Ep4: How do you decide what to charge clients for a services-based company ?

In this episode, I look at the BANT framework by IBM as a way to think about pricing your service, we discuss focusing on value and not falling into the trap of cost-plus pricing. I run through an adapted version of Peter Laurie’s pricing model strategy, and finally, I talk up the benefits of project-based pricing.
In the second half of the episode I cover the classic ‘adoption of innovation’ curve, Simon Sinek’s ‘why’ and a little time is spent on creating great copy.
I finish the episode talking about the false economy of not accepting Amex cards.

If you’re an Apple user then you can subscribe to the podcast here Apple iTunes Podcasts

If you’re on Android then you can find us on Stitcher here

If neither of these work then you can just use Sticher through your browser

and remember, if you do have any questions you’d like me to answer on the show please just leave them in the comments here http://fractal.com.au/questions

Podcast Episode #3 is live and ready for your ears

In episode #3, we discuss the difficulties in building a double-sided business model and a trick that’ll give you a fighting chance. We then look at how to hire your first marketing employee for your startup and finally, we discuss shoe brand AllBirds who are nailing their copy, humour and brand positioning right now.

Please remember to subscribe and if you have any questions you’d like answered please ask them on Linkedin here

You can find an automated* transcription of the episode below:

So welcome to episode three of The Fractal Marketing Podcast. In today’s episode, we’re going to talk about double sided or two-sided marketplaces and how to tackle them with your start-up business. We’re then going to talk about what it’s like to hire your first marketing person and what to look for and what you need to provide them and probably more important than anything else how you’re going to measure the success. And then finally I’m going to have a quick look at a new shoe brand that I’ve completely fallen in love with. So the first question comes in from Scott Clark from claim.io who says, “The challenge my company has is that we’re trying to build up a two-sided marketplace and the issues we face are businesses are hesitant to sign up as our customer base is low and the customers won’t sign up because there isn’t a large number of businesses to offer things to them. Any tips on how to expedite the growth [and income?] would be grateful.”
Well, Scott, I mean, you’ve touched on probably one of those elements in a start-up business that I think is really common [laughter] and that’s people who try to tackle a two-sided marketplace. And the problem with the two-sided marketplace is that it’s such a desirable thing to try to achieve. If you get a two-sided marketplace working, if you can get an Uber, an Airbnb, eBay, if you get these things working, they’re huge businesses. The problem is, is that this huge business actually becomes really hard to achieve. So it’s like anything. It’s kind of like a long odds horse. It’s like 100 to 1 shot. If it comes in, great. You’ve got 100 times your money back. Chances are the 99 other times the horse runs it doesn’t win. And that’s what you’re tackling here. I’ve personally had a lot of experience with this and a lot of experience not getting it right. So I can talk about my experiences directly because my business zippy.com.au that I founded had a very similar proposition. I was trying to reach small-business owners. I was trying to give them a proposition that would work and grow a business at the same time, a two-sided marketplace. So how do you do it?
Look, if you try to grow both sides of the equation, you’ve got a chicken and egg problem. Which came first? So you’re growing that business, and you’re going to struggle. The dilemma you’re facing is absolutely true and there really isn’t a quick fix if you try to grow the business in the organic way you imagine. The strategy I have really come to accept is the only way to really tackle a two-sided business model with any chance of success is actually to try to freeze one side of the model. So when you look at what you’re doing with the business you know where you want to end up. You want to end up with a marketplace where you’ve got buyers and sellers, businesses and customers on both sides of that equation, and they’re growing at the same rate. But we know that’s really difficult to do. So what you need to do is freeze one side. Now, what you’re basically achieving by freezing one side, and I’ll get to sort of how we do that in a little bit, but what you’re trying to do is say, “I’m going to focus all my effort on growing one side of the business.” Now, in practice, of course, if you just grew one side of the business, and if you just focused on consumers, they’re going to come to the business and realise there’s no offers. So to freeze one side of the business you actually have to fake it. I’ve got a half-written blog post on this where I call it, “You’ve got to Wizard of Oz it.” So this is where the wizard hides behind the curtains, and actually, it’s quite fake. What he actually puts forward isn’t the real deal. So how do you go about doing that? How do you freeze one side of your business model? Well, what you do is you basically need to populate– now, in your case where you’re trying to put offers out to consumers, the consumers are really your product, right? Your customer is going to be the business. Your customer is defined as the person who’s going to give you money, and the person who’s going to give you money ultimately is going to be the business. Now, to be able to charge people, you need a product, and the product is going to be the consumers. So when we try to think of which side of your two-sided business model, we want to freeze we want to freeze the business side, right, and grow the customer side. So what we’re going to do there is we’re basically going to fake the offers that are on your business to attract the customers.
So the way we go about doing that is instead of actually going to the businesses and trying to convince that they need to pay you and upload the deals, you actually need to go out and find the deals. You need to find sources of deals that you can collate, publish, and share to consumers that adds enough value that they’ll come to your service. At a point in the future where you’re growing your customer base, you can start to seed in behind the actual paid offers and the real offers. So what does that look like? In your example and looking at your business, claim.io, I would be looking at doing something– and this is a phrase we came up with with my business partner when doing Zippy, but the concept of chalkboard deals. These are the deals that small retailers put in their stores. So these aren’t the big sales. These aren’t the vouchers that you can email around. This is the chalkboard deal at the pub. So this is where you look, and they go, “Wednesday night, buy one parmi, get one free. Pints from $5. This is the happy hour.” So putting those chalkboard deals into a place where people are able to find them. This is assuming a whole lot of other parts of the business are working, but what you’re trying to provide is the content that people will ultimately seek.
If the business proposition that you’ve got actually has a good chance of succeeding, then in theory, if you put all that content out there people will use it, and you’ll be able to sell them. Now, what we’re going to discover by doing this is if people aren’t actually interested in what you’re sending through, like if they’re not interested in the offers you put up there without charging, well, you know that the business model actually isn’t going to work, which is a good thing, right? We haven’t gone too far in. We’ve only sort of spent half the money would have building one-half of the business model. On the other side, if you discover that people are using it, and you control that audience, the consumers, you can build up a critical mass. And whatever that happens to be– so I would highly, highly recommend that you just focus on one city. I live in Brisbane. Brisbane’s a great city because Brisbane is effectively 10% of the Australian consuming population. So whatever you do in Brisbane you can 10X when you expand from there. But you’re based in Sydney, Sydney being the biggest city, so you’ve got good concentration and a good population to go after. So I would just focus on that one area. Even if you can break it down into a suburb, break it down to an area. If you can get that critical mass, and you can get it, then you can realise you can replicate this model. So what we’re doing there is we’re nicehing down geographically. So we’re not trying to do every chalkboard deal across all of Australia. In fact, we’re not even probably going to try to do every chalkboard deal just in Sydney. What we’re going to do is pick a little area that we can narrow down geographically so we can tightly control what we’re doing and then– be another smart way to approach it would be to actually niche, in particular, areas.
So I used the examples of pubs before. I mean, you could just do pub based chalk deals. Obviously, you could expand that into restaurants, and hairdressers, and all other retailers, but we know that pubs use chalkboards so this concept holds true. Because what you’re trying to do is prove your model in the smallest market possible so you get over that critical mass issue as quick as possible. You’re faking the deals by loading it in. Look, you can go to Airtasker and just pay people to walk around taking pictures of chalkboard deals for you, pay them a bounty for each one, shoot that off to a freelancer.com style Philipines contractor base that’ll be relatively cheap to process that information and push it out there. At least you’re going to be able to test whether your model works. All that being said, it is a really, really hard business to get working, but if you pull it off then you’re in a great place. So where do we end up? Ultimately, you’re trying to freeze one side of your two-sided business model. You’re trying to freeze the side where you’re going to make your money because you’ve got to build up your product. Your product is the other side. So the people who aren’t paying you or your product, so these would be the consumers walking around using your app and your website, you fake the business side of it because you know eventually you can get the consumers and you’ve got their eyeballs. When you control that audience that’s the audience you’re going to be able to monetize with the retailers and you can start charging them. What I would recommend if you get to that stage try to filter these offers in over the top. So do it a bit like, I don’t know, Google search engine listings. You’ve got your organic, your natural listings, the ones that Google says through no payment this is the best result I can serve up, and then put the paid ads on top of that, and that’s really what you’re going to ultimately get to and you’ll start to make money. And the goal would be for you that ultimately the bulk of your listings are controlled by the retailers and that a large slice of those are paying for premium positioning, but it’s going to take time to grow that up. So I hope that answers your question, Scott. Like I said, I’ve got a lot of experience in it. I didn’t necessarily get it right and you will not be the first or the last person to double side a business model that’s not able to get that equation exactly right. But hopefully, if you freeze one side it’s going to work for you. So the next question in comes from Ryan Stewart who’s the CEO and founder at [Capisce]. So Capisce is a semantic keyword indexing tool, natural language algorithm tool. It’s an amazing thing, but ultimately what it does and the way that I imagine it working is you know those net promoter scores, the NPS scores you get?  