How I Test New Ideas with Facebook Ads

0:00did you know you could use Facebook ads to test a new product idea or even a new business idea before you launch it doing so could save you tons of time and money if it's a d or give you massive confidence to go ahead and smash it if you're onto a winner in this video I'm going to show you how so how do you actually go about doing this what I'm recommending here is very simply to run Facebook ads send traffic to a page where instead of being able to buy the product service whatever it is you're offering they instead can join a waiting list to get the product service Etc that

0:28you are planning to offer if this experiment goes well and you can very simply look at the data and see look we're getting loads of people signing up to this waiting list they are clearly very interested in whatever we're planning on offering or we're not really getting many people sign up to waiting list they're not that interested in what they have to offer and that is a hugely valuable piece of information that you can use to decide whether or not to actually go ahead with the Venture whether or not to go ahead and contact the manufacturer and get them to make the product that you're thinking about

0:54doing or place that initial order things that can cost a lot of money hire the staff members to deliver the service whatever it happens to be you can get this really really valuable Data before you go through any of those steps relatively quickly and easily I'm going to go through some of the details now but that's the basic premise here now we've done this before for clients where often their existing clients were already advertising some products and services and they're thinking about offering something new and we can simply run this test for them and there's a rule of thumb that we've come to learn when you run this experiment to work out

1:20is the experiment successful or not as in should we go ahead and offer this product or go ahead and offer this service basically what you need to do is you need to calculate what you can afford to pay to acquire a new customer I've got a whole video on that and lgp and things like that so I'll include a link in the description below in case you don't know how much you can afford to pay in terms of advertising cost to acquire a customer I'm going to assume let's take an example business that you can pay $40 per purchase and given your average order value that's going to work

1:46out for your business right now if you can pay $40 cost per purchase then I would say that you want to get signups for 25% or less than that to your waiting list so when you're running this ad campaign people come through to the page are they signing up to the waiting list for $10 or less on average because of course not everyone that actually joins the waiting list is going to go ahead and purchase it's one thing asking someone to join a waiting list and whilst that is good useful information and is a good proxy for interest and and and willingness to purchase we know that

2:15not everyone's actually going to do it when they need to make the actual purchase and part with money and things like that so we have a rough 25% ratio where if we're like okay to offer this service we need to generate leads for $80 or less therefore our maximum cost per sign up for the waiting list for that service needs to be $20 or less in this case we've got $40 maximum allowable cost per purchase and a $10 maximum um cost per waiting list sign up when we run this campaign now we typically do see a larger percentage of people on the waiting list than 25%

2:46actually go on and purchase the product service once it's offered to them uh it might be something like 35% or 40% but I think using 25% as your limit here um is is a good idea because it gives you some nice buffer room right it it Dr risks the new venture as a business owner and if a larger percentage of people on the waiting list actually go into purchase it means that when it comes to offering the product your cost for purchase might not be $40 it might be more like $25 and you know you can pay up to $40 for the campaign and it still work so paying $25

3:14just means the campaign's extra profitable EXT extra um successful and it's good news just wanted to quickly mention that okay so this is relatively quick and easy to set up and that's one of the reasons why I really like this strategy is that you can take literally a couple of hours get this all set up and be generating really useful data um within just a few hours time you can use third party tools something like optin monster no affiliation with me to uh to that company but it's just a software that I use and I like we use it to collect emails for lead magnets and

3:41things like that on on our website and you can simply have people clicking through to the ad coming through um signing up for the waiting list for this product um or service and when you do get them to sign up to waiting list also use that as an opportunity to ask questions that's going to provide you with more valuable information going forward so if you're not sure about a price point for example you could have that as one of your questions that people need to fill in when they sign up for the waiting list what would you be willing to pay or or or you could give

4:06uh brackets that people can select like a little multiple choice something along those lines you could ask people how many of this product they're going to need or how long are they going to need a service for that might give you an idea of what your average order value in total um is likely to be you could ask people what they're going to use it for sometimes it's obvious sometimes it's not and this could be really useful information not only in terms of uh your future marketing efforts because whatever the information they use you could uh address those concerns or specifically emphasize those benefits in the ad copy but it'll also help from a

4:37business standpoint in terms of what features does this product need to have what do we need to include within the service and not include what do people really care about what's important that feedback is so useful for actually improving what you're offering which is obviously a hugely valuable thing to any business if what you're offering is really good that's going to make everything a lot easier now when I've seen people use this strategy in the past they've made one really big mistake that I'm going to get to in a second before I do I've launched a new mentorship program to help you explode your business's revenue and profits

