- Hey there Dan Martell here,
serial entrepreneur, investor, and creator of SaaS Academy.
In this episode I'm gonna teach you
how to create a marketing Challenge Funnel.
If you don't know that term don't worry,
I'll walk you through it,
but it is a powerful strategy
to not only scale your legeneration and fix that,
but also ensure that you build activation
into your product to reduce churn.
And be sure to stay to the end
where I'm gonna share with you
how to get access to an exclusive resource
called the Challenge Funnel Hook
to name your challenge to make sure
that it attracts your perfect fit customers.
(beatboxing music)
So here's the challenge,
I coach some of the world's top
SaaS software as a service founders in the world,
and the biggest challenge that many of them have
is legeneration and churn.
I mean if, you know, I always call it chocolate broccoli.
The chocolate is legen, people want more of that,
and churn is not so hot,
but it's something they need
it's more of the broccoli, right?
So want versus need.
Here's the deal,
there's this thing called the Challenge Funnel.
The way it works is, you look at your product
and you ask yourself what is it
something your customers want as an outcome,
and how can you present it as a challenge, okay?
So I'll give you a really simple example.
Last year I decided to do a pushup challenge.
Just on my Instagram, and my clients,
and it wasn't anything formal,
but I pretty much said baseline your pushups,
add an extra one every day, do it for 100 days.
So it was 100 day challenge,
pushups, add an extra push up.
The whole idea was, I wanted to show people the power
of compounding returns, and consistency,
and the slight edge.
And all these different concepts of, you know,
if we just focus on one simple activity
we can have incredible outcomes.
So what's happened now is a lot of people,
and they've been doing this in
the health space for years.
I literally have a client that has a software
in the health space that came from that industry
and has done over a billion dollars in challenges.
So we talk about like the 30 day weight loss challenge
as a simple example.
So, to give you some real concrete examples
and get you excited,
one of my clients that I coach ClickFunnels,
they have the one funnel away challenge.
So it's a, I think it's a 30 day challenge,
they charge $100 for it,
and it gets you access to creating your first funnel.
Have another client Trevor at carrot.com.
They have the authority challenge,
so as a real estate investor
how to build authority in your market.
I believe that one's a 30 day challenge,
they're looking at bringing it down to 15.
Another one of my clients, Omar WebinarNinja,
they have the automated webinar challenge.
So hopefully you can see the pattern,
but the big idea is that you create
this compressed timeframe outcome
that your potential clients would want,
you know, so your leads.
And then you charge them to be part of that engagement,
essentially that training for that period of a time.
And it just makes it more concrete, and exciting,
and attractive, and fun, and there's a bunch
of other benefits that I'll get into,
but that is how the challenge works.
One of my clients generates 1,200 net new leads every week,
not per month, every week, using Challenge Funnels.
Some of my clients have reduced their churn by 30%,
so a third of churn reduction
deploying their Challenge Funnel.
And others have doubled their activation rate,
so clients that sign up for the product and get activated,
went from 30 to 60% due to their Challenge Funnel.
But they're some key things that you need to understand
to do this right, and that's what we're going to get into.
Number one, drive adoption.
So the whole reason why I love a Challenge Funnel
versus other marketing funnels,
is that it solves the issue of adoption.
If you have a product that requires configuration
or a lot of data entry, or setup,
to get value from your product,
then you want to evaluate using a Challenge Funnel,
because the way I think about it is,
if your product is at the mountaintop
of the outcome result they want,
and your customer's down here
and they're like, "Yay, I want that outcome,
"let's use your product," right?
If it's e-mail marketing automation, work flow,
whatever tool you have, what usually happens
is there's this kind of lake
at the bottom of the mountain, 'kay?
And what the Challenge Funnel is, is the,
think of it as almost like the boat
that they jump into to get across that lake
to start that journey to get that result
from that mountaintop, right?
So the vehicle, the boat, is the Challenge Funnel.
Because it helps them cross
that really difficult sticky part
at the beginning of using your products.
Like I said, you know, Omar uses the WebinarNinja,
the automated webinar challenge,
to help people craft, design,
and create an automated webinar
so that they end up using the product at a higher level.