If you think about the second question that runs behind that, that’s where you ask why you gave the score. What Capisce does is help businesses actually understand why people then use that score. So it’s great that you’ve got an NPS average score of nine, but why did you get it, and that’s what these guys do. But getting to Ryan’s question, which is what should a B2B SaaS company be on the lookout for their first marketing hire? What’s the most appropriate way to measure the performance of that hire and what does the CEO need to provide that hire with everything she needs to succeed? Lots of questions there. I probably won’t tackle all of them in a great amount of detail just because I think we’ll be here for the full half hour just on those three questions. But, okay. So getting to the first part, what should a B2B SaaS company be on the lookout for their first marketing hire? Well, I actually am of the opinion that your first person you want probably isn’t a full-time hire. I think what you really want is contractors to start with and specialists, and probably the first person you want to hire is the seasoned professional, the consultant, the person who’s got 15, 20 years experience under their belt that’s seen a lot, they understand most of the different techniques, and more importantly, they’ve probably worked for a couple of startups, so they’re coming in hardened, they’re coming into your business with experience, and therefore you’ve got a good chance of not having to learn what’s happening. Now, you don’t want that person as a full-time hire. That person is going to be expensive. This person has worked for two or three startups that have actually succeeded. It’s going to cost you anything from 160 to $260,000, roughly speaking, to hire that person. Not the kind of money you really want to be spending as a start-up. What you do want is 5 to 10 hours a month from that person to put you in the right direction. The terms of actually the first marketing hire is that you want a generalist. You want somebody who has got a wide, broad skill set because this person is going to be expected to do a lot. You want them to work under the guidance of consultant, that senior person, to give them direction, but you want this person to have broad shoulders. So if you think about the way– you can visualise– and podcast is not a great medium for me to get you to visualise [laughter], but if you can imagine skill sets, [inaudible] within a traditional digital agency somebody’s skill set up to a certain seniority level is very narrow and very deep. So what I mean by that is– when I first started doing digital marketing I did SEO, and I had very deep knowledge. Like, that was all the experience I had. I hadn’t done any other marketing. I was doing a marketing degree, but that’s not experience. That’s just regurgitating information out of a textbook. You can tell I’m probably not a fan of marketing degrees. But that’s deep and it’s narrow knowledge and that’s not what you want as a start-up. What you want as a start-up is somebody who’s more wide at the shoulders, so at the top end. So if you imagine the deep, narrow person being kind of like a very skinny rectangle and that represents their skill set– so it’s very deep and it’s not too wide. You then have the Jack of all trades, and the Jack of all trades is that rectangle turned on its side, so very wide. Done a lot of different things but they don’t have great depth of knowledge. What you really want is somebody that’s shaped more like a triangle, so quite thin experience on the outsides of the breadth but they’ve got the breadth, they’ve seen some things. So they’ve been involved with small companies, so that means that person might not have done PR but they’ve seen [inaudible] PR. That person might not have done copyrighting but they’ve seen copyrighting or they’ve been involved in touching it. So they haven’t been locked away from different departments and different experiences, but they have been engaged in that, but they will have deep knowledge in some of the disciplines. Not as much as the complete expert in SEO, but that expert in SEO is going to be hired by the big companies and the big agencies who want the best person for a job. You don’t need that as a start-up. What you need is somebody who has a good depth of [inaudible] experience, and they’re not the best, but they can kind of move around. And the reason you want them to move around is because you’re going to need them to do multiple jobs, and you’re also going to change what you think is working for the marketing. So where do I get to with that in terms of skills? You probably want them to have a good knowledge of SEO. You’re definitely going to want them to have some page search experience. Probably the most important area is going to be their social skills, not just the organic, but also the way they do Facebook and paid advertising. So you want them to be strong across Facebook. You’re definitely going to want them to be across LinkedIn, especially if you’re talking in a B2B company. You’re going to want them to understand data. You’re going to want them to understand CRM systems. You’re going to want them to understand [inaudible] anything from Salesforce to Hotspot – probably a bunch of other tools – because they’re ultimately going to recommend what they prefer working with. And then you’re really going to want them to get content and retargeting. And I’ve covered that on previous podcasts, but content retargeting, B2B, and the [inaudible] is absolutely crucial. And if I was going to pick an area for them to be an expert in it’s going to be around content and retargeting, and that retargeting is probably going to be centred around social networks. So how do you measure the performance? Well, look, you’re a start-up business. You’re metrics aren’t locked in stone. We’re looking for incremental gains here, so we’re looking for soft KPIs, things that are going to lead us to– sort of give us a [inaudible] we’re going in the right direction. We’re looking to move closer towards break-even and profitable and scalable marketing [inaudible]  you’re not going to get there straight away. Definitely, if it’s your first hire, this person’s probably not going to be seeing you enough to carry you the entire way through. They’re going to need a lot of support, particularly from you as a founder and anyone else who’s involved with that product in sales, in engineering, in all the other elements of your business. But setting some KPIs, soft KPIs, that we’re pretty confident are going to be leading indicators to successful business outcomes, that’s probably going to be the best thing. I’d really focus on looking at your funnel, looking at the way you’ve got your business set up, so how you’re tracking from impressions the size of the audience, the definition, who you’re engaging with, and how that funnel’s building. And just all the way through, look at what the conversion rate through the steps are and just always set yourself a goal and take a real growth hack mentality, which is to say, “Let’s come up with an idea, a thesis to what we expect is going to happen, what success is going to look like, set a short timeframe, run something, test it, measure the results, and then iterate from that point.” So lots of those small tests. If you can set up the support framework– and I guess this is more your third question. If you can put the network around them, so the programmers, the product people, the salespeople, to support what they’re doing, and you all collaboratively work together to reduce each of the conversion points on that sales funnel, you’re probably going to get some success out of it. What you don’t want to be doing is leaving that person on their own and say, “Well, good luck. Do some [SEO?] and come back when it’s working.” That’s never going to work for you. So look, I’ve lightly touched on each of those things. I think the most important part is to get that triangle-shaped skillset. So broad, experience most things, but a couple of areas of in-depth knowledge. And try to make that in-depth knowledge for B to B around LinkedIn social content and retargeting. If you can focus on that, all the other experiences will be beneficial. I think you’ll be in a pretty good place.
So lastly on today’s podcast, I just wanted to talk about a shoe brand that I’ve come across in the last couple of weeks and completely fallen in love with. And I’ve fallen in love with it not just as a consumer of the product, but I’ve fallen in love with the way these guys have managed to launch a shoe brand. There are some industries that are just hard to crack. You don’t want to try to get into the flavoured sparkling water business up against Coke. You don’t necessarily want to try to launch a car, even an airline. There’s certain industries where it’s just hard work. And shoes is one of those industries. You don’t turn up in the shoe industry and just succeed. But this one company is just making incredible progress, and that company’s name is Allbirds. So that’s A-L-L-B-I-R-D-S. And I hadn’t heard of this company. I was put onto it by somebody in the coworking space who sat across to me and just said to me, “You’ve got to get these shoes. These are the most comfortable shoes.” And whenever you get those kind of product recommendations, you know that there’s a brand that’s onto something. This is where a brand’s gotten to that stage where they’re going viral. People are talking about it. They’ve got promoters. So this is if you knew what their net promoter score, I’m sure these guys are sitting at 9.5.
What what do I love about Allbirds? I think for me is that they seem to be really clear on their why. They’ve got a really clear mission. They’ve got a really strong brand personality, and they’re carrying that into an audience. So they’re really breaking into this young, young-of-mind. They’re probably tapping into the start-up industry. But also, they’ve got a very sort of left-leaning sort of environmentally friendly, sort of poke fun at themselves kind of style brand. And the area where I think they’ve just recently launched a new range, and I love the way they launched it on Twitter because it was almost like they had gone and paid the creative agency to do the photoshoot. And they’d done the classic shots, the classic photoshoots. And then they, to use a very Australian expression, sort of took the piss out of themselves, where they almost make fun of the models and their sort of solemn look and the way that they’re conducting themselves. And yet it’s their ad. So I can highly recommend having a look at the Allbirds Twitter account and just having a look at the copywriting. Take a look at their website. Take a look at some of their emails that they’re sending out. Whoever is doing the copywriting at Allbirds is an absolute genius. They’ve got their brand nailed. The copy is funny and witty. And if you read through the copy, at all points, you get a real idea that they’re still selling the features. They’re still selling the benefits of their shoes. They’re light. They’re environmentally considerate. They’ve got wool. They’ve got eucalyptus shoes. I mean, it’s a very unique proposition. It’s very different. And it’s not cheap. And you’ve got to ship it from– I think to Australia, I had to get mine from San Francisco. But they’re just this amazing thing.
And what’s great about them is when you see somebody else that has Allbirds, there’s a weird connection. So walking through sort of Brisbane City, and I just saw another person with Allbirds, and they recognized mine. And you’re in that I’m in a niche little club. We’re early adopters. We’ve got into this. We’re importing our shoes. Are they the best for walking around? Probably not. They’re kind of like– the woollen ones are kind of like Ugg boots. But there’s something about it. There’s something about the message, the brand, the positioning that makes you go, “I just believe in the company. I believe in the people behind it. There’s something that you’re doing that I just like and I align to that.” It’s not going to be for everybody. But have a look. Have a look at the way they’ve done their stock photography– not their stock photography. It’s all very much bespoke. But have a look at the way the photography is being done. It’s top quality, but at the same time, it’s just on-message, and they’re carving out a spot in the market just by being a little bit different. And I think it’s a good example of how getting something completely on-brand, understanding who your customer is, really being clear on what your brand personality is. What’s your voice? What’s your tone? What’s the image you want to portray? If you get it right, you can even break down an industry like the shoe industry, which is really hard to get after.
So take a look. I will add links to the two companies we have discussed today who put questions in, and of course, to Allbirds. Highly recommend checking out Allbirds. I am eyeing off the eucalyptus tree climbing shoes. I think that’s what I need for the Australian summer. But I’ll send that through. And as always, please shoot through questions at fractal.com.au/questions, and look forward to speaking to you all again next week
  • that means there are probably loads of errors

The Fractal Marketing Podcast – Episode 2 – Calculating CAC, tracking offlines sales and animated video advertising

Welcome to Episode #2 of the Fractal Startup marketing podcast.

