Your product will soon be live on Kickstarter, this is when you’ll learn if all the testing and preparation has been worthwhile. All the time and energy you’ve put into the Kickstarter landing page, the Facebook ads, and the pre-launch email list.
The failure to launch after all the hard work is something that happens to more campaigns then most would realize, after spending thousands of dollars and constructing the perfect email to send to your list telling them about the launch, and then only a few convert into sales.
This can be avoided by knowing how qualified your pre-launch email list was before you launch, you’d have a much better idea of how well your campaign is going to launch. The metrics that you need to be looking at to measure the qualification of a Lead are as follows:
- CTR (Click Through Rate) on the ad?
- Email open rates?
- Cost per lead?
Looking at the engagement metrics and believing that your list is qualified because you get 50% open rates is not the right way of thinking about it, neither is sending a survey out to your list asking them about their purchase intent, or looking at the cost per lead as the main indicator about whether or not your lead generation efforts will be successful.
Only one thing matters, if they take out their credit card and send you money.
You got your first lead with the sole intention of getting some money, which is why you should look at revenue.
Building a pre-launch email list doesn’t mean you have the option of tracking revenue because your building this list months before the launch, right?
There is a ingenious way of tracking revenue long before the launch, it is called The Reservation Funnel.
Step 1. Click an ad from Facebook
Step 2. Opt in on a squeeze page
Step 3. Get dropped off on a “reservation” page where the subscriber can put down a deposit to lock in a huge discount on the product.
Why is this better than building a pre-launch email list?
Using this funnel you can gather revenue data about the audiences syou are targeting on Facebook, it doesn’t matter if they are only putting down a deposit, the simple act of them taking out their card and sending you some money is a much larger indicator of “quality” then an email list, (this isn‘t to say you should do the email list as well). You can use this data to invest heavily in audiences that are leading to more reservations vs. audiences that are cheap leads.
Let’s say you are targeting different audiences on Facebook for your pre-campaign:
Audience 1: $1.00 CPL = $1000 spent for 1000 leads
Audience 2: $1.50 CPL = $750 spent for 500 leads
Audience 3: $2.00 CPL = $500 spent for 250 leads
Would you have decided to spend more money on audience 1 since it was getting lower CPL, lets see what would happen when the campaign launched.
Audience 1 converted 0.5% of 1000 emails into sales, 5 sales at a $150 average order is a total of $750 in revenue, ad spend is $750 / $1000 ad spend = 75%
Audience 2 converted 2% of 500 emails into sales, 10 sales at a $150 average order value for $1500 in revenue, ad spend is $1500 / $1000 = 150%
Audience 3 converted 6% of 250 emails in sales, 15 sales at a $150 average order value for a total of $2250 in revenue, ad spend is $2250 / $1000 = 225%
Mistakenly thinking that audience 1 is the most qualified by only looking at the CPL will make you spend more for less, if you would have run a reservation funnel to see which people were willing to actually take out their credit card and make a deposit from each of the audiences, you could see that audience 1 was much less qualified, even if the CPL was lower.
How long to run the reservation funnel for?
We would recommend that 15% of your advertising budget goes into the reservation funnel, that brings in amount of data you need to understand which audiences are truly the most qualified, and then you can allocate budget accordingly and scale for the rest of the ad campaign.
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This post first appeared on Samit Patel Kickstarter Consultant & Crowdfunding Expert, please read the originial post: here