Show Notes
In the episode of Startups For The Rest Of Us, Mike interviews Matthew Paulson, founder of marketbeat.com, about email marketing. They also discuss his upcoming book “Email Marketing Demystified”.
Items mentioned in this episode:
- MarketBeat.com
- GoGo Photo Contest
- Email Marketing Demystified Book
- Mattpaulson.com
- Drip
- AuditShark
- AWeber
- MailChimp
Trancript
Mike [00:00]: In this episode of Startups For The Rest Of Us, I’m going to be talking to Matthew Paulson about Email Marketing Demystified. This is Startups For The Rest Of Us 251.
Mike [00:16]: Welcome to Startups For the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at launching software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
Matthew Paulson [00:24]: And I’m Matt.
Mike [00:25]: And we’re here to share our experience to help you avoid the same mistakes we’ve made. How you’re doing this week, Matt?
Matthew Paulson [00:29]: I’m doing well. How are you Mike?
Mike [00:30]: Pretty good, pretty good. So, I want to introduce Matt to the audience. Matt is the founder of MarketBeat.com. He’s also the co-founder of Go Go Photo Contest and he’s a partner at US Golf TV. He’s also the author of 40 Rules for Internet Business Success. And we’re going to be talking to him today about a book he’s writing called Email Marketing Demystified and that comes out in a couple of months but that’s kind of the main focus for our topic today. Is there anything else you want to add to that? Did I miss anything?
Matthew Paulson [00:58]: The book called Email Marketing Demystified, it’s coming out October. We’ll get the details at the end but it’s myemailmarketingbook.com to get a free copy when it comes out.
Mike [1:05]: Matt, could you tell listeners a little bit about MarketBeat.com because I think this is one of the interesting reasons why I wanted to have you on the show because of the size of the email list that you have and that you manage on a monthly basis and the sheer volume of emails that you sent. It’s not just about oh, you’re writing this book on email market. It’s like you’ve got a lot of serious experience to back this up as well.
Matthew Paulson [01:25]: Yeah, so we published and invest newsletter to about 242,000 stock investor as of the data we’re recording this. Today, the newsletter we sent out, it’s freemium so most of the people sign up for the free list and we have 3,000 or 4,000 people that pay us 15 bucks a month to get the freemium version of the newsletter but it’s basically away for stock investor to keep track of the companies they own and kind of what’s going on with them. We send out probably about 10 million emails a month but I think we’re on track to do about 2 and a half million in revenue in 2015. We’ve been doing it for about five years now. It’s grown over time and figured out it’s a marketing channels that have really worked well for us and we’ve really been able to just kind of blow up the size of the list in the last 18 months.
Mike [02:05]: Yeah, I mean that’s an incredible size list, I mean not just in the sheer number of email addresses that you have and that you send emails too but like 10 million emails a month is a massive amount and I don’t think that most people can even kind of wrap their heads for.
Matthew Paulson [02:17]: Yeah, I think that’s a big, big number and then I go to the trafficking version concerts in February and Ryan Dice goes on stage and says, “Yeah, we sent out about a billion emails a month.” And it’s like, “Oh, crap. I got a whole another level to be at.”
Mike [2:30]: So, I wanted to talk to you about this because I think the email marketing itself is one of those marketing channels that people look at and they say, “Oh, yeah. I should do that but they don’t necessarily do it.” And, I think part of the problem is that email marketing, they don’t necessarily realize the ROI on it or they don’t realize the benefits and they start looking at all these other things and it kind of gloss over the fact that that is probably going to be the single biggest differentiator in their business long-term. So, can you talk a little bit about why is email such a compelling marketing channel over a lot of the other options that are out there.
Matthew Paulson [03:04]: Yeah. You see people today talking a lot about Facebook and LinkedIn and Twitter, if you add up the user base of all of those combined, it might be 1.4 billion people. Twice as many people use email marketing as all of the biggest social networks combined. So we got 1.4 billion people on Facebook, Twitter, LinkedIn. You’ve got 2.8 billion people on email. So it’s just a massive channel and people just don’t realize how big it is.
Mike [03:27]: So just because of the size of it is different though doesn’t necessarily mean that like if you spend $10 on email marketing, what about the same $10 spent on social media advertising either Facebook or Twitter or various other avenues, I mean is there a different between the email marketing versus the social advertising?
Matthew Paulson [03:43]: I think there is. I’ve seen a few studies. Some of them say that have query marketers and the responses that they got say that about 75% of people are happy with the results they get from email marketing and only about 60% are happy with what they get from social media marketing. There is a lot of data out there, there’s a McKenzie study that said email is 40 times more effective at getting customers and Facebook and Twitter just in terms of total volume. So the direct marketing association said that business were earned in an average of $43 for every dollar invested in email marketing, I don’t know what the logic behind that study was but if that number is anywhere close to crack, it’s a pretty great ROI compared to just about anything else that you can do.
Mike [04:21]: Yeah. And I think the tendency for a lot of entrepreneurs is to look at studies like that and be extremely skeptical of them because they depend on so many different factors, I mean I’ve done my own stuff where I’ve done advertise on Twitter and Facebook and tried to get those people to either buy directly or to get onto an mailing list and then have them buy after joining the mailing list, and what I found is that you can acquire Twitter followers for example relatively straightforward fashion. There’s documented processes that you can go through and follow to get those people onto your Twitter following. But to get those people to buy from you is a completely different ball game than sending email because you can send those emails week after week, month after month but it’s a little bit more difficult to get directly in front of them on Twitter because they may be following 5,000 people or 10,000 people and them seeing your message, it’s kind of hitting mess. I mean just by raw numbers for the first 24 hours in the day, how long is that message going to be in their feed? It depends a little bit on how many people they’re following but for my initial estimates is like five to ten minutes, it’s not very long.
Matthew Paulson [05:29]: Yeah, I think if you look at the [?] that Twitter has, maybe 2%, 3%, 4% of the people will actually see any given twit if that and on email you’re going to get an open rate if you have an engaged list of somewhere between your 20% and 40% so you could send 3 emails and make sure that everyone sees that or you could send 3 Twitter messages or Twitter post and maybe 5% or 10% your followers will actually see it.
Mike [05:52]: Yeah, so that makes it a little difficult so like compare those things because it’s no longer an apple to apple comparison. Email becomes a much better channel. One of the things that write in your book was it was such a profound quote that I have to call it out. You said every now and then I’ll hear someone that runs a website say something like I hate pops out and I hate marketing email. I would never use them in my business. What they’re really saying is I hate making money because email marketing is an incredibly effective marketing strategy and it’s so funny because you look at that quote and it stands and start contrast to like the raw numbers that we pointed out earlier to kind of justify what the ROI is. Why is that you think that entrepreneurs are so resistant to using email marketing?
Matthew Paulson [6:31]: Sure. I think tech people and entrepreneurs and kind of people in the communities that we hang out with, we kind of think we’re immune to marketing and we also think that kind of marketing is annoying, I mean how many of us are on a million email list from a million of different things and we get email, we don’t remember what it was and we just want off the list and we want to receiving email from people. So we think that our customers are just like us. We think that our customers hate email marketing just as much as we do. We think that they also think they are immune to marketing and it turns that we are not our customers. Our customers might actually want to get email from us because they are interested in our product and want to hear from us. You can’t assume that your customers are just like you are and your customers may behave in a very different way than you do with email. Like we might be inbox zero people and want to clear the inbox everyday but if you look at the email of my wife or a lot of other people there’s just a ton of different messages from ton of different brands and it’s more of a stream and they’re okay with having just content from a variety of people in there.
Mike [07:26]: You know, I know exactly what you mean. I mean I tried to maintain inbox zero as close as I possibly can so anything that goes in there is a little bit of extra stuff that I have to deal with but I’ve also seen people where I kind of glance at their phones and the little icon over there email says that they got 14,000 emails in there. I’m just like how do you even deal with that? And of course you think to yourself, well they just must not read any of it but it doesn’t necessarily mean that they don’t want to receive those emails either.
Matthew Paulson [07:51]: Yeah, yeah, I mean if you have a business and you provide helpful information to people and you send out over email, you’re going to have to assume that people want it because they’re not going to sign up for your email list if they don’t want it. If they sign up for your email list, that means hey, I want to receive email from you so you should probably send them some email if they want it.
Mike [08:08]: So seems like that’s one of those helpful hands I guess for getting over the fear of clicking on that send button when you got whether it’s a 100 or a 100,000 people on your mailing list because that’s one of those things that I think that a lot of people get hung up on is they get everything ready. They write the email and then there’s just like, “Ah, I don’t know if I should send this. Maybe I should wait. Maybe I should think about this a little bit more. Maybe it could be worded better.” And so they either delay on hitting that send button or they just don’t put it on their system yet. I feel that’s a very helpful hint for that, I mean there are other things that you can think of that would help people through that.
Matthew Paulson [08:42]: Yeah. I think that the two keys are one is to understand that no email is going to be perfect because not everyone all respond to in marketing email or a piece educational content in the same way. Every email will interest some of your subscribers but not necessarily all of them. So, you just have to know that depending on who the subscriber is and email is going to be hit or miss and you’re not going to hit everyone with every email and that’s totally okay. The second thing you can do to mitigate some of these fears is just to have systems in place. So before we ever send out a broadcast email that says I write my assistant has an SOP to follow so she checks the spelling and the grammar, she make sure how the links work, she checks all the prices and the numbers to make sure everything is correct in that email before we sent it out so that way we don’t have to go back later and say ops we made a mistake or anything like that, we know that an email is correct in the first time because there’s more than one set of eyes on it.
Mike [09:32]: Now that brings up another objection that I hear from people where they’re tracking the analytics behind some of their emails and once you go through and you click on every single one of those links, what it does is it starts adding numbers to every single one of those. It seems to like if you have a mailing list of 100,000 people then those 1 or 2 clicks may almost no difference in the analytics but when you only have a mailing list of say 100, those 1 or 2 clicks make a big difference I mean it’s a couple of percent. What are some strategies you can think of to kind of get around that particular fear?
Matthew Paulson [10:02]: Okay. So, I think a lot of entrepreneurs and marketers think that the emails that they send have to be perfect and I don’t really think that’s the case because a good email now is going to be better than a great email never and you just kind have to get over that and decide hey, every day or every week that I’m not sending out any email is the day that I’m losing sales. So even if your first message or your first several messages aren’t perfect, mostly your first messages are going to probably be pretty terrible that’s okay. Sending out an okay email is much better than sending out no email at all.
Mike [10:33]: Right. It’s about improvement over time versus getting things perfect.
Matthew Paulson [10:37]: Absolutely. I mean if you’ll look at some of my first emails or probably my first seven emails Mike sent out about Audit Shark forever ago, they’re probably not going to be anywhere nearly as good as anything he would write or I would write today.
Mike [10:47]: Right. Okay. So, let’s talk a little bit about like the basic email marketing strategy and I think the first step to that is talking about email service providers themselves and there’s kind of three different categories that they breakdown into is the transactional emails, the bulk emails, and then kind of true marketing automation and there’s different service providers who kind of addressed each of those different needs. Can you talk a little bit about what situations you would use each of those in and why?
Matthew Paulson [11:13]: Yeah, so transactional is just for brought email delivery. You connected them via an API and sent say, “Here’s my message. Please deliver it for me.” So that’s like [?] Amazon SPS, those are great if you’re writing custom software and have to do like a notification email, a welcome email, or anything like that. If you have a SAS app, you’ll probably need a transactional email service provider in there somewhere. It might not be the main thing you have but it’s way for people who are writing custom software and have account notification emails and stuff like that. Bulk emails are the mail chimps of the world, stuff like that. They’re really for managing an email list and sending out messages to that list. They’re weaker in some of the more advanced stuff like marketing automation and auto responders and some of those things. They’re okay for some types of list that are small and/or even big but just don’t have a lot of custom functionality that’s needed. They don’t need marketing automation, any fancy emails or anything like that if you’re just going to send a single email to your list or to check if things are okay. So the marketing automation platform, I think it’s really worth that right now. These are the companies like [?] and Fusion Software and a few others but these really have some advanced functionality that allow you to send specific types of messages to specific people at the right times. So if somebody buys a product, you could create a custom auto responder, send them email to on-board them or if they send for a lead magnet, you could to a special auto responder series just to them and there’s just so much that you can do with the marketing automation platform. If you’re really going to down to the road of – if you need to do email marketing, I think you are better off to starting off with point infusion software or something like that from day one because you hate to sign up for something simple and then have to switch ESPs later, that can be a big pain in the butt to do. So, I recommend start up with something of high level of functionality even if you’re not going to use it right away, it’s good to have down the line.
Mike [12:57]: And I think that’s one of those things where people look at that and say, “Well, I don’t want to pay for that now. Let me do what I have to do with this other provider and then grow into it.” But the reality is they’re just basically creating work for themselves down the road when they are successful with their products.
Matthew Paulson [13:11]: Yeah, and if you look like what a starting Drip account costs, 50 bucks a month or something like that, in any business that makes any amount of money, that’s just a very tiny business expense and I think it’s worth forking the money for that.
Mike [13:23]: Yeah, and I think to differentiate here a little bit more between a bulk email provider and something that does true marketing automation, I think one of the things that people don’t realize is that they look like for example Mail Chimp and what you just talked about there was the idea of oh they signed up for this and then they get a series of email, well, Mail Chimp does that and I think the differentiating factor is that with marketing automation software, things are event driven, so when somebody takes an action of some kind, then it is essentially an event in the system and that event triggers a series of other emails that it is essentially a sequence of emails but it is based on that event and you can kind of do it in Mail Chimp but I think those marketing automation platforms make it significantly easier to do and their designs to operate off of those of that.
Matthew Paulson [14:10]: Yeah, and if you look at Infusion Software or anything like that, you can have just kind of a nice visuals [?] how it actually works kind of tell them do this better than others but just nice to be able to see like what the different processes or if somebody does this lead magnet and then they get this email series and then they buy this and then they get this email series. It’s nice to have a more visual way of representing that.