In this episode, I discuss calculating the cost of your customers – thanks to writally.com for the question

We also cover the other common direct marketing variables and how to calculate them.

We then move onto more complicated offline and long sales cycle tracking  – thanks to BenchOn for the question

And finally, we look into the power of animation as a video medium – take a look at Big Fish & Biteable.com

If you would like to have your questions answered on the podcast, please add your question in the comments section here http://fractal.com/au/questions

If you’re an Apple user then you can subscribe to the podcast here Apple iTunes Podcasts

If you’re on Android then you can find us on Stitcher here

If neither of these work then you can just use Sticher through your browser

Below is a transcription of the podcast:

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

[music] Hi, and welcome to the Fractal Marketing Podcast. My name is  Gerard Doyle. And on this show, I take marketing questions from listeners to provide answers so that everybody who tunes in can learn a little bit more about marketing and hope they find some ideas for their business. [music] So in today’s episode, we’re going to look firstly at calculating the cost of acquisition of your customers and other marketing variables like ROI and ROAS and discuss the differences between those two. After that, we’re going to spend a bit of time talking about more complicated tracking models where it might require an offline sale or a long sale cycle and how to relate that marketing money that you’re spending very early on back to that end sale and the customer value. And finally, we’re going to spend some time looking at animation and the power of animation in video marketing and how we can deliver clarity of message through an uncluttered interface. So our first question this week comes from Cass from [inaudible]. And her question is, “How do you calculate the cost per acquisition if your primary acquisition method is profitable?” Good question, Cass. And I think it speaks to one of the problems with marketing is that and like all industries, I guess, is we have a tendency to create a lot of our own words, a lot of our own acronyms, initialisations, and things that just make marketing generally confusing when it need not be. I think back to some of the rules that people like Mark Zuckerberg and Elon Musk employed in their companies. And they just started stopping people from coming up with new acronyms inside the company because it just made life really difficult. But we are where we are [laughter]. And to answer your question, look, it is still possible to have a cost of acquisition particularly even if you’re profitable because it’s only the cost of acquisition is only the denominator in the ROI calculation. So what I’m talking about there is if you’re looking at the ROI of your marketing, you’re looking at the cost of acquisition over the lifetime value of those customers. And that’s what you want to be profitable. But it’s still completely possible of course, and in most cases, you would have a cost of acquiring those customers. So when I look at that I think, “Okay, there’s some really important variables there that we need to understand completely to get your head around marketing.” So as an acquisition marketer, I live and die by these two numbers. And the first one is the CAC which is the cost of acquisition of your customers, so customer acquisition cost, CAC. This is probably one of the most important variables because it’s much easier to get your cost down with your marketing. It’s generally where a marketer is going to be measured. On the flip side, on the denominator side of this equation for the ROI, you’ve got the LTV, the lifetime value. Now, as a marketer, we can impact that. We can attract sort of better quality customers. In theory, they’ll give us a longer lifetime value. So this is the total amount of value or revenue we’re deriving from a customer who comes to our service or our product. So really though, generally speaking, that’s going to be a product manager. And that’s why when you think about growth marketing, a growth marketing or a growth hack team tends to involve both a marketer and a product lead as well as often a developer of the backend to help you. But that pigeon pair of a product marketer and an acquisition marketer is usually ideal. So that’s pretty much the most important thing as a performance marketer to really be measured by. And the reason is that that typically for a startup, or a new product, or a business is there’s an amazing moment. So this is after we have achieved product-market fit. We’ve found out customers. We’ve got 30, 50 happy customers or whatever we’ll define that to be. But what we don’t have yet is a really scaled marketing process and that’s because at the moment when we start, we’re probably spending $2 to get $1 back in. The amazing moment occurs when all of a sudden you can spend a $1 on your marketing and get a $1.10 back. And what that means is your CAC, your cost of customer acquisition, drops down below the cost of the lifetime value. And then what we’re looking at is, okay, what’s that payback period? Now, that ideally is instantaneous in the sense that you’re selling a product, so the revenue you get back from a product is greater than the cost of selling it. For a service-based business, this is a little bit harder. You might be looking at 2, 3, 6, 12 months payback windows, and that has a big impact on the value of our company, the cost of raising capital, etc., etc. But really these are probably two of the most important variables to understand with your marketing, and then the variables that a marketer should on a daily basis be looking at to see how their campaigns are performing. Now, I’ve also mentioned in there the ROI, probably one of the misused terms marketers do. I had a client about a year ago, in a meeting [laughter] who stood up and said, “If another person uses ROI instead of ROAS, I’m leaving the meeting.” And what he meant was ROI, return on investment is a very general [captural?] term, really refers to the whole business. This is whether the business is being profitable really. So I invest this much. Do I get more back? ROAS, on the other hand, stands for return on advertising spend, so ROAS. I told you it was a lot of initializations [laughter] and acronyms. And ROAS is usually the measure of what the market is doing, so this is where you say how much revenue am I getting? So I might be, for example, selling a couch. That couch might sell for $2,000. The actual profit on that might be 500, but I’ve also got other costs as well, be it staff or it could be facilities, accountants, general sort of management overheads. And all of these variables don’t really appear to your typical marketer.
As a marketer, I might be doing Facebook marketing. I’ve got no idea what the overheads of the company are. I also don’t know where the other investments have gone, so what I’m calculating is the ROAS. So that’s the total value of the sales, particularly if it’s e-commerce, then I know I can get that back. I know I’ve sold $2,000 worth of goods. However, I might also know that I’ve spent $500 to get it, but typically that ratio’s going to be much higher in needs, be much higher in ROAS because it doesn’t take into consideration all the other cost of the business, so you’ll have a client or it could be your business, and you can still have a ROAS goal. It’s just that rather than it being $1 and $1.10 back, it’s more likely to be $1 in and $10 back, so hope that clears it up. If nothing else, there’s a few new acronyms in there for you to learn. CAC, customer acquisition costs. LTV, lifetime value of those customers. Knowing that is absolutely important. Again, working with the project manager, working increasing that value, makes a marketer’s life much easier. Obviously, if that lifetime value goes up, you’re able to spend a bit more on marketing. And secondly, looking at ROI, return on the investment and how that differs from the ROAS which is return on advertising spend. Absolutely crucial that you get that right. There’s nothing worse than presenting to a client, or a manager, or a boss, or shareholders and getting those two numbers wrong because you just end up looking a bit foolish with your campaigns. The second question today comes from Tim from [inaudible]. And Tim asks, “How do you manage the ROI on marketing spend when the signup decision is not impulse driven but rather a slow burn that takes time to filter through the client’s bureaucracy? I justify it now by calling it brand awareness, but there has to be a better way to make data-driven marketing decisions. Great question, Tim. It’s strange more and more this is the sort of the area of questions I’m discovering as I talk to business owners. And that’s because the two biggest marketing engines available at the moment particularly online but even generally across the whole world is Facebook and Google, and both of these tools are absolutely fantastic for measuring [inaudible] online. They are able to track someone through the whole purchase, but when that sales cycle is a bit more complicated, when there is more involved, it becomes really hard. So to answer your question, look, it’s not easy and it’s kind of the point where marketing consultants step in and really help set a framework for your business. But I’m going to break it into two broad approaches for you, the first one is around post-impression platform tracking and the second is using correlations of indicating variables which is a little bit softer. So I’ll cover the first one which is post-impression tracking first for you because that’s the one I prefer to get to. So what I’m talking about here is normally in marketing campaigns and acquisition campaigns, what we’d like to measure from is a click. A click is that magical moment when you know that someone’s definitely engaged in your ad or your content and come through to your website. At that point, you are able to use whatever tools you’d like to track somebody through to an end purchase and ideally, that purchase happens in the same session but it might happen two or three sessions later, but it makes it quite easy to calculate. If that window is short enough, usually a few days, you’re in a pretty good place. Now what happens is, more and more the way we engage with media isn’t see an ad, click on an ad, make a purchase. So originally ad technology was all based around cookies and cookies were great. Cookies run this ability to [drop user?] a one by one pixel to drop a little text file on a computer or users computer and then if that person came back we could read the browser, recognize that our cookie was there, identify who the person was and go, “Ah. They were the person who clicked on the campaign a while ago.” Now what’s happened over time is that the actual cookie tracking technology