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Understand marketing and advertising

Marketing is not bragging, and touting one’s wares is not evil. The baker in the medieval town square must holler, ‘Fresh rolls!’ if he hopes to feed the townfolk.

Jeffrey Zeldman
On Self-Promotion
November 24, 2009

More projects fail from a lack of sales and marketing than a lack of shipping. Plenty of products ship but never get more than a few customers, or worse, never get a single customer. In many cases, this has nothing to do with the product itself. The problem is that the people it can help have no idea it exists. And even when they do, they might not realize it can help them.

No matter what you do, save yourself a lot of pain by not buying into the myth that good products sell themselves and don’t need marketing. It’s a huge lie. Sure, it is easier to sell a high-quality product, but if nobody knows about it, it doesn’t really matter how good it is.

Spend at least half your time on marketing and sales, the other half on design and development. That may sound insane, but it’s a good rule of thumb for the early days. Your biggest challenge won’t be shipping your product–it will be generating enough awareness that people actually sign up.

Sales and marketing are about more than traditional sales and paid advertising. Sales is about helping people, and direct sales is also great for customer research. While you can spend a lifetime learning sales, here’s the key: it’s not about the product–it’s entirely about the customer. If you start a product demo without asking questions about your potential customer, you’ve already failed. You have to understand their pain points. Then you can translate their difficulties into solutions and benefits from using your product.

Moreover, when you’re trying to sell your product to someone over the phone or face-to-face, you’re going to hear their objections. And those objections are the formula for fixing your product. You won’t be able to directly address every one, but you will start recognizing patterns. If the vast majority of your potential customers say they’d sign up if only you accepted American Express, then you know what you need to work on.

An added bonus of talking to customers about their pain points is that they’re giving you the exact words to use to explain your product’s benefits–and now you’re talking marketing. Marketing isn’t just paid advertising and email newsletters. Marketing is blogging, presenting, sharing, creating, and doing things that give people a reason to care. Marketing is communication.

Here are some basic rules of thumb about marketing that can help you recognize when you’re missing the target. If your tagline or elevator pitch can just as easily apply to a competitor–or another industry entirely–you’re not communicating well. “[Blank] made easy” or “[Blank] done right” or “[Blank] for the rest of us” don’t say anything at all.

Look at your marketing copy. If it uses the first person more than the second, you’re probably not helping your potential customers much. They’re more interested in themselves than your product. Help them see that you understand where they’re coming from by talking about their pain and how your product removes it.

Finally, don’t list your product’s features. At least, don’t let a list of features be the extent of your marketing. To sell and market a product, you have to know your customer and their terminology. If you’re a hosting company, for instance, your potential customer’s pain isn’t a lack of virtual hosting. It’s a lack of reliability on the part of their current provider. You’re not selling virtual hosting. You’re selling reliability and uptime.

Be Judicious with Paid Advertising

Marketing and advertising can be a waste of money or a fantastic investment. Your product, marketing site, audience, and messaging are all significant factors. It’s difficult to understand the value of your advertising efforts. And it’s even more difficult if you run multiple advertising campaigns and constantly tweak your marketing site.

Over the course of Sifter’s first four years, we spent around $20,000 on advertising. That was spread out over many different forms of advertising and many sources. Some of it went toward impression-based ads, while some of it went toward Google AdWords.

In all honesty, I didn’t spend all that much time or effort tracking advertising’s efficacy. For the most part, the advertising was little better than haphazard. We used Google Analytics to monitor the quality of traffic from various sources, but we rarely measured any advertising metrics beyond that. My time was scarce, so we usually just threw small amounts of money at advertising now and again without spending all that much time on it.

I can’t give you definitive answers about what you should or shouldn’t do, and there’s no simple “Spend $X advertising here” solution. It’s much more subtle than that. Advertising can work, but if you’re going to spend the money, you need to do a lot more than just throw the ads up. Test and measure your results.