Mike [14:30]: Right. And I’m in a complete agreement with you in terms of email marketing, if you’re going to do anything around email marketing, you really should invest in marketing automation platform of some kind. I’m hesitant to even recommend Mail Chimp at this point I mean not because they don’t do well with what they do but because email marketing can be such a critical component of the business that it almost seems like you have to have that in placed as opposed to trying to do with something like a free or $15 Mail Chimp account now only to have to switch over later.
Matthew Paulson [15:00]: Yeah, I absolutely agree with that.
Mike [15:02]: Well, the other thing that you can kind of add to it is that once you get involved in a marketing automation platform, your eyes are open to all the different possibilities where if you’re in Mail Chimp, you don’t necessarily see all the different options that are available to you because they don’t exist, but once you get into an email marketing automation platform like all of a sudden you see all this different possibilities that were just never there before.
Matthew Paulson [15:23]: Yeah, and if email marketing is going to be a big part of your business, these things aren’t really optional. You would really need to have good marketing automation in place and have different series and campaigns driven by events and you might be able to get away with that 10 or 15 years ago but email marketing has just gotten so much more advanced. You need to have the technology stacked in place that will let you do those kinds of things.
Mike [15:43]: So, now let’s talk about the different email service providers. Let’s talk about collecting email addresses and we’ve talked about this a few different times on this podcast but what are the different ways that people can go about collecting email addresses on their website?
Matthew Paulson [15:56]: Yeah, so obviously you need some opt-in form, you need some kind of offer and then a sign up box. So it’s typically a title, a subtitle, a textbox and a button and to sign up. There are different types of opt-in forms you can do. You can do an entry popup, an exit popup, a welcome gate, something in your sidebars, something below the post. I’ve tried a lot of different opt-in forms on my websites and I found that nothing comes close to doing the popup form welcome gate, just having something that people can’t miss right away. It tends to work very well to get email opt-ins. If you only show the people once a week, they’re really not that annoying so I think if you have scoop those box, it’s not easy to pop up on your website, I think it’s time to just maybe get over that and put it on your website anyway and see how it works. And then another good place I found is pretty one directly below the post of an article, so if you’re reading article, typically you’re looking for the next step to do. And if your email opt-in form is right there, it’s a really good way to get opt-ins. I like to use a combination of both the popup, like an entry popup and an entry form below the post and that does pretty well with opt-in rates.
Mike [16:56]: And I think that’s interesting what you said about getting over in the idea of putting in that welcome popup because personally, I’m not a big fan of those type of things and I don’t tend to put my email address in them but there’s also times where I’ll go to a website where even if I close it three or four times, if I find myself going back to them, I have a tendency to put my email address [crosstalk]
Matthew Paulson [17:14]: Yup, and again, that’s just a matter of we aren’t your customers so if even though we might not prefer our email address into a popup form, that doesn’t mean our customers won’t. So, it’s really a matter of trying it out and saying, “Hey, how many opt-ins am I getting from this versus whatever I’ll say and do from getting a lot more than maybe it’s just worth to leave it there even if you think it’s a little bit annoying.”
Mike [17:34]: Yeah, and that’s something you can even just try for a week. What’s the worst thing that’s going to happen? The people who came to your site are not going to come back? That’s not the end of the world, I mean your business is still going to keep going.
Matthew Paulson [17:43]: Yeah, there is a local coding boutique that does e-convert that is helping out a while back and they had email list and they have a list of maybe 500 people and their email stuff was so hard to find and I just – hey try popup for a weekend and see what happens. The guy was pretty resistant to it but when they did it, they went from having 500 emails on their list total to adding 500 emails every month and the popup is still there a couple of months later so clearly, it’s working for them well enough that they want to keep it even though the guy thought it was a little annoying to begin with.
Mike [18:13]: So let’s talk a little bit about how to entice people to actually sign up. In episode 248, we talked about 14 different ideas for high impact lead magnets. Are there lead magnets that either appeared on that list or that you can think of that worked really well or do you think a lead magnet is not necessary?
Matthew Paulson [18:30]: I think the lead magnet is absolutely necessary. You can’t just say, “Hey, give me your email address so I can send you email.” Nobody cares. You need to give them something to care about in order to get them to give you their email address. I think the format of the lead magnet matters less than the content in the format. So like, I don’t care if it’s a video, a guy, the PDF, whatever, but it should just be very relevant to the content on the page so that might mean that if you have five or six different topics that you talked about in your website, you might have five or six different opt-ins or a lead magnet that show up on each page based on the category that it’s in. So to me relevance is a lot more important than just the medium of whether it’s video, audio, or text whatever. It just is the content in your offer relevant to the content on the page.
Mike [19:13]: And I think that’s probably an important distinction to make for people because there are different types of lead magnets that take different amounts of time and effort to create. So, something that is very simple even though it’s relevant and it’s very quick to create, it can have just the same impact to something that takes 10 or 15 hours to build in terms of getting people onto your [crosstalk]
Matthew Paulson [19:33]: I absolutely agree with that. I don’t think that your lead magnet is something you should spend a lot of time on when you’re first getting started. Don’t let that be something maybe comes a 10-hour ordeal, just take some content you already have and make it into a nice format that’s makes for a nice PDF or something like that and makes it a nice download but I would spend a whole bunch of time doing the original content for your lead magnet.
Mike [19:52]: Yeah, that kind of brings up the idea of premature optimization if you’re spending too much time trying to figure out what is the best thing to do here, you are wasting time and you’re not actually building something to click through.
Matthew Paulson [20:02]: Yeah, I mean if you’re not getting many opt-ins every month, like if you have 100 opt-ins on a monthly basis, you’re not going to have enough people coming and to create a statistically valid split test anyway. So, it doesn’t really matter if you to think that the lead magnet that you have now wasn’t perfect because you couldn’t even test something else out to know whether or not it’s better or not. You just need to do something that’s good enough for an hour than once you start getting a ton of opt-ins every month then you can test out something better.
Mike [20:26]: Right. And it’s about optimizing down the road instead of now. So now that we have somebody on your email list, how do you go about marketing to them? What types of emails should you be sending to them and at what times should you be thinking about sending those emails?
Matthew Paulson [20:38]: Yup. So the first email that you send is probably the most important, that’s called your welcome email. And inside your welcome email you want to accomplish a few different things. First you want to set expectations about what kind of emails you’re going to receives, you might say, “Hey, I send an email every Monday about SAS news and applications or whatever. You can chat us.” And say, “This is what we do. This is what to expect.” The second thing you should do is try to get people to whitelist you or add to your their contact list. So if somebody replies you a message and adds you to the contact list, whitelist you in whatever way that you can, your messages are almost always going to automatically go to the inbox. So you want to ask them to do that right away and then at the bottom of your welcome email, like the PS of your message, you can do some kind of promotion for a product if you want to. So you can say, “PS, hey, do you want to learn more about whatever I do? Check out our cool product here so you could do that in your welcome email as well.” There are two other types of emails you send, one is that auto responder series. So that is 30 to 60 to 90 days the first however many days somebody is on your mailing list, you send them a series of emails, one every other day, one every third day, whatever you want to do. Those emails are designed just to get somebody familiar with your content and familiar with your products and services. So you might have say 15 emails in your auto responder series 1 every 3 days for 45 days, 7 of those might be sales emails for your product and either those just might be contact emails that teach people how to do things or provide people information that isn’t trying to sell something to them but just trying to help them out and establish a relationship and finally there’s broadcast emails so after someone is done with your auto responder series, don’t need to email them so you make a broad cast count every month and you send a mix of content whether that’s just new blog post, new podcast episodes or more product ads or this content whatever you want to do, you still need to send out. You need to keep email in people that are done with your auto responder series because if you stop emailing somebody, then they’re just going to forget about you and forget that they opted and did it in the first place.
Mike [22:29]: Now, one of the things that you just brought up there is that during the auto responders, not every email is essentially a sales emails. You’re not always pitching them a product. Can you talk a little bit about the contrast between establishing a balance of engagement versus generated revenue because obviously there are certain types of emails that are designed to engaged the user and essentially provide value to them and then there’s others that you send them that you’re essentially giving them a sales pitch, you want them to buy something from.
Matthew Paulson [22:57]: Yeah, it’s a lot like somebody that’s a fan of a podcast, person listening to the podcast thinks they have a relationship with the host of the podcast even though they don’t just because you hear them all the time, the same is true for email list. If I’m sending you email all the time and you’re reading it, like I might think that I have a relationship with Kathleen because I get her email all the time even though we’ve never meet. So, you have to think about it like you’re starting a relationship with somebody. You can’t just sell them all the time where you’re going to make them mad at you and they’ll go away and unsubscribe or report your messages and spam, you can’t do that all the time. So you really need to have a mix of content that is relevant to your audience or a stuff that’s entertaining, educational, helpful and stuff that generates revenue as well because that’s the point of being the business. So, a good balance I think is ever other or some people are more conservative than that they might do two content email for every sales email or and it kind of depends on the makeup of your mailing list.
Mike [23:48]: Now, in terms of the sales offers themselves, what are the different ways that you can use an email list to generate revenue for the business? What types of products can you offer? Obviously, there’s your own products if you have them, but what are the other ways that people can generate revenue from their list?
Matthew Paulson [24:03]: Sure. Obviously, you sell your own products and then you can sell other people’s products, through affiliate marketing kind of like what Kathleen does with his mailing this. He promotes a lot of other people’s products and gets a large commission check from [?] and lots of other places every month, people can do that. There are some other ways. There are advertising companies and networks and agencies that work with people that have email lists. I work for [?] investing media solutions that’s specific to finance but they will sell our newsletter ads in my newsletter so people will pay or advertisers will pay on a cost-perfect basis to getting them a newsletter. I’ll get revenue from that. They also sell [?] but they rent it so somebody can pay $50 APM or something like that to email my list, and that’s pretty good money if you can get it. That’s kind of the advertising method for the advertising strategy. That’s also on your thank you page, you can place ads called co-registration ads. So if somebody signs up for your mailing list, they might see offers for somebody else’s product and then if they check those, you might get a couple of bucks for whenever somebody checks those and signs up for a product. Co-registration advertising can be a good revenue source that people don’t realize exist that we do about 40 grand a month in [?] and your thank you page is just a very valuable, a place to monetize because somebody is just taking action and then they’re very likely to take another action if you give them an opportunity to take an action. So, if your thank you page says thank you, you should change it and put it in a co-reg ad, an adsense ad or just even try to sell one of your products in your thank you page because people are very willing to take action right after they signed up for your mailing list.
Mike [25:33]: And I think that this an area where people are also very averse to kind of sharing the fruits of their labor in terms of the emails that they’ve acquired but at the same time these are people who – they’re the ones making the decision about whether or not they’re going to sign up for one of these co-registration ads and I think that the other thing that you mentioned which I thought was very interesting was putting advertisements in your own emails to your own list, can you talk a little bit more about it because I think you very briefly mentioned it about sharing your email list itself, but I don’t think that it was probably clear the specifics of what that really means?
Matthew Paulson [26:06]: Yeah, so you don’t ever give out your email address or your email list to anybody else, that’s a big no, no, but what you can do is talk to an advertiser and say, “Hey, what’s an email from our list for what your product for the set amount of money. They might want to email 100,000 people they’ll pay $50 APM, that’s 5 grand they would pay me to send the email out. I usually work with an advertising agency that sells out stuff for us so I don’t have to really worry about it too much but it can be a good money when the advertisers are available and in season and that kind of stuff. Newsletter ads, that’s also I think the same agency but those are typically done on a cost perfect basis, so there are other financial publishers that people start talking on financial products that have ads they want to get eyeballs for they all put that in my newsletter and they’ll pay me a dollar or two for a products just to get somebody to go to their landing page. So much of that though is you worry about handling over your email to somebody else and a lot of that depends on the industry that you’re in, in the financial industry, people sign up for a lot of different crap. So I don’t care if somebody signs up for my stuff and then I get them to sign of two other stuff. If you’re a co-reg ad or through an email ad or anything like that but if you’re Ruben and you have got BidSketch, you’re only going to use BidSketch or you’re going to use somebody else. So in that case, you probably don’t want to do that, so it just kind of depends on what industry you’re in and if it’s a zero some game or not.
Mike [27:20]: Interesting, so let’s talk a little more about after the person has made a purchase from you. So you generated revenue of some kind from a specifically through these direct product sales or through the affiliate marketing or co-reg ads or the newsletter ads or anything like that, but after somebody has actually purchased a product from you, what sorts of things you do? How do you interact with them after you’ve made the sale? Because I’ve purchased products from people before where I’m getting all this email marketing and then I make a purchase and then I never hear from them again. What are the best practices with that?
Matthew Paulson [27:52]: Yeah, some of it depends on your business model. If you have a SAS app, you need to get them to keep buying every single month or every year. So you have a strong incentive for them to keep using your service array of program or whatever it is. After somebody buys, you should have some kind of consider an event in your marketing automation system and then you have a sequence that goes after that that really helps people use your products or you should remind them that they bought the product, remind them what’s your name, give them the link to go access it, just have two or three weeks’ worth of content that shows them how to use a product, how to get the best value out of it, all of that kind of stuff so that people will actually use your product because if they used their product, then they are more likely to buy a stuff from you in the future. If it’s a SAS app, they’re more likely to go up. The goal is to get people to engage with your product and actually use them because people that buys something and never use it which happens a lot more than you think, they’re going to bounce and they’re going to be somewhere else and never think about you again.
Mike [28:42]: So let’s circle back a little bit. We’ve talked to about how to choose an email service provider and collecting the emails and using lead magnets and then generated revenue from these people and kind of what to do after you’ve made the sale to them but what about the sales funnel itself, so there’s always different pieces that you kind of string together. How do you look at this from the kind of global standpoint. You’ve got this top level view and you want to say, “Okay. Over here we’re going to do this. Over there, we’re going to do that.” Are there any general strategies you have for kind of mapping out what this looks like? In the past I’ve used graph papering, you draw little boxes and point little arrows to different things. But are there other strategies you’ve used or seen people use that could help with this?