has become less and less robust, lots of people are blocking it, but more than that and I think probably a bigger impact has actually been the use of dual devices. People have not only their home computer, but they have their mobile phone, their tablet, and their work computer. So often people are interacting with content at work, going home, sitting on the couch and then purchasing through an iPad. All that means for us is it’s much harder to track and this is where the platform tracking tends to be the easiest for most businesses. Now there are more robust tracking solutions out there but at that level, you’re normally spending enough money that you’ve hired a full-time agency to deliver them for you. So what you do if you are an owner-operator in a small business and you want to achieve this? You ultimately have to leave your marketing in a platform channel. So I’ll talk about– so Facebook, LinkedIn, Twitter, Google. And what you’re doing there is you’re looking at post-impression sales. So post-impression means somebody who has seen an ad and then goes through and makes a purchase. So this is kind of the next easiest level to track. There’s a big difference there. The intent isn’t clear. If I run a Facebook ad and somebody clicks on that ad and comes through to my website and makes a purchase, I’m pretty confident my ad drove the sale. On the other hand, if I show my ad to somebody who it appears in their Facebook feed, they don’t click on it but then they go through and make a purchase. Well, did that ad drive the purchase? What impact did that ad have? It’s not as clear but the great thing is that the person doesn’t actually have to have an interaction. Because you’re on Facebook, you can be on your work computer looking at Facebook, you see an ad on your work computer, Facebook knows who you are, you go home, log back into your tablet. Facebook still knows that that tablet belongs to you; you are the same person. So if you then go through and make a purchase or sign up or do whatever action we want for your business, Facebook is able to identify that and say, “Ah. I know, even though you’re on a different device on a different network in a different location, you are the same person because this is the same Facebook account.” So what we’ve been able to do there is achieve two things by using Facebook post-impression tracking; one, we’ve been able to track between two different devices and two, we’ve been able to track even though somebody didn’t click on an ad. Now Facebook also has some kind fantastic options in there like people who watch videos. It can be a fantastic tool to measure engagement and say, “Well, if somebody watches X percentage of a video, then they must be more inclined to have engaged.” That’s very different to an ad just sort of scrolling past somebody. Now, there’s no hard-and-fast rules. Ultimately, you have to define, as a business owner or a marketer, exactly what you’re comfortable with. But if you’re looking for a rule of thumb, usually, with Facebook, their default settings, I believe, are– post impression tracking is normally set at one day. So in other words, you need to perform some form of trackable action within a day of seeing an ad. Otherwise, we’re not going to attribute it. Whereas, post-click, we’re normally looking at anything from 7 to up to 30 days to say if you’ve clicked. That’s the kind of window we’re willing to consider attributing that person back. Now, attribution modelling is a whole other podcast, so I won’t get too far into that. But to get an idea of how you can measure these things. You can obviously extend that post impression, but it becomes harder and harder to actually decide what’s going to be working. So my advice to most small businesses is use each of the platforms, Twitter, Google, Facebook, whatever you happen to be using, LinkedIn, and do look at post impression as a way to see if your content or your ads are engaging people and they’re converting. If you want to get into attribution modelling, I’ll wait for another question on that. But probably the easiest way to do that is to have a look at what’s built into Google Analytics. Their solution’s actually quite good, and there’s some great models pre-built. So the second, I guess, answer to your question, and this is probably I think where you’re really coming from, is what about if we don’t really have that kind of control? What if I’m doing marketing that might be writing an article on a news site or newspapers or press or radio? All these kind of very normal things that you know are doing the right things for your business, and they’re building your brand as you say in your question. But is it really driving my business forward? Well, the sad, I guess, fact is we don’t know. And that can be tough for people to sort of, I guess, deal with as a business owner because you do want to know where my money goes– where all your marketing money goes.
We’ve kind of been spoiled as we’ve been moved into this digital marketing age where we got used to the idea that, “I know exactly what I’m getting back for my marketing money.” Well, we’ve kind of gone past that now, and we actually have to go a bit old school in the way we think about things. So by going old school, what I mean is going back to that point where– the famous quote that says, “I know that half of my marketing’s working. I just don’t know which half.” Well, this is where most large retail brands find themselves. So traditional advertising through TV, radio, press, PR, there is no direct line of ROI or [ROE S?] that someone’s able to calculate. You ultimately have to go with gut feel. And that’s why sort of the old-school marketers if you like, they’re still a talent out there that needs to be fostered and preserved. And I think, to a certain extent, that skill set’s being bred out of us by this digital age. And it’s only now that, for a lot of industries, the competition’s so tight that skill set’s coming back into its own. So what are we looking at here? Well, we can probably work at how we need to tackle this by thinking about the way that TV advertising has traditionally been measured and people have made their purchase decisions. And to get this right, you really need to go and understand who your profile of your target customer is, the persona, who you kind of imagine that person would be and spend some time looking at where they’re likely to be. Now, old-school TV, you typically use offline survey-based metrics, like it might be Roy Morgan surveys, build profiles, get an idea of where that person is and what kind of media consume and how they do it, which is great. But for the purposes of being a startup or a small business, that’s usually well outside the range of what you’re able to do. My suggestion is always to look at Facebook. Digital marketer [first?]. That’s where I’m going to go back. But the data that sits behind Facebook these days is absolutely amazing. If you’ve installed the Facebook insight Pixel onto your website, you can start to get an idea of who the people are, looking at their interests, their age, their demographic. You can look at the other kind of pages, the celebrities, the interests, the restaurants that they might like. This kind of data is available as marketers. So my tip there is definitely install the Facebook insight pixel, and you can get an idea what’s happening. Getting back to your question, when it actually comes to buying that media, when you’re doing a media planner for TV, you actually start looking at things like [inaudible] all the breaking points. And this is kind of like how many people are watching your show, but media’s purchased in TARPs. So this is target audience rating points. And what we’re talking about there is the media buyer who’s working to a plan for a marketer for a big client is actually are interested in how many people are watching your show who are actually their target customers. So what I mean by that is they don’t really value– there might be a million people watching your show, but if only a hundred thousand of those people are their potential customers, then they value the media by the hundred thousand, not the million that they’re actually seeing it. Why is that important? Because ultimately, the marketers have done their research on who their customer is. They’ve done their research on where they might be looking, what kind of consumer information, what media they’re consuming. And that’s where they place their ads. Now, there’s a lot of [inaudible] behind that. You really have to follow your instincts and see what’s happening. That in itself is probably going to be [laughter] hard for you just to reconcile with yourself. So the trick at this point is to start putting soft KPRIs in, leading indicators in that we start to draw correlations between end business outcomes. Now, go back a few years. And generating likes on Facebook was seen as being very much like a vanity metric. However, where it really resonated and why it took off with businesses and why they built up Facebook audiences is it’s a general recognition that people who interact with your brand, people that see that, it’s a leading indicator. So it is possible to say that the number of fans on a Facebook page is in some way correlated to the size of that business or the audience or potential size of that business anyway. That’s one variable, and it’s a bit of a weak one because it’s kind of being bastardised by people sort of buying likes and becoming fixated on how many people are liking their Facebook page. But we can look at other elements like what’s the total number of minutes or hours our videos are being consumed on YouTube or Facebook or any other media? What’s the total number of clicks we’re getting, the number of impressions we’re seeing, the brand mentioned? These are all indicators that say what we’re doing is going the right direction. One of my favorites is actually tracking the number of brand searches to your website through Google. So to do that you might say, “I know that my brand is increasing, getting more interested in the marketplace the more people who search for me on Google.” So for example, you could run a Google Adwords campaign just bidding on the keywords [inaudible] or mispellings around that, look at the number of impressions that your ad’s being served up to. It won’t cost you much for the click. In fact, it’s probably a good thing to defend your brand and control that path. But what you’re going to collect is insights into the number of people that are searching for your brand even if they don’t click on your ad. Those searches will indicate brand power. So that’s a really cheap and easy way for you to look at whether your brand is taking off. Now, can you correlate that exactly to new business? No. But it tends to be a great way that you can measure potential future success. Other areas you might want to look at is obviously indicators like visitors to your website, brand