How do you handle negative ROI for your clients?

[Gamer-Imp]

Our approach is usually some mixture of “all of the above”.

1. Most important, is try not to start partnerships with clients if you don’t think you can deliver a good ROI on advertising- be transparent, honest, and realistic about goals and expectations. Sometimes a client has a bad site and a bad product, and we have to tell them up-front, “Look, we could spend money on advertising, but it would largely be setting it on fire. You’re better off spending that money on merchandising / site improvements / etc.”

2. We definitely try to help them if we think there are obvious fixes up the chain- maybe that means advising on landing page design (or even helping them build them). Maybe it means pricing advice, or ops improvements, etc. It helps that our team has a lot of ecom operator experience, so we can pull from my pricing background or my colleagues founder experience, or another colleague’s purchasing experience, and so on.

3. No surprises. If things aren’t working, the client needs to know ASAP- so they aren’t shocked by bad performance after weeks of it. Be transparent, explain the problems, ask them how they want to handle it. Maybe they want to keep spending because we’re still learning from the traffic, etc.

4. Our standard pricing usually has a ROAS target, and if we don’t hit those we have structured discounts to our fee (with a min fee still, of course). That helps deal with surprise challenges!

5. Sometimes, yeah, you do need to fire the client if they are unwilling to improve themselves but keep holding your feet to the fire on results.

6. Definitely find good devs, designers, writers, etc. that you can refer business to or white-label, when it makes sense!

[TTFV]

First, if the funnel is trash you shouldn’t take them on as a client or run campaigns until/unless that’s fixed. This should be part of your discovery process ideally or onboarding, worst case.

If you have the skills to improve landing pages, their sales process, or whatever, sure you can add that to your service range if you feel you add value there.

If everything “looks solid” and you’re just not delivering that’s probably a “you” problem. I wouldn’t assume it’s not a good fit given PPC is a sideline for you and you’re not a true expert. Again, somebody doing this for several years can usually (but of course not always) determine whether PPC is going to work just by understanding the business/offer and comparing that with existing competition.

[QuantumWolf99]

Most clients who fail with paid ads fail because they’re trying to make unprofitable unit economics work through “better targeting”… for most of my ecom clients with $200k+ monthly spend… the difference between 2.8x ROAS and 4.2x ROAS is never the ads it’s always conversion rate, average order value, or backend LTV… I don’t take clients unless their funnel already converts organically above 2% because no amount of campaign optimization fixes a 0.6% landing page… the businesses crushing it at $100k+ monthly ad spend all have one thing in common –> they were already profitable at $10k monthly before scaling.

If someone’s losing money at $5k spend they’ll just lose money faster at $50k spend… I’ve fired clients 30 days in when it became clear their offer was fundamentally broken because continuing to burn their budget while “testing” is just unethical… the hardest conversation in this business is telling a founder their product isn’t something people want to buy not that the ads need tweaking… most agencies avoid this conversation and just keep collecting fees while performance stays mediocre.

I’d rather walk away than manage campaigns I know won’t work because my reputation matters more than one client’s retainer… only work with businesses that have product-market fit already proven organically otherwise you’re just the scapegoat when their fundamentally flawed business model fails.