Matthew Paulson [29:22]: Yeah, I mean you really have to start what’s the end goal that I want people to buy my product? Do I want them to do who knows what and then you work backwards from there. So what needs to happen for people to want to buy my product, they have to become familiar with it, they have to learn about it, they have to understand why it’s better than anyone else and here I’ve done all these steps and then you have to convert them into an email sequence of some kind. You can do pen and paper like you do with graph paper or you can use [?] to make some fancy parts. Some ESPs has some of that stuff. I just work it out on the Word document of what kind of emails I need to send. I figure out okay, what’s in a welcome email that leads to this? What needs to happen in the auto responder series? Let’s say they get to the end of the auto responder series and then they don’t buy then, what do I need to do in my broadcast emails every month to try to get them to buy after that fact? So, it’s more about knowing the steps and less about knowing the specific emails right away. You have the steps and then you try to figure out how do those steps translates into the specific emails that will help people get down to fact?
Mike [30:20]: I find it interesting that you use a Word document because for me I’m much more of a visual person so having kind of like I said a graph paper map kind of helps me with that, is that depending upon the type of person that you are or is it just are there certain techniques that you think work better?
Matthew Paulson [30:34]: Yeah, I’m a pretty left-brain person. So I think it’s just how I think about things and how things connect together in my mind. For me, that’s how I do an auto responder series and then a broadcast team around, I print out a monthly calendar on paper and then just kind of fill in what emails I think I should send and what they so that it’s based on appropriately and there’s a good mix of everything but there’s not a whole lot that goes in. It’s not as complicated of a process as it might seem.
Mike [31:01]: It’s not that it’s complicated, there’s a lot of steps though, at least there can be and I think that that’s where people get hung up is, “Oh, I have all this work to do.” And then they just don’t it.
Matthew Paulson [31:09]: Yes, that does happen, because I think people will expect results from email marketing right away or results from email marketing right away and then they look at all of the stuff they have to do and then they get overwhelmed by it and just don’t do it.
Mike [31:20]: With the email marketing, it’s not just one or two emails that you need to send, I mean there are cases where you need to send 15 or 20 or 30 emails before you convert somebody to a custody, right?
Matthew Paulson [31:28]: Well, absolutely, I’ve got people that subscribed my free newsletter for two years before they finally upgrade whenever we sent out like a sale email. It can take a long time for somebody to finally get a sign that they want to buy you product.
Mike [31:39]: And maybe that’s part of the hesitation for some people to kind of invest in this is a channel because they look at that and they say, “Well, I sent out three or four emails and I only get a handful of sales.” So, email marketing isn’t working and they kind of [crosstalk]
Matthew Paulson [31:52]: Yeah, it’s a ramp, I mean it takes a long time to build up a list and to start figuring out how to actually make emails at sales because we print opt-in form in your website, you get 1,000 emails for a month even which would be good for a lot of people. At first month you only have a 1,000 people to email and that’s not a very big list to generate sales from because if you think, if I get open rates of 20% that means 200 people open an email and out of that, if 5%, buy it, 5% buy the thing. That’s maybe 10 sales I will get in the first month and that’s probably optimistic even, but once you get down to 2, 3, 4, 5, when you get 2,000 emails next month, 3,000 on your list for third month and so on down the line, then it only starts to get bigger and you start to get more results as it grows over time.
Mike [32:37]: So it’s more about the iteration process and the incremental improvements or the month over month improvements that you’re getting from it?
Matthew Paulson [32:44]: Yeah, I mean my first month that I did the freemium newsletter, I sold maybe 10 premium subscriptions. So I made $1500 that first month then I made nothing for like the next two months because I didn’t send out any emails to promote the product, so it was not just a matter of time to learn and try stuff and see how it works and not to list grow. The results aren’t going to happen overnight but 2 or 3 years down the line, the results are going to be probably a lot bigger than you could imagine right now.
Mike [33:08]: Well, this has been great so far. Where can people find out more about the book that you’re writing called Email Marketing Demystified?
Matthew Paulson [33:14]: Yup, so the book is going to come out October 1st, 2015. It will be available in Kendo, Paperback, and AudioBook formats. It will be in Kendo version for the first week, so if you want to be notified about that, I’ll go to my myemailmarketingbook.com, again that’s myemailmarketingbook.com. Type in your email and I’ll send you an email when the comes out and you can get a free copy. And if you want to follow me on Twitter, my user ID is MathewDP and you can follow my personal blog at mattpaulson.com and Paulson is P-A-U-L-S-O-N.
Mike [33:43]: Or if you got a chance to go to MicroConf, you’ve been attending to get MicroConf.
Matthew Paulson [33:46]: Yeah, so I went to MicroConf for this year in Vegas. I had a great time. I’m going to go back next year. I’m going to try to do an attendee talk so if you guys see that in the voting, actually vote for it if you’re going to come to MicroConf this year, I did one last year but nobody voted for it so we’ll hope I get in next year.
Mike [34:00]: Okay. Well, great. I just wanted to say thanks for coming on the show.
Matthew Paulson [34:04]: Thanks, Mike.
Mike [34:05]: If you have a question for us, you can call it into our voicemail number at 1-888-801-9690 or email us to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Out of Control by Moot used under creative commons. Subscribe to us on iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 250 | 10 Ways to Use Engineering as Marketing
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about 10 ways to use engineering as marketing. They define engineering as marketing and discuss how it can help generate awareness of your company and product.
Items mentioned in this episode:
- The 8020 Manager Book
- MailChimp
- SumoMe
- Bounce Exchange
- speed.wpengine.com
- Hubspot’s Marketing Grader
- Pingdom
- DontTrack.US
- DuckDuckGo
- Baremetrics
- DotNetInvoice
- Dropbox
- Kissmetrics
- Drip
- Bingo Card Creator
- Tractionbook.com
- Themakerscrew.com
Trancript
Mike [00:00]: In this episode of Startups For The Rest Of Us, Rob and I are going to be talking about 10 ways you can use engineering as marketing. This is Startups For The Rest Of Us episode 250.
Mike [00:16]: Welcome to Startups For the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at launching software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
Rob [00:24]: And I’m Rob.
Mike [00:25]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, Rob?
Rob [00:29]: Well, this is my last episode for a few weeks because when this comes out I’ll be in the middle of France or Spain. I’m taking a month with the family and going to Europe before MicroConf Europe in Barcelona in a couple of weeks.
Mike [00:42]: Very cool. Yeah, we’ll have a couple of Gaston for a few weeks until you return but the show must go on and on that note, we are on episode 250. So, I just wanted to say thanks to everybody who’s been listening to the podcast, been going on for around five years now. I think we had the five year anniversary a couple of months ago but 250 episodes is a pretty big milestone so I just wanted to say thanks to everybody.
Rob [01:02]: Yeah, it is indeed. Our five year anniversary was a few months ago but in early days we didn’t put out a weekly show. Yeah, it’s been good to be on there all this time. The other thing I wanted to mention is we have kind of a secret drip project going on. We’re in the midst of the biggest single feature edition that we’ve added since automation last year and automation if you recall was the big game changer that allowed us to pivot from email marketing and the marketing automation. And so, I don’t know that I’m going to be as lame as to say. That was Drip 2.0 and this is Drip 3.0 but it’s cool to embark upon this and sometime in the next month, I think we’ll have a pretty big announcement so stay tune on the podcast for me to talk about it or you can obviously go to [getrip.com?] send it for the mailing list if you’re interested in hearing about what we’re up to. The only other thing I wanted to mention is I just finished up a book called the 8020 Manager and I don’t tend to listen to a lot of management books just because that’s not necessarily something that I want to dive too far into. But, I like books that talk about 8020 even if it’s a little overly used but they talk about how to find kind of a maybe a core competitive advantage or a thing that you can focus on in yourself that will allow you to do things better, and that’s what I like about this is that it wasn’t all about being a manager. There were things about being a leader and there were things just about performing better in your job, in your company. So even if you’re not really managing people, there were some good and interesting suggestions in this book for how to key in on are you a really good networker, do you have a lot of people that know that can trust you then use that as your advantage. Are you really good at like researching, digging things out, then use that as your advantage. And if I recall there’s maybe 10 of them, 10 different suggestions and the author says, don’t try to do all 10, pick one that for you is going to be your 8020 because it’s not going to be for everyone. And then he said master that one, raise your game, and then pick another one. So, I found myself taking a lot of notes as I listen to this book which is typically a sign that I’m getting a lot out of it and so I wanted to mention it here in case folks haven’t heard about it, 8020 manager.
So what are we talking about today?
Mike [03:07]: Well, today we’re going to be talking about 10 different ways you can use engineering as marketing. So let’s talk a little bit about what engineering as marketing is and the purpose of engineering as marketing is to help generate awareness of your company and products and it’s also a way to provide incoming leads. So the basic idea is that you create or build something that you’re going to put out there and you’re going to do some marketing efforts on it to drive people to the tool or website that you’re building and you’re going to get them to use it because it’s going to be applicable and valuable to them. Now, it’s probably not something that you’re going to charge them for, it could be something that’s a bit of a strip down version of something you already offer or just a click little utility that somebody may find some value in but the basic idea is that you build something that it has some peripheral focus around your product. So, we’re going to talk about 10 different ideas that you can leverage to using your marketing efforts to help drive people to your products. So to startup with, the first question that you can ask yourself is, is there a competitive advantage that I have over my competition that I can highlight? What you want to do is you want to find something that your product offers that your competitors either don’t or simply don’t measure up to and then find a way to be able to highlight that to your perspective customers. And the examples I have for that is WP Engine Speed Test. When WP Engine came out with their WordPress hosting, one of the key advantages that they really focused in on was speed and being able to make WordPress faster. So, what they did was they built the speed test application where you could go, you could plug in your website and you go over the speed.wpnengine.com and you can see this example. But you plug that in and it will tell you how fast your website is. And what that does is it essentially helps to highlight how fast your current hosting is versus what they offer. And the basic idea is very simple, it’s very straightforward. They want to show that they are faster than their competition and by focusing in on at speed, they’re also able to highlight other pieces of information that might be relevant to you such as if your website is slow by X seconds, then you’re going to lose Y percentage of people to your website because they’re just going to say oh, this is too slow and they’re going to leave.
Now, in the case of WP Engine, by making your website faster, they’re actually helping you to attract customers and to keep those customers on your site rather than they click through Google, your website kind of hangs because it’s WordPress and it just happens to be slow on whatever current host you have and they say, “Oh, heck with this. I’m going to go back. I’m going to go someplace else.” And what WP Engine is able to do is capitalize on that fact and help you to gather more customers.
Rob [05:42]: And I think there are a lot of opportunities here to figure out if your unique selling proposition really is that you are faster or that you do things better than other people, then getting this free tool out there. Basically, you don’t just build a tool, you allow someone to enter their URL and then you ask for an email address so they can get the results. And I’ve seen this done like you said with WP Engine, Ruben did this with BidSketch where you enter your email and you get like a personalized proposal. And so he’s basically trying to show that their proposals, how nice they actually look and how simple it is and that’s the kind of thing you could customize. If you were on SEO company, I mean you could crawl someone’s website looking for broken links so you could crawl it and just look for SEO improvement opportunities, some things that are kind of low-hanging fruit. There’s a lot of ways to think about building a tool that really kind of captures your competitive advantage and I think if you sit down and give a little thought and you have some engineering bend with, you can put some together.
Mike [06:40]: The second way is to look at your product and see if there’s a free version of a report from your product that you could offer in exchange for an email address and that email addresses will essentially help get somebody into your sales [?]. But an example of this is something like HubSpot’s marketing creater and you can go to marketingcreater.com where you’ll be able to put in your website and they will give you a grade for your website based on all of the internal algorithms that they have and they’ll analyze it and essentially email you a report that shows you what your current marketing efforts look like and maybe some places where you can improve. Now, that doesn’t mean that they need to give you the entire report, they could give you let’s say the top three or top five different things in each of those categories. And oh, by the way, if you want to get all of these different things that you could be doing better, sign up for our service we’ll be able to give you all this stuff on a regular basis. We’ll give you daily reports, et cetera. But essentially, it’s used as an upsell opportunity to get somebody into your sales funnel and then be able to market to them on an ongoing basis and convince them to use your full-fledged product.
Rob [07:40]: Yeah, I actually have several points in my idea notebooks where I’ve gone through this exact exercise for several of my products including DotNetInvoice and the HitTail and Drip and I always find it fun to kind of think of what is something that someone would A like to see about their website but also potentially be like to share about their website, right, or about their business because just getting them to view it as one thing, and that’s cool, but if you have a Twit button or a like button there, and there is even a little bit of a viral thing of like, “Hey, these are metrics. What are your type of thing?” There’s another element there of marketing where you’re not just getting that one person but potentially getting them to share it to. And if you know your product pretty well and you know the most popular reports, it’s not too hard to realize which of these is probably going to be the most popular if there are any that are applicable.
Mike [8:32]: The third option is to see if you can show a demo of your product capabilities. So, if you go over to Pingdom’s website speed test for example, you can go to tools.pingdom.com and there’s a textbox there where you can just enter in the URL for a website and it will go through and it will do a complete speed test on that. Now you can use that for a variety of ways as an end-user but what Pingdom is trying to do is show you that hey, by the way, we can do these things for you and we can help you and drill in and analyze all the different ways that your website is slow, we can alert you when it starts to get slow and help you to make sure that your website is as fast as possible. Now, this is a little bit more generic than WP Engine Speed Test where that was specifically for WordPress hosting versus Pingdom’s options which is primarily intended for any type of webhost.
Rob [09:16]: Another interesting example of this exact thing I’m showing a demo of your product, I’ve seen some SAS apps that have an actual visual piece, maybe let’s say Drips that will opt-in widget where you can enter on a form, you can enter your website and the site reloads with your site in an eye frame and they’ll actually show you what your website is going to look like with that opt-in form down in a lower right or with the light box covering it or whatever. And so it’s a nice way to get someone just one more step involved, and this actually doesn’t require an email opt-in for that one. It’s just a tool to get someone to maybe enter their URL so that you could certainly reach out to someone later if you wanted, but I’ve always liked that idea of kind of showing them how it might feel to be using your product just to get them one step closer. I mean I think realtors, when they’re showing houses, they know that folks are thinking about making an offer when they start to imagine themselves in the house and maybe even start talking between spouses about, “Hey, would the couch go here? Would the table go there?” You start to get the mindset of, “Hey, we could actually be here.” And I think that’s a similar thing. It’s like showing a demo of you using your product and giving you actionable information about your own website, your own business because more value than just talking in generalities like we typically do on marketing websites.