mentions on external websites. They’re all soft KPIs, but what we’re trying to do is map these softer KPIs and say, “Well, this is leading through to a greater business discovery.” And you’ll get more faith in the model the more confident you are that where you’re placing your brand is in front of the right eyeballs, the right– all the people that you’re actually trying to target. So it doesn’t give you a perfect answer, and I don’t think there is a perfect answer for this. There’s a lot of [inaudible], and there’s a lot of belief in what you need to do. But the more you can establish robust soft KPIs, indicators, whether it be leads or phone calls, all these element and so you’re [inaudible] to website visitors. These are all the soft KPIs I’d like you to build in– for you to build into a model to build some confidence that yes, okay, you might only be doing three or four enterprise-level sales on a monthly basis. I don’t really know what that is. So you need higher volumes and higher numbers to sort of get some statistics behind. So these are all the kind of KPIs you should be looking at. The other key area I’d add is anywhere you’re able to grab data and that data being sort of broken into three broad buckets. You’ve got primary data which will be email addresses and phone numbers. If you’re collecting those, they’re primary data points that mean that you can identify a unique person and also find them again on the web at any different place using custom audiences. The secondary level of data is people who like or follow. So this is your likes on Facebook. This is your followers on Twitter. And the tertiary level of data which is the least robust is the anonymised cookies, the anonymised pixels, and people who’ve clicked on ads in Facebook. But if you start putting these three levels of data down and you start to consider these data points to be crucial value-add variables and KPIs in your business or assets to your business, that’s when you’re going to get a really good idea of, “Okay, I’m definitely growing my audience that I’m speaking to.” And whilst it might not represent a pipeline in the traditional sales sense, it does represent an audience that is willing to listen to you and you’re able to reach in another way. So if you think about those pixels and those three different data points and you value them differently, they can be great ways for you to indicate future revenue and growth of your business. So I hope that helps. Really tough question, I’m not going be able to answer it absolutely perfectly. But hopefully, I’ve given you a few nuggets and ideas there. And rest assure. You’re not alone. Every business that’s out there that has a slow sales process is wrestling with those ideas because they can’t track end to end. But there are proven techniques from old-school offline marketing that work. And the good about it is it’s not as cut and dry as pure online acquisition marketing. There’s a bit of art. There’s a bit of [inaudible] there which yes, makes a bit harder, makes it a little bit more uncomfortable. But if you get it right, there’s a lot more value in your business. And it’s a lot more dependable as a brand position.  So finally, I just want to have a quick look at the idea of using animation in your online videos be it ads or explain the videos. I was inspired to sort of look at this today and [inaudible] question but by searching through LinkedIn during the week. And I saw an article on LinkedIn Pulse written by Sheldon of Big TV– sorry, BigFish.tv is the head of content there. He’s got a great post, and I’ll link to that in the show notes where he’s talking about the power of using animation in your videos. And I think he touched on a really interesting point which is this idea that you can get quite distracted when you do a video when you use real people. I don’t think this is exactly his point, but this was my take away from what he wrote. As humans, we’ve sort of evolved around this idea that we make general assumptions, and we sort of say we recognise people. We have that sort of inbuilt human brain that learns from previous experiences. And what that means is how we relate to people is often how they look in all the information around them. So a traditional video, I’ve got background, I’ve got noise, I’ve got lots of movement. I’ve got these wonderful little idiosyncrasies that could be in the person that they’re interviewing in the video. It could be the subject of that video could be an actor. And the thing is my subconscious is amazingly powerful at interpreting the sort of the hidden message behind those people. And that hidden message in what they’re saying particularly if they’re an actor might not be entirely compelling. Now, on the flip side, animation doesn’t suffer from that same problem. Animation is able to deliver visually simple stories that are easy to understand. So all of a sudden now I can’t look at this like turn up in the eye and wonder if the person’s being a little bit sneaky or whether they’re holding back some information or can I tell if there’s something going on there? I’m actually looking at animation which is naturally going to be simple, but I’m able to focus on the audio a lot more. And the audio still portrays emotion. The audio still has the message in there. But the video, in a weird way, keeps my brain engaged visually enough so that I’m really listening to what’s coming through. And there’s a fantastic example that Sheldon puts there of a video that he created for the Queensland Ballet. And the emotion behind it is really clear. The animations are quite simple. I’m not distracted by costumes or the people. I understand what ballet is, I can see the movement, I can see the story and it’s coming through. The background and all the other colours that are flying around the screen are far more engaging. And I think this is something that we’re seeing more and more. If you’re like me, you’re seeing a lot of videos, influencers on LinkedIn holding cameras. And the problem is, there’s a lot of movement, there’s a lot of noise. You tend to judge the person, rightly or wrongly, by what they look like, how they’re acting, how they’re moving around, whether they’re paying attention. And animation doesn’t suffer from that problem.
The other great thing about an animation is it’s so much faster to produce. You don’t have to do as much with lighting, you can do a lot more in editing. And I can still do a shout-out here for one of the clients and one of the companies I work with called Biteable. And this is exactly the space that Biteable operates in. They create amazingly beautiful and simple animations for explainer videos that allow people who sign up to it to tell their story in a really simple way. And that’s often the case; the simplest stories can be portrayed in just a few letters, a few words. And the animation is a way to engage the person’s brain and keep the audience paying attention. The words can be quite simple. Sheldon’s example, they use spoken word over the top of the animation. Biteable more uses text, a bit like Twitter. You think you’re being restricted down to a small amount of text. But I think the amazing thing is the way that what would seem like a limitation actually empowers you to tell a much more powerful story. So I’d really recommend checking out both Biteable and some of the videos – you can get a free account there, it doesn’t cost anything to try that out – and also head over to Bigfish TV and have a look at a couple of the animations they’ve got.
The ballet one is hugely– so that’s [inaudible] bigfish.tv. The Queensland Ballet is quite an emotional and easy piece. And then there’s a second video they’ve got called Family Law Systems Exposed. That one’s much more emotional. And I think the power in that one is that you’re able to hear the voice. You can hear the person who’s narrating’s voice breaking as they struggle with the pain of the story that they’re telling. The animation isn’t of them. I don’t know what this lady looks like. I can’t see her face, but I can hear her voice, and that makes it easier for me to relate to because I don’t have the ability to judge her physically. I don’t get to look at her and make some assessments about who she is or what she might represent. I’m just listening to her as a person and I’m seeing the animation that brings that story to life. So if you’re struggling with how you’re going to tell your story, if you’re struggling with your website and you’re running copy and there’s lots of information there, I think animation is a fantastic way to explain a message or basically to tell a story. Definitely take a look at it. There’s obviously varying levels of it. You can go hire a great agency to produce top-notch work or you can go use one of the free online tools.
But I think there’s a rising use of animation and if you want to look at the best examples of that it’s just the rise and rise of Pixar movies and other animation studios, and how well those movies are now grossing because people are able to identify. It doesn’t matter what country you’re in, you can relate to two monsters that are blue and green because they’re animated. They’re not real people. Whereas any other movie you might like to shoot with actual human actors, there’s always going to be that slight judgement that occurs. I’m taken to a thought of a movie recently that came out around the Great Wall of China, but with American actors in it. It just grates you the wrong way. Well, grates you anyway. So take a look. Have a think about how you– what story you want to tell. And maybe think about using animation as a way to get around that need to hire talent and have along production crews and big overheads in producing what really should be something that’s fairly cheap to produce.
[music] Thanks for listening to that latest episode, guys. I’m just got two quick favours to ask of your here right at the end. Firstly, if you have any questions, please shoot them through. This podcast only exists because I answer questions that listeners send in. So if you head along to fractal.com.au/questions, that will redirect you to the latest episode and you can drop your questions down there. Those questions you submit become the basis for each episode. So if you’ve got a question around SEO, paid search, growth hack marketing, PR, brand positioning, market segmentation, anything you might like to know and it’s going to help your business, drop the question down there and I’ll try to answer on the next episode. If you don’t have any questions, that’s absolutely fine. The other thing you can do is head on over to fractal.com.au/subscribe. Subscribing to this podcast not only delivers each episode straight through to your smartphone, but it really helps me reach a bigger audience all the time. That subscription really helps me out. So if you can do that, I’d really appreciate it. Thanks a lot for your time, again, and see you next week.

