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Lars Lofgren

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Do You Use Performance or Brand Marketing?

February 14, 2012 By Lars Lofgren 1 Comment

Brand Marketing

Think Super Bowl. Think Coca Cola, McDonald’s, or the artsy car commercial. The ad is fun, entertaining, and doesn’t ask you to do anything.

Companies that use brand marketing to build a specific connection between you and them over time. With enough ads, absurd amounts of cash, and the right connections, brands can get you to love and respect them.

Do you measure what you’re doing? Do you track each ad and marketing piece you put out there? If not, you’re doing brand marketing by default.

You’re putting your message out there and HOPING it comes back to you with increased loyalty and revenue.

But there’s one major problem. How do you really know?

You don’t. You have no idea. And don’t assume you’ll get it right either. You have hundreds (if not thousands) of marketing options available to you when you factor in all the different value propositions, target markets, mediums, calls-to-action, and objections. Most of them won’t work. Only a couple of combinations will give you the ridiculously growth rates you’re looking for.

The odds are against you my friend.

Performance (Direct Response) Marketing

Performance marketing takes the opposite approach and measures everything. Nothing is taken for granted. If a campaign wasn’t measured, then it didn’t work. Since the perfect marketing mix is so hard to obtain, we can’t assume we have it until we prove performance.

Taken to the extremes, performance marketing is the sleazy stuff we all hate (direct mail sales letters, telemarketing, infomercials). But there’s more to performance marketing than just buckets of sleaze.

You don’t have to be sleazy or go for the hard sell, you just need to track and test what you’re doing.

Here’s the thing, nearly any marketing medium or campaign can be turned into performance marketing. All you need to do is build in tools to measure  performance.

So how do you measure your campaigns? You have a couple of options.

The easiest are coupon codes. In fact, coupons were invented to track marketing campaigns, not to generate sales through discounts. For the early performance marketers, the discounts were simply the cost they had to pay to be able to track where sales were coming from.

Instead of just putting your message out there and hoping for the best  (brand marketing), tell people they’ll get an incentive if they use a promo code or coupon. Now you can track everything.

What other options for tracking do you have?

  • Unique phone numbers – Use different phone numbers for different ad versions and campaigns, then you can tell which ads generate more leads and sales.
  • Links – If you’re using Google Analytics, use Google’s URL Builder to generate a unique, trackable URL for your online campaigns. This is the most popular way to track online campaigns.
  • For email or direct mail, check with your vendor and make sure you know how to use their tracking systems. Email vendors allow you to track and test different emails and direct mail vendors can insert hidden codes into return mailers.

Once you’ve got the tracking figured out, make sure you test different ideas. Test different headlines, layouts, calls-to-action, and value propositions until you find the perfect ad for your market.

Honesty Time: Even the best direct response marketers never get it perfect the first time. That means you won’t either. So start tracking your marketing, test new ideas, and adjust accordingly.

This is a lot of work up front but over the course of a year, you can easily double the effectiveness of your marketing several times.

The One Major Exception

You have one other option: building deep relationships.

All business is fundamentally about building relationships with people you enjoy spending time with. If you build those relationship deep enough, your customers won’t just be loyal, they’ll become brand evangelists. They’ll spread your marketing through word-of-mouth farther than a Super Bowl commercial ever could.

You won’t be able to measure any of this. You’ll have no idea where the ROI is coming in. All you know is that you’re enriching people’s lives. Some how, some where, it’ll help you build an extraordinary business. It’s won’t happen overnight either, this is a long term model that takes years to get going.

Here’s some examples:

  • Calling your customers and thanking them for purchasing your product (no sales pitch or marketing research)
  • Sending random gifts to your customers (free upgrade to first class shipping is an easy one)
  • Doing everything you can to help your customers (and I mean everything)
  • Putting the interests of your customers and your employees before your own

But here’s the deal: you can’t half-ass it. Either you go all in or you rely on performance marketing.

You can’t just slap a mission statement on your website about putting the customer first and expect it to happen. You need to live this philosophy and embed it into every last detail of your business. Every employee, every process, every email needs to completely embody this. Otherwise, people will think it’s an act.

All it takes is one seed of doubt to bring this entire model crashing down.

