Dan Martell - How to Build a Challenge Funnel

00:00:00.080 Hey there, Dan Martell here,

00:00:01.080 serial entrepreneur, investor, and creator of SaaS Academy.

00:00:03.680 In this episode, I'm gonna teach you

00:00:05.160 how to create a marketing challenge funnel.

00:00:08.240 If you don't know that term, don't worry.

00:00:10.160 I'll walk you through it, but it is a powerful strategy

00:00:12.960 to not only scale your lead generation and fix that,

00:00:16.360 but also ensure that you build activation

00:00:19.560 into your product to reduce churn.

00:00:21.720 And be sure to stay at the end

00:00:22.560 where I'm gonna share with you how to get access

00:00:24.080 to an exclusive resource called the Challenge Funnel Hook

00:00:26.920 to name your challenge to make sure

00:00:29.000 so that it attracts your perfect fit customers.

00:00:44.180 So here's the challenge.

00:00:45.400 I coach some of the world's top SaaS,

00:00:47.760 software as a service founders in the world.

00:00:50.280 And the biggest challenge that many of them have

00:00:52.280 is lead generation and churn.

00:00:54.620 I mean, you know, I always call it chocolate broccoli.

00:00:56.960 The chocolate is lead gen, people want more of that.

00:00:59.400 And churn is not so hot, but it's something they need.

00:01:02.540 It's more of the broccoli, right?

00:01:03.640 So want versus need.

00:01:05.400 Here's the deal.

00:01:06.400 There's this thing called the challenge funnel. 0.96

00:01:08.180 The way it works is you look at your product

00:01:10.960 and you ask yourself,

00:01:11.800 what is it something your customers want as an outcome

00:01:14.620 and how can you present it as a challenge, okay?

00:01:16.840 So I'll give you a really simple example.

00:01:18.980 Last year, I decided to do a pushup challenge.

00:01:21.460 Just on my Instagram and my clients,

00:01:23.540 and it wasn't anything formal,

00:01:24.660 but I pretty much said baseline your pushups,

00:01:26.720 add an extra one every day, do it for a hundred days.

00:01:29.420 So it was a hundred day challenge, pushups,

00:01:31.880 add an extra pushup. 0.99

00:01:32.860 The whole idea was I wanted to show people the power

00:01:36.120 of compounding returns and consistency and the slight edge

00:01:40.280 and all these different concepts of, you know,

00:01:42.260 if we just focus on one simple activity,

00:01:44.260 we can have incredible outcomes.

00:01:46.060 So what's happened now is a lot of people,

00:01:49.220 and they've been doing this in the health space for years.

00:01:51.520 I literally have a client that has a software

00:01:54.640 in the health space that came from that industry

00:01:57.880 and has done over a billion dollars in challenges.

00:02:00.020 So we talk about like the 30 day weight loss challenge

00:02:02.800 as a simple example.

00:02:03.860 So to give you some real concrete examples

00:02:06.920 to get you excited, one of my clients

00:02:09.120 that I coach ClickFunnels,

00:02:10.180 they have the one funnel away challenge.

00:02:12.060 So it's a, I think it's a 30 day challenge.

00:02:14.320 They charge a hundred dollars for it

00:02:15.720 and it gets you access to creating your first funnel.

00:02:19.540 Have another client, Trevor at carrot.com.

00:02:22.560 They have the authority challenge.

00:02:24.200 So as a real estate investor,

00:02:25.380 how to build authority in your market.

00:02:27.280 I believe that one's a 30 day challenge.

00:02:28.860 They're looking at bringing it down to 15.

00:02:30.920 Another one of my clients, Omar Webinar Ninja,

00:02:33.260 they have the automated webinar challenge.

00:02:36.000 So hopefully you can see the pattern,

00:02:37.800 but the big idea is that you create

00:02:40.960 this compressed timeframe outcome

00:02:44.700 that your potential clients would want,

00:02:47.240 so your leads, and then you charge them

00:02:49.520 to be part of that engagement,

00:02:51.860 essentially that training for that period of a time.