Same thing with the one funnel away challenge,
if I can get people to design a funnel,
then ClickFunnels becomes a long-term viable solution
to have that funnel working for their business.
So the key element is ask yourself,
"What's missing for customers to be activated,
"to get a tonne of value.
"What's the first thing they need to do,
"and can I look at that outcome,
"and frame it as a challenge,
"to really encourage people to not only desire the outcome,
"but to use our product to achieve it."
That's what makes it great.
Number two, bite size bridge.
So, when I say that,
every challenge somebody has, every outcome,
cannot go from like A to Z.
What you want to do, if you're overweight,
you're not gonna go from like overweight
to losing 200 pounds just because you decided to.
What needs to happen is a series of steps,
bridges, that need to be over, you know,
these journeys that have to be completed
for you to eventually end up to the outcome.
So I always say to people,
"Go from A to B, not A to Z."
So, where are they at today? What do they need to know?
Sometimes a lot of it is mindset challenges, right?
So you might have a series,
if you look at a challenge in 30 days,
the first few days might be all about the mindset,
and the belief systems that they're gonna need
to continue on that journey.
You might even have a video trying to argue for the point
that successful people in your industry, with your product,
are people that start, or finish what they start.
So by seeing that video in day one,
it really encourages them to complete the whole challenge.
But then when it gets into the tactical stuff,
you know, breaking it down
into these six to seven minute chunks of effort
that they can do, and you drip it out day over day
so that eventually after the two weeks or three weeks
or four weeks, whatever the length of your challenge,
they get that primary outcome.
So bite size bridges, thinking about A to B to C to D to E,
not going from A to M to Z.
It's too big of a jump, and we want to chunk it down
so they can cross that bridge.
Number three, stack the offer and upsell.
So what that means is, your challenge should have an offer.
It's not enough to just say, you know,
it's the automated webinar challenge,
and I'm going to teach you how to create
an automated webinar.
What are other things that your customers,
or your prospects, might want
to be successful deploying that strategy?
They might need some templates,
they might need some coaching calls,
they might need some additional trainings,
they might need some tools, right?
So a lot of my clients have software products.
What they'll do is they'll take a 14 day trial
and extend it to a 30 or 45 day trial.
And that's part of the stack for the offer.
Meaning that, normally it's a 14 day trial,
but because you enrol in our challenge
and our challenge is $49 or $100,
depending on what you're offering and your price point,
then you get an extended trial,
and that's gonna (mumbles), and that's part of the stack.
So that's one part, making it a irresistible offer
to even joint the challenge.
Then the other side is the upsell,
inside of that registration or signup,
you definitely want to look for opportunities
to add order bumps, or an upsell,
so that you can increase the average order value,
these are all pretty standard, you know,
ecommerce funnel things that can be applied
to a Challenge Funnel.
But most importantly, and the reason why I have it there,
is at the end of your challenge there should be
an upsell offer, an ascension offer,
to a long-term use of your product.
If they're already engaged, they got results,
they got the primary outcome of your challenge,
you want to offer them ongoing support,
ongoing value from your product.
Maybe it's a two year limit, or two year licence
to your software at a discounted price
with premium support added in where normally it's an add-on.
But just don't forget that those two elements for me
are critical to making it work,
cause if not you won't be able to have a high enough
average order value to really drive paid acquisition.
The whole point of this Challenge Funnel
is to be able to liquidate,
or get back your cost acquired customer in that first order.
So most of my clients are about $36-$37
to acquire a challenge customer.
So that, and then a large percentage of those customers,
depending on the client, 60% or more,
will become a customer of your software.
So it's an incredibly efficient way
to scale up paid acquisition
and demand even partnership strategies
to fill up your legen quota and hit your targets,
to get people into the product.
And the cool part as I mentioned,
and they're activated when they come into the software
because they've been using it for that challenge duration.
Number four, engage cohort.
So once you have them in the challenge,
you've done your job marketing,
getting people into the challenge and it officially starts,
there's a lot of cool things that you can do.
I call this positive peer pressure.
When people are part of a community
that are on a shared journey, right?
