The Marketing Framework That’s Generated $23.8M In Sales
I originally wrote this 4,000+ word guide for the people on my private email list (subscribe here) and thought I’d share it with the community here on Medium to help even more founders and marketers. Enjoy!
Growing your business and knowing what to do next, what works and what to avoid is hard. One minute you’re putting out a fire. The next minute you’re in a team meeting talking about your product or a big marketing investment you’re about to make. The next day one of your best employee quits out of the blue and later that week an investor calls to scream at you about last quarter’s numbers.
It’s hard and being an entrepreneur is only for the brave few who can weather the rollercoaster ride of exhilarating highs and soul-crushing lows. But when it comes to building your company, the good news is that there are many entrepreneurs who have grown their companies to where you are today (congratulations!) and well beyond in just a few short years.
Most companies grow through phases which are largely predictable. At each phase there are certain things you must do (and avoid) to keep growing. Knowing what those things are and more importantly, how to do them right, is what separates average companies from exceptional ones. It separates happy founders from miserable ones, too.
According to the SBA (Small Business Administration), only 40% of businesses survive longer than 5 years. Those that survive don’t necessarily have the best product, but they’ve figured out how to acquire customers at a cost-effective rate and how to continue doing that at scale. In other words, they’ve figured out marketing and growth, which are the two most important strategies every CEO needs to understand.
If only 40% of businesses survive past 5 years, then why do the other 60% fail? Most of them fail because they never “connect the dots” between their product, happy customers and their marketing strategies. Truth be told, most small business owners are great at what they do (creating their product) but when it comes to marketing and growth, they’re pretty much clueless.
When you can’t cost-effectively attract new customers and improve your product based on their feedback (which helps you attract even more new customers via a better product and word of mouth referrals), your business starts to suffer. Revenue growth slows, good employees leave and you start questioning yourself.
I know that exact feeling myself. Over the last 15 years I’ve built 5 companies. Some are absolute behemoths and today employ hundreds of people while generating tens of millions of dollars in revenue. Some did pretty well. And one failed.
It’s a soul-crushing experience to close down a company and tell your employees they’re out of a job. It’s even harder to explain to your wife or husband what happened and even harder still to deal with that guilt, anger and sadness inside, when you feel like everything that happened is your fault.
If you’re reading this guide you’ve already demonstrated that you think a bit differently to the rest. You’re a learner. You seek out help from people who have done what you want to do. And you’re not afraid to change course and take action to make your company better.
And I respect you for that immensely.
So, let’s get back to those stats from the SBA. In spite of most businesses going under by year 5, some businesses were able to not only survive, but thrive. So what did they do differently?
First and foremost, they figured out the relationship between their product, their customers and their marketing. And they used that “holy trinity” to improve their product, which attracted more customers and lowered their overall marketing spend while increasing efficiency. And that’s really the critical difference.
Imagine what your business (and your stress levels!) would be like if you could double your revenue in just 12 months from now. What would that mean for you? Your family? Your future?
In the pages that follow I’m going to share with you the exact 5 things you need to focus on to do just that. They are the same things I’ve implemented at the companies I advise and also at my previous company back in 2012 to grow it from $5M to $10M revenue in a year.
Today that company is closing in on $100M annual revenue, but back then we were really struggling to grow. We didn’t know what to do next to keep growing. So we did what you’re doing right now — we sought out the help of various experts and coaches to help us get to the next level.
And man am I glad we did.
All it took were a few small-but-smart changes to how we approached the business and sure enough, revenue started to climb. Once we understood the relationship between our product, our customers and our marketing, we were unstoppable.
We went on to raise $125M in venture capital, employing 500 people across 3 countries. It was a wild ride but I’ll never forget those early marketing lessons that helped us get from a few million dollars in revenue to $20M and beyond.
What follows is the exact list of the things we focused on. I hope you find this guide useful and will implement the suggested changes into your business. I’m confident they’ll help you grow faster than you ever thought imaginable. You’ll regain your sanity, your stress levels will drop and most importantly you’ll stop feeling like your business “owns you”. You’ll get a bit of work/life balance back and you’ll be excited for the future.
OK, let’s get to it…
“There are no secrets to success. It is the result of preparation, hard work, and learning from failure.” — Colin Powell
Evaluating Your Product
You already have paying customers. Maybe you have hundreds, maybe you have thousands. It doesn’t matter. What does matter is how happy those customers are and how well your product does (or does not) meet their needs.
Happy customers tell other people about you and act as your “virtual sales team”, singing your praises and helping you win new customers without increasing your marketing spend. If you sell to business owners (B2B), the average business owner/CEO knows 6–10 other business owners, so if you have a great product that helps solve their problem, every customer you pay for has the potential to refer up to 10 others, which could cut your customer acquisition cost by 90%.
