#29: How To Scale Your SaaS Business With Online Challenges
Play • 31 min

Austin Ford is known as the Challenge Funnel King.  Austin and his team use challenge funnels to consistently generate 30K-$100k a month in recurring revenue for SAAS companies. Austin helped a company scale to $15 million/year in annual recurring revenue in one year. He is one of the most sought-after marketing strategists when it comes to online challenges. Today he is going to talk about how to use digital challenges to help SAAS companies drastically reduce your churn and get those forever customers.

 

Learn More Earn More Business Growth Podcast

Host: Brian Webb

Guest: Austin Ford

Episode 29: How To Scale Your SaaS Business With Online Challenges

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PEOPLE MENTIONED IN THIS EPISODE

Russel Brunson

Stephen Larson

Max Muscle Nutrition

IIFYM Nutrition

Credit Repair Cloud

Credit Hero Challenge

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RESOURCES & HELPFUL LINKS

Whatbox Digital

Funnel Build Website

Challenge Creation Bootcamp

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TRANSCRIPT 

Brian Webb:

One of the things we talk about a lot here at Whatbox Digital are sales funnels. Every business needs a sales funnel. In fact, every business needs multiple sales funnels. Sales funnels are how you convert someone from someone who does not know who you are to having a curiosity about you, to developing trust through enlightenment, and ultimately to some type of a commitment or a conversion. My guest today, Austin Ford is known as the challenge funnel king, which is a very specific type of sales funnel. Austin and his team use challenge funnels to consistently generate 30,000 to $100,000 a month in recurring revenue for SAAS companies. In fact, Austin has actually helped a SAAS company, a software as a service company, scale to $15 million a year in ARR or annual recurring revenue in one year. He's definitely one of the most sought-after marketing strategists when it comes to online digital challenges.

And today he's going to talk about how to use digital challenges to help SAAS companies drastically reduce your churn and get those forever customers. He's going to talk about how to get users to pay for your free software trials and he's going to talk about how to outspend your competitors to acquire new customers without dipping back into your own revenue. So, let's not delay any longer. Let's jump into my interview today with the challenge funnel king himself, Austin Ford. Austin, it's good to have you on the show. You and I have been talking for a while about having you on. And so, it's exciting to finally have you here on the show today.

Austin Ford:

Yeah. Excited to be here, Brian. Thanks for inviting me.

Brian Webb:

Yeah. Absolutely. So, I've got to know the audience is going to want to know how did you become known as the challenge final king? I'm dying to hear it.

Austin Ford:

Yeah. So, that's actually a pretty interesting story. So, basically, four years ago I started my agency and when I say my agency, I was doing everything inside my agency. I was building Facebook ads doing a bunch of different funnels for people. So, anything from VSLs to webinar funnels, to high ticket funnels, we were even running like Pinterest ads, things like that. So I was doing all kinds of crazy stuff when I started this agency and I was actually getting pretty good results with clients. One guy was, he had this RX discount card company, and basically, he asked me to build out a VSL for him. So, I sold him a VSL because I was desperate for some money.

Brian Webb:

And for the audience [inaudible 00:02:24] just to jump in, that's a Video Sales Letter audience, but keep going Austin.

Austin Ford:

Yeah. So, I sold it to him for 500 bucks and he actually ended up writing to the two comma club or seven figures with that in less than eight months.

Brian Webb:

Amazing.

Austin Ford:

So, he had a really good ROI with that.

Brian Webb:

And again, audience, when he says two comma club, that means it did at least a million dollars in total revenue. Well, that's a very big deal. You should be super proud of that.

Austin Ford:

Yeah. I got a case study with that guy. Another company that we worked for was like a supplement store. So, it was called Max Fit Supplements or Max Muscle, excuse me, Supplements. If you're on the West Coast, you've probably been in this a few years and stuff, but anyway, we did like $30,000 in sales with them in less than a week. And we just did some Facebook ads and reactivations with like chatbots and stuff. And then also worked with a company called IIFYM Nutrition and this guy was having problems. So, he had like 500,000 people visiting his website every single month, but they were having a hard time optimizing it and selling their coaching programs. So, they offered nutrition coaching. We ended up scaling that company up to like $3,000 per day. So, I was having great success, but my problem was I was running this boutique fast agency.

