How well does your ecommerce website convert?
On average, ecommerce sites in the United States convert at about a 3% rate.
If you're hovering somewhere around that number, you might think your website is already optimized for high conversions.
Even if you think you're doing well, there's always room for improvement.
In fact, some of the top performing websites, such as the Google Play Store, have a conversion rate close to 30%.
Companies such as the Dollar Shave Club have roughly a 20% conversion rate.
Do you still think 3% is sufficient?
If you have an ecommerce website, you need to constantly make improvements that add credibility to your website. This will help you get more conversions.
For the most part, these changes won't cost you much money but will bring a massive return.
You could double or even triple your conversion rates in just a few months by implementing some of these conversion rate optimization (CRO) strategies.
Those of you who don't know how to optimize your ecommerce site for conversions are in luck.
I'm an expert in this space and have plenty of experience consulting businesses about their CRO.
I've come up with a list of the top eight ways for ecommerce sites to increase their conversions.
Here's how you can get started right away.
1. Simplify the checkout process
How long does it take for someone to complete a purchase once they're done browsing on your website?
Studies show 27% of shoppers abandon their carts on an ecommerce website because the checkout process is too long and complicated:
On average, the number of steps to check out on an ecommerce website is 5.42.
If you're somewhere in that average range, nearly 30% of your prospective customers think your checkout process is too long.
Think about how much money you're leaving on the table.
The more steps a customer has to take to complete the checkout, the more likely they'll abandon the cart.
It gives them too many reasons to back out.
Don't give them an excuse. Finalize your sale.
Get back to the basics, and narrow down the information you actually need from the customer:
That's really it.
You don't need to know their favorite color or who referred them to your website.
While additional insight may be beneficial to your marketing department, you still have plenty to work with from just those few pieces of information.
Based on the shipping location, you know where the customer lives. You have their name from their payment information. And you have a way to contact them via email.
You can even personalize that message since you know the customer's name.
Don't force your customers to fill out a form that's longer than paperwork at the doctor's office.
Simplify your checkout process and only ask for essential information needed to complete the sale.
2. Highlight items that are on sale
Most online shoppers-86% of them- say it's important for them to compare prices from different sellers before making a purchase.
It's no secret price is an important factor when it comes to a purchase decision.
That's why you shouldn't hide your discounted items.
Take a look at how Macy's highlights markdowns on their homepage:
The website is absolutely plastered with buzz words like:
That's why they are able to get higher conversions than their competitors.
Customers love to get a deal.
Buying something that's on sale makes your customers feel better about spending money.
All too often I see companies try to hide their sale items.
They would rather sell items listed at a full price.
That's a big mistake.
Instead, highlight discounted products and services.
You can always try to cross-sell or upsell to those customers later by enticing them to buy something else through other marketing efforts.
3. Display multiple pictures of the product for sale
You shouldn't be selling anything based on just a description.
Your customers want to see exactly what they're purchasing.
Make sure your images are high quality and portray the item in question accurately.
Here's a great example from Lululemon to show you what I'm talking about:
There are six different pictures of just one pair of shorts.
They show the product from different angles and even zoom in on some of the top features like a pocket that's designed to keep a cell phone secure.
Pictures are much more reliable in relating information about a product than a written description of it.
You can apply the same concept to your ecommerce site.
Sure, it may take you a little bit more time to set up each product.
You'll have to take more pictures and include additional images on your website.
But I'm sure you'll notice a positive impact in terms of your conversions after you implement this strategy.
4. Provide live chat support for customers who are shopping
Even if your website is very informative, some customers may still have questions while they're shopping.
You should set up a live chat option for your site visitors to communicate with a customer service representative.
Imagine someone wants to buy something, but they don't-simply because they have a question and don't have a way to get an answer.
Try to offer an online shopping experience they would get inside a physical store, with a sales associate available to assist them.
Look at how Apple does it. They offer a live chat for shoppers on their website, and it looks like this:
They make it super easy for customers to get all their questions answered online.
This is especially important if your company sells products that may need some extra explanation.
Realize not all of your prospective and current customers may be experts in your industry.
Although your product descriptions may be accurate, it's possible there's some terminology the customer doesn't understand.
Rather than forcing them to pick up the phone or do outside research, offer them a live chat. Receiving this type of help can be the deciding factor that leads to a conversion for this customer.
5. Offer multiple payment options
Someone wants to buy something on your website, but they can't because you don't accept their preferred payment method.
This should never be the reason for you to miss out on conversions.
While I realize some credit card companies may charge you higher rates than others, it doesn't mean you should restrict payment options for your customers.
Try to accommodate as many people as possible.
While I'm not suggesting you need to accept cryptocurrency like Bitcoin, you should be accepting every major credit card, e.g.:
You should even offer alternative payment options such as:
Here's an example from American Eagle:
They accept nine different payment methods on their ecommerce site.
You need to offer as many options as possible for your customers.
It all comes down to convenience.
Some companies may just accept MasterCard and Visa.
They figure those are popular options, so everyone must have one, right?
But here's the thing: you don't know everyone's financial situation.
While someone may have a Visa, it could already have a high balance on it, forcing them to use a different payment method.
Others may want to use their American Express card or Discover card because they get better rewards there.
And some people may not want to use a credit card at all if they have a sufficient PayPal balance.
The more options you offer, the greater the chance you'll appeal to a wider audience.
Don't assume everyone wants to pay with the cards you accept if that selection is limited.
Assume people will find a similar product elsewhere, where their preferred payment option is accepted, which will crush your conversion rates.
6. Have clear CTA buttons
Make sure your call-to-action buttons are clear.
They should be bold, standing out from other content on your website.
You can even put a box around the CTAs, clearly separating them from other text on each page.
Take a look at how The North Face does this on their website:
It's clear which buttons on their homepage will direct customers to the right page.
Even though they have lots of different options, their website isn't cluttered, and it's organized in a professional way.
This makes navigation easy.
Now their customers can find what they're looking for faster and start adding items to their carts.
Look at how the CTA button changes when a customer views an item:
Now the button is even more apparent because it's red.
It stands out, so it's clear what the customer should do.
Don't hide your CTA buttons.
It should be easy for customers to navigate and add items to their carts.
Big, bold, clear, and colorful call-to-action buttons can help improve your conversion rates.
7. Include user reviews
Consider this: 88% of shoppers say they trust online reviews as much as they trust personal recommendations.
That means nearly 90% of people trust a stranger's opinion online as if it were coming from their spouses, best friends, or family members.
Furthermore, 39% of people say they read product reviews on a regular basis, and only 12% of customers say they don't check online reviews.
Basically, this means customers want to see what their peers have to say.
Encourage customers to review products they've purchased, and display those reviews on your website.
Take a look at how Johnston & Murphy does this on their ecommerce site:
More reviews means more credibility.
Obviously, you're going to say only great things about the products you're selling.
But other customers will be truthful about their experiences.
That's why consumers trust these ratings and reviews.
Customers share personal stories about the uses of the products they purchased and the reasons for recommending them (or not).
Notice I also highlighted the chat option on the Johnston & Murphy website-a topic I covered earlier.
Don't be upset if not all your reviews are absolutely perfect.
You'll get some negative comments.
Those negative remarks can actually help you. It shows shoppers your reviews are legitimate.
Hopefully, the positive ratings will largely outweigh the negative ones.
This will help you get more shoppers to convert and complete the purchase process.
8. Add a video demonstration
If your products are unique, include video demonstrations showing how to use them.
Here's an example from the Training Masks website:
They have workout videos to show people how to use their product to train harder and smarter.
Since this product isn't something you see every day, the majority of the population may not know how it works.
But don't think you can't use videos even if you're selling something simple.
For example, everyone knows how to use a piece of luggage, right?
Well, that doesn't stop Thule from including a video demonstration on their website:
The video shows all the hidden compartments of the bag.
It also shows customers how they can adjust the handles and straps and utilize other features.
In addition, you can include a video demonstration highlighting the features that set your product apart from similar products.
Even if you're selling something simple, like a shirt, a video can show customers the item's versatility for different occasions, scenarios, or weather conditions.
You just have to get creative.
Your ecommerce site should be making more money.
Don't settle for average.
Take steps to improve your conversion rates.
You can make subtle changes or additions to your site that will get more people to make purchases.
Start by simplifying the checkout process. You'll get higher conversions with fewer steps.
Emphasize items that are on sale or discounted.
Include multiple photos of each product from different angles.
Allow your customers to chat online with customer service representatives to answer any questions they might have while shopping.