That’s pretty crazy. But how do you figure out whether they tolerate, like, love or can’t live without your product? You need two things: a product-market fit survey and a Net Promoter Score survey.
Product-Market Fit Survey
If you haven’t heard of product-market fit before, it’s basically a measure of how well your product (what you sell) fits your market (the people who buy it). To grow fast, you need to really nail product-market fit — ideally early.
To measure product-market fit, you can survey a portion of your existing customer base. Surveying a few hundred customers (about 200–300) is usually enough to give you a statistically relevant snapshot that’s representative of your entire customer base.
So what do you ask those customers? Sean Ellis, a growth marketer has put together a nifty free web site called Survey.io. It’s a simple 8 question survey you can send customers to. They fill it in and based on their responses, you can get a clear understanding of whether you’ve achieved product-market fit.
Of the 8 questions, question #2 is the most important:
You use the responses from this question to calculate your product-market fit. Sean suggests that if at least 40% of your customers don’t choose “Somewhat disappointed” or “Very disappointed” then you haven’t yet achieved product-market fit and really need to double-down on improving your product based on customer feedback.
If, on the other hand, 40%+ of customers choose “Somewhat disappointed” or “Very disappointed” then congratulations, you’ve already achieved product-market fit! The closer to 100% that number is, the better.
When you create your survey, you get a link which you can then email to your customers via your CRM (such as Salesforce) or through your email marketing software (such as Mailchimp). This is the key first step to understanding how your product is currently doing at solving a problem for your customers.
Now that you know your product-market fit score, it’s time to see what customers think of your company, not just your product. A Net Promoter Score is the fastest, easiest and most common way to measure that.
Using a free tool like AskNice.ly, you can again survey a segment of your customer base, asking one simple question:
The question is, of course, “How likely are you to recommend [your company] to a friend?”. Customers choose a rating from 0 (not at all likely) to 10 (extremely likely) and their results are used to calculate your Net Promoter Score, or NPS for short.
If you’re interested, here’s how NPS is calculated from responses to the survey question shown above:
Those who respond with a score of 9 or 10 are called Promoters, and are considered likely to exhibit value-creating behaviors, such as buying more, remaining customers for longer, and making more positive referrals to other potential customers.
Those who respond with a score of 0 to 6 are labeled Detractors, and they are believed to be less likely to exhibit the value-creating behaviors.
Responses of 7 and 8 are labeled Passives, and their behavior falls in the middle of Promoters and Detractors.
The Net Promoter Score is calculated by subtracting the percentage of customers who are Detractors from the percentage of customers who are Promoters. For purposes of calculating a Net Promoter Score, Passives count towards the total number of respondents, but do not directly affect the overall net score.
NPS can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter). An NPS that’s positive (i.e., higher than zero) is good and an NPS of +50 is excellent.
As well as asking for their 0–10 rating, customers are also asked to tell you why they chose that rating:
You can then filter their responses (to find the negative ones) and use that feedback to constantly improve your product, customer service and everything else. You can use the positive feedback as testimonials on your web site and in your sales materials.
It’s like a set-and-forget drip feed of valuable customer feedback that comes in, day in, day out.
The cool thing about a tool like AskNicely is that you can automatically feed in your list of customers and auto-import new customers as they sign up. You can then send them an NPS survey after, say, 30 days of being a customer. Your NPS score will change over time and you can work to improve your company based on feedback from your customers.
If you haven’t yet launched, you should read my guide to validating your idea before you launch. It’s had 100,000 views so far.
Creating Marketing Personas
The easiest way to sell more stuff is to figure out who your existing high-paying, low-churn customers are and target more of them. It makes sense, right? But how do you go about doing that? You start by creating marketing personas.
A marketing persona is one or more “made up” people that are representative of your BEST customers. You can even give them a name like “Enterprise Evan” or “Marketing Mary”. Notice I said best, not typical.
You want to figure out who your best customers are and go out and invest your marketing budget to bring in more customers like them. They spend the most, refer you the most and churn the least.
OK, so how do you create your marketing personas? You guessed it — by surveying your existing customers.
The idea here is simple — you want to survey only your best customers and learn who they are, how they found out about you and where they spend their time both online and offline. You then use their responses to redirect your marketing budget away from poorly performing marketing channels and into the channels they have explicitly told you they used to find you when they became a customer. Brilliant, right?
To get started, you want to dive into your CRM and pull up a list of your best customers. Sort your customers by the metric that’s most important to you, such as lifetime revenue, average sale price, how long they’ve been with you, etc and export that list. Then delete everyone but your top 100/200/500 customers. That’s the list of you want to email your marketing persona survey to.