So, what fast stands for, it stands for funnels as a [crosstalk 00:03:42] service. And here was my problem. I had customers of all different types of flavors, right? I was doing a bunch of custom work. So, every time I got a new customer in my business, I had to reinvent the wheel, go see what worked out in the market, and then go build that for them, right? And I obviously was not charging enough. Charging $500 for a VSL is not enough. In fact, one lady got on the phone with me and she wanted me to run Pinterest ads where I sold it to her for $5,000 and I actually went and learned how to do Pinterest ads on YouTube. So, I was just bootstrapping this whole business.

Brian Webb:

A 100%, yeah.

Austin Ford:

And obviously, that's not super sustainable. Just always looking for money, getting clients on the phone, being desperate and then selling them whatever they wanted and then going out, reinventing the wheel and building it, right?

Brian Webb:

Yeah.

Austin Ford:

So, at the time I was in a coaching program called the Two Comma Club X Coaching program. This is a program with Russell Brunson, the owner of ClickFunnels high ticket. So, it's a $25,000 a year coaching program BN. And I remember actually posting this post inside of their Facebook group. And basically, I don't really remember exactly what the post said, but it was something like, "I've been having zero momentum over the past week. I can't escape, I'm bogged down. I pulled in 1,000 different directions or ideas and I'm always trying to serve all these different clients. I don't know what the focus on." And at the time I was almost completely maxed out my credit card and I had no idea how I was going to pay for my team for the coaching program for next month, right?

So, I ended up getting, so what I learned from that was when I made that post, I was super vulnerable. I had like 100 people comment on that post. And they were like, "Hey," here was the question that they all asked. They were like, "What do you do? How do you help people?" Right? And I thought that was interesting when I saw those, all the comments were about the same thing. But then do you know who Steve Larson is?

Brian Webb:

I do not. I do not know Steve, no.

Austin Ford:

Okay. So, Steve Larson, he was another coach in the Two Comma Club X Coaching program. All you need to know about Steve Larson is, he usually yells at you, right? So, he was like, "Hey, let's jump on a Zoom call, and let's handle this right now, right?" So, I ended up jumping on a Zoom call with Steve Larson and he was like, "Hey dude, did you see all the comments inside the Facebook group after you made that post?" I was like, "Yeah. I noticed that everybody has no idea what I do." And he literally started screaming at me over the Zoom call. And he said, "You're right. Nobody knows who you are or what you do. You are a nobody." [crosstalk 00:06:11].

Brian Webb:

Wow. Okay. All right.

Austin Ford:

So, anyway, Steve Larson basically told me, he was like, if you want to have success and you want to have major success, this is what you need to do. You need to niche down, pick one customer to focus on, solve one big problem for that customer and charge a lot of money for it. That makes sense, Brian?

Brian Webb:

It does. Absolutely.

Austin Ford:

So, I wish I could have said I figured it out then. I did not figure out then it wasn't until like three months later, I ended up jumping on a cruise ship and I'm going to tell you guys how I actually became the challenge funnel king right now.

Brian Webb:

Okay.

Austin Ford:

I actually ended up jumping on a cruise ship. It was called the Two Comma Club X cruise ships. So, it was a marketing cruise ship. There are about 300 markers on this cruise ship. And I was sitting at a mojito bar and I was telling this wonderful person, her name is Latasha, I was telling her about my problems and the agency and what I was going through, right?

Brian Webb:

Right.

Austin Ford:

And I basically told her, I was like, every time I get a new customer in my business, I get them on the phone. They tell me what they want out of desperate need for money, I sell them what they want for not enough and then I go and have to rebuild the whole thing and reinvent the wheel, right?

And he told me the same thing Steve Larson told me. She was like, "Dude, this is simple. You need to focus on one customer, solve a big problem, and charge a lot of money for it." And I was like, "All right, I'm going to solve this right now. So, like four mojitos in at the mojitos bar, we're sitting there going back and forth.