Need a case study for how to do it right? Check out Zappos. Tony Hsieh gives a complete breakdown of how he helped build Zappos in Delivering Happiness: A Path to Profits, Passion, and Purpose. They completely embody this philosophy. Derek Sivers also did this with his former company CD Baby. He has plenty of great articles on his blog and wrote the book Anything You Want. I highly recommend both.

Be very very careful. The line between relationship building and brand marketing is pretty fuzzy. If you’re not actually talking to your customer, it’s probably just brand marketing. Make sure that you’re actually connecting with your customers and not slamming your pitch into their face (which is the best metaphor I can think of for brand marketing).

Bottom Line

  • Brand marketing = wasting money
  • Performance Marketing = minting money
  • Relationship Building = stacking the long-term odds in your favor

How to Pick the Best Social Media Buttons For Your Blog

January 24, 2012 By Lars Lofgren Leave a Comment

Before we dive into which social media buttons, we need to cover how many you should use.

Each and every social media button on your site needs to earn its place. If your visitors aren’t using the button, it’s only getting in their way.

Take the Indian Luxury Trains Blog (totally random, I know) as an example. When scrolling down the home page, your browser will come to the bottom of the post and you’ll see 17 social media buttons lined up pleading for your attention. That’s right, 17 of them. Here’s a screen shot to prove it:

They actually have another 5 to bring the total to 23. The ShareThis button opens a pop-up with 5 more buttons. That’s ridiculous.

So why is this a problem? Aren’t we giving our visitors more choice? Won’t more people like us if we always have their preferred social network? Wrong.

When you only have 2-4 buttons, it’s supper easy to get people to act on impulse. The thought process for sharing is so quick, simple, and easy that people can instantly do it. There’ no thinking and no effort. And when there’s no effort, more people will do it. Which gives you more tweets, likes, and +1’s.

You’re asking your visitors for a favor (to market your business for you) so don’t make them work harder than they need to.

Choice is good, but too much choice is awful. When people have more choices than thay can comfortably handle, they’re forced to make a deliberate decision. This takes time and energy that could be better spent elsewhere.

And don’t assume a few seconds looking through social media buttons isn’t a big deal. You’re fighting for every second of attention you can get. There’s viral Youtube videos, Facebook chats, trending hashtags, new emails, and texts all competing for the same few seconds. And once one of these more entertaining sites grabs the attention of your visitor, s/he is gone. You probably won’t get a second chance so make every moment count.

Here’s the bottom line: every second of our visitor’s attention is precious. Use it as wisely as you can. Focus your website on the few critical elements that make or break your business. Take a machete to everything else.

7 Principles for Selecting the Right Social Media Buttons

  1. Above all else, use the social media buttons that your target market uses. If they don’t use Facebook or Google+, get rid of them. If they’re on Pinterest and StumbleUpon, definitely use those buttons
  2. When you don’t know what to use, start with Twitter, Facebook, and Google+.
  3. If you focus heavily on a B2B market, test out LinkedIn.
  4. Aim for 2-4 social media buttons.
  5. Be wary with StumbleUpon. Even though a few sites have built their business models on StumbleUpon traffic, this is not the norm. The conversion rates from StumbleUpon tend to be horrendous. If you need to make room for another social media button, StumbleUpon should be the first to go.
  6. Definitely test new buttons. But when one consistently under performs, get rid of it.
  7. Don’t hide your buttons in a pop-up. Plugins like ShareThis are very popular because they condense dozens of buttons into a single pop-up. When you use plugins like this, you inconvenience your users. Remember: every second of attention and every click is precious. Pick the most important buttons and make them super easy to use.

My 7 Favorite Business Books of 2011

January 6, 2012 By Lars Lofgren Leave a Comment

Look, I love to read. I’m basically a book-addict. For the last year, I’ve averaged a book each week and the the vast majority of those books have been about business.

My goal is to understand how to grow a profitable business as deeply as possible. And relentlessly consuming every business classic I can get my hands on has helped me tremendously.

But more importantly, these books will also help you.

Just about every business problem you or I will endure has already been solved by somebody else. The trick is finding that somebody else.

Out of the dozens of books I’ve read, here are the most useful, enlightening, and pratical books every business owner should read. I’ve narrowed it down to the essential 7.