00:02:54.600 And it just makes it more concrete and exciting

00:02:57.740 and attractive and fun.

00:02:59.820 And there's a bunch of other benefits that I'll get into,

00:03:02.300 but that is how the challenge works.

00:03:04.120 One of my clients generates 1200 net new leads every week,

00:03:08.520 not per month, every week, using challenge funnels.

00:03:11.700 Some of my clients have reduced their churn by 30%,

00:03:15.140 so a third of churn reduction

00:03:17.240 deploying their challenge funnel.

00:03:19.020 And others have doubled their activation rate.

00:03:21.780 So clients that sign up for the product and get activated

00:03:25.240 went from 30 to 60% due to their challenge funnel.

00:03:29.240 But there's some key things that you need to understand

00:03:31.740 to do this right, and that's what we're gonna get into.

00:03:33.980 Number one, drive adoption.

00:03:36.100 So the whole reason why I love a challenge funnel

00:03:38.480 versus other marketing funnels

00:03:40.460 is that it solves the issue of adoption.

00:03:43.460 If you have a product that requires configuration

00:03:45.780 or a lot of data entry or setup

00:03:49.280 to get value from your product,

00:03:51.340 then you wanna evaluate using a challenge funnel

00:03:53.680 because the way I think about it is

00:03:55.160 if your product is at the mountain top

00:03:57.140 of the outcome result they want

00:03:58.720 and your customer's down here and they're like,

00:04:00.520 yay, I want that outcome, let's use your product, right?

00:04:03.600 If it's email, marketing, automation, workflow,

00:04:06.140 whatever tool you have, what usually happens

00:04:09.540 is there's this kind of lake at the bottom of the mountain,

00:04:11.960 okay, and what the challenge funnel is,

00:04:13.980 is the, think of it as almost like the boat

00:04:17.020 that they jump into to get across that lake

00:04:19.280 to start that journey to get that result

00:04:21.580 from that mountaintop, right?

00:04:24.180 So the vehicle, the boat is the challenge funnel

00:04:27.220 because it helps them cross that really difficult,

00:04:30.240 sticky part at the beginning of using your products.

00:04:32.820 Like I said, you know, Omar uses the Webinar Ninja,

00:04:37.300 the automated webinar challenge to help people craft design

00:04:41.260 and create an automated webinar

00:04:42.960 so that they end up using the product at a higher level.

00:04:46.000 Same thing with the One Funnel Away Challenge.

00:04:48.500 If I can get people to design a funnel,

00:04:50.820 then ClickFunnels becomes a long-term viable solution

00:04:53.740 to have that funnel working for their business. 0.93

00:04:56.460 So the key element is ask yourself,

00:04:59.380 what's missing for customers to be activated

00:05:02.100 to get a ton of value?

00:05:02.980 What's the first thing they need to do?

00:05:05.040 And can I look at that outcome and frame it as a challenge

00:05:09.400 to really encourage people to not only desire the outcome,

00:05:13.140 but to use our product to achieve it?

00:05:15.440 That's what makes it great.

00:05:16.680 Number two, bite-size bridge.

00:05:19.360 So when I say that, every challenge somebody has,

00:05:23.040 every outcome cannot go from like A to Z.

00:05:26.180 What you wanna do, if you're overweight,

00:05:28.340 you're not gonna go from like overweight

00:05:30.080 to losing 200 pounds just because you decided to.

00:05:33.180 What needs to happen is a series of steps,

00:05:36.220 bridges that need to be over,

00:05:38.380 you know, these journeys that have to be completed

00:05:41.800 for you to eventually end up to the outcome.

00:05:44.160 So I always say to people, go from A to B, not A to Z.

00:05:48.880 So where are they at today?

00:05:50.120 What do they need to know?

00:05:51.040 Sometimes a lot of it is mindset challenges, right?