This will give your customers the same feeling they get whenever they are shopping inside a brick-and-mortar store.
Don't restrict payment options. Offer as many payment methods as possible to appeal to a wider audience of prospective shoppers.
Your CTA buttons need to be big, bold, and clear.
When placed in proper locations, these buttons can help you get more conversions.
Make sure you include customer reviews for all your products.
These recommendations can encourage others to make a purchase.
Create videos showing detailed explanations of how your products work.
This is the perfect chance for you to highlight the unique features of your product.
These tips are easy to implement, and they won't cost you much money at all.
Trust me, they work.
You can start applying some of these elements to your website right away.
What have you done to increase conversion rates on your ecommerce site?
In this new webinar, Chief Confidence Officer from the American Confidence Institute, Alyssa Dver, discusses how confidence directly impacts our own and other people's behaviors, how it can impact your marketing results, and how it works in our brains. Moderated by Hanapin's Director of HR, Rebecca Reott, you'll get tips on how to think and market more confidently that will help you in the workplace as well as personally.
Read more at PPCHero.com
“Our brand is strong”
“Our brand is admired around the world”
These words and phrases make most entrepreneurs and employees roll their eyes. They view brand as an overused term that means very little to the world outside the company.
But your brand may be the most valuable asset your company has. It's also the most fragile.
Here's why a brand is so important, what can happen when a brand is damaged, and how to create a great brand.
What is a Brand?
A company brand is an intangible asset because it is not a physical object. This is opposed to a tangible asset, such as your company office and company equipment.
And while it is not a physical asset that you can look at or hold onto or assign value to, it is perhaps the most valuable and fragile piece your company owns. One mistake or PR blunder and your brand, and thus your company, will be damaged.
Why is a Brand Important?
A brand is what people think of when they think about your company. If you're in the airline business, you want your brand to be known for reliability and quality. You don't want to have a customer service disaster like United Airlines had, which meant significant damage to their brand.
Brands are built overtime, but can be damaged very quickly and result in a significant loss of sales. Public companies routinely place maintaining their brand reputation as a risk factor in annual reports. This means that your company, no matter how small, cannot ignore your brand.
Brands are not built overnight. Instead, they are built up over years and can be destroyed in days.
What Happens When a Brand is Damaged?
To further understand the impacts that a brand has on a company, let's look at what happens when a brand is damaged, using a few examples we all know.
If you asked a person in spring 2015 what they thought of Chipotle, they'd probably tell you they served delicious burritos. The food was quality and the prices were reasonable. And shortly after telling you that, they'd go to Chipotle and order one of those delicious burritos.
Ask that same person in 2016 and they'd tell you that it would be risky eating at Chipotle and there are probably some better Mexican food options nearby.
The e coli and norovirus outbreak at Chipotle restaurants. This outbreak resulted in significant damage to the brand (could anyone say their food is quality?) and declining sales. Just look at what happened to the company's value after this outbreak:
This is what can happen if your brand is damaged. Your company value can be cut in half. And if you're a startup, you could be put out of business if you lose customers and investors trust.
Today, Chipotle is still recovering from the damage their brand took from the food safety issues. As I stated, building a quality brand takes years, but can be damaged in days. That's what happened to Chipotle, and they're still working to restore their brand to what it once was. It will only take time and a long string of no food-borne issues.
Similar to Chipotle, Equifax had another safety issues. Except this time it wasn't about food safety, it was about information safety.
Because of poor security measures, Equifax was hacked and left the extremely private information of hundreds of millions of US customers vulnerable to cybercriminals.
After the hack was announced, there were more bad headlines about how poor the security measures were at Equifax:
Equifax has taken steps to restore public trust and rebuild their brand, but they'll have a long way to go before anyone can trust them again.
Today, would you use Equifax for any of their services? Probably not, as you couldn't trust that they'd do a good job or keep your data safe.
Remember Yahoo? Some of you may still use it. Personally I haven't used Yahoo in a number a years because their competitors offer a better product.
Yahoo used to have a strong brand. The classic shade of purple, the yodel, the beautiful design, and the array of features that came with the Yahoo brand.
But that was early to mid 2000s. Over the last few years, Yahoo has suffered a decline. The board hired Google executive Marissa Mayer, and while she gave a valiant effort to rebuild the empire, she ultimately came in too late for it to be saved.
Yahoo was acquired by Verizon and while it is still around today, it's nowhere near its peak.
So what happened?
Hacking, malware attacks, privacy concerns, increasing criticism, and a product that didn't keep up with competitors or the times has led to Yahoo's downfall.
And while Yahoo is still one of the most visited websites, their brand has been damaged and will likely never recover.
Travis Kalanick created an innovative new service that changed the world. Uber made it possible for anyone in an urban area with a smartphone to be picked up with the touch a button. It took over, growing to billions of dollars in annual revenue in only a few years.
Then came a PR nightmare.
He was caught on camera telling a driver to take responsibility and boasts that a tough culture is needed to win.
Then the influential New York Times did a feature piece that didn't shed the best light on him. And another piece was published that reported that Kalanick had knowledge of Uber's sexual harassment problem but didn't do anything about it.
Apple CEO reportedly threatened to kick Uber off the App Store because it violated Apple's privacy standards.
Kalanick wasn't always well behaved, but he was a tremendously talented entrepreneur. But by the time he grew Uber and the brand, the Board decided it was time for Kalanick to go and Kalanick submitted his resignation.
Today, Uber has a new CEO. He's got a big job to do in rebuilding trust in the brand, but has a strong company behind it.
I've experience one of my companies brand's being damaged. The company I cofounded, KISSmetrics, took a hit to our brand when we were sued. It resulted in significant damage to our brand at the time, and it still lingers today.
The lesson here is that your brand is the most valuable asset. It needs to be built up and protected. A good brand can take your company a long way.
Now, let's look at companies with strong brands and what we can learn from them.
Creating a Brand
Brand building is an important step in starting a business. People that are looking at your new business need to know what your company stands for.
Know What You Stand For
This is the most important step. Great companies have brands that stand for something. Here are some examples:
You have to know what your brand will stand for. “Selling quality food” isn't a stance. Any company can say they sell quality food.
“Selling the highest-quality organic and natural food” is a stance because you know what you're getting when you go that store. You can't buy Skittles and Coke when you visit this store. You can buy organic food there. People now know what you stand for, and will visit your store when they're seeking those items.
A lot of companies will say they build world-class products. Many of those companies also have dozens of products. The simple reality is that you can't be world-class at 12 different things. You need to know what you're willing to be bad at.
In this video, Scott Belsky discusses why companies have to be willing to be bad at certain things in order to exceed in others. I'd recommend setting some time aside to watch this.
There will have to be tradeoffs. If you have great customer service, you may have to have higher prices to maintain your margins.
Just look at a company like Apple. Consumers know that Apple products are quality. There aren't a lot of bugs, it's well-built, and their products generally last for years. Any bad news about their product quality is going to significantly affect their brand. That's why they go a long way to protect it.
So when the issue came out about the battery usage on older iPhones, Apple had to go to great lengths to win consumer trust back. They wrote a message to customers and offered a battery replacement for only $29, a $50 reduction in price. This means that Apple will make less money, but consumers ran to Apple stores to get their batteries replaced.
The takeaway here is simple – if you screwed up, admit it to customers (even if it was a misunderstanding). Then offer a discount or something else to win their trust back. For 8/10 customers, this will work great. The other 2/10 will never be pleased.
Make your brand something memorable that stands out in a crowded market.
So when you know what you stand for, you can then effectively message this to consumers.
Messaging Your Brand
You know what you stand for, now it's time to make sure customers know.
Remember this viral video?
Believe it or not, this is actually a video promoting a brand.
The video features Trent Kimball from Texas Armoring, a company that builds armored vehicles. If you were looking for an armored vehicle (chances are you aren't, but stay with me) then it would be difficult to not buy something from this company. It's the owner of the company literally standing behind his protect while three gunshots are fired.
This is Kimball doing his best to message his company's brand. While you don't have to go to similar lengths, you should do all you can to make your brand message stand out and be memorable for people.
Let's look at a couple other examples of how companies message their brand.
Spotify's message is simple. They can message the “Music for everyone” because their music catalog has something for everyone. No matter who you are, you know that Spotify will have music for you to enjoy.
Lifelock wants you to connect two terms – data breach and Lifelock. When you hear about a data breach, think of Lifelock. They are the protection against any breach on your data.
Where to Message Your Brand
Many B2C companies message their brand through their website and advertisements. It's also common to use social media to message your brand to followers.
