It’s bound to happen if you’re putting yourself out there: An offer is going to flop. This post is about how to identify if it is in fact a flop (scientifically :P), because many people get disillusioned about their offers because it doesn’t LOOK like what they expect.
Let’s start with the foundational piece of offer flop measuring: You must have a benchmark to measure against.
If you haven’t set a benchmark for your offer, there’s no way to measure objectively if it underperformed or not! So how do you set a benchmark for an offer?
If you’re looking for standard conversion rates on funnels, I invite you to check out Funnel Rx!
There are three ways you can set a benchmark.
#1 Based on needed revenue from that offer for the month
If you’re only selling one main offer, you might want to back into the benchmark by thinking about how much money you need to make each month to pay the bills and take a salary.
- First figure out how much it costs you to live each month
- That will give you your baseline salary. If you want to save, add a bit more.
- Then factor in about 30% taxes and anywhere from 30-60% expenses, to back even further into what your topline revenue needs to be to cover salary, other expenses, and taxes.
- Now you have your topline revenue number. Let’s say it’s $20,000. If you sell a $5k coaching package, you need four new clients a month.
- In this case, your benchmark for your program is four units.
Obviously this gets more complicated if you have multiple offers, so you might use a combination of #2 and #1 to figure out how many of each offer you need to sell each month. Some offers are scalable and some are not.
#2 Based on support infrastructure for the offer
Perhaps you’re a service provider and you have a team of web designs or VA’s running an agency. The way you set your benchmark might be based on infrastructure. How much can the team take on in any given month?
- Approximately how many hours is a project?
- How many team members do you have?
- How many hours can they work per week?
- You might determine you can handle three web design projects a month with your current infrastructure.
- In this case, your benchmark for your service is three units.
This is a great way to also help price your offer since if you combine numbers #1 and #2 you will quickly see what price you have to charge with the current setup you have.
#3 Based on funnel // launch stats previously
Let’s say you’re a course creator and you did one big launch and sold 100 units. Does that become the benchmark for each month? No, probably not since launches have a lot more pressure built up. But you can use your data to guess estimate what a monthly unit flow might look like.
- Review what your conversion rate was on the sales page (divide number of views on the page by the number of units sold). Let’s say it’s 4%.
- Calculate about how much traffic you think you can bring to that page in 30 days. This will be an estimate. Let’s say it’s 300 views a month. You might want to search your other web traffic to see what kind of momentum you have on a given day.
- Multiple that by 4% and you’ll get your benchmark.
- In this case, your benchmark for your course would be 12 units a month.
Once you have a benchmark, you can measure month over month how your offer is performing. If you only launch a few times a year, measure each time and then add it to a spreadsheet.
So what constitutes underperformance?
- If you notice you only hit between 10-50% of your goal, month after month, the offer is underperforming.
- If you notice you hit between 50-70% of your goal, I would watch your benchmarks for a few more months. It might be the benchmark isn’t quite right, or you’re marketing needs tweaking, but you’re clearly making progress.
- If you’re between 70-100% of your goal (or beyond), congratulations! You are on the right track!
This way you can set proper expectations for what is achievable month over month in your business, and you can set up your marketing plan to hit or exceed those benchmarks as you put more resources towards different campaigns and channels.
If you haven’t read my post, how to set a marketing plan without Facebook ads, that’s a great place to start!