00:05:54.220 So you might have a series,

00:05:56.020 if you look at a challenge in 30 days,

00:05:57.660 the first few days might be all about the mindset

00:06:00.340 and the belief systems that they're gonna need

00:06:02.120 to continue on that journey.

00:06:03.660 You might even have a video trying to argue for the point

00:06:06.920 that successful people in your industry with your product

00:06:10.340 are people that start or finish what they start.

00:06:12.640 So by setting that video in day one,

00:06:15.360 it really encourages them to complete the whole challenge.

00:06:18.320 But then when it gets into the tactical stuff,

00:06:20.500 breaking it down into these six to seven minute

00:06:23.480 chunks of effort that they can do

00:06:25.600 and you drip it out day over day

00:06:27.400 so that eventually after the two weeks

00:06:29.420 or three weeks or four weeks,

00:06:30.560 whatever the length of your challenge,

00:06:32.600 they get that primary outcome.

00:06:34.500 So bite-sized bridges,

00:06:36.240 thinking about A to B to C to D to E,

00:06:38.900 not going from A to M to Z.

00:06:41.460 It's too big of a jump and we wanna chunk it down

00:06:44.060 so they can cross that bridge.

00:06:46.040 Number three, stack the offer and upsell.

00:06:48.940 So what that means is your challenge should have an offer.

00:06:51.860 It's not enough to just say,

00:06:53.240 you know, it's the automated webinar challenge

00:06:55.160 and I'm gonna teach you how to create an automated webinar.

00:06:57.040 What are other things that your customers

00:06:59.300 or your prospects might want

00:07:00.640 to be successful deploying that strategy?

00:07:02.760 They might need some templates,

00:07:04.360 they might need some coaching calls,

00:07:05.720 they might need some additional trainings,

00:07:07.840 they might need some tools, right?

00:07:09.360 So a lot of my clients have software products

00:07:11.400 what they'll do is they'll take a 14 day trial

00:07:13.600 and extend it to a 30 or 45 day trial.

00:07:15.900 And that's part of the stack for the offer.

00:07:19.120 Meaning that normally it's a 14 day trial,

00:07:21.220 but because you enroll in our challenge

00:07:22.780 and our challenge is $49 or a hundred dollars,

00:07:24.820 depending on your, you know,

00:07:26.080 what you're offering your price point,

00:07:27.560 then you get an extended trial

00:07:29.780 and that's got a certain amount of value

00:07:31.240 and that's part of the stack.

00:07:33.780 So that's one part,

00:07:34.660 making it a irresistible offer to even join the challenge.

00:07:38.480 Then the other side is the upsell.

00:07:40.400 inside of that registration or signup,

00:07:42.760 you definitely wanna look for opportunities

00:07:44.780 to add order bumps or an upsell

00:07:46.580 so that you can increase the average order value.

00:07:49.040 These are all pretty standard e-commerce funnel things

00:07:53.820 that can be applied to a challenge funnel.

00:07:56.020 But most importantly, and the reason why I have it there,

00:07:58.600 is at the end of your challenge,

00:08:00.000 there should be an upsell offer,

00:08:01.840 an ascension offer to a long-term use of your product.

00:08:05.960 If they're already engaged, they got results,

00:08:08.080 they got the primary outcome of your challenge,

00:08:10.080 You want to offer them ongoing support,

00:08:13.240 ongoing value from your product.

00:08:15.300 Maybe it's a two-year limit,

00:08:18.160 or two-year license to your software

00:08:20.580 at a discounted price with premium support added in

00:08:23.520 where normally it's an add-on.

00:08:25.240 But just don't forget that those two elements for me

00:08:27.920 are critical to making it work,

00:08:29.600 because if not, you won't be able to have

00:08:31.280 a high enough average order value

00:08:32.960 to really drive paid acquisition.

00:08:35.060 The whole point of this Challenge Funnel

00:08:37.060 is to be able to liquidate or get back

00:08:39.840 your cost to acquire a customer in that first order.