Just look at the social media followings of companies like Skittles, Wendy's, GoPro, Denny's, and many more. In many cases, most people wouldn't even know much about these brands if they didn't follow them on social media. These companies aren't just tweeting and sharing promotions, they're showing their brand personality.
Taco Bell is perhaps the one we all know about. When you think of Taco Bell, you think of a fun place to grab a quick bite to eat. And their social media supports this brand message.
Now, let's get into the last step of brand building. This is perhaps the most important step because if you ignore it, you'll lose public trust and your company will have big hurdles to overcome.
Create the Products and Services That Build Your Brand
Some entrepreneurs will tell you that a brand is overrated. Just create your product and customers will create your brand.
You are what they say you are and there's nothing you can do about it but change your business. Once you change your message, then eventually customers will change what they say about you.
This is all true to some extent. The issue I have is that it's a passive mentality. It means that you're not doing all you can to message your brand.
You need to message your brand and build the products and services that support that brand message. Think of Whole Foods. We all know them as an organic grocer. Can you imagine if you went into one of their stores and saw Pepsi and Mike and Ikes for sale? The brand would be tarnished for you. Their loyal customers would be furious.
This is why your business must support your brand. Once you do that, and message your brand effectively, your brand will become a fixture for consumers. They'll know what your company is about. Warren Buffett says it best:
In this video, I'll go deeper into explaining not just why you need to build a brand, but also how to measure your brand using a simple tool from Google.
Entrepreneurs and managers frequently think of branding as unnecessary and a waste of time.
But when you have a company, you'll have a brand attached to that company. It's what consumers will think of when they think of your brand.
Brands are fragile. One minor slip up can damage your brand, which is why good PR skills are necessary. The good news is that a good brand will last forever.
As an entrepreneur, how have you been building your brand?
About the Author: Neil Patel is the cofounder of Neil Patel Digital.
Businesses need to look toward the future to survive and thrive.
I'm sure you've got an effective strategy in place that targets Millennials or Baby Boomers.
But it's time to shift your focus to a younger generation.
The term Generation Z describes people born after Millennials.
They may also be referred to as:
Although there isn't an exact date range, it typically refers to anyone born after the mid to late 1990s.
That means the oldest members of this generation are in college or just graduating.
The reason why this information is so important is because they are starting to enter the workforce.
With a steady annual salary, Gen Z will now have more buying power.
Extra money in their pockets means marketing experts need to target this group.
There's a big opportunity here for increased and sustainable growth for your company, regardless of the industry.
That's why Generation Z marketing made my list of the top marketing trends for 2018.
If you've never targeted Gen Z before and you're not sure how to get started, I can help you out.
I've used research-backed data to identify some of the top characteristics and habits of this generation.
I'll also explain in detail how you can use this information to your advantage as a marketer.
Here's what you need to know.
Understand the key differences between Generation Z and Millennials
First, you need to be able to distinguish the difference between Gen Z and Millennials.
While on the surface these two groups may have some similarities, they needed to be targeted differently from a marketing perspective.
For example, look at how much younger an average Gen Z person was when they got their first smartphone compared to Millennials:
It's no secret that our world is trending in a mobile direction. Marketers need to accommodate the needs of mobile users.
But Gen Z are the first group to have a smartphone throughout their entire teenage years.
This means they are reliant on these devices more than anyone else, including Millennials.
Generation Z are impatient, and their attention span reflects this.
The average attention span of a Millennial is 12 seconds, but it's only 8 seconds for Gen Z.
That's why they use more digital platforms simultaneously.
Millennials typically use three screens at the same time, while generation Z bounces between five screens at the same time.
Gen Z also doesn't care about customer loyalty programs the same way Millennials do.
I'll go into greater detail about this concept later on.
Generation Z also embraces influencer marketing more than Millennials do:
Their engagement with YouTube creators shows how much they value the opinions of regular people as opposed to celebrities.
Your company may want to consider working with more micro-influencers on social media to promote your brand.
Learn how to market your business on Snapchat
If you want to target Gen Z, you can't afford to ignore Snapchat anymore.
About 71% of Gen Z use Snapchat on a daily basis.
Furthermore, 51% of this group use it about 11 times per day.
Take a look at some of the top companies that promote sponsored content on Snapchat's discover page:
I'm sure you recognize these logos.
The fact that these major companies have already identified and adapted to this trend should show you how the market has shifted to this platform.
You can use Snapchat for brand exposure.
As we saw earlier, Gen Z don't have a long attention span.
Just seeing your company's logo could be enough to remind them of your brand.
In addition to using sponsored ads, your company should also have an account.
Add pictures and videos to your story on a daily basis.
Here's an example.
Sour Patch Kids came up with a Snapchat campaign after partnering with Logan Paul, a YouTube personality.
The campaign delivered:
Once you gain those initial followers, continue to promote your brand using Snapchat as a platform.
Use Instagram stories
One of the reasons why Instagram stories are so popular is because of their similarity to Snapchat.
Instagram realized how successful the idea of “disappearing content” was and added it to their platform.
You can add photos and videos to your Instagram story, and they will disappear after 24 hours.
In less than two years, Instagram stories have blown Snapchat out of the water:
Use your Instagram story to share exclusive content with your followers.
Even if you're not posting a picture or video on your Instagram profile each day, you should at least be utilizing your story.
As I said earlier, Gen Z love micro-influencers.
Try to get those influencers to take over your account.
Alternatively, you can ask them to promote your brand on their personal stories.
Take your followers behind the scenes of your daily operations.
Showcase your production facilities, and introduce your staff.
This connects with people and shows them the human side of your company.
The marketing opportunities are endless with Instagram stories.
You just need to get creative and think outside the box to gain exposure.
Part of being a great marketer means you need to understand how your target audience thinks.
Generation Z have an entrepreneurial spirit.
In fact, 72% of teens in the United States say they want to start their own business one day.
If this group follows through with their goals, it will drastically change the future of our country's workforce.
That's because 61% of this group want to start a business directly out of college.
But Gen Z don't value education as much as other generations do.
Only 64% of Generation Z plan to pursue a college degree compared to 71% of Millennials-a seven-percent difference.
It's possible they don't think they need college education to be successful.
This might be based on the rising cost of college tuition.
These numbers are rising higher than the country's inflation rate.
The high costs could have an impact on Gen Z's attitude towards higher education.
But with so many resources available on the Internet, Gen Z feel like they don't need college to be successful or start their own business.
What does this mean for your company?
Try to come up with clever ways to engage those entrepreneurial minds.
Consider partnering with successful entrepreneurs who didn't go to college as brand ambassadors for your company.
You could also try to create a value proposition that speaks to young entrepreneurs.
Generation Z has an influence on purchases their parents make
Market products and services to Generation Z even if they are not consumed by teens.
Here's a graph to show you what I mean:
Most marketers wouldn't think to pitch a family vacation, cell phone, or car to an 11-year-old.
But research shows that Generation Z has an influence on household purchases.
This generation is resourceful.
They may be more likely to research products and read reviews than their parents.
Just because they may not have the personal funds or resources to buy home furnishings or a plane ticket doesn't mean your company can't target these kids.
Their opinions may be the deciding factor between a purchase from your company or your competitor.
Facebook shouldn't be your top priority
Facebook always tends to be the king in terms of social media marketing platforms.
But Generation Z don't feel the same way about Facebook as other generations.
In fact, Facebook lost over 25% of users between the ages of 13 and 17 on their platform over a three-year stretch.
Don't get me wrong.
I'm not saying you need to abandon your Facebook marketing strategy.
As you can see from this graph, the growth rate is rising for every other age group.
There's still a ton of users out there for you.
But with that said, this shouldn't be your primary strategy if you're targeting just Generation Z.
Campaigns solely designed for Gen Z should be used on other social media platforms such as Snapchat, Instagram, and YouTube.
Generation Z want to make a positive impact on the world
Your company needs to be conscious of the environment, planet, and society.
According to a recent study, 60% of Gen Z want to positively change the future of our world.
Only 39% of Millennials feel the same way.
Furthermore, about 25% of teens today are already involved in volunteer work.
This is great news for the future of our world.
It seems like every time you turn on the TV or read the paper, all you hear is negative stories.
Take a look at these numbers.
To stay engaged with this group, your company needs to do its part as well.
Talk about any positive impact you are making in the community.
Are you working with charities?
Do your employees volunteer?
Come up with a mission that contributes to the greater good of the society.
TOMS Shoes is a great example of this marketing strategy.
For every pair of shoes bought on their website, TOMS donates a pair of shoes to a child in need.