Brian Webb:

You're my new best friend, by the way.

Austin Ford:

Yes. So, we're going back and forth about all the different successes that I had and what I could niche down into and stuff. And long story longer, she ended up bringing up, "What about challenges? Nobody's teaching challenges or helping clients build challenges? What if you would..." And she actually said, "What if you were the challenge funnel team?" And at the time notice I have an agency called Funnel Build, right? I've never built this thing called a challenge funnel.

Brian Webb:

Okay.

Austin Ford:

And I was like, and I had asked her, I was like, "What the heck is a challenge funnel?" And basically, she told me this. She basically said, "A challenge is a process that takes your customers through a series of simple daily tasks, anywhere from five to 30 days to achieve a specific result." And here's the best part. The best part about challenges is, is that people will actually pay you to take the challenge.

So, an example would be like 28-day fat loss challenge. So, in 28 days, people are going to lose, like, let's say the goal is 10 pounds and you could charge $47 for that, right?

Brian Webb:

Okay.

Austin Ford:

[inaudible 00:08:43] In the door.

Brian Webb:

Right.

Austin Ford:

So, I was like, holy cow, this sounds awesome. And without knowing anything about challenges, I ended up saying right there, just declaring my destiny. I took my little toothpick umbrella thing out of the mojito drink and then I found some old gum under the bar stool table and I ended up slamming it on the bar and then putting my little toothpick in there and just saying, "I'm going to be the challenge funnel king."

Brian Webb:

You made a declaration, right?

Austin Ford:

Yeah.

Brian Webb:

Yeah. You made a declaration. Yeah. Well, That's a great story.

Austin Ford:

Yeah. So anyway, I ended up purchasing every single challenge, an online digital challenge that I could find, right? And I ended up mapping out the entire thing. So, I put everything out like on a canvas and I basically had dissected and looked at what made these things work. Ended up transforming my entire agency funnel build to now only building challenge funnels for clients. And I even created my own challenge called the Challenge Creation Bootcamp. And we had some pretty amazing case studies come out of that. Our clients were making anywhere from 45 to 60,000 to $100,000 their first month launching their challenge.

Brian Webb:

Fascinating, yeah. So, now we know you became the challenge funnel king, thanks for sharing that. And you kind of even told the audience what a challenge funnel is and even how long it should be. What do you think it is that makes challenge funnels work so well?

Austin Ford:

Yeah. I think the biggest thing that the biggest reason challenge funnels work so well is because of the hyper-focus result, well I call the hyper-focus result. And what this is, is basically what the challenge is, is you're giving somebody a transformation or you're promising them that you're going to get them a result, right? With the hyper-focus result, it focuses on three things. Number one is who is it? Who is that person that you're going to get a result for? Number two, what is the results specifically that they're going to achieve? And number three, what is the timeframe that they're going to actually achieve that? If you can combine all three of those things, that's what makes these challenge funnels, quote-unquote funnels, convert.

Brian Webb:

Now you work a lot with SAAS companies and how do these funnels also help to drastically reduce customer churn and get more lifelong customers or forever customers?

Austin Ford:

So, when I ended up switching my entire funnel building agency, I was actually approached by a company called Credit Repair Cloud. So, basically, I'm going to tell you a little bit about Credit Repair Cloud, because it will give you an idea about the question you just asked, how we're basically solving the big problem for them. Credit Repair Cloud is basically a CRM slash credit repair management tool, right?

Brian Webb:

Okay.

Austin Ford:

And Daniel, the owner of the company came to me and he's like, "Hey dude, we've been seeing what you've been doing with the challenges. Do you think a challenge would work for our company?" And I was like, "Yeah, I think it absolutely would." And here was the biggest problem that they said that they had it. This is the problem most SAAS companies deal with. The problem is they're very feature-heavy and they're selling a lot more of the product instead of the outcome or the result that the customer will receive-

Brian Webb:

[crosstalk 00:11:54] For transformation.

