Lars Lofgren

Success Comes From a Series of Failures

January 13, 2013 By Lars Lofgren 12 Comments

There’s one question I keep getting asked over and over again.

“How did you land a job at KISSmetrics?”

And here’s the standard answer I tend to give people.

The co-founders of KISSmetrics, Hiten Shah and Neil Patel, tend to be a bit famous in startup circles and I had been following them for awhile.

So one day in March, Hiten randomly tweets that they’re looking for some help on marketing with KISSmetrics. And he told people to find his email and tell him why they would be a good fit if interested.

I jumped at the chance.

So I grabbed Hiten’s email address from his blog and fired off an email.

At this point, I didn’t expect to hear back.

A few days later, he put me in touch with Neil. Then we did a quick phone interview and I started to work on projects for them. Three months after that, I joined the company full-time.

This SOUNDS like a strike of random luck. Out of nowhere, I caught a lucky break that brought my career to an entirely new level.

And it was. But this is only one step of a much longer journey.

Let’s go back to the beginning.

The First of Many Rejections

In a former life, I was seriously entertaining going into a medical profession. You can work anywhere, create odd schedules (like batching your shifts into 3-4 days or working nights), and the the pay isn’t half bad. At the time, I was making $16/hour and was planning on taking an entry-level job at $8/hour. I had already dropped $3000 on a class to get my EMT and figured the pay cut was worth the price of starting a new career.

Get this: I accidentally networked my way to the president of a local ambulance company and landed an interview. Turns out my aunt knew him.

Even with a 50% pay cut and networking my way to the president of the company, I still got rejected.

Then I tried volunteering my time at a local hospital to get some experience. But there was a waiting list for volunteer EMTs. I couldn’t even give my time away. Looks like this medical thing isn’t going to work out after all.

Searching for a Marketing Position (And Failing)

After running my own foreign policy blog for awhile, I had some experience with online marketing. I began to realize that the skill set I was developing was actually way more valuable than the blog itself. So I started to look for positions in marketing.

The first startup I went after was Palantir. They help government agencies understand massive amounts of data to find financial fraud or terrorists. Got an interview for an event marketer position and nearly died from nervousness. But I had absolutely zero experience running events. While I’m sure I would have gotten through the learning curved inside of 3 months and made a major impact to their business, they made the right choice by rejecting me.

Then I applied to be a sales rep of DPS Skis (they make some of the best skis on the market). I even managed to trade emails with the hiring manager but it never went anywhere.

There was that Denver-based SEO agency that was looking for an SEO writer (someone who churns out poorly written content as fast as possible to rank in Google). At least they sent me an email telling me that they weren’t interested.

I also received a rejection from one of the most well-known content farms out there: Demand Media. This is about as low as you can go when it comes to content marketing. In all fairness, my writing was still WAY too academic when I applied.

And there was a online marketing agency in Denver that had an open position for a PPC marketer. I probably sent 3-4 emails to different people at their office, never got a single response (not even for an informational interview).

A chocolate startup in Boulder had an open position for a marketer, couldn’t even get a reply.

Some entrepreneurs from San Francisco were starting a new business in the office supplies market and wanted someone to lead it. I never heard back.

Harvest was also looking for an acquisition marketer. I even got on good terms with one of the guys on their marketing team but was never able to get in touch with the hiring manager.

I applied to be Laura Roder’s assistant, never heard back.

Also applied to help Andrew Warner with Mixergy, never got a response.

One of the best web agencies out there was looking for someone to help organize their client work: Digital Telepathy. Got an interview with the president. He even said that my answer to one of his questions was the best he had ever heard. Then I got turned down.

Tucker Max was looking for a research assistant and I made it to the second round of the application process (hundreds of people applied). Then I failed to make it to the third round.

Applied as a copywriter at AppSumo and perked the interest of Noah Kagen, then I was rejected.

I racked up all of these failures inside of a year and a half. That’s 15 in total.

Lucky Breaks Come to Those Who Hustle

So KISSmetrics was my 16th try to land a gig. This wasn’t resume blasting either, I networked my way into companies, spent hours crafting resumes and cover letters for each position, and went after openings I thought were a perfect fit.

I had also been pitching businesses for freelance work and had worked with a couple dozen clients at this point.