Mike [10:32]: It’s kind of like showing the benefits without forcing the commitment.
Rob [10:35]: That’s right. And it’s reshowing not telling, because you can tell the benefits that my product will bring your more traffic and it will blah, blah, blah. But when you actually show them on their own website, there’s just more value there.
Mike [10:46]: The fourth idea for engineering as marketing is to advertise your product through your own customers, and I think that there’s a really creative way that Rob has actually done this through Drip and they get Drip which is that he put “Powered by Drip” at the bottom of the different email captures and there’s a pricing tier where you can remove that particular branding but I think that it’s very effective and I’ve heard from other people that doing similar things on various website widgets is extremely effective for gathering new customers because anyone who goes and takes a look at that is going to see that powered by logo. So, if they see that and they are interested in any way, shape, or form in doing that kind of thing and capturing that information, they’re probably going to click through that and also take a look at the product that’s behind it.
Rob [11:28]: Right. And there’s a bunch of companies that do this; Olark does it, SumoMe does it, Bounce Exchange. I mean this is a pretty common thing for folks who have any type of UI widget I think Hellobar does it as well. And to be honest, I was at MicroConf a couple of years ago, it was two or three years ago right as Derek and I were building Drip, and Heaton Shaw mentioned this specifically that if you have a visual component, you should mention and have it powered by and I ran back to Derek and said, “Oh man, you’ve been noting this down?” Because I was making notes, and he’s like, “I’m quoting this up already.” Like we were adding it as a conversation because we knew this was a no-brainer to do. And the other thing that I recently did is actually, originally we were the powered by link straight through to the homepage of Drip, but I realized that people clicking on it didn’t want a homepage. They really should get a specific landing page. So if you haven’t clicked on that powered by link in a while, I recommend you click it and kind of see what we did there with the copyrighting and how we couch the landing page and how we approached trying to link up with eth mindset of the person reading it.
Mike [12:26]: The fifth idea is it’s sort of a variation on this but it’s essentially embedding your company name or URL on different reports that come out of the product, and obviously you want to offer a pricing tier of some kind that allows removing this, but this is especially helpful in situations where people are using your products on behalf of their customers. So any product that serves agencies and spits out reports on behalf or their customers, it would be really good to be putting that type of information directly into the product. I’ve seen a bunch of downloadable applications that do this as well. So, when they dump things out to PDF, they embed their own company logo onto those reports and oh if you want the professional version of this product which will cost you an extra $200 or $500 more, then we’ll remove all of that branding from those reports.
Rob [13:10]: And you can see MailChimp does this not with reports but with the actual emails they send. If you’re on their free tier, there’s a little badge at the bottom, that’s a MailChimp badge. I think if you’re sending out any types of emails on your customer’s behalf and you have a free tier or a very, very low-priced like a cheap-mium tier, as [Dormesh?] calls it, where you’re basically charging your cost for the tier, I think that you should have some type of badge or link back or something in emails that are sent out on customer behalf in any type of visual UI component. And as you said, to offer pricing to your folks that want to remove it.
Mike [13:45]: The sixth way to use a microsite and I like microsites because they’re used for telling a story and it allows you to create essentially a marketing angle that for a current new story that might even be publicized or just a general feeling about that people are kind of going through and the example is that if you go over to DontTrack.US, you’ll see that DuckDuckGo has created a microsite that talks about tracking for website searches and they go through essentially what has become a giant privacy issue based on the US governments tracking of all internet communications and intercepting phone calls and things like that. So, they’ve essentially capitalized on this idea that hey, the privacy and security for just something as simple as website searches is important, so let’s create a website, we’ll talk about that particular story and then at the bottom they talk about not just DuckDuckGo but a couple of other sites that they have that kind of revolve around the same type of story but obviously, in this particular case, DuckDuckGo is kind of founded on the principle of hey, we don’t track you and we don’t store information about the people who are searching through our search engine. So it’s extremely relevant to create a microsite around that particular story and publicize that.
The seventh idea is for using a public demo and I think that most SAS applications are going to have probably some sort of a public demo available but the problem with public demos is you don’t necessarily have data to go into them and I like if you go over to demo.baremetrics.com, you’ll see that Baremetrics put together a demo that shows a completely working system and it included their own live data in that. So, this kind of combines two different things. One is the marketing angle of leveraging public transparency but it also shows real live data that’s going into the system and you can see that stuff track overtime and how it changes from day-to-day. And I think some of the issues that some people run into with a public demo of some kind is that demo, the data inside of it tends to be relatively static and maybe it gets refreshed once in a while but it doesn’t change overtime and if you go in today, and then you go in three months from now, that data is largely going to be the same. So it can look pretty barren unless somebody went through a lot of time and effort to make it look like a real functional application that somebody was in the middle of using.
Rob [15:57]: Yeah. I think we’ve largely moved away from the idea of kind of public demos or places where you can click on a demo version and see it all populated and we move more towards these free trial models, that I mean that’s kind of how SAS is done these days. But I think there is still room for public demos in certain spaces. I think that if it takes a lot of time to set anything up, like if the onboarding really is intense and it’s complicated, that I think seeing your app full-fledged working in the flesh can be helpful. Now, there’s also a drawback to it. If your app is so complicated that it’s hard to set up, it might be so complicated that you’re just overwhelmed when you log in and that’s not a good thing. But I also think that if you have any type of downloadable product certainly like a one-time sale piece of software like Perch or DotNetInvoice, then I think having some type of demo to at least be able to click around and feel how it feels, screenshots are good but I think that demo can help especially if you do ask for an email address before people can really click through and try it, you’re going to get the folks who are really interested in entering real emails and you’re going to get the ones who just kind of want to want to poke around. They tend to enter fake email address just do to it, so there’s certainly the roof of it and I think that with Baremetrics, they’re really good example because there are reporting tools. And so having reports that you can see really easily, and kind of explore the product is kind of a no-brainer because even if they just want to hook up to your data, it’s still interesting and relevant to see someone’s data in there and to see all the reports put together. It’s a little harder if you have an app that’s a backend cred app that’s supposed to taking a bunch of data and do stuff with it, and if it’s not catered to your specific data, I’d say it’s less interesting.
Mike [17:32]: The eight idea for engineering as marketing is to implement a referral program of some kind, and you can do this on a variety of ways but the basic idea is that customers who refer other customers get a bonus of some kind inside of the application and I think a primary example that most of us are probably familiar with is DropBox, and if you sign up for DropBox, you’ll get a certain amount of extra free space for inviting or referring other people to use the product. And in addition, that person also gets that free space as well. There should be a cap on it of some kind because you don’t want people running around in inviting everyone under the sun and they get basically the world handed to them for free, but at the same time, you want to be able to use some sort of a viral component to that to get people to share it amongst their friends especially if they’re getting value out of it. And in the case of DropBox, the value of DropBox is pretty evident when you sign up for it and people are encouraged to go out and ask their friends, hey, do you want to sign up for this? This is really awesome. We can both get a benefit if you sign up. I think affiliates kind of fall under this umbrella as well but not as much.
Rob [18:34]: Yeah, and this is less about engineering as marketing and more of a virality I think which is fine but I think anything that contribute to your virality kind of like the “powered by” logo is pretty powerful. Building up a network of affiliates and a referral network, and a referral program actually takes quite a bit of work to do and to manage it properly. I think you really have to have someone that people are stoked to share. But obviously, with something like DropBox which was a kind of a new product and like you said they gave both people the bonus, I think that can work. But I think their numbers also were, they’re B2C product when they started and so, B2C is going to have a better luck with this kind of stuff. I’m not saying it doesn’t B2B but it takes a little bit of I think a longer term to do it and I just think that the viral coefficient is going to be a lot less than when it’s B2C.
Mike [19:24]: The ninth way to use engineering as marketing is to leverage some sort of daily report email and show progress towards the goal and the daily e-report emails can show that progress but the core piece of this is showing progress towards whatever the goal is and for different applications, they’re going to have different goals. So for example, with Kissmetrics, you can get a daily email that shows you some of your KPIS with codeschool.com, you can get a report card that shows you how far along you are in inside of the school and showing you what sort of progress you’ve made. Anything where you’re showing progress towards that goal is something that you’re going to want to be able to highlight to people and use that engineering effort to say, “Hey, you’re making progress towards this goal. Don’t quit now.” And you can go in and implement additional things that look at that and analyze to figure out are they slowing their progress down, or they’re not making as much, are there ways that you can essentially draw them back into the application to help them move forward.
Rob [20:17]: Yeah, I think daily or weekly reports are powerful when like you said with the Kissmetrics I’ve seen perfect audience to a really good job of this. Some of these emails that I get are really irritating and I don’t actually care. To be honest, one that it’s not irritating but I never look at it it’s the one from [?] I just don’t care about the activity. I use it as a tool and I have no interest in it and I should probably just unsubscribe from it but I haven’t yet. Whereas something like Kissmetrics or email marketing software or Perfect Audience which is ads, that type of platform to me it’s a no-brainer and this is in our feature list we trip to actually build one of this but I think having a daily or a weekly report is a really key part of keeping your customers engaged.
Mike [20:58]: And the 10th idea for using engineering as marketing is to essentially leverage the content from your application for SEO, and primary example of this is bingo card creator has a ton of automatically generated webpages that are based on different bingo cards that were created for the application and some of these bingo cards are for either holidays or animals, bingo card creators designed to create bingo cards and from those there were all these different webpages that can be generated to essentially help fill out the website and the larger the footprint for your website, the higher the likelihood is that you’re going to start ranking for some of these very obscure search terms especially if you engineer it in such a way that you’re doing all the right things in terms of the H1 tags and the titles and all the different meta tags that go with it or the URLs, I mean there’s a lot of different things that factor into that. But most of that can be automatically generated especially if you have a large base of content that you can generate it from.
Rob [21:55]: And Bret Palombo also did this with distress pro, and I’ve heard of a few other folks doing it as well. Oh, Zapier, that’s the other one I was trying to think of. They did a good job with kind of linking up all of the things they integrate with. And so if you search for [linktrelo?] with Gmail for the longest time, Zapier will rank number one for that, I don’t know if they still do because they link them and they figure out how to create enough content to link all 150 of their incoming with all 150 of their outgoing. When you do that multiplication, that’s a lot of pages that they spit out and they kind of cover the nice surface area in Google. So, this is definitely something to think about and this is something that you had done I think about a year ago with AuditShark as well. How did that turn out?
Mike [22:36]: It went pretty well. The initial uptake on the traffic was pretty good and then it leveled off pretty quickly and it bounces a lot. It depends a little bit on how much Google is kind of searching around and finding pages that are not relevant for some of those long tail search terms but they are extremely long and most of the pages maybe only get like a couple of visits a month, but at the same time, I mean it does amount to thousands of visits every month because I’ve got I think well over 1,000 pages that are created for that.
Rob [23:06]: And it probably fairly targeted since they’re searching for such a specific thing.
Mike [23:10]: It is, but the problem is that they are searching for that specific thing and they’re not necessarily looking for a product to solve that particular problem. They’re looking more for information about what that thing does. So it’s not quite as targeted as I would like or at least I kind of found that out after the fact it does draw in traffic but not nearly as targeted as I would like, I mean those pages are definitely lower converting the most for the rest of the site but I think that your mileage in that particular situation is going to vary based on what type of information it is that you have.
Rob [23:39]: Right. So for some closing thoughts on this, obviously, it’s reasonable to ask for an email address and email people the results of most of these things. If you let them use the tool and you don’t get an email address in front of that, you’re losing a lot of value especially if you can get it into a system where you can actually tag them as the fact that they did the specific thing and not just dump them into a random list or dump them into a list of people who have used this tool but actually have them in a big bucket and just being able to tag, then you can see who are the people who have never visited, who’ve done this, and who were the people who are already trials and customers who are using and then kind of exclude them from that. It can really see your metrics really well, and then you can engage obviously just the people who have never use their tool that a lot differently than you would if the folks are already familiar with your tool.
Mike [24:24]: And we’re going to link it up in the show notes but there’s a couple of links that you might want to take a look at for additional examples of how people are using engineering as marketing. One of them is over at discuss.tractionbook.com and the other one is over at themarkerscrew.com and they both talk a little bit about engineering as marketing and have some examples there that are a little bit beyond what we talked about here. Some of them are I’ll say are a little bit less relevant in our particular space so they talk about Facebook and Twitter and some companies like that how they were leveraging some engineering as marketing but you still might find it useful and you might be able to pick some ideas out of there.
Rob [24:55]: If you have a question for us, call our voicemail number at 888-801-9690 or email us to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Out of Control by Moot used under creative commons. Subscribe to us on iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening. We’ll see you next time.
Episode 249 | Finding Your Competitors’ Customers, Pre-validating a WordPress Plugin, How to Hire a CTO, and More Listener Questions
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about finding your competitors’ customers, pre-validating a WordPress plugin, how to hire a CTO, and they answer more listener questions.
Items mentioned in this episode:
- Restaurant Engine
- MicroConf Europe
- Appear.in
- Endo Creative
- SendOwl
- Easy Digital Downloads
- BuiltWith
- Datanyze
- GroupAgree
Transcript
Rob [00:00]: In this episode of Startups For The Rest Of Us, Mike and I talk about finding your competitors’ customers, pre-validating a WordPress plugin, how to hire a CTO, and we answer more listener questions. This is Startups For The Rest Of Us episode 249.
Rob [00:23]: Welcome to Startups For the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at launching software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Rob.
Mike [00:31]: And I’m Mike.
Rob [00:32]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week sir?