 

The Fractal Marketing Podcast – Episode 1 – Teas.com.au, Brannd Savvy & Powerwells.org

In this episode, I take questions from Teas.com.au, Brannd Hub and PowerWells.org

We discuss:

  • finding your niche market
  • How you need to own a niche before you expand
  • Tribes and how to use them to expand
  • Great domain names and the ‘radio test’
  • promoting a service-based business
  • Crowdfunding marketing

Thanks to Teas.com.au , Brand Hub , and PowerWells for being on episode one.

If you have a question you’d like answered on the show please leave a comment on Linkedin here 

 

Want your question answered in the next episode? Just leave your question here

Here is a transcription of this episode: (there will be mistakes in this transcript so please just use this as a guide)

 

Hello and welcome to the Fractal Marketing Broadcast. I’m Gerard Doyle. Each week, I explore online marketing objectives and strategies from you, the listener. Sharing the advice on this broadcast for everyone to learn from. The goal of this broadcast is to keep startup founders and entrepreneurs, teach them marketing tips, tricks and best practices that they can apply to their business. Welcome to episode one. On today’s episode, we look at the niche marketing selection for teas.com.au. Help brand hub with their web presence, and I will share how I promoted the ground founding campaign for power wells. So let’s jump straight into the episode. So the first question we have is from Celina who runs teas.com.au, and that’s T-E-A-S.com.au, who asked the question with a rather low population density, yet first world GDP in Australia, how does someone choose a niche? Her niche is too niche. Is there a golden figure or a clever way to say, “Yup, this is a mature market for X or no, its way to small, thanks a lot.” Thanks for the question. First things first, just as I stumble over the word niche right at the beginning of my podcast. Franny Wayne is listening in the US, there would be a niche. It’s probably a little bug there for most Australians and Brits. That there’s a different way to pronounce that word, but in Australia we say niche. Look, great question. I think the first thing I want to say is just a lot of good domain name. Not directly related to your question, but teas.com.au, as somebody who’s worked in the domain industry for a while, one of the things I love is a domain that’s just easier to say, easier to spell and the kind of to quote the wrong sort of brand campaign, it does what it says on the tin. So good work on that one. To get more into your question, is there an easier way? Look, I guess I can give you a roundabout answer and that’s to say for me, the trick with niches is actually to go as niche as you can at the start. I think one of the traps we get into with business is we try to go too broad. And I guess that goes to the second part of the question which is have you gone too niche. I guess it depends on the way you’re looking at it. If one part of your question is the market big enough to justify, that’s a bit different to are we going to a niche. In my mind, one of the key things to do when you’re starting a business or running a business is to go as niche as you can at the start. So what that means is, you’re better off winning over a really small audience and turning them into an absolute evangelist for your brand. So what I mean by that is, it’s really hard to be everything to everyone. So, obviously, [inaudible] with so many tea drinkers, but even tea drinkers are a really broad set. So I think the trick is to get that niche as tight as you can and to play around with that. So, obviously, an easy market to define is people who drink tea. But that again is quite a broad market. I drink tea, not a huge amount. The tea I drink I describe as Bookies Tea. So, how do you appeal to me, or is there a niche market in that? Well, just– I mean, its always easy to use yourself as an example. So the way I’m thinking about it is, I’m a dual citizen living in Australia. Born in Australia, but lived for ten years in the UK. And there’s one thing I picked up in Britain is that Brits tea more than they drink coffee. So already I’m thinking of a niche market, which is British experts living in Australia. And even that in itself is quite a big market to go after. But its interesting because by niching that one level further, you’ve already started to create an idea in your mind’s eye about the persona of who we might actually be going after. So I’m thinking about it now, I’m starting to imagine the British person who is in Australia who don’t have a great tea selection or doesn’t quite understand why Australians are so obsessed with coffee and not drinking tea. And to that end, I think about tea and I think this is a good, long game
for you this is– in Australia is obsessed with coffee at moment, and I say at the moment since that coffee’s got a few hundred years of history whereas tea is based on thousands of years of history. So if I was going to take a bet for the long-term play, tea seems like a better one. It also seems like the slightly more mature option which I think you can play into with your marketing as well. So what I mean by that is– I guess I’ll try explaining through an analogy. Thinking back a long time ago so whatever it is, 20-plus years ago when I sort of I guess first became legal to start drinking or there [or?] thereabouts, [inaudible] drinking spirits or beer. Beer was the easy drink if you like and then over the next few years, people started to introduce wine. Nobody really loved wine the first time but it was that sophisticated answer and wine was more multidimensional. I mean obviously, you start looking at red wine and white wine, and then there’s types of grapes for the red wine, and then there’s regions and price points and styles, and I think tea’s in the same position. I think tea’s something where you can win over an audience and then when you win them over you create that level sophistication. Anyway, I’ll get to that in a second. I think it’s actually key to break down niches even further. So yeah, thinking about myself, the second job I had coming back to Australia five years ago was working at an ad agency at iProspect, and one of the things that amazed me about iProspect was the fact that half of the staff were British. They were either born in Britain or had dual citizenship or a lot of them had permanent residency but half of the few hundred people working for iProspect were British. Across the advertising industry, I’d suggest it could be as high as 30, 35% of the people working in the [al land?] industry in Australia are British which then creates a really interesting niche because all over a sudden now we’ve got probably higher educated, they’re going to be typically 20 to 40 years old. A lot of Brits sort of at around 40 years old start to think about moving back to Britain or back to Europe in some way. But if we’re starting to narrow that niche down, why does that matter? I mean, we’re not restricting our potential market. What we’re doing is creating a more narrow persona, the kind of customer that we want to win and turn into an evangelist. So in my mind zone now I’m thinking about advertising professionals working long hours, trying to be creative, keep clear of mind, try to be a bit healthy whilst probably still working in a desk job, British so a natural-born bias towards tea or coffee, and probably a higher than average disposable income. One of the other issues he thinks about the expert community [yes?], the advertising industry is that the time demands on you means that you’re probably less likely to have a family. So maybe I am higher income but more disposable without the kids, without the burden, maybe don’t [inaudible] have the mortgage as well. So what we have done here is we’ve really tried to come up with an idea of who we’re targetting and by niching down to that level what we’re going to do is attempt to create a marketing campaign that entirely focuses on that one persona, that quite micro niche. That’s not to say we only want to sell to the British expert community in the advertising space between 20 and 40 years old who higher income, higher education, no kids, no mortgage, but what it is is to say we can create a positioning for the tea around that. Now, when it comes to positioning with the tea and the niche market, what we want to do is step the tea up beyond the kind of what the tea does, the actual ingredients, and really move into why you would drink certain kinds. Now, having looked at the website I can see actually you guys definitely moving in this place and I can see that the copy that you’ve got on your website but I wonder whether there’s a way we can lift that to a higher level. So what I mean by that is– here’s another example [of?] a different industry if you look at some of the juices that are out there at the moment, so the premium cold-pressed juices. I go along to Woolworths. I have a look at the cold-pressed juice section, and what’s really interesting about it is often on the labels amongst all the ingredients, and the benefits, and the vitamins, and minerals, that are listed there. What really gets my attention is the fact that they often get labelled to do something, so what I mean is. I can pick up a juice that has lemon juice, orange, ginger, and that will be an immune juice – boost your immunity, or get over a head cold. And all over sudden we’re taking something that we can’t even transitively know or maybe it’s inferred, and you up to that level. So I noticed on your website there’s some great features that we talk about cleansing teas. Well, I think that’s the kind of benefit we really need to hone down on and so rather thinking kind of making a selection about what’s the type of tea that I’m getting. What I want the tea to do for me? What am I looking to achieve? And so all the website, all the copy they’re really targetting the articles, the blogs. I can really see that you’ve got that messaging and I think if we can tie that really nicely around a really tight niche. We’re going to be in a great position to market the products, so getting back to– yes, we started with a question. The way I think about it is what we want to do is take that niche, tailor our copy, tailor our ads the way we describe the product, what it does for me. Am I buying teas that give me energy in the morning? Cleansing teas in the afternoon, teas that help me go to sleep at night, clarity of mind, teas that sort of lead to sophistication, things that I might be able to highlight around a working life of an advertising professional. And then package those teas up in that way and sell to that niche audience and win them over. The great thing is once you get yourself into the head-space that you were thinking about niche market it opens up niche marketing opportunities. So then finding brand evangelists, finding advertising professionals with high net promoters scores for you creates another opportunity. You’re able to gauge places like marketing week, Ad News, Mumbrella and pitch the idea. That the advertising industry is moving towards tea with a high demographics of British people coming across, turning us from the nine cups of coffee in feeling clogged and fuzzy headed. We’re moving into tea which is a more cleansing, sophisticated, power drink, and we start to create this idea amongst this niche that tea is the choice of the successful high-level advertising executives. And so you see where we would never be able to get maybe appear [inaudible] into Ad News all over sudden because we have niched down we’re able to do that. And that’s not the say you have to stop there but this great thing happens and I’ll kind of paraphrase it badly – reference Seth Gordon here – it talks about tribes in his book. I think it’s actually called tribes and one of the things that I really took away from that is that people aren’t a member of a single tribe, so what that means is. I might work in the advertising industry. I might be a dual citizen – British-Australian – I might be male. And these sort of different tribes, so one tribe can be around [Adland?], one tribe can just be around your gender, one tribe can be about being a dual-citizen. But I can also be a father. I can also be a Star-wars geek. I can also be a soccer