How To Test New Business Ideas with Facebook Ads

1. Testing New Product Ideas with Facebook Ads
2. Setting Up the Experiment with Facebook Ads
3. Calculating Success with Cost Per Acquisition
4. Maximizing Results and Gathering Feedback
5. Avoiding Common Mistakes and Enhancing User Experience
6. Harnessing Waiting List Benefits and Customer Engagement
7. Expanding Opportunities and Improving Business Strategies
8. Utilizing Facebook Ads for Product and Business Testing
9. FAQ

Testing New Product Ideas with Facebook Ads

Did 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 dud, 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.

Setting Up the Experiment with Facebook Ads

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 you are planning to offer. If this experiment goes well, 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 to sign up for the waiting list. They're not that interested in what we 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 of doing, or place that initial order--things that can cost a lot of money, hire staff members to deliver the service, whatever it happens to be. You can get this really valuable data before you go through any of those steps, relatively quickly and easily.

Calculating Success with Cost Per Acquisition

I'm going to go through some of the details now, but that's the basic premise here. We've done this before for clients where often their existing clients were already advertising some products and services and thinking about offering something new. 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, is the experiment successful or not, as in, should we go ahead and offer this product or 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 LTV 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.

Maximizing Results and Gathering Feedback

Okay, so this is relatively quick and easy to set up, and that's one of the reasons why I really like this strategy. You can take literally a couple of hours, get this all set up and be generating really useful data within just a few hours' time. You can use third party tools, something like OptinMonster (no affiliation with me) 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 things like that on our website. And you can simply have people clicking through to the ad, coming through, signing up for the waiting list for this product or service. And when you do get them to sign up to the waiting list, also use that as an opportunity to ask questions; that's going to provide you with more valuable information going forward.

Avoiding Common Mistakes and Enhancing User Experience

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 contradictory, but I explain you want to run the ads as if the product, service, software, etc., is ready to go. 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 landing 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 redesigning the product and gen 2.0 of the product will be released shortly. If you're interested, you can go ahead and sign up for a waiting list."

Harnessing Waiting List Benefits and Customer Engagement

One of the things I do quite like to do to help people get over the line 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 the waiting list now, once it's available, we'll let you know about it 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, it just gives them that little incentive to take action and 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.

Expanding Opportunities and Improving Business Strategies

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 the Model 3, the Cybertruck, where he's created these waiting lists, had loads of people sign up, they've even had to put in deposits on 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 purchase it." It also, in a business like that, which may well apply to you as well, he can take that waiting list, people who have said, "Yeah, I'm really interested in this," and he can take that to financial institutions, to banks, etc., and apply for loans and say, "Look, this is a really low-risk 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 because, "Look, I've got all these people that have said they're willing to purchase it, so give me the money for this. I'll get it done." It derisks it for the bank, and it's just going to be much easier to raise finance, which may or may not be something that's important to you, depending on your business.

Utilizing Facebook Ads for Product and Business Testing

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...

FAQ

Q: How can Facebook ads be used to test new product ideas?
A: You can use Facebook ads to test a new product idea by directing traffic to a page where users can join a waiting list for the product instead of making a purchase. This allows you to gauge interest before fully launching.
Q: What is the method of setting up an experiment with Facebook ads for testing product ideas?
A: The method involves running Facebook ads that lead to a waiting list sign-up page instead of a purchase page. By analyzing the number of sign-ups, you can determine the level of interest in the product being tested.
Q: How can success be calculated in this type of Facebook ad experiment?
A: Success can be calculated by determining the cost per acquisition and understanding how much it costs to acquire a new customer through the Facebook ad campaign.
Q: How can results be maximized and feedback gathered in a Facebook ad experiment?
A: To maximize results and gather feedback, it is recommended to set up the experiment quickly and efficiently, use third-party tools like OptinMonster to collect data, and ask users additional questions when they sign up for the waiting list.
Q: What are common mistakes to avoid when using Facebook ads for product testing?
A: One common mistake is to make it clear in the ad that users are signing up for a waiting list, as this may deter interest. It's better to present the product as ready to go and only mention the waiting list after users click through.
Q: How can waiting list benefits be harnessed to increase customer engagement?
A: Offering incentives like a discount for signing up to the waiting list can help increase customer engagement and provide a more accurate representation of interest in the product or service being tested.
Q: What are the opportunities for expanding business strategies through Facebook ad experiments?
A: By creating waiting lists and gathering interest through Facebook ad experiments, businesses can derisk new product launches, secure financing more easily, and streamline the production process based on customer demand.
Q: Is there a video available on utilizing Facebook ads for product and business testing?
A: Yes, there is a video available that demonstrates how to create a Facebook ad campaign from scratch for testing new product or business ideas. It provides a step-by-step guide on setting up the campaign.