Pitching Your Product
There’s an unwritten law in silicon valley that if you have to use marketing to push your product, you have a crappy product. I’m on record as to why I disagree with this law. The corollary of this law is if you have to have a celebrity pitch person pushing your product, you have crappy advertising.
Fair disclosure, I work for a company that was founded by a well-known celebrity, and we take no shame in featuring him in our tv and web advertising. But recently we’ve thought about moving away from that. It was even brought up by the person himself that he wanted to be featured less and less on our website and in our tv advertising. Our testing of display ads has shown better performance without him featured.
While I do think marketing is necessary from the infancy of a product, how it’s done and who it’s done with is a completely different story. Letting the product speak for itself is goal of any business. The benefits and features of the product should scream to consumers on why they should use it and why they should tell their friends about it. Having a celebrity founder or celebrity investors should be the icing on the cake.
Consumers are smart and it’s important to be intellectually honest with them. Doing so says so much more about your product’s quality than any celebrity pitch person ever could.
Once You’re Lucky; Twice You’re Good
“I heard motherfuckers saying they made Hov
Made Hov say, “Ok so, make another Hov”“
It never ceases to amaze me about how well people are able to spin their first careers, where they (arguably) got lucky, into doing whatever the hell they feel like. Lots of people, and this is especially true in tech, think that just because they exited/got paid/pivoted/whatever, the first time around, it gives them credibility to pontificate about whichever subject matter they feel like pontificating about.
There are notable examples about who does this - all you have to do is open up twitter, tumblr or wordpress and you’ll see hundreds of people who think that just because they made it once, means they can give advice to others on how to make it (regardless of the fact that whatever they did the first time around may not have anything to do with why they think of themselves as successful).
To some of you, this may come off as just a big dose of haterade, and you wouldn’t be wrong, but the fact remains there are still millons of people out there who are more then just lucky - they do their job day in and day out and do it well. These people go from job to job, year after year and put numbers on the table, write excellent code and just get shit done. They don’t care about the press, the glamour or the twitter/youtube/blog followers who lean on their every word, all they care about is that their company is successful and that they earn a little coin for doing so.
That’s not luck, it’s called talent.
Changing Consumer Behavior
One of the things that’s been interesting to watch while at my current company is the way we’ve literally been able to change consumer behavior. I work in the payments business. While not incredibly sexy, it does have an every day impact on people’s lives.
One of the products that we introduced last year is early direct deposit, that is, if you sign-up to have your paycheck direct deposited into your account with us, we will pay you up to two, sometimes three days earlier than you would normally see your check appear in a ‘regular’ bank account.
The result of this product has been astounding. All of our key retention and engagement metrics have increased dramatically. If you look at our facebook page or monitor our customer service lines they are literally blowing up two or three days before people are scheduled to get paid. This obviously keeps our social media and customer service people very busy, but more interestingly, provides us with a distinct competitive advantage of our competition.
The point of this post is not all companies are able to really impact consumers lives. I can go days/weeks/months without posting something on facebook and it doesn’t even phase me (that said, millions and millions of people can’t say the same thing) but in some small way I feel we’ve made a real, positive impact in the lives of our customers. When you release products, it’s important to do so (especially early on) if they’re going to have meaningful impact - and early direct deposit has certainly had that impact for us.
Predicting the Future = Predicting Success
In the first week I predict a million sold, we talkin…
Every marketer’s dilemma deals with not knowing if a specific campaign will be successful. What can complicate matters further is if the full lifetime value of the customer is not realized, for 12, 24 or in extreme cases, 36 months. So how do you solve this problem?
One of the best tools is to use predictive analytics to better understand what the likelihood of your customers becoming some of your most tenured and valuable customers. This allows you to know nearly instantaneously if a new source of traffic is valuable and worth investing more into.
The first step to doing this involves you looking at your existing customer base - what sources helped you acquire them, how long have they been a customer, did they refer any friends (if so, how many?), how much do they spend for your product or service? Once you’re able to answer these questions, you will be able to target profiles that look like this customer.
The more customers (i.e. data) you have the better - it will make your guesstimates much more accurate and allow you to react much more quickly as a marketer. How you apply these insights is also important - if you do it incorrectly, it screws up everything. If you do it the right way, you and your business will be golden.
Your (website/app is) So Vain…
I know that I’m a bit late to the game on this, but one thing that is starting to make noise here in Silicon Valley and elsewhere is the fact that Venture Capitalists are starting to pay less attention to so-called Vanity Metrics and starting to pay attention to metrics that are much more meaningful to growing successful long-term businesses.
What are vanity metrics you may ask? Back in the early days of the web, people used to brag about how many ‘hits’ their website received. I’m not sure that metric was ever truthfully defined, but it eventually evolved into things like visitors, unique visitors, and more modernly app downloads/installs and even sign-ups and registrations.
What’s the problem with these metrics? A quick side story - two years ago I was chatting with a partner from a top VC fund and I was showing him the (what I thought was impressive) spike in unique visitors from a start-up I was consulting at. He literally laughed at me and said “You know I can see right through that, right? I was in advertising once too.” The issue with these metrics is they are easily manipulated and they don’t necessarily produce revenue or long lasting customers (i.e. long term revenue streams).
So what are meaningful metrics? Well, the number of active customers you have is one. This can be everything from number of times a customer logs into your website to the number of times a customer uses your app on a daily basis. From a commerce perspective, you can look at how frequently a customer is buying from you and how much are you increasing a customer’s average purchase. Other things to look at is to see how frequently a customer is recommending your product, service or app to his or her friends (hint: your best customers will be doing this frequently).
The end result of this is we should expect companies who focus on these metrics to be more stable to be stronger and to be longer lasting. Long gone are the days when companies will get $5 million in funding simply because they can get a million unique visitors to their site within a given month - anyone with a few dollars and a decent marketing background can do that. What is more interesting is how you can keep those visitors coming back to you month after month.