Mike [00:36]: Well, we’re ready to announce the final two MicrConf Europe speakers. We’re going to have Brian Castle, the former owner of Restaurant Engine and he’s off working on Audience Opposite at this point, and we’re also going to have Justin Jackson who is in the midst of writing of a book on Marketing for developers. He’s the podcaster behind Products People and Behind Build and Launch. So it would be great to see those guys. I think both of them were on the stage over in MicroConf Vegas so it’ll be great to see what other things they come up with.
Rob [01:04]: That’s right, yup. Some more folks who have made the lead from coming and doing an attendee talk at MicroConf and stepping onto the main stage. So, we’re looking forward to hearing from those guys. Yeah, we’ve been getting a lot of really interesting listener comments on the podcast blogs so it’s at startupsfortherestofus.com and folks are commenting on individual episodes. We have a comment from Mathew on Episode 243 where we discussed the tools that we used to run our startups and we mentioned Skype and Mathew commented, he said, “We switched from Skype to Appear.in which seamlessly integrates into Slack. You can start new video chat by typing /appear and then a roomname. It also makes sharing screens easier and we can have multiple people on the same call. We’ve also started using Appear.in. It is nice that it integrates with Slack. It’s also HTML5 so it just goes right in your browser. You don’t need to download a [?] or anything. The drawbacks that I found to it are A, none of us can get it to work in Chrome. There’s no audio to it and I’ve emailed back and forth and done run diagnostics and all types of stuff with the Appear.in guys and it just won’t pick up any of our audio even though our audio works with whatever approaching that we use. In addition, Appear seem to, I don’t know if it’s an HTML5 where it renders in the browser or whatever, but it just hammers through processors, processing cycles. So, you run away like my pancakes on as soon as we started chat and it makes all of my internet browsing really slow. So if you’re going to try to browse and talk, it’s kind of tough. I have like almost like a brand new MacBook Air with a nice processor and everything. So, I like it for quick chats but it we’re going to do anything more involved, we turn to switch over to Hangouts or Skype.
Then we had a comment in episode 244 which is where we interviewed Josh Pigford and we talked about a number of things in that episode but one of them was transparency and Simon from [Small Farm Central?], he says, “I like the idea of “point in time transparency” rather than this level of sharing that only seems to help competitors. If the story of your business is important and you are targeting people who would care about revenue, then this point in time really makes sense because it allows you to craft a story and release only the metrics that are important for the story, rather than baring everything to the world.” So, I enjoyed that comment from Simon and it was kind of a summary there were a lot of folks who Twitted and emailed about kind of the discussion about transparence in that episode so I appreciated it. And the last one was on episode 247 where we talked about whether you should focus on people versus process and Jeremy Green posted and he said, “I just gave a presentation at WordCamp Boston on this very subject. It’s at http://www.endocreative.com.” And we’ll link it up on the show notes. He says, “In creative work, the most important thing is to have a process in place for the tasks that are the same for every project. That leaves you more energy and brain power to focus on the creative side of the project.”
So thanks everyone for your comments. There are more there than we can obviously read but I wanted to call at a few of those because they seem to really kind of hit the nail on the head and add something to the conversation.
So today, we’re answering a number of listener question. We have a pretty nice backlog right now. So, I had to call through those and pull out the best that I could find. The first one is about which niche should I focus on first and it’s Hylton from GroupAgree. And in that, I’m going to summarize because the email is further long and so Hylton is working a GroupAgree which he summarizes as a drama-free group decision making. And he says is that during his alpha, he’s found that his users identified a number of different context for making surveys. And so I’ll start to read his emails from here. He says, “Casual, such as what movie should be see, what restaurant should we go to, what game should we play at our land party. And then the second one is academic, what should our book club read, when should I reschedule my class so most students can make it and what should the topic be for our final project. And the third is business. How should we prioritize our customer’s feature request, when should we meet with the client, what should we do for our offices at summer activity.” In Hylton’s words, he says, “My question is this, with a product so broadly applicable that my users have successfully taken it lots of different directions, how do we identify which of these three niches to focus on first? This may sound like a good problem to have but it’s definitely stressful because it will define the direction by initial marketing campaign and I’m worried that choosing incorrectly now will send me back for to six months.” What do you think about this Mike?
Mike [05:07]: Well, I think even those three different niches that he identified. To me, it seems pretty obvious as to which one to go after and the three options were casual, academic, or business. And to me, I would go for the business because they are much more likely to pay you than any of the other ones. Like I could see myself using an app like this with my friends to find out like what restaurant we should go to or what movie we should see but I can’t possibly see myself actually paying for it. And then in terms of academic use, I can definitely see some uses for it but again, I think that it would be difficult to identify places where there’s like a business justification for actually showing out money for it. So to me, it seems obvious that you really need to go to the direction of the businesses because they’re going to be more likely to pay you than any of the other groups.
Rob [05:50]: Yup, I agree. And how to make a statement that having a broad appeal seems like a good problem to have and I disagree, I think it’s the exact opposite. I think having a great appeal is a bad thing early on when you don’t have a ton of money, a ton of staff, and you have to focus. You really want that narrow, narrow focus so that you can get a small group of people in there who just love, love, love using the product and then we’re in town from there and go broad later.
Mike [06:14]: One other thing that comes to mind though about this given the broad appeal in those other spaces, it might be possible to come out with and I wouldn’t do this right away. But down the road, when you kind of have things locked in, come up with something of a free plan or a free model where it’s like free for personal use or casual use only or something like that, it’s definitely not for businesses but to help essentially expand the footprint of the product and get it in people’s mind so that when they go to work and they start seeing places where they could use it, then it almost becomes an upsell opportunity or a lead generation engine for you. Again, I wouldn’t do that upfront because I think that freemium right off the bat is probably going to hurt you a lot more than it’s going to help but it might be something to consider down the road.
Rob [06:57]: So thanks for the question, Hylton. The next one is about licensing and delivering a downloadable product and it’s from Brian Wall. He says, “Hi, Rob and Mike. Thank you for your podcast. I’m a 14-year faithful employee for a software company in Fresno.” Which is funny that I’m never run into Brian. He says, “After all these years, you’ve opened my eyes and inspired me to take the plunge. I’m taking the stair step approach that Rob talks about and my first product will be a downloadable plugin for a product that runs on Windows and Unix servers. I expect it to be fairly low-touch in terms of sales. My question is, how to license and sell a downloadable product like this? Is this a good candidate for something like Gum Road or would you build your own dedicated storefront? I’m not so worried about activation keys but I do need a way to manage licenses, updates, renewals, cancellations, et cetera. What do you recommend?”
Mike [07:40]: This is hard because I don’t think that there’s a good option, but I don’t know as I would go about building my own dedicated storefront. There’s a lot of different options out there that allow you to do payment processing and I think that it feels to me like the underline assumption here is that you’re worried about too many orders coming in and having to process them all, and I don’t know as I would worry about that problem just yet. I would worry about it once you find that you’re getting a lot of updates and renewals and cancellations and things like that. I mean as long as you can issue a license to somebody, it doesn’t really matter. The other things, you’re not going to have such a high volume of them for the first probably 6 months or 12 months and it’s going to be a big deal.
Rob [08:19]: Yup. I would probably do it pretty manual at first, just with a stripe account is what I would start with. And I totally agree with Mike. I would absolutely not build my own storefront. There are a couple of ways to deliver digital products that you might want to migrate to after you’re getting more than, what purchase a week that you’re manually fulfilling. One that I’ve heard a lot of good things about is SendOwl, it’s send, O-W-L, and it’s Gum Road A in the little more at technical folks and I think it has more API stuff. So you might want to take a look at that. It’s a SAS app. The other one is a WordPress plugin. So you’d need a WordPress as your frontend but it’s called Easy Digital Download and I’ve heard a lot of good things about that. It’s written by a WordPress developer named Pippin who sells his own WordPress plugins through it. So if you have a onetime download and you want to manage license keys and annual renewals and all that stuff, it’s kind of baked into that. So if you’re willing to put WordPress as kind of the storefront, I think Easy Digital Downloads is probably what I would go with. But this is a good question, thanks for sending over Brian.
Our next question is about how to find people who are currently using your competitor’s products and it’s from Ryan@builderbuilt.com. He says, “Hey, guys. Great podcast. You continually provide well-thought out actionable content in today’s episode about why people might not switch to your SAS and provide some good tips on how to convince them to make that switch by removing barriers. My question is, how do I actually go about targeting companies who use my competitors’ solution so I can market to them?”
Mike [09:41]: I think there’s a few different ways that you can go about this. The first one is to find where those people are hanging out and talking about the competitors’ products online. And now, if this is on your competitors’ forum, you probably don’t want to overtly go in there and start pitching your own products. It’s not going to work. It’s not going to go over well. And the people who are currently happy with that products are probably not going to take kindly to you going in there and kind of pitching your own products. I would answer questions but I don’t necessarily think that I would say, “Why don’t you try this to solve your particular problem instead of trying to work within that competitors’ solution?” Another option would be to go over to core and see if there are people asking about what types of alternatives there are for specific products. So, if let’s say somebody is using unbalancing, go over to core and start looking around for people who are talking about unbalance and looking, actively looking for people who have offerings that are in an adjacent market or a competitors’ to unbalance because they’re looking to switch. They’ve already kind of made up their mind and they want to move away. Another thing that you can do is you can use SEOs. So, if you have a specific webpage you set up on your website where you talked about those other competitors and present them directly as competitors to your own products, you can essentially create your own story about those things. So, those are a couple of different things that I would think about in terms of ways to get in front of those people and then depending on what your personality is and how much time you have to go about that and the type of products you have, it may makes more sense to do one versus the other.
The last thing I can think of that you might want to do is offer what’s called a competitive upgrade. So if somebody already has the competitors’ products, you can offer them discounts for essentially turning in that products and switching over to yours and you could offer like onboarding [?] services and move to your data over and all kinds of different things. But again, that can be more of an enticement than something that actively convinces them to switch products.
Rob [11:30]: There are two services I know that actually crawl websites and they can actually figure out what stuff is Built With. The first one is called builtwith.com and these are both SAS subscriptions and they’re not cheap but builtwith.com is the service that I know that several of the kind of outbound legion guys use and they’ll say, “Well, my competitor is X, Y, and Z and it’ll give you a list.” Now, Built With crawls certain amount of websites every so often. The second competitor is more expensive but they crawl daily. So they cannot only tell you who’s using what, they can tell you someone started a trial of this yesterday, like they just installed the code. So it’s much more powerful but they are more expensive. That service is called Data Nyze, it’s data, N-Y-Z-E.com, both of those if you’re willing to put down the money are going to be good services to find out who’s using your competitors and for full disclosure, I am a small angel investor in Data Nyze but I have seen and used the interfaces for both of those tools. So thanks for the question Ryan.
Our next question is on validating a WordPress plugin before using and it’s from Dave Bush. He says, “Hey, guys” one of the things he mentioned on our recent episode was to avoid building before you validate a product idea. One of the things I still can’t get my head around is how to validate a WordPress plugin without actually building the free version first. There’s so many WordPress plugins out there, how can you get away with testing your idea for WordPress plugin without actually building an initial free offering?
Mike [12:54]: I think the misconception here is that in order to validate something, you have to go out and specifically talk to people or have a free version available. I think that there’s multiple ways to do can go about validation, and I think the bottom line is that validation is about gathering information and being relatively confident and what’s your analysis of the situation is. So, in this particular case, you sure getting a working prototype built and put it in out there and driving traffic to it and having people go through is going to give you that validation, but at the same time you can also get that validation by looking at what people are already doing today. So, instead of driving people to your own plugin and looking at those download numbers, take a look at the existing download numbers of other plugins that are doing similar things and measure those overtime and it should be fairly simple. You can go into wordpress.org, just take a look at the download numbers and it will tell you flat out like whether somebody’s downloads are increasing overtime or are they decreasing, when the last updates were, all that kind of information. And you can get a sense from that information alone as to whether or not it would be possible to put another plugin that offers similar functionality that it also going to get a some level of attraction from people who are looking for that type of plugin.
Now, it’s not an absolute guarantee but at the same time nothing is. I mean unless you have people giving you credit cards saying, “Hey, take my money,” that’s probably the next best thing that you can get without building something.
Rob [14:19]: I take it a step further. I think that is the initial validation. I would agree that I would poke around and look at what people are talking about, what the download numbers are; with a WordPress plugin, in my opinion, you can’t validate it until you’ve built that free version. WordPress is so much different from SAS and that with SAS you need some customers paying you a decent chunk of money and spending a lot of time validating that upfront is worth it because to build your SAS app might take you a year, I mean tremendous amount of time. It might take you more than that if you’re doing it part-time. Whereas with a WordPress plugin, you can build it yourself at nights and weekends in a month or two months, I mean you can build it full-time to get a kind of a prototype free version out there, probably in a lot less than that, you can hire developer. WordPress plugin developers don’t tend to be that expensive. WordPress plugins are not that complex to maintain. You don’t have to get servers up and running and do dev up stuff and there’s just all the stuff that makes is so much simpler to validate that after I did some initial look at numbers and other downloads, if I knew it was for a specific niche mark and then I knew that it fixed a problem for them, yes, I would reach out to some people I know in that market. But to do cold calling and do the interviewing and the other stuff that you would consider doing if you’re going to do customer development for a SAS app, I don’t think it’s worth it because the WordPress plugins that I see are making in volume, right. They’re doing $20 for a one-time thing or $40 or $50 for a one-time thing.
So going and trying to find 10 people who are willing to pay you for that, I question if you shouldn’t just go and build the thing, get it out there fast. And now, if you’re trying to build some super exotic that WordPress plugin is going to sell for $1,000 license, then yes. Now we’re talking about enough of a lifetime value where it’s worth really doing a bunch of upfront research. But if you’re sitting there, trying to think about how to validate something that you’re going to sell for 30 bucks one-time, I would say just go do it like go build the thing, go hire somebody to build the thing. Get it in the store, you’re going to learn so much by doing that and it’s really not that big of a risk compared to actually building a full-fledged app.