It's a powerful campaign that speaks to generations who care about the future of our world.
Quality is more important than brand loyalty
Does this sound like your current marketing strategy?
Acquire new customers for as cheap as possible and retain them through customer loyalty programs.
It's not a bad idea, and it's probably been working for a while.
Once a customer becomes loyal to your brand, they'll continue to support you for years to come.
They may start buying different product lines within your company, spend more money with each purchase, and even be willing to pay for more expensive products.
But you may not have as much luck with this strategy if you're targeting Generation Z.
Look at how Gen Z view brand loyalty compared to Millennials:
This means you may have to put more effort into your current retention strategies for Gen Z.
Find ways to make them loyal.
There's another way to interpret this information.
You could save your marketing dollars and not dump money on loyalty reward programs for Gen Z.
This decision is totally up to you.
It depends on your current retention and acquisition rates.
One of the best ways to retain Gen Z customers is through meaningful interactions.
A recent study showed that 44% of Gen Z are interested in contributing ideas to products and designs for their favorite brands.
Take advantage of this.
Use surveys, interviews, and focus groups with your customers to come up with new ideas.
If your customers contributed to the design, they are more likely to feel a connection with your brand and stay loyal.
Another statistic of interest is that 61% of Generation Z consumers are drawn to new brands.
Startup companies need to start targeting this generation right away in an effort to build brand loyalty.
Upload content to your YouTube channel
Generation Z love YouTube.
I discussed this earlier when I talked about micro-influencers.
I also showed you the success that Sour Patch Kids had using a YouTube creator in one of their marketing campaigns.
On average, Gen Z watch two to four hours of YouTube content each day.
They enjoy this much more than cable TV, which only accounts for about 30 minutes of their daily video consumption.
So if you're relying on TV commercials to reach Gen Z, you're wasting your money.
Instead, you need to increase your YouTube presence.
I love using YouTube as a promotional channel because it's so easy to repurpose those videos.
It's easy to add YouTube videos to your website or emails and incorporate them into your overall content marketing strategy.
Focus on their love of video games
Sixty-six percent of kids between the ages of 6 and 11 say that gaming is their primary source of entertainment.
Furthermore, Gen Z own more video game systems than every other generation.
But your company doesn't make video games.
You may not even be in the technology or entertainment industry.
What does this mean for you?
That's the fun part of marketing.
Come up with clever ways to use this information to your advantage.
For example, you could try to use product placement in video games.
You could also partner with specific games or gaming systems.
Sponsor an event or release of a new game.
If you sell certain electronics, advertise them for video game usage.
Things like microphones, headsets, routers, Wi-Fi extenders are all important to young gamers.
Right now, Generation Z are still an untapped market.
While companies have started targeting this group, there is still a huge opportunity for your brand to get a piece of the action.
You just need to understand how this new generation behaves, thinks, and consumes.
Don't approach them the same way you have Millennials. As we saw, these two groups are different.
Use Snapchat and Instagram story to promote your brand.
Recognize that Generation Z value entrepreneurship and want to have a positive impact on the world.
They even have an influence over purchases made by their parents.
Gen Z are less active on Facebook, and they care about the quality of interactions with companies more than brand loyalty.
They love watching content on YouTube and playing video games.
If you follow this guide, your company can benefit from a new income stream.
What marketing platforms are you using to target Generation Z?
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You're writing stuff, and people are reading it. They're clicking your links and arriving at your blog. Your efforts are finally paying off with a steady stream of traffic.
We're not going to focus on the importance of a business blog. You know it's crucial to business success in the 21st century:
Blogs are a popular, effective, and affordable way to bring people to your digital domain. That's the good news.
The “bad” news? Traffic generation is only half the battle. Pageviews, likes, tweets, and comments are nice, but none of them are the ultimate goal. You need to convert that traffic into leads. According to Forrester Research, around 97-98% of your visitors leave without taking an action or identifying themselves.
They may absolutely love your posts. They may come back again and again. They may consider you an authority and expert in your industry. But the vast majority pop in, read, and leave. You have to do something to take it to the next level. Can you afford to let 98% of your potential leads disappear without a trace?
Traffic generation combined with lead generation make your blog a worthwhile investment. Everything else – likes, retweets, comments – are nothing but vanity metrics. People like your posts and that gives you a nice little ego boost, but that and $3.50 might get you a coffee at Starbucks.
You need to actively generate both traffic and leads. Traffic without leads is meaningless. Leads without traffic will eventually dry up.
Here's the best news: a frequently updated blog with high quality, valuable content is a lead generation machine…when done properly.
Small to mid-sized (SMB) businesses that blog experience 126% more lead growth than those that don't bother.
So increase your traffic. There are plenty of great guides and tutorials on how to do that. Just don't forget about the lead generation part of the equation. Remember:
Traffic generation + lead generation = digital marketing bliss
That said, you don't want to explicitly bombard your readers with aggressive tactics. No one likes a pushy salesperson.
Nor do you want to be so subtle that no one even notices your trying to convert them from visitor to lead.
Find the middle ground with these tactics to nudge your traffic into lead territory because that's where they want to go.
If you want them to do something, you've simply got to ask.
For some of you, this might be a wake-up call. Your blog posts need a call-to-action. Every one of them. If you're ending your posts with nothing more than an invitation to leave a comment, you're doing it wrong. You need to get your visitors to do something: sign up, download, click, read something else, subscribe, install, contact you, and so on.
Are you asking? Are you giving them those opportunities to convert, or just hoping they'll decide to do so on their own?
A high quality blog post without a compelling CTA is a lead lost. They're already on your site. They're already interested and engaged with you and your brand. So give them more.
A strong CTA is action oriented, benefit-to-them driven, visual, persuasive, and ideally creates a sense of urgency.
But it also needs to be easy to find. There are several places you could locate your CTA on your site:
You don't want to crowd the page and choose them all. You need to select one or two that maximize exposure on your blog and resonate with your readers.
And you do that by testing. In real estate, the axiom is location, location, location. In digital marketing it's test, test, test.
Pick a few, set up an A/B test, and see what actually works best. Test various locations, types, colors, designs, copy, offer, and more. Zero in on the single most (or top two, or top three) powerful to turn your traffic into your leads. Use VWO, Optimizely, AB Tasty, or a similar service to make it fast and easy.
While only you can ultimately decide what works best for your blog, these are a few popular and efficient tactics to test.
When someone arrives on your blog, they're at the top of the page, and there's no guarantee they're going to scroll down any further. Putting your CTA at the very top, then, makes a lot of sense.
The Hello Bar is a very simple but highly effective tool that places your call-to-action in a thin, attention-grabbing band across the very top of your page. Instantly recognizable, static, and stays there even if they do decide to scroll down.
Using just a hello bar, DIYThemes generated just under 1200 new subscribers in only 30 days.
While the Hello Bar is perhaps the industry standard, there are alternatives available that do the same thing:
You can also find several free WordPress plugins, but remember that you get what you paid for.
A hello bar can be used to encourage social engagement or email subscriptions, promote new products or services, and more.
You can still get your call-to-action in front of those individuals with an in-text CTA.
Some of you may be thinking that the hello bar solves this problem. It's at the top and seen by everyone. That's true in theory. But let me introduce you to something called banner blindness.
Because we're so used to them, because we're inundated with them everywhere while online, many of us either choose to ignore or subconsciously block out static banners and ads. We just don't “see” them. This is banner blindness at work, and your colorful hello bar may fall victim to it.
But an in-text call-to-action that's either a direct or indirect part of your blog post is different. Include 1-2 in the first 60% of it, and you're going to have a lot of eyes on it as they read.
Hubspot generates between 47-93% of their leads via what they've labelled anchor text CTAs (compared to only 6% for end-of-post banners).
It's a bigger font and different color to stand out, but still relevant to what they're currently reading about in the blog post. Value added. Visitor to lead.
That same analysis revealed that anchor text CTAs combined with internal link CTAs represent a whopping 83-93% of their leads.
As you can see, internal link calls-to-action are part of the blog post itself. Click one, and it takes you to a landing page to subscribe or download something relevant to the topic at hand.
Location, Location, Location
Besides the top of the page and in the post itself, you can place a CTA virtually anywhere on your page. Test each one to see what works best for you.
It's unobtrusive. It's not “in the face” of your readers. It's not annoying. It's just there, quietly doing its job of helping to convert traffic to leads. Here's the sidebar CTA I use on my blog:
That said, it shouldn't be your only tactic. The sidebar CTA is easy to ignore, subject to banner blindness, and gone as soon as they scroll down. Use it in partnership with something else.