00:08:42.800 So most of my clients are about $36 to $37

00:08:45.600 to acquire a challenge customer.

00:08:48.100 So that, and then a large percentages of those customers,

00:08:52.040 depending on the client, 60% or more,

00:08:54.240 will become a customer of your software.

00:08:56.900 So it's an incredibly efficient way

00:08:59.800 to scale up paid acquisition and demand,

00:09:02.180 even partnership strategies,

00:09:03.780 to fill up your lead gen quota and hit your targets

00:09:07.880 to get people into the product.

00:09:09.340 And the cool part, as I mentioned,

00:09:10.360 and they're activated when they come into the software

00:09:12.840 because they've been using it for that challenge duration.

00:09:15.480 Number four, engage cohort.

00:09:17.380 So once you have them in the challenge,

00:09:18.940 you've done your job marketing,

00:09:20.100 getting people into the challenge and it officially starts,

00:09:23.200 there's a lot of cool things that you can do.

00:09:24.740 I call this positive peer pressure.

00:09:26.300 When people are part of a community

00:09:28.180 that are on a shared journey, right?

00:09:30.260 It's why I do CrossFit, it's why I really enjoy CrossFit,

00:09:32.740 is the idea of a group workout, we're competing,

00:09:35.580 we're all doing the same workout,

00:09:36.840 we're trying to get an outcome.

00:09:38.340 There's a sense of comradery

00:09:39.900 and there's in this positive peer pressure,

00:09:41.860 just seeing somebody else in the group complete their work

00:09:45.180 or in a workout environment, go for an extra,

00:09:49.020 maybe a heavier load or extra reps.

00:09:50.920 It's really, it's motivating, right?

00:09:53.100 So you need to make sure that at a minimum every day

00:09:56.360 you're prompting people in the community

00:09:58.360 to submit their homework based on the video

00:10:00.840 that you've dripped to them for that specific challenge.

00:10:03.900 And really, creating moments inside of the Facebook,

00:10:07.920 a lot of my clients use Facebook for this,

00:10:09.940 inside the community to prompt people.

00:10:13.100 So let's say, maybe once throughout the challenge,

00:10:15.460 you say, all right, it's time to connect,

00:10:16.880 post your social media link below in the comments,

00:10:19.460 want everybody to connect.

00:10:20.540 And then that gives everybody permission to post

00:10:22.500 their Instagram, their Facebook, their Twitter,

00:10:24.020 their TikTok, whatever social network they're using.

00:10:27.900 And then that way everybody starts connecting

00:10:29.780 and building relationships and friendships in the group.

00:10:32.640 But if you don't do that,

00:10:34.440 if you don't offer maybe a coaching call once a week

00:10:37.520 to really answer all their questions,

00:10:39.040 to motivate, to push them forward,

00:10:41.040 then it's hard to get them to a point

00:10:42.740 where they're not only gonna activate

00:10:43.900 and be successful in the challenge,

00:10:44.900 but more importantly, be ready to take the next step

00:10:47.900 to extending their relationship with your software.

00:10:50.840 So engage cohort is really important

00:10:53.380 to just build that community, get results,

00:10:55.240 create positive peer pressure

00:10:57.180 so that they're more successful

00:10:58.500 to be able to continue with you long-term.

00:11:00.800 Number five, bolt on funnel.

00:11:03.100 So once you have the challenge offer figured out

00:11:05.840 and you've got people engaged in the community

00:11:07.700 and you're getting people results,

00:11:08.760 then it's about promoting this challenge flow.

00:11:10.960 So there's a bunch of cool ways to do that.

00:11:12.580 One is adding it to an upsell when people just sign up.

00:11:16.540 So if you have a website and people register

00:11:18.100 on the website for a 14 day trial,

00:11:19.900 you can actually use the challenge as an upsell in that flow

00:11:24.460 because a lot of what happens I've seen with my clients

00:11:26.620 is 60 to 70% of the people in a challenge

00:11:29.280 or existing customers, they wanted that outcome,

00:11:32.320 they wanted that support,

00:11:33.280 They wanted that training and community.

