Ep 75: 3 Evergreen Offer Traps to Avoid with Scott Paley
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3 Evergreen Offer Traps to Avoid
If you're an online course or membership owner, chances are you've heard the word “Evergreen" before. Maybe you've even considered launching an Evergreen Campaign yourself. The allure of seeing your course or membership generate sales consistently, day in and day out, without the need for frequent launches is definitely appealing.
The whole concept can feel overwhelming and complex. Perhaps you've tried it in the past but ended up pulling the plug because you weren't sure if it was working or you lost money while trying to scale. Well, today I have the pleasure of introducing my friend Scott Paley, an absolute expert in scaling using evergreen methods. He's here to share with us 3 traps that we need to be cautious of, and the best part is, he's providing an incredible free resource that will revolutionize your evergreen game.
Scott Paley is someone I've known for a long time through our mastermind group. Scott is not only a successful membership site owner of two thriving communities, the Nonprofit Leadership Lab and Evergreen Edge Academy, but he's also experienced in scaling membership sites to more than 5,000 members. Today, Scott works closely with membership site owners to help them achieve similar evergreen success. He'll be sharing valuable insights and lessons he has learned along the way, specifically focusing on going evergreen with your membership, course, or any online business you have.
Favorite Community
What's your favorite community you've ever been a part of and what do you love about it?
I've been in a bunch, including some with you, Shana. So don't take this the wrong way if I don't choose one of those as my favorite. Because it's close. It's very close. I think I would say (pulling out my geek card right now I was in college and I was involved in the acapella scene. I was a member of a group called, The Brown Derbies. That whole community, that whole scene was kind of the center of my college life. So I have to say that was probably my favorite.
I've had somebody say something similar before, I think they were part of a theater group and they talked about just how strong the community was, especially since you traveled together. So did you travel together and do all of that?
Yes! We had gigs all over the country. We would travel, I mean a lot on the East Coast for sure, but throughout the whole United States. And we even did some big international trips. We spent a couple of weeks in Russia and the Baltics. Right after the whole Yeltsin coup thing in the early nineties. And we also spent an entire summer once in Japan traveling around and touring.
You probably still feel a deep connection with a lot of the people from that group, I would guess.
It was kind of like a fraternity that made music, and some of the people in that group, I'm still very close with. One of my closest friends in the entire world, actually, is someone who was in that group with me.
What is Evergreen?
So can you just give us an idea of what we are talking about when we say Evergreen?
In this particular case, what we're talking about is setting up a system or a funnel of some sort that allows new members to come into your membership day after day after day. And this can be true regardless of whether you have an open membership that anyone can join at any time anyway.
Or even a closed membership where what the Evergreen funnel is doing is allowing a backdoor way of getting in while still maintaining that sense of urgency that a closed model typically would have.
For everyone’s understanding… An open model is when you give people the option to buy or join anytime. A closed model is when people can only join or buy during certain periods including launch periods whether they are big or small launches. That could mean the doors are open for five days and they are going to close. But some people have ads running all the time or different ways to get into the funnel, which means you get an offer that is exclusive to you in that moment and has a deadline or an incentive exclusive to that particular funnel. Am I understanding that correctly?
Yeah, that's exactly right. And you mentioned launches and the ROI (return on investment) of launches coming down a little bit. That can be obviously very frustrating, especially when you're so reliant on launches as the way to bring in members to your membership. It can be very stressful. There are people who love, love, love to launch. There are other people who, if they could, would never launch again. I had one of my students actually write to me earlier today. She's just finishing up a launch and she said, "For the amount of time and effort we've been putting into this launch and the return we're getting, I'm questioning all of my life choices. And I cannot wait to take this evergreen."
When you're launching, there's just so much out of your control. And what happens if there's a natural disaster while you're launching? What happens if there's a major tech outage? It could be something minor like you just put the wrong link in an email.
Yes! Or like our friend, Stu who was launching this week and Facebook actually had a big ad issue, so costs were skyrocketing and everyone was in a panic to turn ads off with the glitch in the system. When you are only selling for five days and you have to be off for a day or even 12 hours that’s thousands of dollars, and for someone like him probably tens of thousands of dollars.
Yeah, there are a lot of eggs in one basket there, especially if you're only going to launch once or twice a year. If it doesn't go well, like what does that mean for your business? It's really hard if that's the only way that you're bringing in members. Now, launching works great. I mean, there's, I'm not, I have nothing against launching.
I know you talk about retention on the podcast all the time, but I just think you get to a certain size where no matter how good your retention is, it's never going to be 100%. You're always going to have some churn. Even if you have outstanding retention, let's say 97% monthly retention, you get to a certain size where that 3% that you're losing every month is actually a lot of people.