You can then use a free tool like SurveyMonkey to create your survey. You basically want to figure out two things:
- Who your customers are (age, sex, location, job title, responsibilities, problems)
- Where they spend their time (which websites do they visit, which blogs do they read, which influencers do they look to for advice, etc)
You then look for common answers between the best customers you surveyed and join them together to become your marketing personas (also called buyer personas). You might end up with something like this:
Sample Marketing Persona
- Sex: Female
- Age: 40–45
- Relationship Status: Married
- Location: United States
- Income: $150,000 — $200,000
- Job: VP of Marketing
- Digital Marketing
- Generating enough high-quality leads
- Converting leads to customers
- Hiring great marketers
- Hubspot Blog
- Seth Godin’s Blog
- Marketing Sherpa
- Seth Godin
- Dharmesh Shah
- Sean Ellis
- Rand Fishkin
You can then take the marketing persona of your best customers and use it as the foundation on which you build out your marketing plan to reach more customers like them.
Two killer ways to leverage your new marketing personas are via Facebook ads and promoted tweets on Twitter.
On Facebook you have extremely targeted advertising options for sex, income, relationship status, location and interests. If you know your best customers are female, married, live in the U.S. and have incomes of $150–200K and like digital marketing, leadership and travel, you can not only explicitly target other people like them, but Facebook will also tell you how many people there are like that using Facebook.
On Twitter, you can create ad campaigns to target people who also follow the same influencers that your best customers told you they look to for advice and recommendations. In our example marketing persona, they follow Seth Godin Dharmesh Shah, Sean Ellis and Rand Fiskin.
Between them, they have millions of followers and by telling Twitter to target their followers with your ads, you can reach everyone who “looks” like your best customer based on their marketing persona.
Building and using marketing personas really does one thing — it lets you stop the “spray and pray” marketing approach and helps you start “shooting fish in a barrel”, massively narrowing your focus to reach people who are as similar as possible to your best customers.
Not rocket science, but man will it improve your marketing metrics substantially. Don’t be surprised if you can spend 80% less on marketing and 2x your conversion rate in under 30 days.
CRO (Conversion Rate Optimization)
It’s 2016 so you probably sell your products either 100% online or primarily online. But have you given much thought to your web site since it went live? The act of continually optimizing your website to maximize your conversion rate is called (surprise surprise) Conversion Rate Optimization, or CRO for short.
Spending some time testing, tweaking and optimizing just a few key elements on your web site can make the difference between a 2% conversion rate and a 20% conversion rate. And I say that speaking from experience at 2 of my companies.
So what kind of things can you (and should you) test on your web site, and how do you actually test them? Well, the testing is easy. You use a tool like Optimizely to run split tests, which lets you test 2 or more versions of the same thing at once.
For example, you might come up with 4 different headlines (these are called variations) for your home page, which you test against your current headline (which is called the control). You then use Optimizely to randomly show one of those headlines to each person that arrives at your web site. You can then track which headline results in the best sign up rate.
The simple headline test above, for most companies, will increase their conversion rate by at least 10%. The key is writing compelling headlines that resonate with your audience.
What else can you test as part of your conversion rate optimization efforts? Well, there’s a heap of things, but you really only want to focus on those that have the biggest impact. For example, you would test making small changes to the layout of your web site or spacing between text. You want to test big changes like:
- Subheads (the text below your headline)
- Calls to action (like “Sign Up Now”, “Buy Now”, etc)
- Your offer (30-day free trial vs 60-day free trial, etc)
A/B testing is great because the numbers don’t lie — and the testing gets rid of your biases. Whether you “like” a headline or call to action becomes irrelevant, because all you care about is what your website visitors do.
Over a few tests, you can try different headlines, subheads, calls to action, offers and more, progressively improving your conversion rate over a few weeks or a few months. Conversion Rate Optimization, when done correctly, takes very little time, is inexpensive and can produce the biggest revenue upside for your business.
Just recently I was able to increase my conversion rate by 460.4% by testing a few headlines, subheads and calls to action over a 2 week period. It took about 2 hours to create the tests and look at the results using Optimizely.
Sure, I’ve studied copywriting and conversion rate optimization for the last 15 years, but it’s pretty simple when you understand who your customers are, the problems they have and how you’re best positioned to help them. You just take all of that and “spit it out” on your website as your headline, offer, call to action, etc.
Price Elasticity And Testing
Most products are priced 1) too cheaply and 2) based on what other competitors are charging. This is a mistake most companies make. Before you launch, you look at what your competitors are charging and how many pricing plans they have. You copy them and make yours a bit cheaper to be more competitive.