If you want to fully understand how to grow a business, they’re the perfect place to start.

These books are the best of the best. I promise that they won’t waste your time with tangents, go off-topic, or endlessly repeat themselves.

The Personal MBA - Josh KaufmanThe Personal MBA: Master the Art of Business

Looking for a book that will give you a practical overview of business? Josh Kaufman covers every major business concept in short, concise segments. If you don’t have a background in business, you desperately need this book.

Kaufman spent years reading every notable business book out there. He then condensed everything he learned into a single volume. You won’t find any MBA mumbo jumbo here, every concept is as practical as it gets. There is simply no better place to start.

Unlike the other books on this list that merge theory with stories to make them more digestible, The Personal MBA is a little dense. You won’t be enthralled as you read it. But it’s structured to give you quick overviews on nearly every major business concept out there. Get yourself a copy and take a few minutes each day to go over a new concept. By the end of the book, you’ll have a better grounding in business that most business school graduates do.

Made to Stick - Chip and Dan HeathMade To Stick: Why Some Ideas Survive and Others Die

What makes ideas spread? After all, we’d love for our customers to share our ideas and spread the word. How can we increase the chance that our messages will be remembered and then shared?

This book breaks it down completely. After reading Made to Stick, you’ll have a framework for making your ideas and products go as viral as possible.

Here’s the 6 principles of any sticky idea:

  • Simplicity
  • Unexpectedness
  • Concreteness
  • Credibility
  • Emotions
  • Stories

When you apply these concepts to you own messages, people will easily remember and act on them.

Influence - Robert CialdiniInfluence: The Psychology of Persuasion

Wouldn’t you like to know how people respond to your maketing at a deep psychological level? Most marketers consider this a classic and I wholeheartedly agree.

For starters, you’ll learn how to tap into people’s need to reciprocate.

You’ll also learn how to obtain large commitments by getting small ones first.

But that’s just the beginning. You’ll learn how to use social proof that builds people’s trust in you, increase your likability so people buy from you more frequently, speak from a position of authority, and use scarcity to encourage immediate action.

These strategies are used repeatedly in marketing and provide the fastest way for you to grow your business.

The Lean Startup - Eric RiesThe Lean Startup

Every business plan is built on assumptions. We assume our customers will like our product. We assume we can even reach them in the first place. The primary goal of any business plan should be to test those assumptions. Instead of building intricate business plans that take months or years to perfect in isolation, we need to launch products as soon as possible, get market feedback, then change course as necessary (and we will be changing course frequently).

Your strategic process should follow this formula:

  1. Brainstorm ideas for improving your business and only build what’s absolutely essential for that idea
  2. Measure the impact of what you’ve built
  3. Learn from the results
  4. Repeat with new ideas

Successful businesses are those that go run through this cycle more frequently than their competitors.

I’ve already put together a post on the three engines of growth covered in The Lean Startup.

The 80/20 Principle - Richard KochThe 80/20 Principle: The Secret to Achieving More With Less

A minority of your effort gets you the majority of your results. What does this mean? It means you’re wasting a great deal of time and energy on stuff that doesn’t improve your business or your life. you’ll learn how to focus on what matters.

Because if you figure out what gives you the majority of your results, you can get rid of the waste, replace it with the best, and easily increase your productivity without increasing your workload. After you read this book, you’ll know how to get better results in less time.

To get you started, I’ve already written a post on how to use the 80/20 principles to get better customers.

SPIN Selling - Neil RackhamSPIN Selling

If you’re going to read one book on sales, it needs to be this book. It breaks down the fundamental structure of any sale. Then it shows you how large sales are different from small impulse sales.

Here’s the kicker: the best sales techniques are the complete opposite of the sales dogma we’re familiar with. This isn’t snake oil/used care salesmen tricks that alienate your customers, this book shows you how to close sales while building long term relationships. If you have ever wanted your customers to find you irresistible, become exceptionally pleased with the result, and come back for more, this is the book for you.

On Writing Well - William ZinsserOn Writing Well

Just about every writing rule we’ve learned since the 7th grade makes our writing worse, not better. This book will give you a great overview of what great writing looks like.

It won’t help you win any literary awards but it will help you connect with everyone around you.

