and scaling. Right now we’re saying you’re spending $101 and making $1,500, which is a no-brainer. But even as you say it, you’re kind of ballparking it. You need the data to back it up so you can have the confidence to act on it. That should be one of the tasks you tackle alongside the avatar research.
Then going into the actual marketing system, I want to make sure I talk about your ads and your sales funnel. Here’s what I would very likely do.
Number one, I would not run a CBO campaign. I know that goes against what a lot of people say about Andromeda, but I don’t think it makes sense for where you’re at because your constraint right now is not being able to spend enough money on ads.
What I would do is set up ad budget optimization at the ad set level. Every ad set would be targeted toward a specific avatar. One for tree removal, one for gutters, and so on. And then each one of those would be set at $200 or $300 a day. You can slowly scale those up. Traditionally you’re trying to increase by about 20 to 40% every three to four days, you wait to make sure it retains the same KPIs, and then you go up from there.
Another good practice for you is to reverse-engineer what are called max allowable KPIs. You know what your current KPIs are, but the problem is as soon as you increase ad spend, those KPIs go up and you’re turning the campaigns off or not increasing because you’re saying, well, it’s more expensive than it was before. That’s always going to happen.
What you want to do is ask: what is the threshold of what I’m willing to accept? In your scenario, if you’re getting $1,500 in three weeks, I would probably allow a max allowable cost per acquisition of $500, because that means I’m still getting a 3x return, 300% return, in three weeks. That’s incredible because they’re paying for the next person coming in, over and over again.
So if your max allowable CPA is $500, that means all your other numbers can increase proportionally. Your $37 cost per call could increase to $185. I’m not saying it’s going to get there, but now when you’re scaling ad spend and you get a $100 cost per call, you’re not sweating it because maybe you’re spending $1,000 a day, which is what we want to get to. You’re able to really start scaling the spend. Does that make sense?
JACOB RAY: Yeah, totally makes sense. Okay, cool.
RAVI ABUVALA: And you need to adjust your ad descriptions, by the way, because they just say go.close-ai.com. You need to make the descriptions relevant to the actual ad copy themselves. Okay. And I’m assuming you’re using AI for the entire ad setup?
JACOB RAY: Yeah.
RAVI ABUVALA: Okay. First step: I would launch the ads the way I described so you’re able to put spend into the individual segments you want to. Second, I would be trying to create new creatives and launch new creatives on a bi-weekly basis. Try to put out two to four new ads per group you’re going after every two weeks. That way you’re scaling both vertically and horizontally. You’re spending more money on the winners that are already working, but you’re also launching new ads, some of which are going to be winners that you’ll then scale vertically. That gives you the highest chance of being able to spend more money on ads. Does that make sense?
JACOB RAY: Totally makes sense. Okay.
RAVI ABUVALA: And then the other thing I would do is on this actual landing page, I’ll be honest, this could use a lot of work. But rather than going too deep on it, what I would consider, especially with the help of Claude Code, is customizing these landing pages based on the ads people are coming from.
I’ll get a little nerdy here, but it’s actually relatively easy to do. Every time you click on an ad on Facebook, they pass something called an ad ID. When you click on it, an ad ID gets passed that’s specific to that ad. What you can do is create some custom code on these pages where you have a templated title. It might say something like, “[blank] only pays per estimate, no setup fees or commitments.” And that blank could change dynamically based on who is landing on the page. So it would say “tree removal companies only pay per estimate” or “roofers only pay per estimate.”
Even if you just change the first couple words of the headline, you’re going to increase your conversion rate from ad to booked call because it feels hyper-specific to them.
JACOB RAY: Got it, makes sense. So every niche I’m targeting should have their niche reflected on the landing page as well.
RAVI ABUVALA: And truthfully, if you go through the avatar research and you find it’s really only five different niches you can crush, it might just be easiest to create separate landing pages for each one. I’m talking about dynamic customization if you end up finding it’s like dozens of variations. But if it’s five, I would actually create a hyper-relevant page for each avatar.
And another thing that would make a lot of sense is if you can get testimonials, screenshots, or case studies from those specific avatars. Here’s something we’ve done really well: we’ll cross 3,000 clients served this year, we have over 1,200 published client wins, and hundreds of testimonials. I could put all of them on one page. But the truth is a specific VSL about getting more revenue from the leads you’re already generating, the testimonials I pulled are all saying that exact thing. All the screenshots and everything prove that specific headline.
For you, the exact same principle. If you say “tree removal people,” you want social proof on that page that is all from tree removal people. Video testimonials, text messages, someone saying “I can’t believe there was no cost to get started, I’m already getting leads.” All of that you want to put below the booking widget to increase your conversion rate.
JACOB RAY: Got it. Okay.
So the key takeaways are: get the actual LTV data, maybe do a second tracking segment for clients I know are legit companies so I’m not mixing up the data. Use that to find out what my ideal and borderline clients have in common.
RAVI ABUVALA: And that’s going to feed directly into the first step, because your ideal clients are probably your highest LTV. So you can sort that Google Sheet by highest LTV and start looking at what niches and attributes appear there. And you can upload all of this into Claude and just ask what are the commonalities.