Remember that rejection I got from Palantir? I was devastated. It sounded like the opportunity I had I always been looking for.

The rejection from Digital Telepathy also did me in. As soon as I got that email, I drove to Target, bought a video game (Deus Ex: Human Revolution), and didn’t do a single productive thing for like a week. I drowned my sorrows in Arrogant Bastard, Netflix, and video games.

By the time Hiten tweeted about needing some help, I had gotten pretty jaded about the whole “job hunt.” The first thing I thought was “there’s no way he’s going to reply to my email.”

But I didn’t let myself stop hustling. Even though I didn’t expect this opportunity to be any different that the previous 15, I still stepped into the ring.

And this time, everything finally clicked.

Did I reach a whole new level with a single email? Yes. Had I been hustling for the last year and chased plenty of other opportunities that could have been just as amazing? Absolutely.

When I had that first interview with Neil, I was ready. I had notes of improvements I would make to KISSmetrics, had already helped several companies get off the ground, and had a wealth of experience to draw on.

I may have gotten lucky but I was going to get lucky sooner or later. Even if it hadn’t of been KISSmetrics, it would have been some other awesome company.

Marketing Success Also Comes From a Series of Failures

A long string of failures produced an amazing success for me.

And marketing works EXACTLY the same way. Most campaigns? Complete failures. The majority of your blog posts, tweets, AdWords ads, and emails? Nothing changes.

But every once in awhile… you finally hit it.

Instead of staying up all night wondering where you’re going to find customers, you’re now losing sleep wondering whether or not your business can serve them all.

I see this ALL the time when running A/B tests. If you try to run a bunch of A/B tests to increase your conversion rates, you’ll endure this same series of failures. Most A/B tests don’t move the needle at all. Either the test results don’t produce a meaningful result or your new idea doesn’t beat the original. This is the norm.

And then you slap an A/B test together at the last minute, thinking the test won’t produce a significant difference, and BAM. Now you’re acquiring 5-10% more customers every month from a small tweak to your home page.

So keep hustling and keep learning. Don’t get jaded.

You never know when a single email will change your life and your business.

The Shifting Divide Between Features and Benefits

December 13, 2012 By Lars Lofgren 2 Comments

There are only a few LAWS in marketing. Out of all the advice, best practices, and books, there’s only a few principles we can rely on every time.

And one of them goes like this: push benefits, not features.

But there’s a subtle nuance that people never really discuss. But before we dive into it…

Let’s do a quick recap of how benefits and features work.

When you’re talking about your product and service, you’ll choose whether to prioritize your benefits or your features.

One will make you a massive amount of money. The other will open to crickets and closed wallets.

What’s even worse is that we don’t automatically choose the right one when we first get into business and marketing. Unless you learn the difference, you’ll slow down your growth and prevent your own success.

For someone new to business, they’ll get in front of a prospect, they’ll get super excited, and start saying “My product has THIS. And it has THAT. You NEED it.”

The whole time the prospect is wondering “Why?” She or he doesn’t get it. They’re not persuaded. And the entrepreneur goes home empty-handed wondering what went wrong.

If you’re going to persuade prospects to view your products the same way that you do, you need to spell it out for them and connect all the dots. You need to tell people WHY they should care.

The easiest way to do this is with benefits.

Check out this description of a product:

“My new vitamin supplement has Vitamin A, Riboflavin, Calcium, Potassium, and Sodium.”

BORING. Excuse me while I take a nap.

What about this one:

“My new vitamin supplement has all the ingredients you need to feel energized all day, look good naked, and is completely natural.”

Now we’re talking! Where can I get some of this stuff?

The first example focuses on the features of the product (the ingredients). This won’t get you anywhere.

And the second example pushes the benefits. In a nutshell, benefits tell your prospects how their lives will improve after using the product. Features describe what the product is made of. If you’re talking about the customer (or your soon-to-be customer) you’re on the right track and you’re focusing on benefits. But if you’re spending your time talking about your product, you’re going through the features.

This is usually where the lesson ends. You’ll be told to ALWAYS push the benefit instead of the feature.

And in general, this is pretty solid advice. Getting your benefits in front of people is a good habit to get into.