Austin Ford:

Yeah. The transformation that they will receive from using their software, right? And typically it looks like this. They spend a bunch of money on traffic to start free trials. And then they're going to hope that those free trials stick around long enough to recoup their ad costs, right? So, basically, SAAS companies are paying people to try their software. So, they spend a lot of money on ads to attract what I call trial freeloaders, who don't take initiative, who don't understand the value for the price. And they end up canceling faster than they signed up. And this also causes most SAAS owners to daydream, right? They're just like, holy cow, either I have to get the funding and put all this money and the capital into growing this thing or I just have to take a risk and hopefully, people stick around long enough. The solution we came up with is, is like, what if we could get their customers to actually pay for trial?

Brian Webb:

Fascinating. Keep talking. I'm curious. Yeah.

Austin Ford:

Well, so basically the model flips. So, instead of running traffic to a free trial, now we run traffic to a challenge that promises the results, and during the challenge, we get them to activate that trial, right? So, we completely flip the model and most challenges that we build for SAAS companies, we don't mention anything about the actual software.

Brian Webb:

The transformation, yeah.

Austin Ford:

It's not about the transformation, it's all about the result. So anyway, we ended up launching this challenge for Credit Repair Cloud. The first time we launched it, we ended up getting 450 people to join the challenge. And they made about, I think, $30,000 on the front end, but that's just front end money. So, usually what you do with that front-end money. So, that's people paying to join, right? So $31,000 people paid to join this challenge.

Brian Webb:

The challenge itself, right?

Austin Ford:

You guys could go check it out if you want, it's called the creditherochallenge.com.

Brian Webb:

Okay, creditherochallenge.com.

Austin Ford:

They made 30,000 on the front end, but that's money that you just put back in the ads, right? Here's where it got really interesting. On the backend, they had 50% of those 450 people start a new trial. Then during the challenge, they learn how the user software and then we ended up retaining 60% of those new trials. So, we ended-

Brian Webb:

Fascinating.

Austin Ford:

...We ended up having 130, like 130 something trials actually stick. Their software is $179 a month. We increased their total monthly reoccurring revenue by about $25,000. That was one campaign, one 14 day challenge. Now imagine we run this thing for them every two weeks.

Brian Webb:

That was going to be my next question is why not do it on a recurring basis because that totally makes sense?

Austin Ford:

Yeah. So, we run the challenge for them every two weeks and it does the exact same thing like clockwork. We get anywhere from 300 to 600 people in at a time, 50% activate a trial during the challenge, around 60% end up sticking and we keep increasing their monthly recurring by 20 to $25,000 every time we run this campaign. And in within the last year, we've increased their revenue in less than a year, we've increased our revenue to 15 million annual recurring revenue, just running this one challenge is the same thing. It's completely automated.

Brian Webb:

Kudos to you, you are the king. So, basically then what you're doing is while people aren't paying for the trial of the software, in essence, they are paying for the trial by putting their money into getting into the challenge, right?

Austin Ford:

Yeah, 100%.

Brian Webb:

So, one of the big, this is something that every business owner in the world wishes that they knew how to do, how to outspend the competition to acquire new customers without dipping into your own backend revenue. Talk to us a little bit about that.

Austin Ford:

Yeah. So, with this challenge that we ended up creating. So, when we first launched the challenge, we did it to their internal list. So, with all my clients and what I like to do is I like to promise them, "Hey, what you spend on me to build this thing, we're going to try to get you back on the first launch." And we typically do that with their internal lists. So, whatever list they have internally. But when you switch the cold traffic, it becomes a different story, right? And honestly, just to tell you the truth, when we launched this challenge, it was actually during the pandemic, right? When COVID was hitting and it was spreading across the US, Credit Repair Cloud ended up shutting down their virtual, not virtual, but they're live events. And Daniel said to me, he was like, "Hey, we're relying on this challenge to work and push us through this."

So, a lot of pressure on me because it's one thing to launch to a list of people that know who you are. They've heard of your brand. Perversions are much better on that. But when you go to cold traffic, conversions can be scary sometimes, right?