For example, just this past week, the Nonprofit Leadership Lab went over 5,000 members. So still growing with the Evergreen. So when you have 5,000 members and you lose 3% every month, that's 150 people that you're losing every single month. If you only do a launch once a year, you've got to get 12 times 150 people just to go steady, just to go sideways, just to get back to where you were a year ago.
You can launch more often, but you can't launch every week. It's not really a launch at that point. So, one of the big benefits, one of the things that Evergreen does is it allows you to get through this plateau, what I call the launch plateau, where your churn ends up equaling what you're bringing in on a launch.
If you can use Evergreen, even just to keep things steady in between launches and then you do a launch, you can go sideways for a while and then way up sideways, and then way up. And that's a good way to grow too. But even better is if your Evergreen is outpacing your churn. And there are definitely ways to do that, and that allows for consistent and steady growth all throughout the year, day after day.
I love that about Evergreen, and I'm sure you'll talk about that a little bit, but just about how you get so much data that you can even apply it to your launches if you're still doing launches. The data you're getting from Evergreen, you can apply it, and it's keeping your ad account nice and warm so that if you move into a launch, you don't feel like you're starting from scratch, which, you know, Facebook doesn't really like.
I should tell you what our friend Stu McLaren said to me. Now, Stu is somebody who loves to launch. He loves, loves the energy of it. He lives for launching. But he also said to me, and I'm going to quote him here, "I love launching, but launches give us a very short window to optimize the experience. Evergreen gives us the opportunity to dial things in so much faster." So, that is exactly what you're saying.
3 Traps People Fall into When they Go Evergreen
What are the things that we need to be looking for or avoiding if we're moving into the evergreen space or trying to scale?
This is a big reason why I created the Evergreen Edge Academy, to help people break through and actually have success with Evergreen because the promise of it is so big. I'm going to talk about 3 traps that I see that people fall into quite frequently when they attempt to go to Evergreen.
It makes them think they're not having success, but it's not a big deal to make changes to these and then, therefore, have a lot more success.
#1 Pull the Plug Too Soon
So the first one is they get started. They build it, they run it, and then they pull the plug too soon. Imagine for a moment that you are digging for oil. You have an oil well that you're building. You wouldn't dig a well without knowing upfront how big the potential oil deposit is. You also would want to know by doing some type of survey how deep it is, how much you are going to have to dig, how much time it would take, and the cost.
Now imagine that you don't have the tech available to you to get that clarity, to know all of those things. You might start digging, and then it could be literally 10 feet before you get to the actual oil. You may decide that it is taking too long. You may question if you will ever hit the oil and decide to forget it when you were so close to finding the oil.
People do this all the time with their Evergreen funnels. They try it for a bit. It doesn't seem like it's working. They've spent some ad dollars, they're maybe losing some money in the early going, and they have no insight into how long it might take before they might start to make money or how much they might make. So, they pull the plug.
An example of this is a client of mine who runs a big membership site. She had been very successful for a long time with launches. She hit the launch plateau, which we talked about earlier, and she brought me in to help her company by having her membership go to Evergreen.
She had a high-converting webinar that worked really well on launches. They'd run ads very successfully. They knew their messaging worked really well because of their launches. They had all the elements they needed. We got this all setup. She was one of the very first clients I ever worked with on Evergreen. We ran it for a few months and it didn’t immediately pay off. It wasn't making money right away, she lost some money at the start. , A few months in, she still hadn't made any money and she got scared that it wasn't working. She pulled the plug. After that happened, I realized that all of this fear ultimately came from a lack of clarity around what to expect, what was supposed to happen, and what did success actually look like? It's scary to invest money into something when you don't make an immediate return.
The thing to remember is when you're talking about memberships, we're talking about recurring revenue, and so the lifetime value of a member isn't coming to you on day one. In fact, usually only a small fraction of the lifetime value is realized with that first transaction. And so you have to be able to look at how long it is going to take for any individual member to become profitable, on average.
Imagine you were buying real estate, making an investment in real estate, and we have a lot of friends who are really into real estate investing. Do they expect to get all their money back and profit in the first month after they've made the purchase of the property?
No, it takes them years typically to get back to just getting back to profitability before they actually start making money. And yet, in the online world, we have this tendency to think, "Well, if I am not profitable on day one, this is a bad investment." But what I learned in analyzing this is that actually, that is really misguided, but it's also a really big reason people fall into this trap of pulling the plug too early.
So, what I did was, I ended up creating the survey technology to figure out how deep the “oil well” is and how much “oil” you might extract from it. I created something that I call the Evergreen Calculator. In the calculator, it takes into account certain factors like your membership's retention rate and the different pricing options that you offer, and how much you're spending on ads, and what is a normal cost per acquisition for you.