Buuuuuuuuut life isn’t quite that simple…

Take a look at this diagram:

It’s the Benefits vs Features spectrum. On one end, we have a raw benefit (you’ll look good naked) and on the other hand, we have a raw feature (50 mg of Vitamin B manufactured in XYZ factory).

After reading a few marketing books, you’ll forsake your feature-based ways and move on over to the Benefits side. Hurray!

Now let’s work through another example.

The other day, I was looking for some apps for drawing diagrams. Building content is a major part of my work and it’d be great to quickly build simple diagrams that looked great.

When it comes to professional diagrams, one of the most well-known tools is OmniGraffle.

Here are the 3 main selling points from their homepage:

New layout engine
Bézier lines
Mini inspectors

To me, this stuff is just a feature. You have bézier lines? That does absolutely nothing for me. But to someone that builds professional diagrams all day long, I bet they’ve ranted day and night about how they’d do ANYTHING for some bézier lines.

This sort of thing happens to me with analytics tools all the time. After helping countless clients with Google Analytics and working at an analytics company, I’ve gotten to know the benefits and features of the industry pretty well. On a regular basis, I rant and rave about how badly I need one tiny, little feature. And if someone said they had it, they would get my attention (they’d also have a strong chance of getting my credit card).

What’s worse it that marketing copy from analytics tools actually PISSES me off. Just lead me to the support docs already and get out of the way. But I’m not a beginner when it comes to analytics.

And I’m sure some people have gotten just as advanced with diagrams, they’re not beginners. For them, bézier lines might be a major selling point.

But maybe OmniGraffle would do a lot better with a heavier emphasis on benefits. There’s no way to know without talking to their customers and running some A/B tests to get our hands on the data. It’s very difficult to judge the effectiveness of someone’s copy until you have a solid understanding of who their target market is. And you’ll never be able to tell someone they’re doing it wrong until you have the data to back it up.

One person’s feature is another person’s benefit.

Remember, it’s the Benefits vs Features SPECTRUM. There’s a sliding scale between the extremes on each end. As a marketer, it’s your job to find the right mix that’ll resonate with the skill-level of your target market.

5 Best Practices for Using Benefits and Features

Here’s a few guidelines:

If your industry is new and people aren’t familiar with it, start with benefits.
When in doubt, go with benefits. It’s always better to err on the benefit side than it is on the features side.
For most people, most of the time, most of your copy should still focus on benefits.
The more advanced your customer is, the more you’ll need to include features.
Don’t ever go PURE features, use benefits to grab people’s attention then support those claims with features.

Bottom line: benefits are still the safe way to go, they will serve you well. But we can’t judge the benefits/features mix without having a deep understanding of who the target market is.

So the benefits vs features law isn’t that good of a law. It makes a great rule-of-thumb though.

How To Control What People Think of Your Price

October 8, 2012 By Lars Lofgren 6 Comments

Just now, I received an email trying to sell me a research report on the analytics industry. Since I work for an analytics company, I’m probably a good fit for their product. But I have no idea how they got my email. Maybe they scraped it off the KISSmetrics blog, maybe they bought it from someone that hosted a webinar I attended. Whatever, that doesn’t matter.

The copy was awful (and I mean AWFUL). Their headline was “Global Web Analytics Market 2011-2015” with this opening sentence: “TechNavio’s analysts forecast the Global Web Analytics market to grow at a CAGR of 15.27 percent over the period 2011-2015.”

Not only do I have no idea who’s pitching me, I’m having a really hard time figuring out how their product is going to help me.

No worries, I’m curious on what other companies are doing in the analytics space so I’ll cut them some slack. So I click through to this landing page and see a price tag of 1,168 Euros (about $1,500 right now).

Only one thought came to mind: “Holy saint fiddlesticks! No way am I paying $1,500 for a research report. I can go to a conference or buy an entire marking course for that.”

Before they could hook me with the copy, I was gone.

They did have a chance at getting me to buy. After all, I did click through to see what all the fuss was about. But as soon as I saw the price, they lost me for good.

This also happens to your customers. They’ll find you via Facebook, a Google search, or email. Then they’ll get interested and look around a bit. But as soon as they see your price… they bail.

Every product, every price, every business goes through this. When people see the price, they make a quick decision on whether or not it’s worth it, then most of them leave.