That's why I do Cross-Fit,
it's why I really enjoy Cross-Fit,
it is the idea of a group workout,
we're competing, we're all doing the same workout,
we're trying to get an outcome,
there's a sense of camaraderie, and there's,
in this positive peer pressure,
just seeing somebody else in the group complete their work,
or you know, in a workout environment,
you know go for an extra, you know,
maybe a heavier load, or extra reps.
It's really, it's motivating, right?
So you need to make sure that at a minimum, every day,
you're prompting people in the community
to submit their homework, based on the video
that you've dripped to them for that specific challenge.
And really, you know, creating moments
inside of the Facebook, a lot of my clients
use Facebook for this,
inside the community to prompt people.
So let's say, you know, maybe once throughout the challenge
you say, "All right, it's time to connect,
"post your social medial link below in the comments,
"want everybody to connect."
And then that gives everybody permission
to post their Instagram, their Facebook, their Twitter,
their Tik-Tok, whatever, you know,
social network they're using.
And then that way everybody starts connecting
and building relationships and friendships in the group.
But, if you don't do that, if you don't offer
maybe a coaching call once a week
to really answer all their questions, to motivate,
to push them forward, then it's hard to get them
to a point where they're not only going to activate
and be successful in the challenge, but more importantly,
be ready to take the next step to extending
their relationship with your software.
So engage cohort is really important to just build
that community, get results, create positive peer pressure,
so that they're more successful to be able
to continue with you long-term.
Number five, bolt on funnel.
So once you have the challenge offer figured out,
and you've got people engaged in the community
and you're getting people results,
then it's about promoting this Challenge Funnel.
So there's a bunch of cool ways to do that.
One, is adding it to an upsell when people just sign up.
So if you have a website people register on the website
for a 14 day trial, you can actually use the challenge
as an upsell in that flow, cause a lot of what happens
that I've seen with my clients is 60-70% of the people
in a challenge are existing customers that wanted
that outcome, they wanted that support,
they wanted that training, and community,
so they'll just join that challenge.
So it's not 100% net new customers,
so as they're signing up you can offer them the challenge.
The other one is is a downsell
to any other of your marketing funnels.
So if you have a, what I teach
is a winning webinar method,
which is using webinars to enrol people into your software.
If you have that going, people don't enrol
through that funnel, you can actually downsell them
into a lower cost option, which is the Challenge Funnel,
so that they can still get into your world,
get some results, and eventually be introduced
potentially to a long-term contract for your software.
My favourite though, is one of my clients taught me this,
where they use the Libsyn Pro Account
for the podcast hosting, so if you have a podcast
Libsyn is probably the tool you're using to promote that.
The Pro account allows you to insert dynamically ads,
and what they do because they're doing 30 day challenges
so every month resets to the next challenge,
is they're running ads to promote
the next challenge dynamically for anybody
that downloads new episodes or even historical episodes
but they're new to the podcast, and they're subscribing now.
So there is so many, I even have another client
that allows their customer's Success Team
to upsell the challenge
when they're doing onboarding calls.
So it is just this beautiful opportunity
to not only support your customers,
get them to invest and commit by paying,
because people that don't pay don't usually pay attention,
so you get them involved,
and get them activated into your product.
So you can scale legen, and get them activated
into your product and create a lot of value
for your potential customers into the future.
So quick recap, five key principles.
Number one, drives adoption.
Number two, bite size bridge.
Number three, stack your offer plus upsell.
Number four, engage cohort.
Number five, bolt on funnel.
As I mentioned at the beginning of this episode,
I want to share with you an exclusive resource,
it's called the Challenge Funnel Hook,
you can click the link, download that below.
It's a worksheet that's gonna allow you
to review the key topics and outcomes
that you're gonna achieve with your challenge,
four distinct patterns that you can use to name it,
deciding what characteristics you want in regards
to the length and the duration,
and then the final outcome is to name your challenge
so that it pops and gets your desired perfect fit customers
to register, so you can click the link below
to download your copy.
If you like this video, be sure to smash the like button,
subscribe to my channel,
if there's anybody that you think this could serve,
feel free to share it with them directly,
and as per usual I want to challenge you
to live a bigger life, and a bigger business,
and I'll see you next Monday.
There, if I do this, then I'll always put
the canister the right way.