Free challenges typically have much higher participation rates but lower conversion rates.
Paid challenges are often the other way around because many people are not willing to pay for challenges.
In this episode, we are looking into a third, hybrid option that combines the best of both approaches without confusing people.
It’s one single challenge but different levels of access or different experiences.
This way, you’ll make sure to create short-term as well as long-term business for you.
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3 Big Take Aways
- Pros & cons of free and paid challenges
- How to create hybrid challenges that combine both approaches
- How to avoid confusing your audience with too many offers at the same time
- Paul & Melissa’s Inner Circle – The Inner Circle with Paul & Melissa Pruitt is an epic 12-month experience for online business owners, coaches, course creators, and membership site owners who aspire to create financial freedom and a lifestyle they want for themselves and their family and also create a positive impact in their community and the world.
- Adaptive Membership – Adaptive Membership is an exclusive opportunity for online business owners, coaches, course creators, and membership site owners to play bigger and bolder in their business and explode their bank account with more clients!
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Ian: So the question is regarding paying for challenges. I did a challenge a couple of months ago, a free challenge and it converted well and it led to a course. So I got proof of concept and people paying for the course and conversions, which is great. Just didn't get the profit side. So now the next step I want to take is to up in another notch so title of the challenge is basically co-writing a song in seven days for $7.
So the question is like, is that going to affect my conversion? Or obviously it will because, you know, I want also qualify people, you know, I don't want the people who are not willing to pay that. Otherwise they're not going to way be willing to pay for my course, but at the same time, how do you balance that concept?
Melissa: Good question.
Paul: Has anybody done paid versus non-paid challenges and, or as we do hybrid, because I know a few people have followed our model a little bit,
Kari: I've done both and the hybrid. Okay. So I feel like I'm knowledgeable. So the free definitely has a much higher participation rate, but has a lower conversion rate because as you said, people that get for free don't necessarily complete it. They're not really as invested, right.
You know, when I've done paid challenges, my conversion rate has gone up quite significantly, but I don't get the signups on the front end because, you know, it's almost like they don't know you enough. And so they're like, ah, I don't even want to pay, you know, 20 bucks for you. Right. Because I'm not, you know, I'm not convinced that this is going to work.
So I'm just using what Paul showed us to do, you know, how to do. And now I am always doing a free challenge with a VIP group and the VIP group it's, you know, it could be like 15 or $20. And for that, they just get something extra as part of that. And you know, for my VIP group, I gave them like four zoom sessions that we did. So you try to make it. So it's not like super, you know, amount of work for yourself, but it's almost like you get the best of both worlds because even when you open your membership, you're going to have free people that are going to sign up. And, but your paid people are probably going to sign up at a little bit higher rate. And so I feel like when I've moved to this hybrid model, I've had, she had much better conversion rates in, you know, in total, which it's all, not necessarily about the percentages, but the total number at the end.
Melissa: Great. Okay. Thank you.
Ian: All right. Thank you.
Paul: And well, we'll expand on that. In the internet marketing space, you're going to have two camps, typically black and white. Now, when you want to become an expert, you typically have to take a stance and be an authority and like take a position on something it's not good sometimes to like waiver between two things, because people don't follow that. They follow, you know, very specific leadership. So you're going to have one camp when it comes to, to doing these types of events that the best way to do is to get the bigger bucket, okay. Is to get the free.
So I'll give you our example in February, when we did our ads challenge, we had over 3,700 people that signed up for that challenge. Okay. So there's a bigger bucket of people there now by doing the hybrid though, by having a paid option on that, thank you page to then have a, you know, for people to level up their experience, to do a VIP option. We had a little over 300 people that invested in that that was a $47 offer.
Now that $47 offer basically paid for our ads. We actually made a little bit of a profit. So before we even went into our core offer, we basically paid for our ads to get 3,700 email opt-ins okay.
Now, if you look immediately short tail, you're always looking at the immediate ROI. If you want to run a successful business, you also have to balance it out with long tail effect.