I’m going to let you in on a little secret: you have MASSIVE influence on whether or not people think your price is valuable.

Yup, you can get a lot more people to think you have a good price.

But before we dive into the tactics, we need a quick overview on how people make decisions when it comes to money.

People Are Not Calculators

There’s a myth out there.

And it goes something like this: “We are all perfectly, rational people that make purchasing decisions based on value. If that value exceeds the price, we’ll buy. If it doesn’t, we won’t.”

This couldn’t be further from the truth. You see, we cannot perceive ABSOLUTE value. We can only understand RELATIVE value.

What does that mean? Well, let’s say I offer to sell you a completely new product that’s unlike anything you’ve ever seen before. I could ask for $5. I could also ask for $5,000. Either way, you won’t know which one is correct. Neither does anyone else.

Whenever we try to figure out if a price is fair, we have to make a comparison. What other products are similar to this one? How are those products priced? Once we’ve made a comparison, we judge the price from there.

Going back to that research report I didn’t buy. Is a research report worth $1,500? Maybe. If I only consider that report, there’s no way to know. But as soon as I saw the price, I immediately made a comparison that made sense and determined the value from there.

These guys lost the sale because I made a comparison that made the price look outrageous.

But I’m sure there are executives that would look at that report and make a very different comparison (which would lead them to buy the report). They might compare it to the amount they’ll spend having one of their teams perform a similar analysis for 2-3 months. That could easily cost $50,000 in labor and expenses. In this case, the $1,500 price looks pretty reasonable.

This applies to me, it applies to you, it applies to everyone. I’d love to say that I’m perfectly rational when it comes to purchasing but it’s just not true.

When we see a price, we make a quick comparison, then we make our decision.

If you want to dive deeper into psychology, both Thinking, Fast and Slow and Influence: The Psychology of Persuasion will get you up to speed.

How to Control the Comparison

To get people to think our price is reasonable, everything depends on encouraging the right comparison.

Wrong comparison = no sale.

The right comparison = can’t fill orders fast enough.

You have two methods to control the comparison that people make when they see that price.

1. Offer a more expensive product
2. Positioning

Let’s dive into both.

Why Offering Most Expensive Products Increases Your Sales

The easiest way to control the comparison of your price is simply offer multiple versions (at different prices) of the same product.

Back in the late 80’s, Williams-Sonoma released a bread machine at $275. At the time, it was the only bread machine they offered. No one had any idea what a good price might be because they didn’t have anything to compare it to.

On a whim, they released a second bread machine at $429. Now, they didn’t sell much of the new one. But sales of the $275 model DOUBLED. The more expensive product anchored customers at a high price point and made them feel like they were getting a good deal with the $275 model.

You can do the exact same thing.

From here on out, you should never ever ever offer only one price. Simply by offering a more expensive package, you’ll increase sales of your original option. You’ll also get a few customers that always choose the more expensive one (woohoo!).

Many companies take this a step further by offering 3 prices. Ever wonder why McDonald’s or Starbucks offers 3 sizes for their drinks? It’s because most people pick the middle option. And with anchors on both sides, the price of the middle option seems completely reasonable.

So when you’re listing your prices, give three options. And never display less than two prices. You’ll get customers to make the right comparison and feel much more comfortable with the prices you’re listing.

Positioning Your Product

Every product and service is placed within a category. “Denver Orthodontists” and “smartphones” are both categories.

You will be compared to every other business in the same category as you. If they have lower prices, your prices will seem high.

This is why we want to control which category we get placed into. Brand image, slogans, and marketing creative persuade people to put the product within a certain category. When you can pick the category, you can make sure the comparison is in your favor.

Positioning is one of the core concepts in marketing and I highly recommend you gain a deeper understanding of it. Definitely pick up the 22 Immutable Laws of Marketing (it’s only a hundred pages) and you can find a list of the 22 laws here for easy reference.

Competitors will take advantage of this even if it’s unfair to you. When a major retail brand enters a new area, they’ll often lower prices below everyone else (while taking a severe loss). Sooner or later, they’ll dominate the market and everyone else will close down. Once they have the market to themselves, they raise their prices again since they control the category.

Even if your competitors are keeping their prices artificially low, you will still be compared to them.

This is why it’s essential that you’re aware of who you’re being compared to. Pay extra attention to your positioning and understand what category you’re being placed in.