But why would you need to learn how to write? Well, do you send emails to customers? What about business plans or proposals? Have you put together any marketing material? Learning to communicate effectively will help you close deals, get people interested in your product or service, and make you more persuasive in everything you do. And since everything you learned about writing in school has done you more harm than good, learning how to do it right is probably a good idea.

The 22 Immutable Laws of Marketing, Rapid-Fire Style

December 13, 2011 By Lars Lofgren Leave a Comment

There is a single book that will teach you more about marketing in 134 pages than an MBA will. It’s not just a classic, it’s a must-read. The 22 Immutable Laws of Marketing is the most valuable marketing book you’ll ever buy.

In fact, I’m betting that you are breaking most of these laws right now. Why? Because nearly every business breaks them. Except for the incredibly successful ones.

These laws are critical to the survival of your business. If you learn nothing else about marketing, it needs to be these 22 laws.

In marketing (and business) there are volumes of best practices, principles, and methods. But there are very few iron-clad laws. Well, here they are.

Since it’ll take some time for the book to arrive at your doorstep, I’m going to get right to the good stuff for you. I’ve compiled a rapid-fire list below with brief explanations on each law.

Don’t just skim this list and think to yourself that you’ve gained an understanding of how they work. You owe it to yourself to completely internalize them. And the best way to do this is by reading the book. Since it weighs in at a speedy 134 pages, you’ll breeze right through it and have all the insight you need to strengthen your business for the long-term.

The 22 Immutable Laws of Marketing

1. It’s better to be first than it is to be better.

The business with the largest market share is usually the business that got there first. Being first in a market is the single greatest advantage you’ll ever have for your business.

2. If you can’t be first in a category, set up a new category you can be first in.

Rarely will you have the opportunity to be first. So when you’re not, just create a new category. Instead of trying to beat Facebook as a social media site, be the social media site for moms.

3. It’s better to be first in the mind than it is to be first in the marketplace.

Being first to market is only valuable if it helps you to be first in the prospect’s mind. It doesn’t matter if you’re first if no one knows about you.

4. Marketing is not a battle of products, it’s a battle of perceptions.

Whether or not you have the best product is irrelevant. Your customers need to perceive that you have the best product. This is usually accomplished by being first.

5. The most powerful concept in marketing is owning a word in the prospects mind.

Pick a single word or phrase to dominate. Google owns search. Fedex owns overnight. Amazon owns online shopping. Focus all of your efforts on a single word and neglect everything else.

6. Two companies cannot own the same word in the prospect’s mind.

You’ll never succeed if you go after the same word as a competitor. They got to it first.

7. The strategy to use depends on which rung you occupy on the ladder.

You’ll need to use different strategies depending on when you enter the market. If you’re second or third, customers will only listen to information that’s consistent with that placement. Dell can’t claim to have “America’s favorite tablet” because Apple already dominates that space.

8. In the long run, every market becomes a two-horse race.

When a new market forms, there’s countless competitors. Over time, those competitors will consolidate into just two companies.

9. If you’re shooting for second place, your strategy is determined by the leader.

To secure second place in a market, figure out the main benefit the market leader provides. Then provide the opposite. If you try to copy the leader, you will fail.

10. Over time, a category will divide and become two or more categories.

As a category evolves, it will break into multiple categories. First there were personal computers. Then desktops, laptops, work stations, tablets, etc. Each fragment will have it’s own market leader. Expect fragmentation. Since being first is exceptionally hard, look for fragmentation and build a new category (the second law).

11. Marketing effects take place over an extended period of time.

Short term profits usually produce long term losses. Run too many discounts and you’ll train your customers to only buy discounted products from you. Be careful when maximizing for the short term.

12. There’s an irresistible pressure to extend the equity of the brand.

You’ll feel constant pressure to expand your brand into new products. This rarely works. Be very careful about expansion and make sure you don’t dilute the focus on your core product.

13. You have to give up something in order to get something.

One of the easiest ways to super-charge your chances of success is doing less. Carry fewer products, narrow your target market, or reduce your service offering to only the most profitable. If you try to do everything, you’ll end up with nothing.