And then it will tell you how much you can expect to make or how many members you can expect to gain. It will tell you how long it will take to make it, and it will tell you how much you'll need to invest at the beginning before you start seeing a profit. I plugged in this client's numbers, and the results were really interesting. Turns out she was literally one month away from profitability. Okay, so she pulled the plug just 10 feet before hitting the oil well metaphorically. If the projections held, in six months she would have made a 4x return on her investment.
If she had kept going 24 months in, she would have had a 12x return. She pulled the plug. We are now re-engaging. She is excited about this, so we are hopeful to pick up again. Now, the first thing we do is go through this calculator so that they understand what's coming, what to expect, and that they can then make better decisions as a result.
#2 Delaying Scaling Until Everything is "Perfect".
Number two is delaying scaling until everything is "perfect."? Another way to say this is that the funnel has to be performing at a certain level before you can scale it. I remember a couple of years ago when I was contemplating creating the Evergreen Edge Academy and we were at our mastermind together, and I asked the whole group, “ I know a lot of you have talked about creating evergreen funnels for your memberships, and I keep hearing about this over and over again for many months, years long time. What is stopping you from moving forward? Why?”
I continued to ask what they were scared about and what the blocker was. I found the issue was that they didn’t believe their funnel was performing well enough to scale it. They just turn on the spigot, and keep tweaking it. I asked myself why this happens?
I found It happens in part because there's no urgency when you have a launch, and one of the nice things about a launch is you have a deadline. For example, if you’re launching on May 15th, you need to get to the point where it is good enough.
And it goes right with Evergreen. There's not a date where it has to go live. It is whatever date you've set There's no external pressure on it, so it's harder to get yourself to say, this is good enough. This is a backwards way of thinking. People stay in this kind of testing mode forever. When you are launching, things have to be perfect because you have just one shot. It is hard to get your idea around the fact that it’s okay to not be perfect when you’re dealing with a launch. But, with Evergreen you constantly are iterating. You constantly have a chance to test, to try things, to make it a little bit better, to make it a little bit better.
It's a totally different mindset in how you approach launching. So with Evergreen, the goal should be to get it good enough, then scale it, and then optimize further, and then scale further, and on and on we go.
Is that a factor of knowing your numbers so well, that you can get to the point where you realize if you scale more, that’s going to shift and the ROI isn’t there. So, now instead of pulling the plug, you tweak and you get better? Basically, and it's even simpler than that.You know you've gotten to the point where it's good enough in terms of “good enough to scale” by knowing you really just need to know two numbers, our max CPA (cost per acquisition) and your actual CPA.
Your actual CPA is just how much it costs you on average to acquire one new member. If You spend, on average, a thousand dollars on ads and that brings you 10 new members, then your CPA is a thousand divided by ten, which is a hundred. The max CPA is the other number. That is the most money on average that you should be willing to spend to sign up a new member. For example if you spend up to a ceiling of $150 to acquire a member,and that works for your business model,your actual CPA is a hundred then you have a gap.
You have a gap between the max and the actual. The bigger the gap is, the more comfort you can have to scale. For example, if yourmax CPA is $150 and you are currently at a hundred and want to get it down to $80, $60, 0r $40, that is where you will make some money.
However, all the time, energy, and money is wasted not bringing more members in and not scaling the funnel.
To figure out your Max CPA you can use the calculator that I am giving to all of your listeners to help figure that out. And what you do is you put all your numbers into the calculator. So again, your pricing options, your retention rates, your ad spend, you'll put in what your current cost for acquisition is.
If you don't know, that's fine. You can just plug in a guess to start. And the calculator will show:
How long it is going to take you to get to profitability.
How much you will need to invest.
How profitable your Evergreen funnel can be over time.
You can look at that outcome and see it is going to take 4 months to get back to profitability and will need to invest $5,000 overall. You can see that in 12 months, you will have 6x my investment, 10x my investment, or whatever is relevant. You can ask yourself if it is an acceptable outcome for your business. If the answer is acceptable, you increase the CPA in the calculator and you try it again. You run it again with a higher number. You continue to ask yourself if it is acceptable until it’s no longer acceptable or you move it down until it is and you iterate until you hit the highest cost for acquisition, the highest number that is workable, that's good for your business, and that number is your max CPA.
As my friend always says, and I think she quotes somebody else, she says, “ In God, I trust everyone else. Bring data. “ That is how I think about it. As well as setting yourself up for success to where you can make better decisions because you have this kind of data that is going to be provided with the calculator.
I look at this kind of knowledge as putting on guardrails. In a sense, all of this entrepreneurial stuff we do is risky.? It can also be risky to climb a mountain. But if there are guardrails that will stop you from actually falling off the cliff.