Don’t Try to Make Advertising a Silver Bullet

I strongly believe that if we have to advertise, we haven’t made a compelling enough product. That’s an oversimplification, but it’s the safest mindset. A good product with clear messaging is much more valuable than advertising. Advertising can boost a good product or really help a great product, but no amount of advertising can save a terrible product. Don’t fall into the trap of thinking that spending heaps of money on advertising will fulfill your wildest dreams of growth. It can be a good complement to other forms of marketing, but without the other pieces, you’re just burning money.

Look Into Branding and Lead Generation

There are two major types of marketing. Branding, usually in the form of impression-based advertising, gets your name out there and helps you stay at the front of people’s minds. It’s unlikely to pay off directly in terms of new customers, but it’ll contribute to your growth over the long term. Because of branding’s long-term nature, it’s difficult to accurately measure. But in the early days of a startup, it can really help get the word out. Unfortunately, to see significant short-term results from a branding campaign, you’d probably need to spend several thousand dollars a month for several consecutive months–and that assumes your product and marketing sites could convert the traffic once it was to arrive at your site.

Lead generation is a much more precise form of advertising. It also requires more time and effort to manage. If branding is widespread and its direct results difficult to quantify, lead generation should be accurate and measurable. One of the best sources for this type of advertising is Google AdWords–it’s not cheap, but if you work on your ad copy and landing pages, it can be incredibly effective. We regularly saw Google AdWords send higher-quality traffic than our organic search results; visitors from Google AdWords bounce at a lower rate, spend more time on the site, browse more pages, and sign up for free trials more often.

Don’t Send Good Traffic to a Bad Site

One of the biggest mistakes you can make with advertising is to spend money bringing people to a site that doesn’t offer a compelling reason to sign up. If you plan to use advertising as a significant component of your marketing strategy, you must regularly make improvements to your marketing website. One of my greatest frustrations is that I’ve never had time–or made time–to work on our marketing. I toyed with it now and then, but we’ve never made anything more than a superficial commitment to marketing. This is part of the reason we never advertised as much.

Spend Some (but Not All) Your Time on It

In Sifter’s early days, I made the mistake of thinking that advertising was a quick and easy way for us to put small amounts of extra cash to good use. Unfortunately, it’s not quite as easy as spending the money–you also have to work on messaging, copywriting, designing, and managing it all. You should also analyze the results after each ad campaign. But keep in mind that optimizing your ads and landing pages can consume large amounts of time if you get caught up in Google AdWords or other targeted marketing. Don’t assume that advertising won’t require significant amounts of time and attention.

Measure Your Efficacy

Google Analytics is one of the simplest and cheapest ways to measure your traffic quality and understand whether your advertising is worth what you spend. Set up some goals and maybe even some custom reports. Starting with Google Analytics offers the best bang for your buck in your early days. There are several services, like Kissmetrics and Mixpanel, that can provide deeper insights into customer behavior, but they require some up-front time to set up, and their monthly fees aren’t insignificant. If you’re bootstrapping, I’d suggest putting those off until Google Analytics no longer provides you with enough actionable information. This will save you time and money, and if you put some effort into using Google Analytics, you should have more than enough data to last you for quite some time.

Don’t Forget about Search Engine Marketing

Search engine marketing (SEM) is difficult to use effectively, but it can be incredibly powerful once you get the hang of it. (Specifically, I mean pay-per-click search engine marketing, not search engine optimization.) SEM requires time, research, analysis, and a fair amount of cash. Throwing ten-dollar clicks at a terrible marketing site is nothing more than a quick way to burn cash. If you’re not careful, you could easily waste several thousand dollars just learning how to play the game. Don’t dabble with SEM unless you’re committed to experimenting, analyzing, and iterating on your messaging and landing pages.

If you want to give SEM a try, I think your best approach is to learn as much as you can. Then, over the course of a week, buy some ads, try what you learned, and monitor things. As you learn more and gain confidence, slowly start to expand your campaigns. During this time, you should constantly update and manage your landing pages. You’ll probably lose money in your first month or two, but don’t let that get you down. Your ads and conversion rate will improve, you’ll learn which keywords and phrases are best for your product, and you’ll start to turn a profit.