AdEspresso found a 0.4% conversion rate (CVR) for their static sidebar CTAs.
A scrolling CTA looks very similar, but it follows the reader down the post. Because of this mobility, it tends to stand out a bit more and gives the reader more time to decide to click. AdEspresso scrolling ads had a CVR nearly double – 0.76% – the static rate.
Slide-in or Popup
A slide-in popup or overlay is the next logical step in the evolution of the call-to-action. It relies on a trigger – say, X% of the page scrolled, or X number of seconds on page – before it slides in from the side, top, or bottom.
In doing so, it's only revealed to those readers that have already demonstrated real interest in the post. If they've scrolled down 75% of the way – past the 60% where most visitors stop – or spent at least 90 seconds reading, then you've got their attention. Strike while the iron is hot.
OptinMonster, Sumo, and NinjaPopups are three respected options to give these a try. Popups delivered a 2.5% CVR for AdEspresso, while others have experienced an impressive 10x higher email subscriptions after introducing the strategy to their site.
You can customize and experiment with everything from where, when, and why to find the perfect combination.
Exit Intent Overlay
An exit overlay works in much the same way, but is only triggered when someone demonstrates their intent to leave by moving the cursor towards the tab, address bar, or back button on their browser.
Remember when I said that 97-98% of your traffic leaves without completing an action? An exit popup or overlay can pull back at least some of those lost leads.
Demonstrate intent to leave on the DODOcase website, and this pops up:
This is a great example of a lightbox overlay. The box takes center stage, overlaying and darkening the rest of the website. It stands out, and gives each visitor a clear choice between this or that.
An exit popup can offer a special discount or coupon, collect feedback, introduce a useful lead magnet, suggest another product or blog post, recommend your newsletter, or whatever else you want to dangle in front of them to tempt them to stay and convert.
When a visitor first arrives at your site, take advantage of the opportunity to convert immediately with a welcome mat. This whole page overlay displays a compelling call-to-action before revealing the post or page they've clicked on.
Navigate to ClickMinded, and you don't initially see their homepage, you see this:
Both Sumo and OptinMonster offer popular options. With them, you can encourage your site visitors to join your email list, check out your latest blog post, download some valuable resource, and more. Much like an exit overlay, they have to actively choose not to do whatever it is you're asking them to do. Some will. Many won't.
AppSumo discovered that a welcome mat was 3x more effective for them than any other page or tactic for collecting email addresses.
An optimized and compelling call-to-action strategically placed on your page is your best bet for turning traffic into leads, but it's not the only way.
Despite your best efforts, there will still be a sizeable chunk of traffic that leaves without completing your CTA. Maybe they were pressed for time, or your offer wasn't compelling enough, or they simply missed it.
That's where retargeting comes in. It gives you another kick at the can.
Essentially, a tiny string of code called a pixel is placed on your website. This pixel drops a tracking cookie on the browser of every visitor to your blog. That done, it can follow them around the internet.
It's a lot less creepy than it sounds.
Ever notice an ad for a product you were looking at on Site A in the sidebar of Site B, or on your Facebook feed? That's retargeting doing its thing.
The pixel follows them, and displays relevant ads to them to draw them back to your blog or landing page. You get a second chance to convert them.
Wordstream, for example, experienced a 300% increase in engagement and 51% more leads after 18 months of retargeting.
If you're willing to put some time, money, and effort into retargeting, you will absolutely see an increase in conversions.
There's a learning curve to it, but most services provide tutorials and how-tos to get you going in no time.
The more chances you give yourself to turn your visitors into leads, the better.
Exclusive or Upgraded Content
Another useful tactic to try is offering exclusive or upgraded content in exchange for contact details.
Either in or at the end of your post, offer some relevant but additional piece of content. It might be a template, or checklist, or blueprint that allows your readers to put what they just learned into action with as little friction as possible.
How about a registration box for an upcoming webinar on a relevant skill or strategy?
Or a free online course to help readers build complementary skills. A post about lead generation through blogging combined with a sidebar ad for a course on doubling or tripling traffic? That'll work.
The sky's the limit on what you can offer. Make it relevant, useful, and irresistible. Ask for nothing but an email address and maybe a name. Make it easy for them to say 'yes'.
Learn To Be More Persuasive
Ultimately, you're trying to convince someone to trust you. Most of us are a bit reluctant and cynical when it comes to handing over our details online. You've got to persuade and convince them.
To do that, there are few tools as powerful as the six principles of influence as described in Dr. Robert Cialdini's seminal book Influence: The Psychology of Persuasion. If you're not familiar with it, I highly recommend it.
Cialdini outlines six basic principles – sometimes called weapons – and you can use them all in your blog posts:
While you don't want to utilize all six in every post you write, strategically using one or two will make you a more persuasive and trustworthy individual.
Most of the strategies we've covered so far are long games. But that doesn't mean you can't use a few quick tips to land more leads.
And last but not least, consistently provide the best, most valuable, highest quality material you can. There are millions of blogs out there, but the vast majority aren't worth the digital space they consume. Be different. Be better. People will return again and again if you're delivering the goods. They'll recommend you to friends. They'll sign up, subscribe, download, and purchase.
Try the ideas here, and let me know how it works out for you.
I also describe how bloggers can get readers to buy their products and services. Give it a watch and let me know what you think!
When it's done right, content marketing can be one of the most effective marketing channels you'll have. It can reliably bring a steady stream of traffic to your blog and marketing site.
But just like your marketing site converts visitors into customers, your blog needs to convert readers into subscribers. You need to get some information from them while you give out tons of free, actionable content. Often times this means you'll have to give more free content, but this all part of the transaction. You give a little to get a little.
Anything you'd add to our list? What tactics have you tried to convert your traffic to leads?
About the Author: Neil Patel is the cofounder of Neil Patel Digital.
Don't let money stop you from pursuing your dreams.
If you want to start your own business but don't have the funding, you can still get it off the ground in a number of ways.
As an entrepreneur myself, I admire anyone who wants to create a company.
It's not easy.
In fact, only half of small businesses in the United States will survive through their fifth year of operation.
Furthermore, just 30% of those businesses make it through ten years.
Based on this information, it's clear that failure is more frequent than success when it comes to startup companies.
So I commend you for wanting to pursue this path.
While running a startup may be difficult, it's also extremely rewarding.
You'll learn a lot along the way. There are plenty of things I wish I knew before starting my first company.
But getting your startup off the ground is the first step.
Like with most aspects of business, you'll need some money to do this.
If you've never been through this process before, it may seem intimidating.
Not sure where to start?
There's no one right answer.
In fact, you can get money from multiple sources.
I've outlined 9 ways for you to get your startup funded.
I'll let you decide which ones are best for your startup company.
1. Create a detailed business plan
Before you do anything else, you need to have a clear understanding of how you plan to operate your business.
A business plan will increase your chances of securing funds:
Companies that have a business plan also have higher growth rates.
First of all, it'll be hard for you to raise money from anyone without a business plan.
Different types of investors, which we'll discuss shortly, will need to see financial projections before they even consider giving you a dime.
This plan will also set you up for success.
Once you get into the daily grind of your business operations, you'll always have your plan as a reference to remind you how to proceed.
You may forget some ideas a year or two down the road if you don't have everything in writing.
Your business plan should have a clear description of your business.
Who are you?
What do you do?
It should also include a market analysis.
This will discuss information and research about your competitors as well as your target market.
You'll also want to outline the organizational structure of your company.
Have clearly defined roles for managers and other positions within your organization.
Arguably the most important part of a business plan is the financials.
Do your best to include financial projections for the next three to five years:
Make sure your projections are realistic.
As you can see from the example above, this company doesn't project profitability until the third year of operation.
You don't need to turn a profit on your first day or even your first year.
Just try your best to accurately predict your finances.
This section of the business plan will help you secure funding from other sources on our list as well.
2. Visit your local bank
Go to the banks you use for your personal banking needs.
I recommend starting there because you already have a relationship with those companies.
Set up an appointment with a loan officer.
Show up to your meeting prepared.
Dress professionally. Bring your business plan.
Explain to the loan officer how much money you need and what it will be used for.
Depending on your situation, you may qualify for loans for certain aspects of your business, such as equipment.
If the bank denies your small business loan application, you could also try to get a personal line of credit from that institution.
You can use that line of credit to fund your initial business expenses.
Don't quit after your first appointment.
You could try other banks and financial institutions if your first stop is unsuccessful.
3. Seek help from friends and family
In the United States, friends and family are second on the list for top startup funding sources.
