How to calculate profitability of your next Group Challenge

Launching any type of marketing campaign or promotion can be quite a scary, and exciting, experience. Especially if you’re doing it for the first time.

Today I’ll share how you can best prepare to run a group challenge, get your numbers in order, and know what to expect.

Ever run an online challenge on Facebook before? Thinking about starting one?

Chances are you’re already a bit worried that things won’t work out for you as you planned.

What if it doesn’t work?

….you ask yourself. You’ve put so much time and effort into preparing it all.

You know you’ll have to invest some money in it, too. Your hard earned money.

And what if you invest hundreds (even thousands) of dollars, and nothing happens? What if people won’t react to your offers? What if it all turns out to be a waste of time?

NO ONE wants to waste their precious time, trust me. Nor lose money, or blow away their efforts in the wind.

So be cautious. Know your numbers. Learn new tactics, and ensure your success.

How to do it?

The Rule of Expectations

It’s all about knowing why you are doing your challenge, and WHAT to EXPECT.

Let’s say you want to run a Group Challenge as your next marketing campaign.

You’ve seen case studies, probably been part of few challenges yourself, and have a basic idea of how your challenge needs to look.

Unfortunately, in most cases people set totally unrealistic expectations which sets them up for failure long before even running their challenges.

For example:

You set a goal to have 1000 people sign up for your Facebook challenge.

You know a thousand members would be an amazing job. Of course you know that not all, every single one of them, will be active in the challenge. However, you do hope that most of them will.

The harsh truth is that only a percentage of them (much lower than you might expect) will actually go through your challenge, and even a smaller percent will complete it in full.

So you invest your time, your money, plus your energy to create the challenge. Of course the number of sign ups is lower than you initially planned, costs are higher, and before starting the challenge you already have that bitter sweet taste in your mouth of, “Well this isn’t going as I expected”.

You’re already thinking about quitting, perhaps even canceling the damn thing. On the launch day when you are supposed to be at your peak level, all you want to do is disappear or end the challenge misery as soon as possible.

You know what?

Your statistics might be good, even though you don’t know it – yet.

You just need to prepare better.

Yes, it’s completely normal to have less people doing the challenge. But the big question is: how many “less”?

That’s why I want you to learn what’s happening behind the scenes of a challenge, and what you can expect for your challenge.

I’ve done more than a few of them in the past, and even though there are no official industry standards, I’ll present you with some numbers based on the average outcomes of mine and others’ challenges.

The Reality Example

Based on average numbers and experience in different markets (plus a few assumptions).

Let’s say you want to have 500 people in your next challenge.

We’ll take 500 as the number of people who need to sign up for your challenge.

(below the illustration there is a detailed textual explanation)

I will assume your landing page, where people sign up for your challenge, converts visitors into leads at 40% which is a good conversion number. So, to get 500 to sign up for your challenge you will need to get 1,250 people to visit your challenge landing page (because only 40% will sign up for the challenge).

To set the stage, we’ll assume you can afford to spend $1,000 on Facebook advertising (can you?). This would mean that each new lead (a new signup) will cost you $2.

(This is a conservative number because we’ve had campaigns and challenges with a cost per lead of less than $0.5 . There are free ways to get people to join your challenge too.)

Congratulations, here you have 500 new people on your list who are ready to take the challenge.

Now, it’s time for a reality check…

On average you will have 50% of people who signed up join your group and start the challenge. The number may increase as you learn how to engage with your audience better, but let’s stick to 50% as a good start rate.

And don’t worry, it’s perfectly fine if you get even 35-40% of people to start the challenge.

Now you have 250 people on Day 01 eager to dive in and complete the challenge.

Out of the initial 500, around 30-35% will end up being engaged until the end of the challenge. Again, this is a completely expected and normal behavior.

There are strategies and tactics to increase this number, however, let’s stick to the basics now.

By the end of your 5-7 day challenge you will be interacting with approximately 150 people, and assuming that you did everything right they will be receptive to your product/service pitch.

Of course, you will probably present your offer to everyone who signed up for the challenge, however, we’ll focus on your most engaged members because they are the most likely ones who need your services and are open to buy.

The final selling part is highly individual, and it depends a lot on the way you plan to present your pitch. If you don’t have experience with webinars or have a good quality sales copy for your offer, my advice would be to have a very simple and straightforward approach.

Remember, there are at least 150 people who already like, know and (probably) trust you.

Ok, but how much money did I make, Phill ?

Let’s say 3-5% of people buy your $700 dollar offer. Meaning you should have at least 5 sales totaling $3,500.

Heck, one of my students had less than 80 active challenge participants in her last challenge, and she’s managed to sell out her coaching program spots, totaling around $10,000.

Honestly, with a bit of experience and practice your sales numbers can go way up to even 20% when it comes to very engaged audiences. So the overall challenge potential could be more than $21,000, resulting in a $20,000 profit (remember, you’ve invested $1,000 into paid ads)

Not bad for a simple 7-day challenge, right?

IMPORTANT:
Once you complete the challenge, there are still 500 new people on your email list. The fact that some of them didn’t buy right away doesn’t mean they don’t like what you have to offer.

Remember, you are playing the long term game!

I can guarantee you there is a percentage of subscribers who just need more time and contact to make a decision to dive in. That’s why you always need to have a follow up sequence in place, to cover all questions, doubts and obstacles.

I hope the example above has cleared the air, and set the right expectations.

Internet Marketer & Funnel Engineer dedicated to make your website (more) profitable. Food lover and world traveler :) Read myfull bio here