Brian Webb:

Oh, yeah.

Austin Ford:

So, we ended up actually running cold traffic to this challenge. After we launched the first one, we got the second one up and running and we were hitting the ads right then and there. When we started running the ads, they were spending around 20 to $30 to acquire a customer on the front end of a $47 challenge. They were actually making money.

Brian Webb:

They were profitable right from the beginning, yeah. To cold traffic, yeah.

Austin Ford:

Now fast forward today this year, the costs have gone up obviously due to a number of different factors, but they're currently spending $88 to acquire a customer for this challenge. The average cart value I believe is hovering around the $75 mark. So, they're spending $10 to acquire a customer into their challenge now. They're activating those customers on the back end, right? So, if you're eight, so basically the challenge it's a self-liquidating offer, right?

Brian Webb:

Yeah.

Austin Ford:

So, if you're able to actually spend money or spend less money if you can make it break even, great. If you can make money off the front end, great. Even if you're spending a little bit less than, it's costing them $88 to acquire customers. They're recouping $75 of that, right? So, they're willing to spend now to do that, but they're spending 10, knowing that 50% will sign up for a trial and 60% of those will actually stick, which goes around. I think it was like 25, 30% will actually adopt the software at the end. It's a no-brainer that a company has been scaling extremely fast over the past year.

Brian Webb:

Yeah. One of the things I tell clients all the time is marketing done right is really very extremely formulaic, right? And so, what you've done with the challenge funnel is you've given them a system, a marketing system that's proven and by the way, recyclable. Like you said, they're running the same challenge funnel over and over and over again. I'm sure at some point it'll make sense to refresh it somehow a little bit, but you've literally given them a propeller or another jet engine to put onto the airplane or their business to move them, to get them the thrust, to move forward and grow their business. You've given them a system basically.

Austin Ford:

Yeah.

Brian Webb:

So, let me ask you this, what's one or two pro tips you wish you would have known in the beginning. This can get down into the weeds, whatever what's one or two tips that you would tell the audience that you need to do it this way to optimize or avoid this mistake? What's something you can tell the audience that they wouldn't know without having your years of experience?

Austin Ford:

All right. I got a bunch of great things but I got two that are coming to my head right now. So, number one is, if you're thinking about building a challenge and you want it, the biggest thing is you want the front end to convert, right? And this goes back to delivering a result that your customer actually wants, right? People don't buy stuff. They don't buy products. They buy results. Think of aspirin, right? I don't go to the store and buy aspirin because it is in a pretty bottle or that it has a special chemical, whatever aspirin is made up of, right? I buy it because it relieves pain. And people will buy based on these two emotional needs. One, the avoidance of pain. Two, the pursuit of pleasure, right? Think about anything in your life like for me, if it's Valentine's day, I'm going to go buy my wife flowers.

Why? Because I want to avoid the pain of her being upset and I want to pursue the pleasure of her loving me more, right?

Brian Webb:

Sure. Absolutely.

Austin Ford:

So, anything that you've done in your life is based on those two emotional needs, right? And it's not different for a challenge, but here's the thing, Brian. And a lot of people don't know this. There's actually something that's more powerful than the result. Well, it's called outcomes, right?

Brian Webb:

Yeah.

Austin Ford:

Think about this, products produce outputs that produce results, right? So, if somebody uses your product, it's going to have outputs that produces a result. The result is great. But a result also produces outputs that gives that person outcomes. Now let me explain this really simple to you.

Brian Webb:

Sure.

Austin Ford:

Think of heart surgery, right? What is the product of heart surgery?

Brian Webb:

The surgery itself.

Austin Ford:

Exactly.

Brian Webb:

Yeah.

Austin Ford:

Six hours of heart surgery, 10 new medications, a donated healthy heart, your family crying, right? That's the product of heart surgery. What's the result of heart surgery?

Brian Webb:

You get to live.

Austin Ford:

Well, it's actually, you get a new heart, right?

Brian Webb:

That's true. The result that you get a new heart, yeah.