What if your category sucks?

Build a new category.

Instead of trying to compete directly with the main player in an established category (trying to beat Apple in the smartphone market probably isn’t the best idea right now), go into a different category.

Granted, this is NOT easy. Companies and fancy ad agencies try to create new buzzwords for products all the time. Most of them don’t go anywhere. For example, laptop manufactures are pushing the “ultrabook” category but everything just gets compared to the Macbook Air. It’ll take some trial and error before you find a category that sticks with your target market.

While you can influence your category, it’s the customers that ultimately decide where you belong. I could release a new smartphone that looks exactly like the iPhone, call it a “GeniusPhone,” and no one would care. My product would just be another smartphone.

Positioning your business and building a new category takes a long time. It’ll most likely take years before you get any traction, not weeks or months. So dig in for the long haul.

By getting your product in the right category and anchoring your price with a more expensive option, more people will think your price is reasonable and you’ll acquire more customers. That’s how you control what people think of your price.

How to Test When You Don’t Have Any Data

August 30, 2012 By Lars Lofgren Leave a Comment

We all know how important testing is. Some of our marketing works, some of it doesn’t. Some customer love us, others don’t. Testing helps us cut through that endless fog of uncertainty.

If you spend any time in the startup or online marketing circles, you’ll hear how wonderful A/B testing is. Let’s say you want to test your home page. Throw up two different versions (usually the current version and your new one), compare the results, and BAM, you know which is better.

Sounds easy right?

Well it isn’t. Here’s the thing, we need traffic to make those tests valid. If you only have 10 people go through your test, the numbers are just too small. You won’t be able to learn anything. At that volume, our results are just random coincidence. We mine as well just flip a coin. So we need dozens, hundreds, and preferably thousands of people to run our test on.

Well that’s just swell. What do we do if we don’t have hundreds of customers or visitors? What if we have like 2?

Even when you only have a few customers or visitors, you still need to be testing. And you’ll need to take a completely different approach. And it just so happens that we use this approach every day at KISSmetrics (for slightly different reasons).

Instead of obsessing over data, we need to reach out and talk to people directly.

Let’s run through the nitty gritty with a real example.

How I Get Test Results From Small Groups of People

Right now, I’m helping redesign the People Search report in KISSmetrics. The report helps you find different groups of people within your data. And we’re revamping it to provide better insights and making it easier to use.

If we followed the conventional approach, we would build a second version of the report, enable it for a small portion of our customers, and compare engagement rates between the two groups.

But we’ve gone a different route.

Before we drafted a single new design, we started talking to our customers. In fact, we scheduled meetings with 5 of them to get a DEEP understanding of how they use the report. We learned why they use the report, what frustrates them, and how the report helps them build a better business.

And we didn’t stop there.

We started putting together some mock-ups (really rough drawings) of ideas we had on how to make it better. Then we scheduled some more meetings. This time, we showed the drawings alongside the current version. First, we asked them to walk us through the current report and how they use it. Then we showed them the drawings of the new version and asked them what they liked and didn’t like. We ran our own little A/B test right on Skype.

The feedback we got was amazing. It saved us hours of work and kept us from building something that would have been much worse. Right away, we learned that one of our ideas was straight up terrible. Not kinda sorta bad. Completely terrible.

With a few meetings and a drawing, we ran our A/B test with limited data.

In our case, we’re looking for speed. Will 5 people give us a complete picture of what all of our customers want? No. But it will allow us to move a LOT faster. If we wanted to do a legit A/B test, we’d have to make a bunch of guesses on what we think are improvements, build and design the whole thing, then launch it. This takes weeks of effort.

Instead, we can get quick feedback on our overall direction and change course without having to build the whole thing.

We also gain a depth of understanding that a simple A/B test would never give us. By talking through the report with someone, we understand what they’re biggest frustrations are and how they incorporate it into their business. Then we’re able to build a new version that goes far beyond the first.

And this process works just as well when you don’t have enough data to run a full A/B test.

What if you only have 2 customers? Reach out to them and talk through your different ideas. What if you don’t have ANY customers? Get in touch with the types of people you think would be your customers. By listening for the passion in people’s voices, you’ll quickly know if you’re on track.