00:11:35.920 So they'll just join that challenge.

00:11:37.340 So it's not 100% net new customers.

00:11:39.920 So as they're signing up, you can offer them the challenge.

00:11:44.640 The other one is a downsell

00:11:46.340 to any other of your marketing funnel.

00:11:47.900 So if you have what I teach is a winning webinar method,

00:11:50.960 which is using webinars to enroll people into your software.

00:11:53.520 If you have that going

00:11:54.980 and people don't enroll through that funnel,

00:11:56.780 you can actually downsell them into a lower cost option,

00:12:00.480 which is the challenge funnel

00:12:01.800 so that they can still get into your world,

00:12:03.880 get some results, and eventually be introduced

00:12:06.880 potentially to a long-term contract for your software.

00:12:10.020 My favourite, though, is one of my clients taught me this,

00:12:13.400 where they use the Libsyn Pro account

00:12:17.600 for the podcast hosting, so if you have a podcast,

00:12:20.420 Libsyn is probably the tool you're using to promote that.

00:12:23.560 The Pro account allows you to insert dynamically ads,

00:12:27.000 and what they do, because they're doing 30-day challenges,

00:12:30.040 so every month resets to the next challenge,

00:12:32.260 is they're running ads to promote the next challenge

00:12:34.700 dynamically for anybody that downloads new episodes

00:12:38.420 or even historical episodes,

00:12:39.660 but they're new to the podcast and they're subscribing now.

00:12:42.340 So there is so many, I even have another client

00:12:44.300 that allows their customer success team

00:12:47.040 to upsell the challenge when they're doing onboarding calls.

00:12:50.260 So it is just this beautiful opportunity

00:12:54.040 to not only support your customers,

00:12:55.700 get them to invest and commit by paying

00:12:57.660 because people that don't pay don't usually pay attention.

00:12:59.900 so you get them involved,

00:13:01.720 and get them activated into your product.

00:13:04.220 So you can scale lead gen,

00:13:05.760 you can get them activated into your product,

00:13:07.980 and create a lot of value for your potential customers

00:13:10.500 into the future.

00:13:11.480 So quick recap, five key principles.

00:13:13.560 Number one, drives adoption.

00:13:15.460 Number two, bite-sized bridge.

00:13:17.460 Number three, stack your offer plus upsell.

00:13:19.940 Number four, engage, cohort.

00:13:21.860 And number five, bolt on funnel.

00:13:24.500 As I mentioned at the beginning of this episode,

00:13:25.880 I wanna share with you an exclusive resource.

00:13:27.540 It's called the Challenge Funnel Hook.

00:13:29.620 You can click the link, download that below.

00:13:31.860 It's a worksheet that's gonna allow you to review

00:13:34.020 the key topics and outcomes that you're gonna achieve

00:13:36.300 with your challenge, four distinct patterns

00:13:39.120 that you can use to name it, deciding what characteristics

00:13:41.780 you want in regards to the length and the duration.

00:13:44.040 And then the final outcome is to name your challenge

00:13:46.880 so that it pops and gets your desired perfect fit customers

00:13:50.320 to register so you can click the link below

00:13:51.780 to download your copy.

00:13:53.100 If you like this video, be sure to smash the like button,

00:13:55.840 subscribe to my channel.

00:13:56.920 If there's anybody you think that this could serve,

00:13:58.640 feel free to share it with them directly.

00:14:00.680 And as per usual, I wanna challenge you

00:14:02.180 to live a bigger life and a bigger business,

00:14:04.000 and I'll see you next Monday.

00:14:06.840 There, if I do this,

00:14:07.680 and I'll always put the canister the right way.

Dan Martell - May 18, 2020

How to Build a Challenge Funnel

Episode Stats

Summary

Transcript