14. For every attribute, there is an opposite, effective attribute.

If a competitor already owns a word, secure second place by going after the opposite word. Instead of building your company on “intense,” build it on “comforting.” This opposite word probably won’t be the most valuable word in the market (the leader already owns it). But you will be able to defend your position in second place.

15. When you admit a negative, the customer will give you a positive.

Negative statements about yourself are immediately accepted as truth. Positive statements are approached with skepticism. So if you start with a negative statement about your product and then turn that attribute into a positive, more people will believe your positive statement.

16. In each situation, only one move will produce substantial results.

Your competitor usually has a single weakness. Focus exclusively on that weakness.

17. Unless you write your competitor’s plans, you can’t predict the future.

Be careful with market research. New products and markets are impossible to predict. Make your business flexible so it can handle unforeseen changes.

18. Success often leads to arrogance and arrogance to failure.

As you become successful, you’ll overstate your capabilities and assume your brand can do any product. This is a mistake. Continue to heed the laws of marketing.

19. Failure is to be expected and accepted.

Recognize your failure early and cut your losses.

20. The situation is often the opposite of the way it appears in the press.

Hype rarely predicts actual market revolutions. Real change sneaks up on you in the middle of the night.

21. Successful programs are not built on fads, they’re built on trends.

Avoid chasing fads, look for long-term trends to build your business on. If demand is explosive early on, it’s probably a fad that will come crashing back down. Trends build slowly over time.

22. Without adequate funding, an idea won’t get off the ground.

To properly test any new idea, you’ll need funding. The fastest, most effective way to sell a new product is to front-load the investment to find out what works.

That’s it, all 22 immutable laws of marketing.

Like I already said, you definitely want to pick up the book and go through them yourself. By reading the book, you’ll understand these concepts at a much deeper level than you do right now. This will improve your ability to build your business within these laws and take your business to the next level.

Get it from Amazon here.

Git Rid of Holes in Your Marketing by Removing FUDs

December 2, 2011 By Lars Lofgren Leave a Comment

You’re visiting a site and thinking about buying a blender. You’re moving around, trying to figure out if you actually want it but something feels a little “off.” You don’t even know what it is. You’re getting the feeling that this site isn’t completely honest. And then you leave.

Your customers do this to. They come to your site, click around, and before they even understand what you’re offering, they have a bad feeling about your site. Without a second chance, they click away and they’re gone forever.

What Causes Customers to Click Away?

FUDs do. Which stands for:

  • Fears
  • Uncertainties
  • Doubts

FUDs are everything that prevent you from building trust with your visitors. They make visitors resistant to your message. They are holes in your marketing that actually slow you down. They are activity preventing you from getting where you want to go.

Typical FUDs

Here’s a list of many common FUDs I’ve removed from sites:

  • Poor Navigation – Always make sure your visitors can easily find what they’re looking for. Navigating through your site should be intuitive, easy, and simple.
  • Broken Links – When a visitor hits a broken link, this is a red flag. You’re telling them that you can’t keep your promises.
  • Under Construction Page – If you’re still building a page, just leave it off your site until it’s done. Under Construction pages only show people you haven’t finished what you started.
  • Links that Don’t Look Like Links – Every link needs to have visual clues that it’s a link. Otherwise, a visitor may never discover it and not know where to go. Which results in poor navigation.
  • Unclear Calls To Action – Not only do you need to tell people what to do, tell them what’s going to happen. Instead of saying “Submit” on your contact form, say “Send” which is a much better descriptor of what the button will do. This will eliminate any surprises for the visitor.
  • Unclear Copy – Many people try to be cute or clever with their marketing. Usually, this just confuses people and creates more uncertainty. Every sentence on your entire site should be as concise and clear as possible.

If you want to increase your customer base, you need to focus on removing as many FUDs from your site as you can find.

It can be difficult to maintain an impartial view of your site and find FUDs. After all, you’ve been working on your site for months or years. Of course the navigation makes sense. The problem is that a new visitor doesn’t have that wealth of experience to draw on when they first visit your site.

To get a better perspective on how your site appears to a new visitor, ask a friend to visit your site and have them talk through what they’re thinking as they click through it. This single tactic will find dozens of FUDs for you in 15 minutes.