When multiple people start getting excited about the same idea, that’s when it’s time to turn that idea into a reality.

5 Best Practices When Talking to Customers and Testing Ideas

1. Ask open-ended questions without leading the customer.

Don’t show someone a drawing of a new design or product, explain the entire thing to them, and then ask for feedback. You won’t be there to explain the concept to every customer. You want that initial reaction to better understand what customers will be going through when they see it for the first time on their own.

2. This is not a sales call.

Don’t sell anything, not even yourself. In fact, you should be listening a lot more than you’re talking. Spend your energy focusing on understanding the perspective of who you’re talking to and ask them great questions.

3. Take notes.

Once you start doing several of these, it’s going to be really hard to keep track of who said what. Taking notes will make sure you’re able to keep everything straight. Feel free to record the meeting if you don’t want to take notes at the same time. You can even have your recordings transcribed for you and save some time.

4. Look for passion.

You’re on the right track when people start to get excited over your ideas. If they start asking “Where can I get this?” or “When will it be available?”, you’re definitely on to something. Listen for the passion in their voice, it’ll tell you what’s most important.

5. Look for trends.

We still want to be careful with not getting enough data. Remember that one idea I had to completely throw out because no one liked it? Well, one guy liked it. If I had only talked to him, I would have recommended changes that the rest of our customer base would have HATED. Avoid making changes on a single comment. Look for things that come up over and over again. That’s where you want to focus.

The Bonus Points of Awesome

As you start doing these interviews on a regular basis, you’ll enjoy another serious benefit. You’ll start building relationship with all the customers you’re talking to. They’ll go from happy customers to loyal evangelists without you having to do any extra work. Simply by reaching out to people and asking them for help, they’ll become more committed to your cause. They won’t be able to stop talking about how awesome you are when they see how their feedback helps you build a better product.

This alone is worth the effort of all these interviews. Combined with learning which of your ideas will work the best, this is one of the easiest ways to grow your business.

You Can Only Have One: Growth or Lifestyle

July 1, 2012 By Lars Lofgren Leave a Comment

When most people start a business, the overall plan goes something like this:

Get funding (angels, VCs, absurd amounts of credit card debt, whatever it takes)
Find product/market fit (make sure customers actually love what you have to offer)
Sacrifice everything you have for growth to establish yourself as the market leader
Sell your business to a major corporation or go for the IPO in order to cash in

And to pull this off, you need to work 100-hour weeks, sacrifice your health, say goodbye to friends and family, and poor every ounce of effort you have into making it happen.

But there’s another option: the lifestyle business.

Instead of building a business that will grab headlines and shake industries, why not build a business that can support you? If that’s your main goal, the entire business strategy radically changes.

So way back in 2007, Tim Ferriss released a book called The 4-Hour Workweek. It became an international bestseller and advocated for building a business that supported your life instead of using your life to support a business.

To build a lifestyle business, the entire plan gets much simpler:

Grow a business to the point that it can support you
Prioritize, automate, outsource, and batch everything to give you the largest income with the least amount of time required

You only need a little funding, a small market, and a little luck to get going. Then you work to build a business that doesn’t require your constant attention.

The 4 Pillars of a Lifestyle Business

Prioritization

In business, some tasks have high value. There’s the tasks that only you can do and your entire business depends on the quality of that work. If you’re a freelance designer, the time spent designing is by far the most valuable. But there’s a host of other tasks and responsbilities that a business requires. You needs to keep expense records, manage invoices, find new clients, keep in touch with old clients, etc.

Even worse, a small portion of your overall efforts produce the results you achieve. This is called the 80/20 rule (also Pareto’s Principle). A minority of your inputs (effort) produce the majority of your output (results). Most of your effort is completely wasted. When you learn to identify and focus on the tasks that produce disproportionate results, you can greatly increase your productivity.

So we have to ruthlessly prioritize and only focus on high-value tasks. Get rid of everything else.

But what about low-value tasks that are required? That’s where the other three pillars come in.

Automation

Whenever you find yourself doing the same tasks repetitively, think of ways to automate it. You want to remove yourself from the process as much as possible.

Let’s say that you send out several invoices each week. Currently, you use a Microsoft Word template, fill in the details, save it as a unique document, write an email to your client, thank them for their business, and link to your Paypal account every time you have to send one of them. That’s a lot of repetitive steps that suck up a ton of time.