These are the people who love you and trust you.
Most importantly, they believe in you and your potential.
Don't be afraid to ask your loved ones for a loan.
Plus, unlike with a bank, you'll likely be able to get some money from your friends and family without having to pay any interest.
Who knows, if you're lucky, you might even get funds as a gift.
So talk to your parents, siblings, grandparents, or even your rich uncle.
Just know there are some risks associated with this approach as well.
You definitely don't want to take a loan your friends gave you in good faith and lose it.
That could put both of you in a very uncomfortable situation.
With that said, I've talked to some entrepreneurs who said this had the opposite effect on them.
Loans from their family contributed to their success because they had extra motivation to not lose the investment.
They didn't want to let their loved ones down.
4. Venture capitalists (VCs)
You can also secure funds from venture capitalists.
VC firms invest in the early stages of your company in exchange for an equity share.
If you decide to take this route, be prepared to give away a portion of your business.
That's not always a bad thing.
If VCs have some skin in the game, they may be able to provide you with other resources that can contribute to the success of the company.
But just understand that smart VCs will only structure these deals if they are in their favor.
They don't want to make a return on their investment in 30 years.
VCs want to make their money back, plus some, as soon as possible.
The likelihood of you receiving VC funding largely depends on your industry.
As you can see from this data, venture capital firms are typically drawn to startups within software and technology sectors.
So if your startup company is a local pizza shop, you probably won't have luck with VCs.
5. Angel investors
Although these terms are often used interchangeably, angel investors differ from VCs.
While angel investors can take an equity share of your startup in exchange for their investment, their funding can also be exchanged for convertible debt.
It's not uncommon for these investors to be entrepreneurs or former entrepreneurs themselves.
Although money is their motivation, they are more likely to be genuinely interested in your business as well as the growth and development of particular industries.
If you find the right angel investor, you may benefit from their expert advice and management skills.
It's more common for angel investors to supply funding to businesses when they are still in the early stages, whereas VCs typically look to get involved a little bit later.
Unlike a VC firm that has a committee and advisors working together, an angel investor may make a decision on their own.
They may simply like your plan, trust your goals, and believe that your business will be successful.
That's why it's important for you to be able to articulate your business plan well.
A short meeting over coffee or lunch with an angel investor might be all it takes to get them on board to fund your startup.
Take advantage of the resources available to you online.
You can use crowdfunding websites to raise capital.
While most people think of Kickstarter when it comes to these platforms, there are some alternative websites you can consider as well.
Here are a few popular choices for startup companies:
All of these sites operate in more or less the same way.
Some put you in a pool of professional investors, while others let you raise money from anyone.
If your project is promoted properly, you can raise a ton of money.
Here's an example to show you what I'm talking about.
In 2012, a company called Oculus Rift launched a campaign on Kickstarter with a goal of $250,000.
The company aimed to produce virtual reality headsets.
They ended up raising $2.4 million dollars, which was nearly ten times their goal.
It's safe to say that funding was successful.
The money led to rapid success and growth of the company.
Just two years later, Facebook bought Oculus for $2 billion.
It just goes to show crowdfunding isn't just for college students or small side projects.
There's real money to be found out there.
You just need to look for it.
Here's a look at some of the other top crowdfunded startups in terms of capital raised:
But just because you secure millions in funding doesn't mean your company will automatically be successful.
Pebble Watches raised over $10 million in 2012, which largely exceeded their $100,000 goal.
But a highly competitive space made it difficult for this company to stand the test of time.
In 2016, Pebble announced they were ceasing daily operations. They stopped producing watches and honoring warranties.
The company folded.
7. Dip into your personal savings
You could also consider funding the startup company on your own.
If you've got money saved up for a down payment on a house or some other big purchase, you could use it to launch your business instead.
It's risky because you won't have any money to fall back on if your business is unsuccessful.
But if you're willing to bet on yourself, there are plenty of positive factors to this route.
First of all, you won't have to give up any equity in your company.
You get to keep all the profits instead of sharing them with investors.
You also won't have to pay any interest on a line of credit or bank loan.
If you pay for everything yourself, you won't be letting down friends or family members who may have loaned you money.
This isn't an option for everyone.
But if you have an extra $20,000 in the bank, consider using it if your startup costs are low.
8. Look for a strategic partner
I'm sure you've heard the saying, “Two heads are better than one.”
Getting a strategic partner for your startup company can help accelerate the development of your business.
In fact, over 80% of companies say partnerships are essential to their growth.
Your partner has a bank account as well.
Between the two of you, you might have enough money saved to get your startup off the ground.
If not, it's another person to help you secure funding through the other methods I've outlined in this post.
Partners also reduce your liability. You won't be on the hook for as much if things go south.
On a flip side, you'll only get half the profits.
You may get even less if you give away equity to other investors.
Make sure you find someone you can trust.
While your strategic partner may be able to bring new ideas and solutions to the table, there can also be conflicts and disagreements.
9. Try to minimize initial business costs
Reevaluate your startup costs.
You may not need to raise as much money as you initially thought.
Make the money you already have last as long as possible.
Instead of paying for an office, you could work from your home or a shared office space.
Pay for goods and services as you go instead of paying upfront for large quantities of products.
Use cost-effective materials.
Think outside the box.
And while this may not work for every startup, you can also barter.
Instead of paying for certain products or services, offer your own services in return.
This may be successful if you're working with other startup companies in a similar to yours situation.
Just do your best to keep costs as low as possible.
Starting a new business is exciting.
But it's not cheap.
Not everyone has enough money to get their startup company off the ground.
If you can't fund your business on your own, try getting a loan or line of credit from your local bank.
You could always ask your friends and family for help.
Venture capitalists, angel investors, strategic partners, and crowdfunding platforms are also great options to consider.
It's important that you always start with a strong business plan.
Come up with realistic financial projections.
This will make it easier for you to get money from investors.
You also need to keep all your costs as low as possible to make your funds last until you can get a steady income stream.
Follow these tips, and you'll be on the right path toward raising money for your company.
What strategies are you using to secure funding for your startup company?
Searching online is an everyday practice. Where is search headed? If we could pause our online searching use right now, what would that usage look like? That is where you come in… If you have 3 minutes, we invite you to take part in our Global Search Behavior Survey (oooh, fancy). We want to better understand […]
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Moats are ditches of water that surround castles. They're the first-line of defense against intruders.
Legendary investor Warren Buffett suggests you look at your business in a similar way. Your business is the castle, and the moat is what protects your business from competitors. Some refer to this moat as a competitive advantage.
Successful companies have moats that protect them from competitors. Their moat can be a technological advantage, a real estate advantage, pricing advantage, and intellectual property.
Here's why moats matter, and why every successful company needs one.
Background on Moats
Warren Buffett was the first to refer to a competitive advantage as a moat. Here's a video of him explaining moats back in 1998 at a speech at the University of Florida:
Now that we understand moats, let's look at the common types of moats. We'll then get into examples of companies with wide moats, and how entrepreneurs can ensure they're building a moat for their business.
Types of Moats
Moats can vary in every industry, but let's look at some common ones that cross industries:
Offering discounts isn't a moat. Being able to offer a lower price over a long period of time while at the same time offering similar service to competitors is a moat.
A prime example of this would be Geico insurance company. Everyone needs insurance, and Geico is able to offer lower price than competitors. And customers don't have to sacrifice service in order to save, either.
Most realtors charge a 6% commission fee for selling your house. So what does Redfin do? They cut those fees down to 4%, which means that the seller makes thousands more when they sell with Redfin.
The only way another realtor can compete is by significantly cutting their fees and accepting less money. And are they really going to do that after keeping their fees at 6% for years? Probably not, unless they're forced to.
Another company with pricing advantage is Walmart. Amazon and E-Commerce may be growing, but Walmart is still the king of retail (which is not dead).
One of the biggest criticisms of Walmart (which is ironically also its strength) is that they put their big-box stores in small towns, and undercut local stores using predatory pricing, and drive those established, local stores out of business.
It's that strategy of being able to consistently undercut competitor prices (even in suburban communities) that drive Walmart's success and is their deepest moat. If Walmart raised prices on all the products they'd sell, their revenue would plummet and they would lose market share to their competitors.
Exclusive technology can encourage customers to use your product over any other. And it doesn't have to be anything groundbreaking. It can be the sum of many features all rolled into one.
Salesforce CRM has a lot of features. You can do a lot with the product – both sales and marketing teams can get a lot of use out of it. The development cost of this is steep for other competitors looking to disrupt the commanding market share that Salesforce owns. This technology, combined with high switching costs makes for high retention rates and strong recurring revenue growth.