Once you’ve fine-tuned the formula so nearly every dollar you spend on pay-per-click ads is profitable, the only effective limit is the amount of search traffic in your niche. If your niche sees only ten searches a day, you’ll run out of potential searches long before you run out of budget. But let’s say every dollar you spend on pay-per-click ads generates five dollars in revenue: how much of your money would you spend to buy clicks? I’d hope your answer is “all of it.”

Put Off Gimmicks and Promos

Here’s the scenario. Your application is just getting off the ground. You’ve bootstrapped it. You’re short on time and money, and you need the business to grow to pay your salary. You can’t afford to pay for significant advertising campaigns, and you don’t have time to blog, let alone wait for the blogging to create an audience of potential customers.

That’s when you may start thinking a promotion or discount on your application could be great because there’s no upfront cost–you’d only have to pay for the new customers. It may sound enticing since it doesn’t seem to cost you anything, but you’ll find that the long-term costs and side effects probably outweigh the short-term benefits.

I’ve heard that some businesses have had short-term success with promotions or discounts, but they’re a poor strategy for sustainable growth. We regularly received offers to include Sifter in steeply discounted promotions or bundles–ostensibly to help promote Sifter to a new audience. Those offers can be tempting, but we invariably passed; these days I wouldn’t even give them a second thought.

Discounts or bundles may seem harmless enough on the surface (and therein lies the temptation), but selling your software for a discount can create more problems than it solves. If it takes a gimmick to get people to sign up, that likely means the discount or promotion is masking their underlying gripes with the product. Better to spend your time improving your product to make your existing customers happy.

If you use a promotion or bundle to reach new customers, you’re mostly just reaching an audience unified primarily by their desire for a good deal–they don’t necessarily share a common interest in the problem that your application solves. And they’re less likely to be interested in ever paying full price.

Since price–and not fit–is such a significant factor in their decision, you could end up with cohorts of customers who shouldn’t really be using your product: it’s probably not right for them. And they might file a boatload of feature requests as they try to shoehorn your product into their workflow. At best, they’ll be a distraction; at worst, they’ll pull your vision in the wrong direction. You’re much better off in the long term if customers choose your product on its merits rather than price.

Discounts and promotions may also come across as unfair to current customers who pay full price. They might feel like second-class citizens because they’re now paying more than the people who got the discount. If you gain too many customers too quickly–without any immediate profit from those customers–you could find yourself with a greater support burden while lacking the cash flow to expand your support team. I love welcoming new people, but not at the expense of our existing customers.

I’ve found that customers generate their highest support load during their first month while they become familiar with the product and ask questions about it. And if there’s a massive influx of new customers, that can throw your support team for a loop–and that hurts everyone.

Promotions and discounts devalue your product. It’s an unfortunate truth that people conflate price with value. If you deeply discount your product, or bundle it with others, people will think less of it.

Affiliate Programs

Affiliate programs aren’t quite discounts or promotions, but they’re worth addressing since they’re in the same realm. In our early days, we regularly received emails asking whether we offered an affiliate program. We also spoke with a few companies that wanted to recommend Sifter if we became partners. I can’t be sure whether we made the right decision, but we decided not to offer a program.

The biggest strike against affiliate programs is that they require development time to run effectively. Every development hour spent on marketing is one not going toward the parts of your business that really matter. Simply put, affiliate programs take time away from more important things. Sure, you could set up a program with a third party, but that will cost money. You could try to build one yourself, but then you’d need to process payments and approve accounts–and you’d probably have to deal with fraud and other hazards as well.

You’ll meet plenty of people who want to partner with you to promote your service, and they’ll ask about an affiliate program. This may seem attractive, but it shouldn’t be on your radar in those first few years. I’m inclined to argue that it shouldn’t ever be on your radar, but I’ve heard of some companies that have had modest success with affiliate programs. I still don’t believe the risks are worth it.

If someone needs a kickback to promote your product, then either they care more about the kickback, or they don’t love your product enough to promote it without. You’re better off focusing on your product rather than spending money to acquire customers. Customers come and go; product improvements last forever.

Affiliate programs create questionable motivation: when someone is paid to recommend something, it’s difficult to know whether they like the product or they’re just trying to make some money. Were someone to recommend a tool because it made their life better–not just because they were hoping to make a buck–their recommendation would carry a lot more weight.

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