5:04through paid ads and marketing now in this mentorship program myself on my team will Mentor you daily literally every single Working Day and because of that spots are very limited so if you're interested you can click on a link in the video description below and book a call with one of my team members who can explain everything about the mentorship program and how it works I'm really really excited about this and I hope to be working with you and mentoring you very soon I've seen people use this strategy but the big mistake they make is they run the ad to get people to sign up to a waiting list that might sound

5:33contradictory but I explain you want to run the ads as if the product service software Etc is ready to go it's it's it's there to be bought right now you don't want to say in your ads that someone is joining a waiting list if you do that people will see that they'll go I can't even click and get this now I can't go to join your waiting list I'm not that interested and you won't be able to collect any useful data it will just look like it's a failed experiment you want to run the ad as if it's ready to go they click through and then the

6:01landing page says oh we're really sorry but we're actually out of stock of this product right now or if it's a service we're at Max Capacity we're in the process of of redesigning the product and gen 2.0 of the product will be released shortly um if you're interested you can go ahead and and sign up for a waiting list it's also important on that landing page that you don't make people feel like they've been tricked you're going to run the ad as if the product service Etc is ready to go you don't want to then say gotcha we just wanted to collect information and find out if

6:31this is a good product or service or anything like that people aren't going to like that at all instead you want it to make it look like like I said we're out of stock um the service uh isn't available right now because we're out of capacity we're redesigning it etc etc we've all had that experience when you click through on an ad or you know you're searching organically or whatever and you come through to a page and you go I really wanted that thing it's not available um I'll quickly sign up to waiting list you can do stuff like that on Amazon so users are quite familiar

6:59with that um process but just make sure that it feels natural as in you're running a proper ad for the product or service they click through the landing page says oh sorry we actually had a stock of this etc etc um but you can sign up to waiting list and you'll be the first to to find out one of the things I do quite like to do to just help people get over the line um when it comes to signing up to that waiting list is offer a 10% discount when the product service Etc is available so you say look if you sign up to waiting list now once

7:25it's available we'll let you know about it um and we'll give you a 10% discount and that helps overcome the hurdle that people will have of yeah do I really want to give them my contact information they're probably going to email me I might get messages do I really want that no um it just gives them that little incentive to uh to take action and I think gives you more representative data of whether or not people are actually interested in this product or service which is the whole point for running the experiment in the first place so a little 10% um discount when they go ahead and purchase you know for for

7:54signing up and then once you've obviously got the product service you let everyone on the waiting list know and you give the 10% discount code or whatever it is you're going to uh deliver that to those prospects in the email SMS blast whatever now one of the absolute best things about the strategy is not only do you test the viability of a new product service before you do it saving tons of time money Etc you could test 10 different business ideas this week using this strategy quite easily for example but it also means that let's say you do have a successful experiment it works well you think this is great

8:25we're going to offer we're going to go ahead and get this manufacturer we're going to go ahead and hire the staff to to deliv the service whatever it is you need to do when you actually do that you take those steps you incur those costs you then have a waiting list of people that you can immediately say it's in stock it's ready to go we have capacity if you're interested click here here's your 10% discount go ahead and sign up and that's going to massively help in terms of cash flow having those customers that are there really willing and ready to go and purchase and because

8:53you have that immediate influx of of customers for this new thing um obviously that increases sales but you could also use that to get real quick feedback and and information around how to improve it or or where there are issues with it or things like that again stuff that you might take you longer to find out and therefore cost you more as a business or you miss out on sales Etc um if you didn't have that initial influx the best example of a business that's done this really well that I can think of is Tesla so Elon Musk has done this with uh the model 3 he's done it

9:23with the Cyber truck where he's created these waiting lists had loads of people sign up they've even had to put in deposits his waiting list which is something you could look into if you wanted to but then that makes everything so much easier right when the product is ready to go he's got thousands tens of thousands hundreds of thousands of people on a list to say oh car's ready if you're interested here go ahead and uh go ahead and purchase it um it also in a business like that which may well apply to you as well he can take that that waiting list people who have said

9:49yeah I'm really interested in this um and he can take that to financial institutions to Banks Etc and apply for loans and say look this is a really low-risk um loan that you're going to give me so that I can build out the manufacturing plan or in your case it might be placing an initial order or something um because look I've got all these people that have said they're willing to purchase it so you know give me the money for this I'll get it done it Dr risks it for the bank and it's just going to be much easier to uh to raise Finance which may or may not be

10:14something that's uh that's important to you depending on your business if you want to know how to create a Facebook ad campaign that you can use to test new product or business ideas then I'd recommend you check out this video in it I show you how to create a Facebook ad campaign from scratch I think you'll find it very helpful