Austin Ford:

The outcome is exactly what you said.

Brian Webb:

More time with your family and the people that you love, right?

Austin Ford:

Exactly. The ability to be active, avoiding death, funeral costs. Those are the outcomes people want. Now let's put this in perspective to what your audience would probably end up using.

Brian Webb:

Okay.

Austin Ford:

Think of a coach who teaches online trainers, right?

Brian Webb:

Right.

Austin Ford:

The product of that coach. So, let's say he teaches online PT, like personal trainers online, his result for the program is a $10,000 a month online PT business. The product of that program is eight weeks online PT program, I don't know, a high ticket sales training, lead attraction system, whatever. It's all the stuff, right? That's the stuff that people don't want to deal with, but that's the product. That's the pain people have to go through to get the result of 10,000 a month. What's the outcome? Be their own boss. Quit their 9:00 to 5:00. Create financial freedom. So, what I'm trying to tell people is like, number one, all my challenges are based on outcomes that clients want.

[crosstalk 00:22:21] not sell products on those sales pages. It's all based on the outcomes and the results that they will receive going through the challenge, right? Because people are signing up for a challenge to get something done in their life that's caused them pain and is not moving them closer to pleasure, right? The next tip that I would give is I wish I would've known this, but it's super critical at the beginning of your challenge, whether it's a five-day challenge or a 14 or 21 day or 30 days, like however long, the challenge is, it's super critical that you implement these things at the very beginning of the challenge to have success and to drive people all the way through to the end.

Brian Webb:

Okay.

Austin Ford:

Again, you have to tell people and repeat what is the transformation that they're going to get going through the thing that you're pushing them through?

Brian Webb:

Sure.

Austin Ford:

You got to remind them why they're doing it.

Brian Webb:

Right.

Austin Ford:

Number two, you got to showcase studies of people actually doing the thing that they want to achieve. People that were just like them and got to where they want to be, not yourself. So, case studies. Another thing you want to do at the very beginning of these challenges is you need to give them data and numbers to cast the future vision, right? And you need to get your audience to imagine what life would be like to achieve that. There also needs to be internal transformation, right? This is where like Russell's if anybody has ever read Expert Secrets, this is where Russell's manifesto that he calls kind of comes into play, right? With the Credit Hero Challenge that we built for Credit Repair Cloud, the transformation was them becoming a Credit Hero, what does it mean to be a Credit Hero?

It's deeper than them. It's about impact. Helping other people. We did the same thing with, we're making another challenge called the Massage Hero Challenge, same exact thing. And we tell them, what does it mean to be a Massage Hero at the very beginning? So, if you do all that stuff, I like to call that NLP stuff. But if you do all that stuff, you're setting yourself up for success during the rest of the challenge, because you've framed what exactly they're going to get out of it, who they're going to become. And if they put in the work, the result will be there for them at the end.

Brian Webb:

Yeah. People never move into a fog. So, the more that you can paint that clear vision of where they are, what the steps are to get to where they want to go. And then obviously you've really highlighted the importance, the necessity I would say of showing them a better future that they can have. I can see where that would make a challenge funnel go even better. Well, I was hoping that you would drop some value bombs today and Austin, you definitely delivered. So, for those in our audience who want just want to connect with you more or know more about what you do with challenge funnels, where's the best place for them to find you?

Austin Ford:

The best place to reach me is funnelbuild.com. So just F-U-N-N-E-L-B-U-I-L-D.com. They can contact us from there, fill out a form or just explore and see what we're up to.

Brian Webb:

Awesome. And I'll make sure we get all of that into the show notes, along with your LinkedIn profile, your bio, and phone, all that stuff too. So again, for anyone who this kind of a model is relevant too, I think that there's going to be a lot of people that open their eyes to this for the very first time.

Austin Ford:

Yeah. I'm super excited about it. It's definitely been impactful for my business, it's been impactful for other people's businesses. And if you're thinking about doing a challenge, I highly, highly recommend it.

Brian Webb:

Thanks for being here today, Austin.

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