Apple has created a moat with their products. A feature like Messages automatically syncs with your iPhone and you can send and receive text messages through your computer. I've personally become so used to it that it makes it cumbersome to go back to texting on my iPhone. This feature, combined with dozens of others, is why someone may choose an iPhone over Android. Apple has done a tremendous job of creating this ecosystem and bridging iOS with macOS.
Google's algorithm is probably the most high-profile technology advantage that we all know. Their search algorithm, along with their infrastructure, has been built up and refined over the years and competitors simply cannot match it. Creating a new search engine with the goal of more accurate search results would result in failure. So smaller companies that are looking to disrupt Google, such as DuckDuckGo, take advantage over some user concerns with using Google. DuckDuckGo is a privacy-based search engine that capitalizes on the ascension of privacy-related concerns more and more of the public is having.
Socially-driven companies like Ecosia plant trees when users search. They've found some niche of the market and used it to their advantage, but ultimately they won't be able to surpass Google.
Google throws some piranhas in their moat with Android, which has Google search built into every phone. And Google pays Apple a hefy charge to have their search as the default on iOS devices, but it nets them billions more to ensure it's a profitable deal for Google.
Think about what matters in your industry. Are you in information security? Then a unique technology that no other company has would be the start of a moat – you've got the ditches built and a little water, now you need more to add to your moat.
The employees can be the sharks that swim around in the moat. Good people make good products. If your company is able to attract and retain the best people, you'll be adding more to the moat that you already have.
Think of the companies that consistently attract the best people – Google, Apple, Goldman Sachs, etc. These companies are great because of the products and services their employees create, which in turn attracts more great people to work for them. (Because who wouldn't want to work for a great company that's surrounded with talented employees?)
Apple has a moat, particularly because of its design, which Marissa Mayer has called the “gold standard”. The design can be credited to the creativity and innovation from Apple's design team, most notably Jony Ive.
Ive is the design leader at Apple, and has more than 1400 patents in his name. Would it be possible to put a dollar value to the growth that Ive has contributed to Apple? Some may argue that with Jobs' passing, Ive is Apple's most valuable asset.
There's a reason why we have patents. They encourage innovation and protect intellectual property. A pharmaceutical company that discovers an effective new drug has a moat protecting that discovery for years.
The new profits from that drug continue for as long as the patent is held, and the company grows its business because of that moat. The only thing that could disrupt the moat is a competitor creating a similar drug, or undercutting prices.
For instance, take a look at the Viagra business for pharmaceutical giant Pfizer. Developing that drug cost a lot of money on Research and Development, and once they discovered it and how effective it was (and the market opportunity), they secured the patent. It's estimated that Viagra drug has earned Pfizer nearly $1.5 billion in annual sales.
That moat – being able to spend millions on R&D and discover a new drug with a great market opportunity (and patent the drug) has made Pfizer a leader in the pharma market.
This is obviously more important if you're in retail or real estate, but a great location can help your company a lot. Good locations are expensive but very valuable. And once you have a good location, it's locked in. A competitor can't literally build on top of you (although some may try to get right next to you).
Apartment company Aimco acquires properties and buildings in key locations that serve their business well. They pick cities and neighborhoods that are growing, have an educated population, and high-incomes. Then they charge a premium for their apartments. And they can do it because they have the locations that people want to live at.
A competitor may be able to offer a cheaper apartment, but it won't be next to the lake or have the great views. Those are the things that the higher-income people care about, and they'll pay a premium for it.
Companies with Successful Moats
Companies with sustainable competitive advantages have moats. Here's three examples of companies we all know with deep moats.
Do you have a Netflix subscription? I'll bet you do. And if you don't yet, you'll eventually give in and pay Netflix that $10/month for access to their library of high-quality content.
Netflix is taking over the entertainment world. They have 118 million worldwide subscribers and it's only growing more by the day. They're able to keep attracting new subscribers and retaining their current subscribers for a few reasons:
So how did Netflix create their moat that has led to this phenomenal success? Let's look at their keys – a data-driven formula to content.
Content and Data Model
You may not know it, but Netflix is one of the most data-driven companies there is. Believe it or not, they didn't greenlight American Vandal because the executives laughed at the pitch. They greenlighted it because their data said it was worth the investment.
You may be thinking: so what? A lot of companies use data, why does that mean Netflix has a moat?
The key lesson here is that Netflix doesn't just rely on savvy network executives. They have an edge on these companies because they rely on data. The success rate for network executives is pretty low. Most shows don't last more than a few seasons before they're cancelled. Netflix, on the hand, has quickly risen to the success of HBO, which has long been considered the gold standard of cable television. The list of successes with HBO is long, but Netflix has become quite a competitor to HBO, with most recently getting 2nd place in Golden Globe nominations.
It's the data system that they have that can continually produce high-quality content. That technology, and that team, provide a moat for Netflix.
In the era of Spotify (free), podcasts (free), and terrestrial radio (free), SiriusXM (paid) thrives. And not just thrives, their business is the best it's ever been. They recently recorded a milestone – 32.7 million subscribers, most in the company's history. How does a company that charges roughly $200/year for radio do so well?
They succeed because of their infrastructure, exclusive content, and deals with automakers. Let's break all three down.
SiriusXM uses satellites to transmit their programming to subscriber's cars. This essentially means that anyone in the world can receive their signal, and thus, their programming. If anyone wanted to compete with them, they'd have to have massive upfront costs. This makes it a high barrier to entry.
The only other competition is terrestrial radio, which has limited range, and internet radio like Pandora, Spotify, and Slacker. These are good options, albeit their data usage, but here's where SiriusXM throws some sharks in their moat with their exclusive content.
SiriusXM has exclusive contracts with the NBA, NFL, and NHL. This means that if you're in Phoenix and can't get the Chicago Cubs game, you can tune in and listen to it through SiriusXM. No one else offers that. You cannot get it with terrestrial radio or streaming services.
They also have an exclusive contract to broadcast Howard Stern, a massively popular talk show host. You can't podcast him. If you want to listen to Stern, you'll have to sign up for SiriusXM.
This content, combined with hundreds of talk and music stations give SiriusXM a deep moat over their competitors. And they add some phirnahas to their moat by having deals with automakers.
Deals with Automakers
Most people sign up for SiriusXM when they buy a new car (or sometimes a used car). Their conversion rate from trying SiriusXM to subscribing is 40%:
Four out of ten people who try SiriusXM end up subscribing, and those that subscribe tend to stick around given their low churn rate. With strong auto sales, SiriusXM will continue to acquire new customers. Is there any competitor that has as good of a distribution as SiriusXM? It would be like if Spotify came pre-installed on every new iPhone and Android sold.
For decades, hotels competed with each other without any disruptive competitor. Some competed on price, others competed on location, some competed on service (at a high price), while others competed on all three. They all got market share and at the end of the day were very successful.
Then came Airbnb.
Airbnb was able to compete with hotels on all three fronts, and grew quickly. Unlike hotels, they don't own real estate. Instead, they're a service that facilitates travel between hosts and guests. They offered something hotels never could – a wide range of location options and pricing flexibility. And they've perfectly maintained the balance between supply and demand in nearly all markets.
Just take a look at their growth, according to CEO Brian Chesky:
Here's a chart of that growth:
That growth is pretty remarkable, right? Pretty much hockey stick growth. That's what a moat gives you – sustainable growth.
So that was their moat. Now they've threw sharks in their moat by improving their service and processes and building their user base. Let's take a further look.
The Service Protects Against Entrants
Let's imagine we want to create an Airbnb competitor. How would we get hosts and guests to use our service?
Going through this exercise shows us that creating a service that is superior to Airbnb is difficult. They have the brand equity built up, the business model works for them and their customers, their supply cannot be matched, and demand is equally as strong as we can see from the graph above. Can you think of any ways you could compete with Airbnb and threaten their moat?
Building Your Moat
While there is no formulaic method for building your moat, I'll lay out a few steps to help get you thinking in the right direction.
1. Understand the Market
The first step in building your moat is to deeply understand the industry you're about to enter. Understanding the market, pain points, and incumbents already in the marketplace is key to building your moat.
The last thing most industries need is another “me too”. If you build a hotel in a crowded urban area, will anyone notice? Probably not, unless you force them to notice you through beautiful architecture, historic landmarks, or exceptional service.
This sounds like an obvious first step, but many people start companies in already crowded markets, and don't offer anything unique, and end up failing.
2. Understand Market Needs
Once you understand the market, it's time to know if you can offer something unique. What does the market need that isn't currently offered?