fan. I can be lots of different things. Now, why is the important? Well, it’s important because if you win me over to tea in my dual citizen 25 to 40-year-old male, hard working advertising professional persona and that tribe, and that becomes stunted. Well, I can bring that tribe to the next level or to the next tribe that I’m part of, and it might be that I’m able to bring it to a world of school or me, as a dad, or other social circles that I’m able to get into. And that is the way you can take one niche or one tribe and move it into the next so I think it’s an interesting position. I think I guess what I’m getting at with this whole thing is I guess two things. One is I think you need to niche down. I think absolutely niche down to the tightest audience you can, which allows you then to create evangelists, get that high net promoter score. And once you’ve got that, you’ve got a fan base, a supporter base, that don’t just buy your product, they rave about it. I think it’s important that you absolutely then, once you got those niches, focus down onto the, “Why are people drinking tea?” not just, “I’d like a black tea or a green tea” or the ingredients or whether it’s got ginger or not. What we’re trying to do here is talk about the benefits of tea. We’re trying to sell the whole idea. And part of this education process is not just to sell to new customers. It’s absolutely crucial in the way that we do our marketing that we take these great I guess rationales as to, “Why I drink tea,” the irony here being often the logic – not the heart, the head logic here- is something we apply after a purchase, a post-purchase rationalisation of our decision. And this is the great thing you’ve got. You’ve got email addresses, you’ve got Facebook fans, you’ve got retargeting pixels. This is where you’re able to educate your existing customer base and give them a rational reason as to why they bought the tea in the first place. They might have bought the tea with the heart. You pitched in the idea they can work harder, longer, stronger, smarter. So they bought the tea to be better at their job. But actually, what you need to do after that is give them the rational arguments. So when they’ve got a high net promoter score, they’re inclined to promote to other people, to talk to other tribes. That’s when we take the rational things and we pitch those in to other people. So when niching down, we can create the 10 out of 10 net referral scores, give the people who are giving us these scores the argument, the rationale, the reasons as to why they want to promote your Teas.com that are you, and then I think you’re going to be in a great place to go from niche to niche to niche. Look, if you really wanted to– I mean, the other great thing about the web is it is completely possible to produce multiple brands without a huge amount of [inaudible]. So it is possible that you could have one I guess holding brand if you like, and then you could actually produce sub-brands under that. So it could be, for the advertising executive, you could have an entirely separate brand and domain although the whole backend and processing is all the same. But you could bring those people in. So there’s a lot of different options open to you.
So, that’s I guess my view on the niching side of things. The other posed question was around the size of the market. Look, I think the trick is, whilst your expanding those niche markets, is to recognise that– look, I don’t think Australia’s too small of a market to make this work, but it is a premium product. It is going to require you to win those niches over to expand out. So I just really focus on winning group to group to group as you expand your market. I’ve got a general feeling that you’re backing the right trend. I’d rather be selling top-end, quality teas much more than I would be coffee. I think coffee’s a much more competitive market. I think you’re on a better long-term game with tea. I think it’s more sophisticated. What you need to do, though, is you need to bring that purchase decision up into more around why I’m drinking tea. What’s in it? What’s the result going to be of drinking tea, as opposed to the actual tea itself? Again, it’s in the copy on the website. I can see the messagings there. I think maybe just commit wholeheartedly to the idea that, “I’m not selling tea, I’m selling clarity of mind,” or a positioning statement that you can go with. So I hope that’s been a help. I’m going to post, obviously, the podcast. Of course, I got your details, so more than happy to do follow-up questions afterwards. And then we’re going to move on to our second case study.
So the second case study we have today is from Brannd Hub. So that’s Brannd Hub, which is B-R-A-N-N-D-H-U-B.com, who come with a question, “How does an online, service-based business effectively market itself?” So Brannd Hub is targeting small businesses, medium businesses, startup firms, etc. And they professionally develop names and slogans for entrepreneurs, businesses, and brands. So this is a tough one for me because I think my first instinct is to test your name itself, which is Brannd Hub. And the test I was given by a good friend of mine from evergreen.com domains is what she calls the radio test for domain names, which is if you can’t say it on the radio without having to spell it out, it’s probably not a fantastic brand. The reason I bring this up is the difficulty I think you’ve got at the start is that Brannd Hub, in its own self, doesn’t necessarily pass the radio test because, for me to spell it out, I have to actually– or for me to explain exactly who you are, I have to mention the double N. So for me I think one of the core things is going to be not to fall into that trap of being the mechanic’s car. Sorry, this is the idea that you look after everyone else’s brand but not your own. So I think it’s going to be absolutely crucial that Brannd Hub doesn’t have two Ns. I think to have the two Ns is kind of self-defeating and it’s going to be really hard to sell the business and services you offer after that. So my natural position as an ex-domainer – so it’s obviously coming up a lot – is to go look at, well, who owns other domains similar to that. So I’m not 100% sure where you’re based but, for example, I looked at branndhub.com.au and noticed that that was a parked domain which was potentially for sale from Sedo. At the same time, I might get a look at brandhub, with just one n, .com, and you see other sites that are there, which is not a great place. Because if you think about it, there’s going to be two scenarios, and they’re going to play out here. Scenario one, you struggle to take off as a brand because people can’t really remember it, in which case you never really got to have a chance to demonstrate how good you are at the service. Scenario two, which in some ways is even worse, is you do become successful. Then you have massive leakage of your brand traffic off to the person who owns the premium domain, the actual, real domain. So I guess it’s a difficult one to give advice on on that side because, obviously, I’m looking at your brand first. Look, the other thing is really focusing and spending some time on your website and the way it looks and feels. I think it’s going to be absolutely crucial for you that your brand, your website and the way you portray it, needs to be super slick. At the moment there’s a lot going on with your website. I think the animated snowflakes is very sort of late nineties in terms of website design. I’d be really keen to see you guys [taking?] your domain, and then throw up a template from Wix or a Squarespace. On one side, you kind of look at these and you think, “It’s just Wix,” or “It’s just Squarespace,” but these sites look amazing now. And as a brand, I don’t think you have to communicate a huge amount through your website. I think you can actually keep it really slick. I think minimal is probably the way you need to go, so for your website in itself, I’d really be focused on minimal. And why do I say these two things? What am I thinking of when I look at this, and I say, “Look at your domain. Look at your brand.” Well, this is the thing about selling services online. There’s very little people can use to assess you, so your domain name, your website, I mean, that’s basically it. You know, in terms of the last check. So this website has to look great. This website has to be slick. This website has to look like you really care about brands, and if you care about brands, then you got to care about layout and design. So using a template that’s going to work on every browser and every style. I mean, I’m looking at this on a Windows 10 Surface Pro looking through Chrome. But I could just as easily be using an iPhone 8, X, using a Safari browser, an Android phone. These are all very valid options, and at the moment, your design just doesn’t really work across those. So I’d really recommend looking, yourselves, at the brand, and something simple. Probably stay away from even using the brand in the actual domain. Let’s look for a domain or a brand for yourselves that’s super slick and maybe doesn’t actually say a huge amount. Borrow a leaf off the way I approached it, naming my company Fractal. It’s not the perfect brand by any stretch, but it’s one word. It means something. It can be spelt, but I get to make and use a brand that I want to make it into. Anyway, getting more specifically to your question and some ideas that I think everyone else can sort of take away and use, I think the trick for service providers is not to try to do everything on their website. It’s really around content and content distribution. So what we’re doing is we’re trying to present you guys as thought leaders, and the best way to be a thought leader is to share those thoughts. Look, there’s a general rule which is you should be able to talk about all the different strategies and still retain a whole lot of value in what you do. So what I mean by that is you should be able to sort of create bespoke documents, detailed documents, talking about specific areas of brand marketing, and come up with brands, and add a lot of value, and position yourselves as thought leaders. Though over the years it’s actually a lot harder to execute. So you can give someone all the answers, all the ingredients, but it’s kind of like a recipe when you’re making a cake. It’s one thing to say to somebody, “This is what the cake is going to look like. These are all the ingredients. This is in the method. You can hand all that to me, and I’m still going to make a horrendous cake. And that’s the way I want you to think about your business, as a service business online. Give away the ingredients. Give away the method. Give away the final product. Give it everything you possibly can to help people. Don’t hold anything back. The reality is for services that provide real value and require real talent to deliver, the people aren’t going to have to do it, but what they are going to do is see you as an authority. They’re going to see you as the person with the answers, with the method, with the process, and they’re going to trust you to deliver all of that knowledge into what you do. It’s actually really hard to validate everything you’re going to do for a brand in one of these services. You can spend a long time justifying your decisions to get the person’s radio content all ready, and they’ve considered what you would– potentially considering you’ve done a lot of the pre-sell for you. The thing about content is it’s absolutely fantastic for distributing online. Use LinkedIn, use Twitter, the more professional channels, and put your content out there. Partner with people. Approach other websites, web hosts, small business start-ups, accounting firms, whatever it might be, and offer to write articles for them. There’s enough accounting firms out there with small business coming to them in local areas. They don’t really have anything to say. They’ve got emails like– my accountants send me a newsletter every month, and it’s so dry and dull. There’s never a huge amount in there. But if you were to write something that was for them, for their clients, that used your brand, I think you’d find a really high take-up. So I’d really focus around create a nice brand for yourself, a brand that is nice and clean. Carry