Why not just use an invoice program that saves all your client information and does all the other work for you? All you have to do is fill in the line items, enter the cost of everything, and click send. Done.

Not everything can be automated. But when it can, this will free up a lot of your time.

Outsourcing

When a system can’t be built in order to completely automate something, consider outsourcing it. For example, it’s pretty hard to automate customer service. But you can hire someone to help your customers for you.

You also want to outsource any activity that can be done at a cheaper rate than what you’re worth. If you make $75/hour, should you really spend an hour doing data entry? Why not pay someone $3/hour to fill out that spreadsheet for you, work for that hour on more important tasks, and pocket the difference?

The entire goal of outsourcing is to pay other people to do tasks that take up your time. Then you can spend more of your time working on the projects that produce an immense amount of value for your business.

Batching

What happens when none of these options are available and you still have to deal with repetitive tasks? When you can’t get rid of something, batch it. So instead of doing something here and there throughout the day or sporadically in the week, do all of it at one time.

Let’s go through an example. You’re interviewing for an open position at your company. Hiring is a pivotal decision so you definitely don’t want to automate or outsource it.

Right away, resumes start coming in sporadically throughout the day. Now if you look at each one as it comes in, all your other work will be interrupted. Simply by having to start and stop each task, you’ll waste a ton of time. Instead, look through all the resumes from the day (or the week) at one time. You’ll do a better job at finding the great applicants and the quality of your other work will also go up. Then when it comes time to do interviews, try to batch them on the same day which will save you even more time.

By being heroically productive, reducing the time that your business requires of you, and building systems to run your business, you create a lifestyle business.

Before long, you have a legitimate 4-hour work week and a full-time income. Is it easy? Absolutely not. But is it easier than starting a business from scratch and having a successful IPO? Of course. Most people can build a lifestlye business, very few can build a company that shapes industries.

Bonus Round: these are also great strategies for people trying to dominate markets and go for a massive exit. But instead of spending their spare time living the lifestyle, they’ll pour it back into their business.

But there’s just one small problem with all this…

As Soon As You Play the Lifestyle Card, You Give Up Growth

As anyone that’s started a business can tell you, growth at any level takes a monumental effort. This is true when you’re starting and it’s also true when you’re trying to take everything to the next level. Building a business from scratch that pulls $100,000 in revenue is only stage one. You won’t magically find yourself at the $1,000,000 in revenue mark within a few years. The next stage of growth requires just as much effort and hustle as the stage before it.

Every time you try to take your business to the next level, you’re going to sacrifice just about everything in order to make it happen. Your lifestyle becomes the business.

Without your determined will and unrelenting passion, you’ll never get there. Your business will stall and next year will look exactly the same as this year.

So when you step back and enjoy life, you’re giving up on growth.

You Also Become Vulnerable to Competitors

The only way to ensure that you don’t get sideswiped by some upstart is to relentlessly pursue growth. If you grow faster than every other play in your industry, no one can catch up to you.

But if you’re not growing, not innovating, and not improving, it’s a matter of time before someone finds your same business model and figures out how to do a better job than you.

And when that happens, you’re finished.

These days, the Apple App Store is ridiculously competitive. People play for keeps. But it wasn’t always this way. For awhile, a halfway decent app with a little luck could rocket to the top of the app charts. Seemingly without cause, an app could bring in $5,000+ each month that only required a few weeks to build. A lot of developers got lucky and started to enjoy the extra income.

Then people started to take notice how building a mobile app could produce great revenue in a very short amount of time. Instead of starting from scratch, they went after the lucky developers. They kept a close eye on all the top 10 charts, looking for any app that had gotten lucky but wasn’t polished or innovating. As soon as they found one, they copied the concept, built a better version, and dominated that market. And all the lucky developers that had stumbled into a lifestyle business by accident? Well, they no longer have a lifestyle business. Don’t belive me? You can hear all about it in this interview on Mixergy (sorry, it’s behind a paywall).

So what’s it going to be? Lifestyle or growth?

“But Lars! You’re wrong! My cousin Vinny only works 6 hours a week and his business keeps growing.”