When FUDs INCREASE Your Conversion Rate

I’ve going to level with you, I’ve seen tests done where FUDs actually increased the conversion rate. All else being equal, a sales letter with a few typos or a banner ad with a rougher graphic design can actually outperform a perfectly crafted piece of marketing.

But here’s the kicker, most of the time it just hurts you. Intentionally including a FUD that successfully increases conversions takes a lot of luck, experience, and testing.

When should you experiment with FUDs? Only once you have enough data to test with. Anytime you use a FUD, you’ll want to rigorously test it to make sure it’s not harming your bottom line. You’ll do this with split testing. To split test your website, Visual Website Optimizer and Optimizely are both great options. This is really only an option if you have thousands of visitors each week though.

For split testing emails, MailChimp and AWeber both offer tools to test conversion rates on different emails. Once again, you’ll need thousands of subscribers on your email list for you to get enough data for the split test.

And if you don’t have enough subscribers or traffic to test? Then get rid of the FUDs completely. Getting rid of FUDs is a far more reliable strategy for increasing your conversions when you don’t have enough data to test with.

Everything You Know About Sales is Wrong

November 6, 2011 By Lars Lofgren Leave a Comment

Most business owners HATE sales. And for good reason. When most people think of sales, images of the Boiler Room or used car salesmen come to mind. This is the hard sell, a high pressure routine designed to sell product without any regard to the actual needs of the customer.

This is not the best way to sell.

If you’re looking to create a devout following and delight your customers, you won’t get very far with the hard sell. The entire way you think about selling needs to change.

Instead of focusing on closing the sale, you’ll want to look for excuses to not sell your prospect.

That’s right, you want to find a reason for your prospect to go elsewhere.

This sounds ludicrous. And it is. But it works wonders.

Put the Prospect First

Your entire focus during the close (and all marketing or sales) needs to be figuring out how to provide an extraordinary amount of value to every person you do business with. In other words, you want to filter your prospects to make sure you can make them incredibly happy.

When you only do business with customers that are practically guaranteed to love your product or service, you’ll drastically increase word of mouth which is one of the three engines of sustainable growth.

Granted, you will lose revenue in the short term as you turn away some prospects. But you’ll make more than you could have possibly imagined in the long run as your customers evangelize your brand.

This will also free up your time and allow you to focus on the small percentage of your customers that contribute significantly to your bottom line. Remember: 20% of your customers account for 80% of your revenue. And when you focus on your best customers, you can also figure out how to find more of them which will grow your business substantially.

Reasons to Turn Prospects Away

First and foremost, find out if they’re looking for a solution that you can provide. Ask them the following questions:

  1. What’s your primary goal with _____? (Fill in the blank with the general service you provide like fitness, marketing, accounting, etc).
  2. Where do you want to be 3 months from now?
  3. If you achieved X, what would that mean to you?

These three questions will give you an excellent idea of whether or not you can genuinely help your prospect. Feel free to ask followup questions to really dive into their goals and aspirations. The best salespeople listen more than they talk.

Once you’ve determined that you can help them achieve their goals, you’ll need to make sure they’re able to purchase your product. Ask them what their budget is and when they would like to start. If they don’t have the cash on hand and aren’t willing to start right now, turn them away. Then offer to get back in touch with them when the timing is better.

How to Turn Prospects Away

If you discover that you won’t be able to help a prospect, don’t just bail on them. You want to point them in the right direction so they can still find what they’re looking for.

Know the best players in your industry that go after slightly different target markets than you (different types of customers, different price points, different specialties, etc). This will allow you to give amazing referrals to people that aren’t your ideal customer.

And when these prospects find everything they were looking for, they’re going to remember you. They’ll recommend you to their friends because they have a really clear idea of what you do and also know that you’re as honest as it gets.

What if you don’t have many customers and need every dollar you can muster just to keep the lights on?

If you’re just starting a business, you won’t have the luxury of turning away a few customers. This is completely fine. In fact, you probably don’t have a great vision of what your value offering is or who your most valuable customers are. This means you need to be doing a lot of testing, getting to know a lot of customers, and going after every sale you can.

Even if you need every sale and they aren’t your ideal customer, you still need to make sure that you’re providing them a great deal of value.

Once you’ve figured out what your target market is, how you want to differentiate your product, and what your customers care about the most, you’ll have enough revenue to turn away some prospects.

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