that through to a super slick website. You don’t have to spend a lot of money. Like I said, Wix or Squarespace are just really valid options now with so many fantastic templates. Keep it minimal. Don’t put too much onto your website. Don’t try to say too much on your website. Keep that looking premium, slick. Make sure it’s compatible with every kind of browser. And then focus all your efforts on writing down your thoughts and distributing that content to as many different providers as you can. Post it on LinkedIn. Share it. Grow your audience. Post it on Twitter. Follow people. Engage. Look, one of the best things you can do on both Twitter and LinkedIn is actually be the listener and offer value. So what I mean by that is social media channels, these days, are full of people shouting and not many people listening. It would be absolutely amazing if you became one of the people that listened to what people were shouting about, and responded, and added value. It would be an amazing way for you to build up traction online. So instead of being just one more person shouting out on Twitter and making a post, why don’t you put all the effort into replies because that what people can respond to. It’s amazing. You look at the number of businesses that are tweeting frantically trying to get some kind of traction to an audience that really doesn’t care what they say on Twitter. If you’re the one person who’s on there who makes a valid comment, you’re probably going to pick up a follow. You’re probably going to win a little bit of love back from that particular brand, and that can be a fantastic guerrilla way to kind of get your brand out there. So I guess, in a nutshell, content’s going to be your friend. Use your experience. Use your knowledge. Share as much as possibly can. Again, think of it a bit like a recipe. Share all the ingredients. Share the method. Share the final product, and you’re going to find that people will find a way back to you eventually. Some people will solve it. Some people will take your instructions and do a really good job. That’s actually not a bad thing. Two great things come from that. One, you’ve got someone who genuinely values what you’re doing and will be grateful. And, secondly, you can feel good about it. You’ve helped somebody. But what you’re going to find in most cases is that people look at it and say, “Do you know what? I’m just going to ask BrandHub to just go and do all the work for me because they seem to know what they’re talking about.” I hope that helps. I look forward to seeing some changes on the– maybe your brand and the way you can position your website. And, look, when you produce your first content, send it through to me on LinkedIn, and I will give you my friendly comment and help spread love from my end as well. Good luck. So, lastly on today’s podcast, I just want to cover off a company I have been doing some work with about 16 weeks now, and it’s called Power Wells. That’s powerwells.org. And what the Power Wells guys do is they come up with this really novel way to provide power to remote communities around the world that don’t have regular land supply power. So what they do is they find large containers where they drop recycled laptop batteries into them and then you use solar panels to charge up the batteries. And the idea behind this is they’re looking to provide means power supply to communities, what they discovered is that these are remote communities, their mobile phones is actually an absolute essential tool. Now, at first part, you think mobile phone, its a luxury. But in a lot of these remote communities, and they have done a lot of work in Indonesia, they discovered that their mobile phone is their only form of communication. And that’s not just to chat with people, this is about emergency communication, trade, any kind of information to the community. It’s also often their only source of light, which was another amazing fact. So, what the Power Wells are designed to do is during the hours where these remote communities who are typically farmers are out working the land, the solar panels charge up the recycled laptop batteries, so you’re reducing e-waste. And it allows the community to come plug their phones in at night, charge them up to remain connected to the rest of the world, to give them some light so they can do things like prepare dinner and extend the number of useful hours in the day. Anyway, I met these guys at the Logan startup weekend. And meeting Nick and Brad, well they didn’t actually have a great idea exactly how they were going to go about this. One thing was abundantly clear, and that was these are two guys with a heap of passion and a really sort of strong desire to do something. So I quickly went from mentor to permanent mentor, so I guess weekend mentor to permanent mentor and started donating a lot of my time to these guys. And what we did is we sort of set ourselves a really ambitious goal, which was to sit down and we said, “Can we go from zero, startup weekend to running a successful crowdfunding campaign that would finish in January,” which gave us a total of 12 weeks from the two founders meeting each other to actually launching a crowdfunding campaign and hitting the target within 12 weeks. So what I wanted to share with everybody was really I guess my approach in how we did that. The end of our story is good, we hit our target. We wanted to raise $12,000, which we did. But I think what really interesting is a couple of lessons we’d learned. One of the key things we did was that we built an audience first. So we went back and we started all– the people we had at the beginning with the Logan startup weekend people. So got them, added them to our Facebook page, and then decided, “Okay. Well, Facebook is going to be our primary method of communication. We need one channel, but we got to be really good at it.” Any other channels we got, we decided that was going to feed towards Facebook. Again, it’s from the same square, it’s easy to be successful on one medium rather than trying to spread too thin. And everywhere we went, everyone we spoke to, the guys just encouraged people to follow them, to like them on Facebook to see the post, and everyone was directing people here to Facebook. So what we were really doing was building an audience and the idea behind the audience was people that have met the guys, met somebody, heard something could engage in some different way. The bigger that audience was the day that we decided to launch– the day we launched, sorry, the crowdfunding campaign, we had somebody to talk to. And the key to these crowd funding campaigns, and I have only run one, so this an experience of one is that if you launch and have zero dollars in the bank, you’re going to struggle. So what we did is we– as soon as we launched, we had a few bankers, people who we knew were going to come in and make donations. So right from the very word go, we had
me coming in. I guess [inaudible] the theme of today’s podcast I’m talking about [inaudible] talking about Seth Gordon talking about tribes and another thing, in his book, he talks about the need for the first person to jump out there and do something and say, “I’m going to start a movement.” And the absolutely crucial thing to the tribe is the second thing. Once you have a second person who joins in, you’ve got a tribe. That makes it really easy for person three, four, five and six to come along. Sitting back with zero dollars on a crowdfunding campaign waiting for the first person to drop a dollar is absolutely gut wrenchingly, excruciatingly hard to do. You’re sitting there saying to yourself, “This is never going to happen.” No one wants to move first so having two bankers at the very start made a massive difference for us, it meant that the momentum was there and people thought, “Yes, I’m going to get behind this and I’m going to give them a few dollars as well.” And obviously, the first two people it helps if they’re making reasonable donations. Over the course of that campaign which we ran for four weeks, we really focused on the story, we focused on the why. The amazing thing with Nick and Brad, is that they were really clear on their why. And it was really clear to everybody else who read their story and watched their videos is to why they were doing it. The amazing thing was they didn’t really know how, they still don’t really know exactly how, we had [inaudible] so we knew what we were going to deliver which was these PowerWells, exactly how wasn’t known. So it gets to this really interesting Simon Sinek quote and thing around getting to why and answering your why. We were able to successfully raise $12,000 and we didn’t even really know how, and we still didn’t know how we were going to get the PowerWells exactly in. We knew what we were doing, we knew why we were doing it, and it was the why that made a difference for these guys. Couple of other things we do in the crowdfunding campaign, every single time somebody donated, sent them a thank you email and that’s the automated one but Nick was in there sending a personal email saying “Thank you.” Giving the person at the same time some collateral that sort of said, “Hey, can you post this and share it so.” And when they did and then we were sort of posting and thanking them on social media so it really shined the movement. We told the story to news spots. We got some great coverage on the Brisbane Times, 4ZZZ, ABC Radio, and the reason we did is you get one go, you get one go at telling these stories and so we knew it was our momentum play, we knew we could get some press, we could get some coverage but it something that was going to eventually die down. So there was no real reason reason for us to go run this campaign for 12 weeks, it was really, we had one shot, one go at the story, had to draw a line in the sand, and the exciting thing for us was it’s actually the last few thousand dollars goes quickly. So effectively, in the crowdfunding, we launched, we started quickly, the middle was a real low, took a lot of people, a lot of 10 and $20 dollar donations and then as you get to the end and people can see that you’re inside– once you [inaudible] got past $10,000 dollars, we kind of even doubt if we were going to get there because you get to a situation where the people that have already backed you and the people that are thinking about it don’t want you to fail. The thing about a crowd funding campaign is when you set that mark, and we set it at $12,000 dollars, if we had raised 11,900 it would have been a failure because we wouldn’t have got a single dollar, you’ve got to get to the 12, 000, you can’t go under. But the great thing is when you do get close, you do find you tip over the end. So really, the key of the campaign for us was that we launched with some backers, we had an audience, we kept building the audience. Two, we really focused on the why, why we were doing PowerWells and what we have to achieve from it. And thirdly, we just kept the communication going, we focused on the explosive start, did as PR as we drive towards the story and got it over the line. So I don’t think PowerWells is typical, it’s sort of a B Corp style setup but the one definite thing, I’d recommend it for anybody, is if you’re to do any kind of crowdfunding campaign, is make sure you’ve built up a real audience before you get started. So that’s the end of my first podcast. I hope you’ve really enjoyed it, I’ve had a good time recording it for you. If you’d like to be featured or you have any questions you’d like me to address in future podcasts, just head over to fractal.com.au, the follow links through to the LinkedIn page where you can drop some comments down under this episode’s links. In those comments, and I’ll put some notes in the description there but just try to describe what your company is, the name of it, the URL is absolutely important, explain to me who your customers are, the problem that you’re solving, and then finally, in a little bit of detail, one or two lines, what’s the question you’d like to ask me for me to address in the next podcast. Those questions on LinkedIn almost always form the basis for each of my podcasts each week. I hope you’ve enjoyed it, look forward to answering your questions in future podcasts and we’ll see you next week. Cheers. [music]