Mike [16:17]: And I think that’s the key point here which is the risk versus reward versus the investment that you’re taking and if it doesn’t take you very long to do it, you may as well just do it. I mean if you were going to build a plugin that literally only took you two or three days to build, would you go out and do the customer development? And the answer is no, why not? And the answer because, well, it’s going to take you more than two or three days to do the customer development. You may as well just build it and see if you can sell it at that point because your investment is so incredibly small.
Rob [16:42]: Right. I feel like this ties in to Dan Norris’s idea of the 7-day startup of if it’s going to take you less than 7 days to build the thing, then just go build it. I would say seven days collectively like if you would work let’s say 10-12 hours a day for 7 days, so what is that? Maybe 80 hours, if you can build it in less than that, even if you don’t have the 7 days and you have to do it 80 hours nights and weekends for the next month or two, I’d be more of the might get the code out there and will validate. So I appreciate the question, and I hope that helps.
Our next email is actually not a question, it’s some advice on hiring a CTO, it’s an audio recording and it’s from Ben Cole. And he says, “Hi guys. You briefly touched on hiring a CTO to help find and manage a development team in episode 242. I’ve had some experience in this base and a particular quick audio response with some tips for your listeners.
Ben Cull [17:28]: Hi, guys. First of all, I just want to say thanks for such a great show. I can’t wait for each new episode and you really got me hooked. Thanks for all the great info. I just wanted to talk about a topic that came up recently about CTOs for hire. Now, I’ve been in this position myself a couple of times recently and I think I’ve got some great advice for your listeners. My name is Ben Cull. I’m a senior .NET consultant for a company called SSW in Australia. And first of all, what you going to want to do is to find yourself a senior developer. Try and get them in as early as possible and get them into the meetings with your potential development teams because they’re going to ask the right questions and know what kind of team is going to work for you. Second of all, find a CTO that understands process because about two-thirds of what you’re going to be doing is ensuring the process is going smoothly. Now personally, in SSW, we use the scrum methodology but you don’t have to be that formal. My advice is just to ship small, ship often, and ship all the way to production. It really forces you to get your process together by even shipping your very first feature even if it’s a registration page. Ship it to production and you’ll understand that you need all the environments, and all the automation to get things running smoothly.
My next tip is to use video to describe your requirements. Now, as a product owner, you can get across way more information in the video than you can with just pictures and text. And on the flipside, get your developers to put together a video to demonstrate the functionality that they have just developed. This lets you give feedback a little easier and you can pick up on more of the problems quicker.
Finally, have retrospective meetings. This is probably the most important tip. And for people that don’t know a retrospective meeting is where you ask three questions; what went well, what didn’t go so well, and what can we improve. Now, you include the development team, the CTO, and the product owner in this and you’ll come up with things like, what went well. We had meetings at 10:00 AM instead of 8:00 AM because everyone has had their coffee and they’re raring to go. What didn’t go so well was support tickets took a while to answer. What can be improved, well, I think that the moment database development is a bit tricky. Maybe we should have one person in charge of that. Let’s try that out this week.
These are just a few tips to managing your remote development team and hiring a CTO to help with that. If anyone has any questions, you can catch me on Twitter. My name is BenWhoLikesBeer. Cheers guys.
Rob [19:44]: So thanks a lot, Ben. Thank you for that, and hopefully that’s helpful for folks out there who are considering doing kind of that CTO approach where instead of managing a develop for yourself, if you’re looking for an intermediary because you might not have the technical experience to hire someone yourself.
Our next question is about conversion rates from a launch list to paying customers. It’s from [Percaush?]. And he says, “Hi Mike and Rob. My question is about conversion rates. Is there a general conversion rate to keep in mind to translate from a beta signup list to a trial signup to paid subscriber. Put differently, how many in a range of beta signups lead to one paying customer?” Here are two additional pieces of information in case they matter. Number one, these beta signups are coming from a landing page and not necessarily from friends and a network so they are not well qualified. And number two, it’s a SAS product costing between $100 and $300 per year. Thanks in advance, you guys rock. So, this is a really hard question because having cold signups and trying to convert them to trials is hard enough but if you don’t have a product that someone wants to pay you for, meaning if you don’t have product market fit yet, then your trial signup to paid subscriber ratio is very likely to be somewhere within the approximation of zero, literally zero. I’ve seen people with launch list of 1,000 get one or two paying customers right out of the gate and then lose them within a month or two because they turn out. So, there is literally no number that I could throw on this that could give you an idea. Now, I can tell you that if you have a beta signup list of let’s say 1,000 people, if you mark it really well and you build anticipation and you’re sending them screenshots and the product looks good, and it solves the problem that they want, and you send a sequence of launch of emails instead of a single email, I think that you can get upwards of 30%-40% of your list to sign up for a trial. I think that’s your range. I think the low end is literally zero if you fumble a ball in all respects and if you did everything really well executed, I may even rich and say if you get 50% into a trial, but I think a reasonable performance is somewhere between about let’s say 20%-35% to trial. Then the number of trial folks who convert to paid and then who stick around, it’s all a bunch of other numbers, right? If you don’t have product market fit, then that number say from trial to paid, if you ask for credit card upfront is going to be between 10% and 20%, and if you do have product market fit, when you ask for credit card upfront, maybe it’s between 40% and 60%. If you haven’t asked for credit card upfront, then it’s going to be between 0% and 10% or 15% depending on if you have product market fit. Then insurance is going to kick in and you’re going to lose somewhere between 5% and 25% of your people per month depending on how well they like it, how much of a problem this solves for them.
So, that gives you an idea of how wide ranging these numbers can be, and if you multiply those numbers, those ranges that I gave you, it can give you literally anywhere from out of 1,000 people, it’s like anywhere from zero to several hundred paying customers. So, I think that’s the answer is not to try to think of what is the number that’s going to become paid. It’s the real question is how can you optimize every stage of this funnel and just wild up hands off of people so that they really want to stick around to the next page especially if you have a new product be listening to what their requesting so that you can actually build something people want because that’s the goal with this launch, right? Is to get to the point where you have something people want so that you can then continue on from here and scale it up. Thanks for the question Percaush, that was helpful.
Our next question is from David Sandbrand. And he says, “Hey guys. In the context of your listeners, when is a startup no longer a startup?” So of course if someone stops pushing forward and essentially folds, that would count. But I’m wondering more on the side of success post launch. So is it the number of clients, is it time since the launch, is it revenue based? I’d love to hear and extend the discussion on when is the startup no longer a startup? Is it Eric Ries’s or Steve Blank’s definition? Is it a startup is in search of a repeatable and scalable business model? And so once you’ve achieved that, then you become a – you’re not a startup anymore. So like HubSpot would not be startup right because they kind of raised funding when we need a product market fit, and then you figure out how to scale your marketing and sales, now you’re scaling and you’ve less startup, that’s a fair definition of it.
Mike [24:06]: Right. Yeah. I guess from my standpoint, it depends on how you classify yourself. I mean there’s different points of view that you can look at. It’s like, is your business no longer a startup by your definition or by somebody else’s? And at the end of the day, I almost wonder like does it actually even matter? And I think in most cases they answered that as really no. I’ve almost feel like when company’s self-identify as startups, they’re hungrier. They do a lot more things and they’re much more aggressive about taking a different path as they go down. But once a business kind of stops referring to itself as a startup, then it’s much more of a mature company, double quotes around the mature part, but really they stop going after things hard because they don’t necessarily have to anymore, they get comfortable. And I wonder if to some extent, somebody might look at that and say, “Well, that’s no longer a startup.” And it could be very early on.
Rob [24:54]: Yeah. I think it’s an interesting question. I wonder if it really matters. I guess I’ve never been at the point where I have not thought of myself as a startup, so I guess the companies I’ve worked at that sees being startups like you said become a little more maybe process-driven, they become bigger, they become – they’re trying to scale up. They’re not hungry. What’s a good word for it?
Mike [25:12]: Yeah, I mean I just remember when I was a pedestal and we were required, we had like 60 or 70 employees or something like that and we got acquired but to us, we were still a startup. We just raised like $8 million or something like that and then even before we got a chance to really start spending it, we got acquired. So, I don’t know.
Rob [25:29]: Yeah. I think the lean startup, or I don’t remember from Steve Blank’s definition or link startup where they say it’s a scalable, repeatable business model where it’s a company in search of a scalable, repeatable, business model. I like that definition in terms of summarizing what a startup is but I think in terms of what David is asking about, I think I would go beyond that because as soon as you find that scalable, repeatable business model, then you have to execute. You have to find hungry people. You have to motivate yourself and them, and in my opinion, you’re still a startup there. You are scaling revenue up but you can find that business model and only have 10 grand a month in revenue and I think you’re still a startup at that point because you’re still kind of clawing your way forward. So I think there’s a certain point where I don’t know, I don’t think it is just headcount. I don’t think it is just clients. I definitely don’t think it’s time since launch because that’s going to depend why learn if you built something people want. I definitely think that it’s way pass product market fit. It’s like product market fit, then scaling things up and I think for me personally, I would call something not a startup when there’s so much process in place and such a headcount that it’s now feels like kind of a big company. And even for me like working, I worked at a company that when it hit 100 employees, it felt like a big company because I’m not a fan of organizations that big. And so that was when I was kind of like I started thinking about taking my exit because it really didn’t feel like a startup any longer, but I think that certain companies could still feel like hungry startups even with more employees than that.
Mike [26:53]: Yeah. I mean I’ve been looking at over at the leanstartups.com right now and the quote that I think that you might have been referring to was that Eric Ries said that, “A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty.” And I think that last part right there is really the key, it’s like “extreme uncertainty”. So, if you haven’t fit product market fit yet, then you’re probably still a startup and you should still be classifying yourself as a startup because you’re still hungry, you’re still trying to figure things out. And because you don’t have it figured out yet or you got that uncertainty, you need to keep going. You need to keep moving forward because you don’t know specifically what is going to work for you moving forward and what’s not. But once you figure that out, yes, you can be radically hit the product market and continue to grow, but once that I think starts the level out or once you’ve got it figured out, maybe you’re no longer a startup at that point.
Rob [27:42]: The quote I was actually referring to is Steve Blank’s quote from January 2010 on his blog, and he says, “In this post, we’re going to offer a new definition of why startups exist. A startup is an organization formed to search for repeatable and scalable business model.”
Mike [27:57]: Yeah. Tough question though.
Rob [27:57]: I agree. It’s a good one to think about. Thanks for tossing that to us, David. All right. We’re going to wrap up with one final question and it’s about client work versus the uncertainty of working on your own product, and this is from Joe Robinson of greenflagdigital.com. He says, “Hey guys. Have you seen any research or discussion topics about how when working for clients, your brain just clicks and does the work, but when you’re trying to work on your own products, there’s often too much resistance to fight through. Does this mean that fear of a client dropping you is way more than an incentivizer than the vague idea of success on your own product?
Mike [28:32]: I haven’t seen any specific research on that part of it, but I think I can talk generally around the kind of the concept of working on your own product versus working on something that somebody else is paying you to do. So, if you were working on a project that you’re getting paid to do, there is a very concrete and definable ROY on that time versus working on something of your own where you don’t get that. You don’t necessarily know if things are going to work out. So, it can be demoralizing to look at two different sets of task, one of them which you may or may not get paid at the end of the day versus one of them where you know you’re going to get $125 an hour. Most of us are going to gravitate towards that one that pays us $125 an hour unless we absolutely hate it and we will do anything to get out of staying on that treadmill and we will work on the other stuff on the side in the hopes that it will turn into something that gets us off of that treadmill. The other thing that I think comes into play really heavily is the fact that when you’re working on your own stuff, you don’t necessarily know what you have to do. There are a million and one things that you could be doing and you’re not quite sure if any of them has the right one to do. So, with client work, you know what you have to do and you know what you have to get done because the clients already told you or they’ve given you a problem and you have to solve that problem. You’re working towards kind of a known goal. But with your own products, yes, you have to build the products but at the same time, there’s all these other things going on with SEO and marketing, and code, and process, and SSL [?] and all these other stuff that’s kind of thrown in your way, that’s really hard to kind of sort out sometimes. So, you don’t know which you should be doing first. You don’t know what problems you should be prioritizing over others. And it makes it that much more difficult because you don’t necessarily have the experience to deal with any of them either because theoretically, you’re probably in a position where you haven’t really launched very many products of your own. You’ve launched them for other people but those people have kind of set the timelines and deadlines and things like that versus your own where it’s kind of on your own time, you’ve got a million different options and you’re essentially in a position where you have so many options, you don’t know what to do.
Rob [30:37]: Yeah. And for me, I think the latter one has a lot more impact. I think both of them are valid reasons but I think the indecision and the analysis paralysis of your own product, and not knowing what to work on next is what keeps a lot of people from working on their product, and also feeling like maybe their throwing their time away. But the fact that a client basically typically tells you what feature to build next or at least you can ask them and they have to make the decision, that makes it a lot easier because then you can go in, you can design, you can write some code. Whereas if you have to decide what you’re doing next, and that’s always a hard point. That’s always a sticking point in your schedule is any time you have to make a tough decision.
Mike [31:15]: I think some of that also comes down to the ability to self-regulate as well and I think that some people are more inclined to do that from a younger age than other people. There are specific studies that I’ve seen are about little kids who were given us option of getting a candy bar now or getting two candy bars if they wait, and it’s about that delayed gratification and whether or not they can handle it and I think that there are certain people who are predisposed to taking that instant gratification versus looking much longer term and being able to go down that road instead. It’s not saying that you can’t fight it and go against it, but I think there is a certain amount of predisposition of one towards the other.
Rob [31:51]: We appreciate the question, Joe.
Mike [31:52]: Well, I think that wraps that up for today. If you have a question for us, you can call it into our voicemail number at 888-801-9690 or you can email that to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Out of Control by Moot used under creative commons. Subscribe to us on iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening and we’ll see you next time.
Episode 248 | 14 Ideas for High Impact Lead Magnets
Show Notes
In this episode of Startups For The Rest Of Us, Rob and Mike talk about 14 ideas for high impact lead magnets. They discuss the types of things you can offer in exchange for email addresses.