Netflix saw a market need. People didn't like paying late fees for movies, and the selection offered at movie rental stores wasn't vast. Netflix disrupted this by having a vast selection with no late fees. Tie that in with a recurring revenue model and they've put their competitors out of business. The only downside was the wait to receive the movie, but consumers decided the tradeoff was worth it.
3. Create Your Competitive Advantage
Now that you understand the market and the market needs, you can start creating your competitive advantage.
When Hiten and I created KISSmetrics, we created an analytics product no one else had. We created a better, more streamlined funnel report. And we didn't track pageviews, we tracked each visitor as a person. We did this only after doing market research, building a Minimum Viable Product, and gaining market traction.
I can't tell you what your specific moat should be. It will vary with each industry and market. The examples I have been giving should help you understand moats and get you started.
4. Create and Add to Your Moat
Now that you have a moat and it's proven to get market traction, it's time to build upon that moat. You have to do this because moats don't last forever. If other businesses see you're doing well with your competitive advantage, they'll copy you. That's why Warren Buffett says it's important for business owners to throw some sharks and piranhas in their moat to further protect the business from competitors.
The early KISSmetrics team had a competitive advantage with our product, but no marketing advantage.
Then we started our blog and began building traffic.
After routinely publishing blog posts and promoting our posts, we started getting hundreds of thousands of people to our blog every month. That took a lot of time, but it added to our moat.
Most competitors would have loved to get our traffic and the amount of eyeballs we got on our site every month. And as we added to our traffic with each successive months, we throw more sharks into our moat. We had our product moat and marketing moat and that became very successful for us.
To help you further understand moats and get you in the frame of thinking, let's look at some companies that have deep moats.
There are many reasons why companies go out of business, but a common one is that they didn't have a moat. Their offering just wasn't different or unique enough from the incumbents in the market.
Large corporations wind up with reduced margins and increased competition because they didn't protect and add to their moat. Remember the market share Microsoft had with their Windows operating system? That dwindled because they didn't innovate and Apple capitalized on their shortcomings.
As an entrepreneur, you have to build your moat and then add to it with some sharks and piranhas. And always being aware of competitors and disruptive companies that will try to take market share from you.
What moat does your business have and how have you added to it?
About the Author: Neil Patel is the cofounder of Neil Patel Digital.
I'm a bit of a cable news junkie.
Now, I don't watch it often, but am generally more interested how a news product can draw people in hold their attention for hours, and keep them coming back everyday.
But why is this so interesting? And why should marketers care?
Because news itself can be pretty boring.
For your average 9-5 American with two kids and a mortgage, there's not a big reason to watch news.
And the thing is, news outlets know this. They know reporting on the latest earthquake in Oklahoma is mundane and doesn't matter.
Unless you spice it up a little bit. Get people's emotions involved. Make viewers scared or angry.
So here's why all marketers can take a lesson from cable news.
Cable News is Entertainment Masquerading as News
Their expertise does not lie in reporting the news or helping you understand the world's events. Instead, they're experts at messaging and grabbing your attention and holding it for hours, everyday. Because the only way to get viewers is to entertain.
It's designed for channel changers. Those people with their hand on the television remote, flipping through channels. Cable news is designed to capture that 1-2 seconds of the channel changer, and holding that attention.
In this post, I'm going to examine the different ways news programs (primarily CNN and Fox) use emotions and classic Hollywood-style entertainment techniques to grab viewer's attention and make sure they come back night after night. Then, we'll see how marketers can steal these for their own gain.
1. Use Numbers to Your Advantage
Numbers can tell a story. They let the viewer understand impacts and effects. Numbers can be attention grabbing.
And cable outlets know this. They love using numbers, especially when it relates to danger.
Don't believe me? Just wait for a hurricane or any other major natural disaster.
You'll see cable and other news programs use numbers whenever a hurricane hits the U.S. And it's generally meant for fear mongering. It's typically “5 million people in the storm's path” and “13,000 homes underwater” and “20 million people under evacuation orders”. It's forceful messaging that grabs attention.
Here, in big text, Fox tells viewers how many are without power:
CNN uses a different number, but makes it clear so the channel changers see it right away (and how could they leave out Anderson Cooper and his correspondent standing in the pouring rain):
During Hurricane Matthew, Fox reports on evacuation numbers:
Here's how CNN reports on Hurricane Maria:
Rescues underway in Puerto Rico as Millions Without Power captures the eye. It takes a few seconds to read, but draws you in. Who would turn the channel after reading that banner?
Another hurricane, and more attention grabbing numbers. And if that wasn't enough, they also threw one of their correspondents into a hurricane!
This correspondent is away from the hurricane, but that doesn't stop them from throwing the Millions Could Be Without Electricity For Weeks banner:
You get the idea. Numbers grab people's attention. They may not hold the attention for a long time, but they do catch the eye.
Now, let's look at how some marketers are using numbers to their advantage, and how you can as well.
Lessons For Marketers
Some marketers use numbers as social proof. Help Scout uses numbers to show how many customers they have:
Or to encourage you to signup for their email list:
LifeLock uses numbers to sow fear (more on that later) for visitors – and make their product the protection:
It's also important to note that they're using a recent data breach to sell their product. If marketing is all about timing, then LifeLock is getting their marketing right and profiting from it by pouncing on opportunities.
McDonalds used to post the “Billions and Billions served” under the golden arches. Here they give a more specific number while keeping the emphasis, billions served, the same.
Rainforest Trust, an organization that preserves forests, tells visitors how many acres of forest they've saved:
Combine that with a call to action to save more land, and it makes for a great use of numbers to draw donations.
I'll frequently use numbers in blog posts to capture reader's attention. In one of my videos, I give the reader a specific number:
Think about it – what headline would get more people to read my article (or in this case, watch the video):
How I Built 23,540 Unique Links to NeilPatel.com
Or this headline:
How I Built Links to NeilPatel.com
The number adds to the impact and gives the headline more of a “punch”. I didn't just build a few links – I built over 20,000 links to the Neil Patel blog. I guarantee that I got more views on this video because I gave readers a specific number.
On the Quick Sprout blog, I've used this advertisement for many years with a lot of success:
I didn't just increase pageviews. I helped a company grow to 500 million pageviews.
In this video, I give viewers a few numbers to chew on in my intro:
What's the message here? Rich people listen to podcasts. The impact? 60% of podcast listeners make over $150,000. And they listen to roughly 5 hours of podcasts per week.
I used the cable news model – what's the story, and how do you capture people's attention using numbers to explain the impact?
So, how can you use numbers to persuade? Here are a few ideas:
Now let's move onto another favorite tactic of cable news outlets, instilling fear. What better way to hold a viewer's attention?
2. Fear Will Grab Attention
Watching news media outlets in the summer and fall of 2014, you'd think that walking outside would make you susceptible to Ebola. This is despite four cases of ebola and just one death.
This CNN headline takes advantage of two things people are scared of – deadly diseases and terrorist organizations.
If you're flipping through channels, what does this headline do to you? It grabs your attention. Makes you stop and turn up the volume, lean in, pay attention, and maybe makes you a little scared. For some people, it may make them think the end of the world is near.
In this way, fear picks up where the numbers left off. The numbers will capture the eye of channel surfers, and the emotion of fear will keep them glued to you for hours.
CNN wasn't alone with the fear-mongering. Here's the version from Fox:
Did any of these things come true? Was Ebola used as a biological agent? Did terrorist organizations contaminate the water supply with the Ebola virus and hurt millions?
Of course not. But it's easy to say it now. Back then, Ebola covered the news cycle. People were scared. So the headlines that cable news outlets used capitalized on that fear (which news itself built) and only grew that fear that most people already had.
Just watch as Jon Stewart brilliantly tears down the news media's attempts to dramatize the Ebola outbreak:
So, how can you use fear marketing?
Lessons for Marketers
Perhaps the most common use of fear is the Fear Of Missing Out (FOMO). And with FOMO, you can use two classic tactics – scarcity and urgency.
This Facebook ad has a good message. Anyone that's scrolling through Facebook, sees this ad, and likes the shirt will buy it. It's limited edition, meaning that it won't be around for a long time, and now there's only a few left in stock? Where do I place my order?
This Facebook ad has a simple FOMO message. The pre-sale is available now. Get your tickets before anyone else or else you'll miss out.
The “best worst movie” The Room recently had a nationwide one-day special screening. It spread via word of mouth and some press coverage:
Needless to say, when people couldn't make it, FOMO triggered and they were pretty upset:
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