The thing with pricing, though, is that you actually want fewer customers who will pay you more money for the exact same product. By generating the same revenue with fewer customers, your operating costs stay low, meaning you’ll need fewer employees to support your customer base as you grow. It also means you can spend more to acquire each customer because they’re paying you more. You can also give each customer more attention, increasing the likelihood of referrals.
If you haven’t looked at your pricing for a while (or at all!, where should you start? Well, the Price Intelligently blog is a gold mine of valuable pricing information, especially if you sell subscription products.
After reading a few posts on their blog, you’ll quickly come to realize a few things:
- Fewer pricing plans are better than more. Go for 3 instead of 6.
- You should have an “Enterprise” plan, even if you don’t sell to large companies, because “price anchoring” will make your other plans seem cheaper.
- Your pricing page is the first destination for 80% of your visitors and if it’s too confusing or you omit pricing, they’ll leave.
- You should structure your pricing plans based on two axes — features and usage. For example, your basic plan might have 5 features while your standard plan might have 10 features and your enterprise might have 20. Across all plans, there is also some sort of usage metric that starts low and increases. For a CRM, that might be the number of customers you can store. For a file-sharing product that might be how much space you get to store your files.
There are two ways to do price testing: by yourself or using a consultant or agency. If you’re going to do it yourself, you’ll want to use Optimizely to A/B test a few different things, specifically:
- How many pricing plans should you have?
- How much should each plan be and what should it include?
- Should you have a free trial?
- Should you offer a pre-paid yearly discount?
- Should you show a strong refund guarantee?
- Should you show testimonials from happy customers?
- Should your pricing page be long and detailed or short and brief?
- Should your pricing page include your website navigation or include nothing but the “Buy Now” buttons to minimize your bounce rate?
Sounds like a lot of work right? Well, one of the easiest tests you can try with Optimizely and a limited segment of your website visitors is increasing your pricing. Take a look at your current pricing and add 30, 50 or 70% to it. Test that for 30 days to a limited audience, such as only visitors from a particular country or 5% of new traffic and see how it goes.
The funny thing is, you don’t even need to actually be able to charge them more. All you care about is their willingness to pay, so as long as you can show the increased pricing — and they sign up — they’ll expect you to bill them at that price while they’re a customer.
When they get billed at your current (low) pricing, you can explain that it’s a glitch and that you’re happy to keep them at the lower price. They’ll love you for it and you’ll have valuable test data which you can use to actually increase what you charge.
Building A Content Funnel
If your conversion rate is currently sitting around 3–5% (industry average), doesn’t it make sense to capture the details of the remaining 95–97% of visitors to your website so you can contact them again at a later date?
Of course it does. But how many websites actually have a good strategy in place to say “Hey, you’re not ready to buy now. That’s cool. Leave your email here and we’ll send you some good educational content to help you out.”. Maybe 2% or less.
Today there are so many amazing tools available to help you capture the contact details of website visitors, you’d be crazy not to. 95% of your visitors aren’t ready to buy right now, but you know what? A good portion of them will buy, soon. And you want to make sure they buy your product, not your competitor’s.
So how do you do it? Well, first you want to ask for their email address in exchange for sending them genuinely useful educational content that will help them. Not cleverly disguised sales pitches. Not discount coupons. Really helpful, educational content.
The easiest way to get their email is to show some sort of email form on your web site and/or blog using HelloBar. It’s an incredible tool that integrates with all of the popular email marketing systems, meaning once they enter their email address it will automatically be synched across to your email list.
Here’s an example of HelloBar from one of my web sites a few weeks ago:
Guess how many people leave their email address? 4.25% of all visitors:
In 6 days, that’s 252 people who left their email address. That’s over 200 people who normally would’ve visited the website and then left — without a way for me to reach back out to them and keep me at the top of their mind.
On the backend, they go right into my email list in Mailchimp where they automatically get an email every time we post something new on our blog. What do we post on our blog? You guessed it, 100% educational content targeted at our typical customer, which helps them solve a problem we know they’re currently experiencing in their business.
The key word in that last paragraph is “automatically”. To reach back out to them every few days with useful content, we do zero work besides writing the content, which normally takes 30 minutes per blog post, 3 times per week. A great investment.
By sending them so much useful, educational content, they can’t help but feel good about us. And how a potential customer feels about you goes a long way in determining whether they’ll buy from you. While our competitors are busy emailing discount coupons and “time-limited offers” which are completely fake, I’m sending prospects useful, educational content.
Guess who ends up with the customer and the sale?
Like this guide? I publish new stuff every few days based on what I’ve learned building 5 companies and generating $200M in revenue. Join my private email list to get my content first, plus growth, marketing and strategic advice I only share via email. I sometimes coach and advise founders too. If you’re smart, aren’t a jerk and have been coached before, you can get more info here.