And I don’t know what questions you’re currently asking on your application, but if you still have the original applications, you can map application question responses to lifetime value. And if you really want to go deep on it, you can take your sales call recordings, combine the transcript, the application answers, and the LTV. That’s pretty much everything you need to build an absolutely killer marketing system that only attracts your ideal avatar.
JACOB RAY: Got it. Okay, cool. This makes total sense. I think that’s pretty much everything.
RAVI ABUVALA: Let me show you the application here too. Application questions are an art and a science. You need to ask the questions that allow you to make a decision on whether to take the call, but not so many that you increase friction.
Let me give you a few I don’t love. Your company website, I don’t really love that question. It’s not going to determine whether you’re going to work with this person or not. What I’d rather ask is, once you’ve figured out your avatar: are you a tree service or removal company doing at least $2 million a year? Yes or no? No? Disqualified. Yes? Take the call.
Another thing you can do with applications is pre-suade. One of the questions could be something like: we only partner with tree service companies who can handle a high volume of new clients. How many new clients could you handle in the next 30 days if we sent them your way? Zero to five, five to ten, ten to twenty?
Now you’re saying, hey, we’re going to get you so much business that we need to make sure you can handle it. And you’re also disqualifying the people who say they can only handle three clients. You’ve just set up all this infrastructure for someone who’s going to pause within the first couple of weeks.
JACOB RAY: Yeah.
RAVI ABUVALA: And “what leads are you looking for?” I would remove that. They’re coming inbound, you should already know that.
“How many team members?” I don’t love that either, because team members could be anything. Admin, customer service, anyone. You should be asking: how many salespeople do you have?
“Best time for a call” is fine. Then maybe pull one or two multiple-choice questions from the LTV and avatar research you do.
And I would probably remove this whole side section about phone calls with home service leads. That’s all distraction.
And then just so you don’t break your funnel, you can set up an automation where once they book, you automatically run a disqualification check through Zapier or whatever you’re using. Cancel the meeting as soon as it books if they don’t qualify, and let them know: unfortunately it looks like you’re not qualified.
JACOB RAY: Got it. Okay, cool. I’m going to make those changes immediately.
And my last question: over the last three months, I’ve found that ads are really what’s going to take me to the next level, because my forte has always been outbound, cold email, cold call, cold text. And for me it’s always been one offer, one acquisition system, one fulfillment, one onboarding process. And I kind of want to just put all of my focus into ads. Do you recommend I just stop outbound entirely?
RAVI ABUVALA: Are you still doing outbound right now?
JACOB RAY: We are, but not at the rate it was in 2024 and early 2025.
RAVI ABUVALA: I’m very similar to you in that once I decide on a plan of action, I burn the boats. And I will tell you, that has ruined a lot of things for me.
You don’t have to be like that. If you have something that is somewhat working, keep maintaining it until ads prove themselves. Everything is an arbitrage game. Right now ads have proved themselves better than cold email. But as soon as ads prove themselves further, every time you’re doing cold email, you’re taking time away from doubling down on ads. And so you go deeper on ads.
But the nice thing is you could make all the changes I talked about in the next 24 to 48 hours, launch the ads, start getting qualified people, and in the next three days ads could be proven and you turn off cold email. It doesn’t have to be six more weeks or four more months to prove this out. But at your stage, your biggest constraint is time. Number one, working with time-sucking clients who aren’t making you enough money but are taking up too much setup and communication time. And number two, your marketing system requires outbound responding, setting appointments. Cold outbound are way harder sales than people coming inbound from ads. They’re not going to fill out a long-form application because you’re reaching out to them.
So if you go to ads, you might spend a little more money and your CPA goes from $100 to $200. But instead of doing five calls a day, you’re doing two calls a day, closing both of them, and their LTV is $3,000.
JACOB RAY: Got it. Cool. Man, you answered everything. The clarity you’ve given me is next to none. That’s kind of what I really needed, to know I’m not crazy. I’ve kind of known these changes needed to happen. I just needed to hear from a professional that this needs to be done.
RAVI ABUVALA: I think you just need to stay the course. I actually like the business model. And the other thing I think you could benefit from down the line, after you’ve done everything else, is working a little bit on the branding side of things.
I get it. You’ve done raw and direct response and you’ve made it work. But the way you’re going to separate yourself from competitors more and more is making clients feel like they’re working with a serious company. Your page needs to feel polished. And the nice thing is with AI and Claude Code, you can do it in a couple seconds if you know what you’re doing. It should still be direct response as the primary focus, but in today’s world there’s absolutely no reason it can’t also have clean fonts, consistent branding, testimonials, social content. That’s going to be the constraint after you finish all of this.
JACOB RAY: Got it, okay, cool. I’ll write that down too. All right. Well, thank you so much, man. I really appreciate it. That was amazing.
RAVI ABUVALA: My absolute pleasure, Jacob. Thanks for hopping on here, man. Make sure to shoot me a message and keep me updated on where you go from here. Thank you guys. Appreciate everybody watching the Constraint Call. I’ll see you guys in the next one.
JACOB RAY: I definitely will. Thank you, man. Have a good one.