That’s nice. Your cousin Vinny is an anomaly. If you’re in the right industry, with the right customers, and the right product, at the right time, your company may be lucky enough that it grows on its own without any effort on your part. But this sort of thing doesn’t happen with any regularity.

Some people have been lucky enough to have growth kiss them right on the cheek. The rest of us have to work like dogs to make it happen.

Is a Lifestlye Business Worth it?

It definitely can be. For many people, a lifestyle business is exactly what they need. You’ll get plenty of spare time to enjoy life as you wish, enough income to support a modest lifestyle, and you’ll be the captain of your fate. That sounds like a great deal to me.

But remember: growth is not one of the benefits of a lifestyle business. So if you want to take your business to the next level, you’re going to have to make some serious sacrifices. Get back to eating ramen and hustling until 3 in the morning. Growth only comes to those that are truly committed.

The Difference Between Web Analytics and Customer Analytics

June 13, 2012 By Lars Lofgren 5 Comments

When we see the word “analytics,” this is the image that pops into our heads:

Good ol’ Google Analytics. Data like this measures every detail of our website. It’s not just “analytics,” it’s “web analytics.”

Web analytics does a fantastic job at measuring your website. Pageviews, bounce rates, time on site, it’s all there.

But how much of this is actually useful? If you’re a major internet marketing geek like myself, you will find data that will help you grow your business. The thing is, it’s not easy to find the data that matters. When we focus on our web site, we have to piece together all sorts of random information in an attempt to figure out what our customers are doing. This is doable if you:

Spend way too much time on the internet
Have experience with behavioral psychology, web design, and marketing
Don’t scream in terror at the sight of endless rows of data
Can manhandle your analytics to give you the data you need
Have the time to wade through everything until you find a piece of data worth acting on

For most people, several of these criteria are deal-breakers. So what are our options? Should we just ignore web analytics?

There’s a better way to do all this.

Using Customer Analytics

With web analytics, all our data is organized around our website. We have lists of pageviews, landing pages, and traffic sources. But there’s no way to organize the data around our customers.

The most critical piece of all this data (our customers) is completely missing. Well, that’s no good. I don’t know about you but I’d much rather spend time analyzing data on actual people instead of my website. I’d be able to stop spending so much time on data sources of low value like pageviews and get much better insights by looking at what real people are doing.

By dropping the data on our web site and focusing on our customers exclusively, the data becomes much easier to manage. We’re not dealing with abstract data on a landing page, we have data on actual people. We know where each person came from, what they did on our site, how they became a customer, what they did as a customer, all of it.

Data on real people is easier to understand and use.

This is called customer analytics. Instead of focusing on your site, it collects data on your customers. In fact, every bit of data is tied to a real person.

What Customer Analytics Looks Like

This all sounds great in theory, but what does this sort of thing look like?

Check out this report:

This is data on an individual customer. Now, I’ve blurred out a line at the top which is where the email address is displayed. We know how much they’ve spent with us (in total), where they came from, and how frequently they visit our site.

There’s also data like this:

This timeline shows EVERY action a single person has had with our business. We know what feature’s they’ve used, what actions they’ve taken, and we know how many times they did each action on each day. And those fancy lines connect the steps of funnels that we’re tracking. We have a complete picture for how a customer behaves.

Data from reports like these tells the story of our customers. We know what matters most to them so we can work to build a business they love. And if we run into data we can’t make sense of, we have their email address. Within a few minutes, we can reach out them directly and get feedback on how we’re doing.

The only product I know that provides data like this is KISSmetrics.

Full Disclosure Time: I’m the Marketing Analyst at KISSmetrics which provides businesses like yours with customer analytics. This is where I’ve pulled these reports from. If you’re interested in learning more about customer analytics, reach out to me and I’ll help however I can.

Other Customer Analytics Options?

Ever other instance of customer analytics that I’ve seen was built in-house. In other words, the company paid an engineer (or an entire team) full-time to collect data from multiple sources and organize it around their customers. Considering you’ll pay at least $100,000 in salary to a single engineer, you’ll easily spend hundreds of thousands of dollars over the course of several years to get a system like this fully functioning.

If you’re looking for a plug-and-play solution, I don’t know of any other options besides KISSmetrics. Definitely let me know if you’ve seen another example of customer analytics, I’d love to check it out.