Items mentioned in this episode:
- Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future
- The Micropreneur Academy
- Bidsketch
- GrowthHackers
- Digital Marketer
- Petovera.com
- Google AdWords Cheat Sheet from Software Promotions
Transcript
Mike [00:00]: In this episode of Startups For The Rest Of Us, Rob and I are going to be talking about 14 ideas for a high-impact lead magnets. This is Startups For The Rest Of Us episode 248.
Mike [00:17]: Welcome to Startups For the Rest of Us, the podcast that helps developers, designers, and entrepreneurs be awesome at launching software products. Whether you’ve built your first product, or you’re just thinking about it. I’m Mike.
Rob [00:25]: And I’m Rob.
Mike [00:26]: And we’re here to share experiences to help you avoid the same mistakes we’ve made. What’s going on this week, Rob?
Rob [00:30]: New iTunes reviews, sir. We’re at 432 worldwide reviews in iTunes. We’re going to read a couple of verses from Nick Goede in the US, he says, “Inspiring and enjoyable. A great podcast to listen to. It’s full of actionable advice and every episode has inspired me.” We have [Cole Klav?] from Germany who says, “Very practical and I like the varied topics. A good Tuesday starts with Startups For The Rest Of Us. I don’t conceive riding my bike on a Tuesday without listening to a new episode. In fact, I will actually ride my bike in order to listen to a new episode of this podcast.” So thank you so much for the five-star reviews. If you haven’t given us a review, I appreciate it if you could log in to Stitcher or iTunes or whatever pod catcher you use. Give us a five-star review. Even if you don’t leave a review a full-on text, multi-sentence review, it really helps us, keeps us motivated. Mike reads this when he’s sad and alone.
Mike [01:22]: When I’m crying into my pillow.
Rob [01:24]: Exactly. And it helps us rank and it helps our [?] which is going to keep us producing the podcast. We’ve been doing it for five years and hopefully we can do it for another. How are things with you?
Mike [01:33]: Well, I recently took a short-term consultant gig and the impetus for that was to say, it doesn’t pay very much to be perfectly honest, so I definitely did not take it for the money but it has implications for potentially an audit shark sale down the road. And the people who are having me on this project, they basically have a enterprise-wide compliance projects that they need to have sold. So I was kind of brought in and tapped to go in and take a look at everything and help them put all the data together in a way that they needed to be done and I don’t know, we’ll see how it goes but it’s pretty exciting so far.
Rob [02:06]: Yeah. You haven’t consulted for more than a year I think, how was it to be back in the saddle?
Mike [2:10]: It’s interesting. It’s funny because I remember having to go through all these different projects that were just to complete nightmare and hassle and this one has been a dream so far. They just basically dropped the problem in my lap and said, “We know you know how to do this and so just do it and give us the results.”
Rob [02:25]: That’s the best kind, right?
Mike [02:27]: So they’ve just completely left me alone and just completely hands off. I barely talk to them at all. It’s just kind of I do my work and hand it over to them and that’s the end of it.
Rob [02:35]: Yeah, that’s nice. Cool. Good to hear that things are going well with that and hopefully it leads to the enterprise sale you’re looking for. So, I read a book.
Mike [02:42]: Congratulations.
Rob [2:43]: Yeah, it’s my first ever.
Mike [02:45]: Was that paper?
Rob [02:46]: It’s called Elon Musk: Tesla, SpaceX, And the Quest for a Fantastic Future. I have to say, I was really impressed with Elon Musk with the risks that he has taken. He made a bunch of money early on with an app. I don’t remember what it was called, it was before PayPal and he just reinvested it. He like put it all on the line. I mean that’s tough, man. It’s stuff to make several million. I think he made 10 million or 20 million from the first one and it was all back in to what eventually merged with PayPal. I think it was called x.com. And then he made 150-200 million from PayPal, put it all back in to SpaceX and Tesla and SolarCity and he was basically, if these things had not pinned out and they were months and/or years when it looked like and all of them were going to fail, he would’ve basically been, I’ll say broke. I mean he wouldn’t have been destitute on the street but he would not have had very much money because it was all tied up in these companies. And then they have all succeeded widely and he is making a bazillion dollars now and certainly he’s not doing it for the money but I was really impressed by this guy’s ability to deal with stress, his ability to work extremely, extremely hard for long periods of time and just a sheer raw intelligence, like his IQ must be off the charts. So it was a really enjoyable lesson for me, if you haven’t listened to it, I definitely recommend it just a tail of someone who perseveres and then puts it all on the line over and over and is really changing the world frame, I mean a lot of startups talk about starting something to change the world and it’s like yeah, you’re building a delivery service for cat food or whatever, I don’t know how much that changes the world but the stuff Elon Musk is doing now, is literally driving our species forward.
Mike [04:21]: There’s demons in the closet too.
Rob [04:23]: What do you mean?
Mike [04:24]: How do I put it? Like I’ve heard stories and stuff like his divorce and how his ex-wife has come out and said that it was just very difficult living with him because he was so driven to succeed and so driven towards certain different things –
Rob [04:37]: I think that’s really important to call out actually. If you look at the “great people” like the Henry Fords, the Ben Franklins, the George Washingtons, the, I don’t know the great industrialist or the Steve Jobs, or the Bill Gates or the people who do big things, like this, they almost always, almost invariable have complete train wrecks for personal lives because they value their goal of doing the business or of changing the world or whatever how do you, more than they value people. And so, I don’t model myself after these people, right? I mean I’ve chosen the exact opposite. But, they have multiple divorces, they had all these terrible marriages, a lot of them have kids that disown them. I think Ben Franklin and all of kids disowned him. Steve Jobs –
Mike [05:18]: Steve Jobs disowned his own kids, I mean –
Rob [05:20]: They’re train wrecks, and it’s actually interesting to remember Sarah Hatter had a quote a couple of years ago at MicrConf. She said, “Don’t take business advice from people who have terrible personal lives, or don’t have work-life balance or something like that.” I really take that to her, like I’m not going to start a business like Elon Musk, or Steve Jobs, or any of those guys. But unfortunately, those seem to be the folks that actually do kind of change things on a world scale.
Mike [05:41]: I wonder how much of that is about the control that they exert over the business and I mean because if you look at Steve Job as an example, I mean he’s notorious for having exerted, absolute control over various parts of the business, and in your persona life, it’s very difficult to do that because there are people in life. They’re not your employees. Your kids are not your employees. Your wife is not your employee or your spouse or whoever. And so you can’t exert that level of control or that degree that you could if it was the business and you are basically given the person a paycheck. So, I think that it becomes difficult for them to deal with their personal lives because they can’t exert that control and maybe that’s why there are train wrecks.
Rob [06:22]: For sure. I would say that’s a big part of it. The other thing I think is it’s like being obsessed with your goal. It’s being kind of a workaholic I’ll say. It’s like if you work 80 or 90-hour a week which all of the people that I mentioned did, if not more, I think Elon is working 100 hour a week or some crazy thing and he’s done it for years, you can’t really maintain relationships with a life that looks like that.
Mike [06:43]: No, I mean and he kind of goes even one-step further I think, doesn’t he? He owns two public companies, doesn’t he? The SpaceX and Tesla, is SpaceX public?
Rob [06:51]: SpaceX is not public.
Rob [06:52]: It’s not public.
Rob [06:53]: I think SolarCity might be.
Mike [06:55]: And either way, I mean that’s still a heck of a lot of responsibility and probably not enough time to deal with all of it and once you’re trying to throw personal life in there, it’s hard to carve that out. So you need to have somebody within your personal life who’s going to be understanding that they are certainly not the number one priority and they may not even make the top 10.
Rob [07:12]: Yeah. So what are we talking about today?
Mike [07:15]: Well, today, what we’re going to do, is we’re going to go through 14 ideas for a high-impact lead magnets. And I was thinking about this because I’ve talked to a bunch of people recently about the types of things that they can offer as part of their website in order to get people to basically handover their email address. So, I think that most common one that I’ve seen that’s been recommended is an email course of some kind and obviously you’re very familiar with those through Drip. But I think that there’s other ones that people either overlook in favor of an email course that are potentially less work or have a different RY in certain cases or a better fit for certain types of customer. So what I wanted to do is go through some of these different ideas for different lead magnets because I think that people just kind of clause over them and think that an email course is the only one and it’s probably one of the better ones but I don’t think that’s the only one that people should be looking at. So I think before we start, we want to talk about exactly what a lead magnet is. And, as it kind of implies, lead magnet is designed to essentially help you generate leads and that could be leads for your product or for a course that you’re selling or just want to add to your email list. But, the basic idea is that you’re creating something and you’re offering it to them in exchange to get it for their email address. And so, that’s the primary goal for you is to get some of these email address. But you have to be able to provide them something of value that is significant enough that they’re going to give you that email address. So, the whole premise behind a lead magnet is that you’re using it to essentially bribe somebody to give you their email address.
Rob [08:46]: Yeah. And I’ve heard people call it an opt-in bribe and I don’t like that term. To me, it has like a negative connotation to it. I’ve always called it an opt-in reward but I think a lead magnet is probably a better term and a more common term for this. So to kick us off, the first idea we have for lead magnets is of course an email course and that’s what you mentioned. I tend to lean towards email courses, five-day, and seven-day email courses work really well. The real reason that I like them the most is it gets a subscriber used to hearing from you on a regular basis and it gets them used to opening your emails and they do tend to consume them because they’re smaller pieces of content. If you send someone, let’s say an E-book or a PDF, I don’t know how many of those I have on my desktop or in some folders somewhere that I’ve never read whereas when I sign up for email courses, I do tend to read them when I have spare time. I’ll read them on my mobile if they’re in my certain category in Gmail. I just think they’re consumed more. I think it gets subscribers used to hearing from you and opening emails which also tells spam filters that people are opening and reading your email. Gmail, I know uses behavior to determine whether it should deliver the emails under the promotions of the other tabs and I think that getting a five or seven to eight mail course kicked off will get the rest of your emails into their inbox, I mean if people are reading the early ones. So, that’s why I like put them together. I also think they’re fairly easy to assemble and we give away a free kind of blueprint which is the shell of putting the other five-day course. And even if you don’t sign up for Drip, we give it away in our knowledge base and we can link that up and shown us, but we have a bunch of blueprints that people use within Drip if you’re a customer and you can just link and kind of enter some specific content to you but the intro and the outro are already in there so that it doesn’t take a ton of time to set one of these up.
Mike [10:29]: Yeah, I’m a big fan of email courses as well and they work well as you said that I do train people to open your emails and they do help you bypass some of the spam filters because if Google recognizes or other email providers recognize that you are not flagging those as spam and you are taking action inside of that email course, then it is more likely to let other things through when you are for example presenting a specific offer to somebody or you’re running a flash sale or just a regular promotion of any kind. They’re going to let that through because they already let five or seven other emails through that you accepted and you looked and you probably clicked through. So, that’s very helpful from the standpoint of the person offering it. And if the person is getting value out of it, then clearly, they’re going to clicking on those.
Rob [11:15]: If I could think of maybe two drawbacks to give the other side of the story. I think email courses do take longer to create than some of the options we’re going to list. And I think in some markets, they might be oversaturated with email courses and they might be valued less than say an E-book or a cheat sheet.
Mike [11:32]: I think one of the other good points about an email course is that it helps to promote trust and it helps to establish you as some sort of an expert and whatever the industry is that you are promoting the email course on. So if you’ve created an email course on how to create landing pages for example. Whoever is receiving those is going to look at you as essentially the fact to expert of landing pages, and that may not necessarily be true but that’s going to be their perception. And when it comes to selling to that audience, the perception piece of it is extremely important.
Rob [12:04]: You said that it builds trust. I also like that it builds trust over time. Even if it’s only five or seven days, if someone hears from you every day, there’s just a little bit more of a longer term relationship than if they get one email from you with a PDF toolkit or something and you redirect and you’re like, “Oh, that was cool.” It’s not something where you’ve touched with them every day. So I think there’s probably a difference in the trust level there.
Mike [12:24]: The next lead magnet that you can use is the report of some kind. And for example this, you can head over to micropreneur.com, put in your email address, and you’ll get a short PDF that essentially outlines the high level concepts of what a micropreneur is and kind of walks you through the thought process behind starting a business and micropreneur.com is a website that Rob and I host, part of the Micropreneur Academy. But you can generate a report and create a PDF or a word document that can be associated with a landing page where people can just go in and they enter in their email address and they will get a report, and that report can be a sample report from the application that you have. It could be a sample set of data. It can even just be what you stand for. What source of ideas that you’re trying to promote your manifesto so to speak. So, there’s a lot of different ways that you’re going to leverage your report like that but my advice I think in most cases would probably be to use a specific landing page for that report because you really want that to be on its own page where you’re driving traffic to it that is relevant to that, and I think that if you have multiple different types of reports that you’re going to offer, then you need to be able to drive traffic that is relevant to that type of report and sometimes you’re going to be able to change the landing page copy and sometimes it’s going to be a little bit more difficult just because of the type of people who are coming. So, let’s say that you are doing something around email marketing, there’s going to be people who are much further along and you’re going to want to offer them a different type of report than somebody who is much more entry level. So, you have to balance those types of things and I probably wouldn’t necessarily recommend putting both of those on the same page for example.
Rob [13:59]: Right. And the other advantage to a report is if your audience happens to be more audio inclined, let’s say it’s something to do with podcast or you know that they might listen to podcast, you can turn a report into an audio report pretty quickly with a USB headset, read for 15-20 minutes, do a little bit of editing, and then you have now a report in PDF and an audio version of it, it’s pretty powerful. I mean it’s worth a lot to a lot of people to be able to listen to that. The other advantage by the way of having it on its own page is if you’re going to build links to it, you can get some SEO juice and rank for a specific term. And now, in some cases, it’s not relevant, but in others, having it hosted on your own website can just be better. My third idea for high-impact lead magnet is a cheat sheet or a handout. I’ve also heard Clay at LeadPages called this like a tools list, top 10 tools to get really good at taking pictures or top 10 things that the best gardeners use to trim their hedges or whatever. The nice part about this thing, the biggest advantage is these are pretty easy to put together especially if you’re already in a space and you’re knowledgeable, you could probably type this up as text in 5 or 10 minutes off the top of your head, and it intrigues people. People like tools lists, people like cheat sheets. I think there’s some value in just getting something out there quickly.