It’s not quite as risky anymore. That’s really what we're trying to accomplish with the calculator and with this methodology, to know when it is time to scale.Which would be the case if your actual CPA, your actual cost per acquisition, is much lower than your max. If it's above your max, you should not be scaling.
If it's way above, you might want to pull the plug. If it's somewhat above, then you go to the next stage, which is optimization. You’re going to look for ways that you can optimize this funnel to make it work so that you can bring your cost per acquisition down so it's far enough below your max that you feel comfortable scaling.
#3 Make Sure That You're Spending Your Time Efficiently
What's the third one we need to be looking out for?
The third one is spending too much of your time inefficiently. People don't understand or know what optimal performance can look like for their funnel. When they do, they don't necessarily have a strategy for how to get there. They try to do all the things. This is the performance of your ads, your registration page, the performance of your webinar, the sales page, or any of the different points in your funnel that could be tweaked in some way.
You realize the registration page needs work, you make it better and it improves. However, that does not have a sizable impact on your overall outcome that you're going for. Which has more members. The answer is a higher-performing registration page, resulting in more members. But you have to ask yourself if it was worth the investment of time and energy. You also have to remember, the point of going Evergreen is to keep things simpler. You want to be able to bring new members in day after day without having to constantly be hustling for it. If you're spending tons of time optimizing every little thing and you don't know what to focus on, you will try to focus on everything.
You're going to get frustrated and eventually you're going to give it up. To prevent this from happening, you must analyze what good looks like. What great looks like, What does suboptimal look like in all the steps of your funnel. .I developed a really simple chart that shows that, but it also shows if you're in certain ranges for each of these different areas and if it makes sense to go all-in investing in improving or optimizing that specific area. It will also show if it will lower your cost per acquisition overall enough to be worth investing time and energy into. I am also going to make this chart available to your listeners at the same time by going to evergreenedge.com/shana.
I think about the story of my student, Dalia Her costs per lead and her show-up rates were both good. Now, there was room for improvement for sure. As an example, her show-up rate was 45%. What I mean by show-up rate is, for every hundred people she had, this was a webinar funnel, for every hundred people who were signing up for her webinar, 45 of them would actually show up to watch it. Now, if you're not familiar with webinars and you don't do well, everyone here is familiar with webinars. But in terms of doing webinars, a 45% show-up rate is actually pretty good. People very typically are in their thirties. That seems to be the most common. Lots of my students are actually getting 50, 60% show-up rates and up, and the webinars that I run as an example, for my other membership, the Nonprofit Leadership Lab, we've been consistently getting over 60% show-up rates for like the last two and a half years.
So it's definitely possible to do better than 45%, but 45% is pretty good. Even looking at that, we did our analysis and what we found was that the biggest opportunity for her was in increasing her sales page conversion, not in worrying about the show-up rate. Her sales page conversion was converting at the time at 2.2%, which is okay.
We Made some tweaks, we did some testing, and we were able to move that conversion rate up from 2.2% to 3.4%. Okay, well that might not sound like a huge thing. 2.2 to 3.4. Okay. But here's what the outcome of that is, that all by itself lowered her cost per acquisition on average from $180 down to $116.
That is a huge difference. This tiny little tweak, this tiny little improvement in the conversion of her sales page took her CPA, her cost per acquisition on average from 180 down to 116. And this was the thing that was magical about this, is that we had calculated her max CPA and it was 140. So when she was at 180, she was not in any position to scale.
She would've lost money if she scaled. By getting it down to 116, she was able to start scaling. And when your actual cost per acquisition is below that max, the more you spend, the more you make. And that's what that little tweak was able to do for her. Now, if she had focused instead on improving her cost per lead or her show-up rates or, you know, got them above the ranges they were, and they were already in normal ranges. If anything, they were on the good side of normal, would not have had nearly the same impact. So lastly you want to make sure that you're spending your time efficiently. You want to make sure you understand where you can actually get the biggest bang for your buck.
Advice for Those Ready to Try Evergreen
How does somebody know if they're ready for Evergreen or if they're ready to like scale at a deeper level with Evergreen? Is that something that these laser coaching calls are essentially for?
That's exactly what it's for. So you're going to have access to the calculator. You'll have access to the optimization chart. And if you are already knowledgeable enough on how to use these kinds of things, it's going to be super helpful for you. Not everybody is as focused on serving their member side or data geeks like us. They could use some help. So, if you would like me to help you understand how either of those resources, the calculator or the optimization chart, could apply to your membership, you'll be able to, on that same page, you'll be able to book a 10-minute laser coaching session with me, where we can talk through it and see if Evergreen makes sense for you and if the Evergreen Edge Academy makes sense for you.
Connect with Scott Paley
Download the the FREE Evergreen Calculator at evergreenedge.com/shana
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