We have 3,700 people. We did not influence before, even if only small percentage to them by now, it doesn't necessarily mean in the future they won't buy something from us when they're ready, willing, and able, because they like know and trust later on.
Okay. So when you think short term, you're only going to think immediate when you're going to create a longterm business, you want the immediate cause that pays the bills, but also you need to have a long game as well.
So for us, in our case, we did a six figure launch. 40% of our sales came from the VIP people. So 40% of our sales came from only to 300 people.
So very high percentage, you know, number of sales from that small bucket. Now the big bucket of the 3,700 people, not as great at conversion, 60% of our sales in that launch came from that bucket. So the question is, would you rather only have one bucket or would you rather have both buckets? That's where the money is.
As far as we're concerned is you don't say one or the other, you say I want both because both will make your money now and will also make you money in the future. Because if we only did it the other way, then we would have only had that great conversion. 40% of the sales we've only had 40% of the total sales would have been the people willing to pull their wallet out before they really knew who we were.
So you can take and I just want you to think about this, like compare it to the real world, especially in the music, right? You can have the same event happening on stage, but you have the people that are in the nosebleed section all the way in the back and the lawn of the pavilion.
They paid $10 to come in and they're sitting there sitting on the, on the grass. It's the same concert, but if you want to be covered and be on inside the pavilion undercover, you suddenly paid over a hundred dollars to be there. It's the same music at the same concert, but now it's the first three rows. Now you're paying hundreds and hundreds of dollars to be in the first three rows. Now it's the first row you're paying close to a thousand dollars from a scalper because you wanted to be in the first row.
Oh, you want to be in the pit. You just paid a couple thousand dollars. It's the same concert, the same music. It's the same light show. There's nothing different. You're just now have proximity. You're closer. Oh, you went to VIP backstage access. You want to meet the band and get a photo with them and a little souvenir cup, thousands of dollars. It's the same concert. So it's the same challenge. You're just giving people different levels of access or a different experience within that same challenge.
So there are people that are willing, that'll come in free initially, because they don't know who you are. They don't know the trust. You, they don't know if you're an authority. They'll know if you're a scam.
They don't like, you're just an internet person. They saw 10 minutes ago. I have no clue. They're not pulling their weight. Like most of us were taught not to give money to strangers or not, you know, be careful stranger danger, right? So they come in, they give up an email address, but now you have the ability to influence them.
So do you want to not have them at all? They just got you your last launch. Those are the free people, but I bet you, some of those people are willing to give you something if you gave them the offer.
Ian: That offer comes in the landing page then off the freebie.
So it's like, thanks for coming in.
Paul: Yep. Here's here's the free thing. So they opt in, they only see the promise of the free thing initially, as soon as they opt in on the, thank you. Hey, before you go, we've got this incredible offer. You're in the challenge , you'll get an email, check it out.
But while we have you here, here's a VIP offer. Here's an opportunity. Here's some bonuses. Like here's a PDF, here's a cheat sheet. Here's some other things that you can have, you know, you just heightened the experience
Melissa: Go ahead Kari.
Kari: I was going to say the other thing that I did is, is every time I would send out an email to the free group throughout the whole challenge, the bottom of the email was, and if you'd still like to join the VIP group.
Kari: here, here you go. Cause I got a lot of signups up to the end to the, to the VIP group as a result,
Ian: right. Yeah. That's excellent. Well done.
Paul: Yeah. So before you open cart to the next thing, make sure you close down your VIP offer because you should only have one paid offer at any point in time. So if you're getting people in the heightened net experience to come into the challenge part and you want to bring them in, you can make that offer in advance.
But the moment you go into the open cart sign of people coming into your main offer, like why you did the challenge, don't have the VIP offer still available because now it just confuses because people will just buy the VIP and not buy your main offer. So just, just keep that in mind you need, you want people to walk forward. You don't want them to get confused at a, at a Y in a rude.
Ian: That's great.
I'm gonna use that. I'm gonna get that, that methodology. So thank you.
Melissa: Oh, you're welcome. Keep us posted, let us know. Awesome.