Mike [15:15]: I like that idea of just typing up something in Word or Notepad or something like that and that at least gets the ideas out of your head and then you can turn around and hand it off to a designer who could then make it look pretty and could make it something that could actually be printed out. I’ve seen things from Dave Collins over at software promotions where they have a Google AdWords cheat sheet which is essentially a kind of a four-page flier that walks through all these different concepts about how you should be using Google AdWords and what sort of things you should be paying attention to, which sorts of [gulches?] there are or areas where you need to take a little bit of extra care and it talks about each and every single one of those on this Google AdWords cheat sheet and it’s really well put together. There’s tons and tons of information on it. I’ve had that cheat sheet laying around for probably close to a year and a half now, I mean it’s really good.
Rob [16:01]: Other nice thing about a cheat sheet is if you just type this up in a text editor real quick and then you go into something like Microsoft Word or Publisher and just get one of the reasonable templates, you don’t need something fancy but just something that looks reasonably professional, you can kind of paste it in there, use their existing styles, and maybe not even need to hire anybody to make it look cool. And so if you can get by without having to invest a lot of time or money on this one.
Mike [16:26]: The next lead magnet is a template. So, you can make a downloadable template for a variety of different things. And these I think appeal very much to the do-it-yourself crowd especially if your application, whatever your app is automates the stuff inside of the template and tracks everything for you. I think a really good example of this is if you go over to Bidsketch, you can download some sample templates of what their proposals look like, and you can even just modify them yourself if you really want it to and just say, “Okay. I’m going to use this as my template and you wouldn’t have to necessarily buy the application. The application makes it a heck of a lot easier to replicate that over time and keep them all in one place and do all sorts of other things, but as a basic template to essentially get someone started, they’re still valuable because they can use them by hand until they get to a point where in their business, it makes sense for them to invest in a tool that will automate some of the rest of the stuff.
Rob [17:17]: And LeadPages did this a lot in the early days. I think they still do it when they talk about a landing page template, in a blog post, and then at the bottom for an email opt-in to give away that template in HTML and obviously that template is available inside LeadPages if you sign up and I heard that it is very successful for them. Tim Pages talked about that on a couple of webinars. Our fifth idea for high-impact lead magnet is to give away a free video. So a training video, a walkthrough of something and I think the key here is that video overtime, it used to be super, super valuable because no one was producing it but over time I feel like it’s becoming maybe a little less valuable. And so just giving away a single video, it depends on the market, right, but some people might not be that wowed with it. It’s also, you can’t listen to it on the go and you need to carve out time with audio. You probably not going to want to watch it at work in your cubicle or whatever. So there’s some drawbacks to it in terms of it’s a little bit more difficult to consume than these other things. However, if you have a pretty well-produced video and you keep things pace pretty quickly and you have a really good title for it like three secrets you must know in order to do email marketing or the walkthrough that no one else will show you or whatever. I mean something that intrigues and kind of builds that interests, I think those a lot of value. The other thing is if you’re reasonably good, whether if it’s on camera or doing a screen cast, video can be super easy to produce and take you 5 or 10 minutes if you can get it done for a couple of takes. I might produce a bunch of screen cast and they get easier and easier overtime. And so, this is one that could potentially a hyper super value if you title it correctly and then keep the pacing moving but really not take a ton of time to produce.
Mike [18:57]: The thing that I really like about doing a video is that if you have a link back to your site for them to do the video and you’re not embedding the video directly into the email, you can get a sense of how much people are actually watching them by using the analytics on your webpage to figure out whether people are watching 30 seconds into the video and just cancelling it or watching the entire video. And I know that there are certain ways to see how much people are leveraging the things that you are sending. So for example, if you send somebody an email course, you can look at open rates. If you’re sending people a PDF, you can check the download numbers and things like that. But just because somebody downloaded the PDF doesn’t mean that they actually ever opened it and looked at it. And again, there are some tools that will allow you to do that but it’s a lot more advanced and it’s a little bit less obvious that you’re going to be to get that information whereas with the video, you can track to see how far into the video is people are watching and if you need to re-record some parts of the video or see which parts are resonating when people because they watched that part of the video three or four times, you can get that information and that’s why I really like the idea of using these videos to send people to a webpage and monitor the usage on that page.
Rob [20:03]: If you’re going to record a video, I would say record it as quickly as you can in terms of keeping the pacing going really fast and then have someone edit it so that when you’re typing, it just appears on the screen. No one wants to sit there and watch you type. And you can take like an eight-minute demo and crunch it down to between four and six minutes pretty easily if you just cut out time to load screens and time for you to fill in forms and all that stuff, and it will definitely increase the number of people who make it through the entire video if the thing moves faster and it’s the shorter overall.
Mike [20:35]: The next lead magnet is a toolkit. And I think tool kits tends to consist the things like checklists, and spreadsheets, and guides about how to do different things. But essentially, it’s a resource that people can leverage to perform a particular task and these are really good for allowing people to manually do something that your application does automatically for them. So if you have this series of steps that somebody would have to go through, you can provide those as a checklist or they could purchase your application and it will automatically be taken care of for them. But, if they don’t even know what those steps are, chances are good that you can take a lot of those things and add them into a checklist or a spreadsheet and package it up and allow them to download it as a toolkit and you can market that toolkit in exchange for the email address so that you can then upsell them later to your full application. So the seventh idea is a free trial, and when I say free trial, most people will say, “Oh, it’s a free trial of the application.” And I think that that’s probably the wrong way to pitch it when you’re offering this as a lead magnet because you don’t want to offer it as a free trial. You want to offer, so let’s say you’re giving them 14 free days of your application, you want to offer them 14 days of whatever the beneficial output is. So for example, Ruben Gamez who owns Bidsketch, he offers a 14-day trial for proposals that can help you make money for your business. And that’s the way it’s offered. It’s not offered as a 14-day free trial for Bidsketch, it’s offered as that 14 days of proposals for you. So it’s a very slight difference in the way that it’s marketed.
Rob [22:04]: Yeah. Kind of pitching the benefit rather than the pitching the fact that you’re going to have to spend a bunch of time getting on-board it into an application or pitching the benefit rather than the work the person has to do to get the benefit.
Mike [22:15]: Exactly.
Rob [22:16]: Our eight idea for a high-impact lead magnet is an E-book or a physical book. Obviously, this tends to be a lot more work than something like a report. I would typically think a report is maybe 5 to 20 pages whereas an E-book, I would think 40 to 100 pages, 40 to 200 pages. And a physical book is probably in the realm, I mean you could have a paperback book that’s 50, 60, 70 pages. I know Jason Cone had used this at a smart bear where he wrote a book about code reviews and would give away paperback copies. I don’t remember if you had to pay shipping. I think they might just give it away.
Mike [22:50]: Nope, they gave it away. Yup.
Rob [22:51]: Yeah. They gave it away totally and they covered the cost and he said that when they would go in to do sales calls and they saw that book up on the shelf, it was a shoe and because they had literally written the book on the topic. So it’s a total no-brainer. I think if you’re marketing your price point more [?] than you have the time or can produce something like this, I think this is pretty valuable.
Mike [23:10]: The ninth idea is access to a community. And I’ve seen this a lot in different info products but you can offer access a set of forearms or choose a [slot shot?] instance or anything along those lines where people are essentially buying into this community aspect for a particularly type of product. And I think that it works really well when you’re trying to educate people about how to do something whether that’s design skills or programming skills or how to build a business or how to do an email campaign. There’s lots of different ways that people want to communicate and by providing them access to a particular community, that can be one benefit that people will buy into. One that I see do this really, really well is growthhackers.com where you go over there and one of the benefits of growthhackers.com is just having access to that community. And by joining the community, they get your email address. So, it’s really an interesting way of harvesting email addresses to send out promotional emails or educational emails and use those as leads for your products or your business.
Rob [24:13]: The 10th idea for lead magnet is a swipe file, so a collection of tools, information, guides, or text snippets, et cetera that you have picked up from your experience in the niche. So if you are selling at the copywriters, then that’s probably a really common swipe file that I’ve heard of is a bunch of headline ideas. Here’s my swipe file of 100 of the best headlines that I’ve ever seen and they serve as good inspiration and frankly a good swipe file is worth quite a bit. And if you already have it lying around, it’s kind of a no-brainer to issue it and it certainly doesn’t need to be formatted very well, that’s the other advantage. You could literally just do it as a Word doc or a text file.
Mike [24:50]: Our 11th idea is running a webinar and I like webinars because they have the sense of reality to it where it’s not just a video for webinar, the idea that you’re kind of pitching to people is they have to show up and I’ve seen people put into their webinar email campaigns, and when you’re inviting you they say, “Oh, we only have space for so many people.” And sometimes, just because they want to say that and it’s part of their marketing copy. Other times, there are technical limitations on the software that they’re using. So, depending on their level of go-to webinar for example, there might only be 25 space or 100 spaces available for them to run the webinar. And that can be a very good incentive for people to sign up and attend the webinar, but because it is a live session, you can ask questions on the spot and if you’re really interested in it, you’re going to show up and you’re going to be there for the live webinar versus the recording that may or may not be emailed afterwards.
Rob [25:43]: I’ve been skeptical of webinars because I’m just not a fan of them personally but very huge. Everyone who I hear who starts doing them has a lot of success with them. So, I think there’s a real value that people put on a live presentation like this and I think it’s absolutely something that you’ll want to move to though it’s a bit time intensive to set up obviously and it’s something you have to do on an ongoing basis. It’s not like a toolkit or an E-book that you can write ones and give away, but already, the webinars that we’ve done for Drip in partnering with other companies, they have been quite successful in terms of the number of trials we get out of them. So I think there’s a lot of value there.
Mike [26:21]: Well, you mentioned the part about it’s time intensive to do and you’ll have to create multiple webinars. I think you want to be able to pitch it to different segments of the population in different ways, especially if it’s for the exact same products. But if you have a sequence of let’s say six or eight different webinars that you’ve put together that are related are similar or overlapping in some way, shape, or form and you’ve Twit the copy and headlines and things like that, you can then repeat them because if people didn’t make it to one of them, if they’re on your email list, then you could potentially get them to one of your other webinars.
Rob [26:52]: Our 12th idea for lead magnet is a case study. So it’s like a deep dive into a specific type of problem of before and after, so what’s great is if you have existing customers, it’s so easy to do case studies because you can just interview them on Skype and either use that, do a video case study of it. You can have it transcribed or you could just take notes off of it and write out blog post case studies that can have a lot of impact because people get to see the true before and after of using your service, and there’s value there even though you don’t have to produce a ton of the content.
Mike [27:23]: Our 13th lead magnet is free consultations. And I think with the free consultation, you really need to be very targeted on the type of problems that you’re solving, but I think that that’s also a very good legion for a high-priced product. I don’t think that you want to do free consultations for a product that’s $39 or anything like that. But if you have a relatively high-price product, then those free consultations can turn into thousands, and thousands of dollars or revenue or annual contracts. I mean it just kind of depends on what it is that you’re offering. But at the of the day, you want to be able to have that consultations you can get on people’s radar and talk to people directly. This is I think extremely important early on when you’re still trying to figure out what your ideal customer is, but again, it goes back to what your price point is. And if you have a higher price product, it works a lot better than if you have a lower price product because it’s just not going to be worth it if the price point is below a certain point.
Rob [28:13]: And our 14th and final idea for high-impact lead magnets are to do a short interview and get a transcript as well. And what I like about this one is you can give away two formats, so you have both audio and something in text and this doesn’t require you to create much content and you can just pick an expert in the space. So, for example with email marketing. I interviewed Patrick McKenzie about a bunch of different pacific, marketing questions and then have it transcribed, and we have video of it. You can make an audio of it. And so, you don’t have to create the content but you get an expert who is essentially lending their credibility to it ending at some really good opt-in rates if people know who that expert is because you have name recognition. And so, even if you’re in a niche where you are not an expert. Let’s say you were doing horseback riding or something, you just need to find that big name and interview them. They probably haven’t been interviewed by many people if you’re in a small niche, and then you don’t have to learn all the stuff. You have a little bit of content there that you’re able to kick out. So, I’ve always like this idea as a way to get a lead magnet up pretty quickly but one that has quite a bit of value to it.
Mike [29:20]: So those are the 14 different ideas for high-impact lead magnets, and I think that there’s a couple of things that you want to consider when trying to decide on what lead magnet you’re going to create and I think the very first one is what is the goal of that lead magnet? What is it that you’re trying to accomplish? Is it that you are trying to get people to trust you? Is it that you’re trying to get people to have familiarity with you or brand awareness or are you trying to establish yourself as an expert? That is probably going to dictate the majority of what the content is. And then you also have to think about what types of formats your audience is going to be interested in consuming. Is it going to be video? Is it going to be swipe files? Is it going to be an email course? What is appropriate for not only the goals that you’re trying to achieve but the way that your audience is going to consume that information. And the last thing to think about is, what type of prospect do you think that you’re going to attract? And I think that’s probably an extremely important piece of it because if you’re attracting the wrong people, then it’s probably not a good idea to create that type of lead magnet. So to recap our 14 ideas for high-impact lead magnets. Number 1 an email course, number 2 a report, 3 three cheat sheets or handouts, number 4 templates, number 5 free videos, number 6 tool kits, number 7 free trials, number 8 E-books or physical books, number 9 access to a community, number 10 swipe files, number 11 webinars, number 12 case studies, 13 free consultations, and 14 interviews with transcripts. And the last thing to mention is we’ll link up a couple of different resources from this podcast and the show notes for this episode. You will find them over at digitalmarketer.com and petovera.com.
Rob [30:53]: If you have a question for us, call our voicemail number at 888-801-9690 or email us to us at questions@startupsfortherestofus.com. Our theme music is an excerpt from We’re Out of Control by Moot used under creative commons. Subscribe to us on iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode. Thanks for listening, we’ll see you next time.