How Much Should You Spend on Paid Ads? Here’s My Data-Driven Formula

A few years back when I first started NeilPatel.com, I spent $66,372.09 on paid advertising through LinkedIn, Google AdWords, Retargeter, Perfect Audience, and StumbleUpon ads.

You might say that’s a lot of money.

It was. But I learned some valuable lessons.

I learned which platforms and networks work best for targeting which audiences with which ads.

Some of my takeaways?

LinkedIn, for example, provided an excellent return on B2B ads, while Google still reigned supreme for B2C. StumbleUpon’s conversion rate for paid products was woefully low.

The top three paid ad spots on Google’s SERPs, for example, get 41% of the clicks. Even the best SEO techniques will only expose you to 59% of the viewing audience, and Google’s knowledge graph and infoboxes are quickly cutting into that as well.

Marketing professionals across the board agree that pay-per-click advertising works. The hard part is getting set up with a solid PPC plan to serve as your foundation.

We need to know how much to spend, when to spend it, where to spend it, and how to spend it correctly.

Those are tough calls to make, especially if you’re a paid advertising newbie. The paid platforms can be complicated and confusing. What do you do with all these options, data, and metrics?

To answer these questions and be successful, instead of playing a guessing game, we need information and cold hard data. 

How PPC works

First, a quick lesson in PPC, which you probably already know. I’m including it for the newbs (and a refresher for the pros—it never hurts!).

Google and other search engines allow you to purchase ad views on their platforms on a pay-per-click pricing model. The actual price is determined by the number of searches and ads running for a particular keyword or phrase.

A popular search term, such as “insurance,” can cost $59 per click to advertise, meaning you’ll have to pay Google $59 for every lead it gets to your website by displaying your ad at the top of the search results for the terms you bid on.

This isn’t your typical example, however, as “insurance” is actually the most expensive PPC keyword by a large margin.

These costs can be mitigated (and conversions improved) by targeting specific demographics, affinity groups, geographic locations, and mobile devices, which are generating more and more search traffic.

Of course, search engines aren’t the only platforms for paid ads. Social networks and video ads are rising in popularity, as explained in this Search Engine Land article by Pauline Jakober.

Video ads in search results aren’t a reality yet, but with Alphabet owning both Google, the world’s largest search engine, and YouTube, the world’s largest video platform, it’s only a matter of time.

Determining CAC and LTV

CPC isn’t the same as your customer acquisition cost (CAC). What ultimately determines your CAC is your website’s conversion rate.

If each web visitor costs $59 to obtain and you’re only converting 50% of your visitors, the customer acquisition cost for your PPC campaign is actually double your CPC, or $118 in the example of insurance.

This doesn’t take into account the rest of the marketing budget either, which also includes radio, print, television, social media, billboard, event marketing, and other customer outreach initiatives.

The CAC is calculated by dividing all marketing expenses by the number of customers acquired in the same period. For example, if a company spent $10,000 on marketing in a year and acquired 10,000 customers as a result, its CAC is $1.00.

Balancing the CAC with the customer’s lifetime value (LTV) is how you create a successful business model.

So long as the LTV is larger than the CAC, your marketing efforts are working, and you have a sustainable business model.

When the CAC rises above the LTV, you’re in trouble.

Because understanding this concept is critical, here’s a graphic to help make the lesson sink in:

To calculate the LTV of a customer, you need to know how much each customer spends in an average purchase, how many purchases the average customer makes in a certain time period (day/week/month/year), and how long the average customer sticks around.

Profit margins, discounts, customer retention rate, and gross margins are all factored in to the final formula, which you can find here.

In the case of an insurance company, if an average policy costs $1,000 ($100 is profit), and the average customer is retained for 3 years, you’re making $300 for every $118 spent on your PPC campaign, which is close to the actual average.

Businesses make an average of $3 for every $1.60 they spend on AdWords.

I’m sure you want to double your money. We all do. But if everyone is advertising for the keyword “insurance,” they’re missing quite a bit of traffic. You need to check associated keywords.

Extending keyword searches

There are millions of searches for insurance every month, but you have no idea whether those people are looking for medical, life, business, home, phone, or auto insurance.

It’s still worthwhile to advertise on a single keyword, but with such a high CPC, you shouldn’t pour all your budget into that one highly competitive keyword.

“Car Insurance,” “insurance quotes,” “auto insurance,” “compare car insurance,” and “car insurance quotes” all have different prices for different search volumes. Spreading your budget across all these keyword phrases increases the chances that your ad is seen by people searching the web in different ways.

At this point, your overall CPC will be determined by the cost and frequency of each individual search term. You can afford to buy some traffic for “insurance” and “auto insurance” so long as it’s balanced out with “compare car insurance,” “insurance quotes,” and “car insurance quotes.”

You now have a potential pool of customers that’s three times the size of your original pool, which maximizes the reach of your ads.

Continue this research into five- and seven-word long-tail searches for the best results. For example, phrases such as “Best car insurance company in Arizona” or “Cheapest car insurance for 2005 Ford Mustang” are great ways to target specific regions or car owners.

The longer a search term, the more specific information a customer is typically looking for. While searches may be lower, bids will also be lower, allowing you to obtain some customers for $5 and others for $50 while still maintaining a low CAC.

Portioning budgets for each keyword is critical as this is one of two places where smart marketers maximize their ROI. The other is targeting specific customers using Remarketing lists for search ads.

Targeting the right customers

A few years ago, Google moved beyond focusing on just keyword searches to looking at contextual information about customers.

The most valuable result from this change was RLSA—remarketing lists for search ads.

RLSA lets you target customers who have visited your website previously.

Bounce rates are high on websites, but just because a customer leaves doesn’t mean they’re not interested. Shoppers may visit a site 9 times before purchasing, so the more they visit, the further down the conversion funnel they may be.

Take a look at this sales funnel:

For every 5,000 visitors, only 100 inquiries are received, so why waste ad money on those 100 when you should be focusing on converting the other 4,900?

Using RLSA, you can optimize bids to increase your ROI. Tirendo Tires, for example, increased sales by 22% and conversions by 163% simply by raising their bids on previous homepage visitors.

World Travel Holdings increased ROI by 30% by using RLSA to target previous site visitors for broad search terms (like “insurance” in the example above).

By adding the remarketing tag to your website, you allow Google to further segment your visitors and hyperfocus your PPC ad campaigns.

Of course, the downside to these PPC ad platforms is you can’t determine who is already a paying customer. I constantly receive ads for products and services I’ve already purchased, which I know is wasting the advertiser’s money.

You also have to be wary of disgruntled customers and employees who may purposefully click your ads without making a purchase. (Seriously, people do this in order to drive up the cost of your ad spend.)

Segmenting and targeting ads in any way is an essential step toward optimizing them and getting the most bang for your marketing buck.

Conclusion

PPC is still one of the most popular methods of advertising, with over $500 billion spent annually on it.

It can be exciting to envision massive ROI and all the extra sales you’ll be able to make by simply toggling some ads and letting them run.

Before spending any money on a campaign, however, it’s important to understand what keywords and searches have the best conversions for your site. Targeting these searches with ads moves you to the top of the search results, giving you optimal visibility.

Beyond just search terms, it’s also important to target customers at specific points in the sales funnel.

The actual cost of your PPC campaign isn’t as important as the ratio of CAC to LTV. It’s okay to spend a little more if you are marketing a more expensive product or a company with higher retention rates.

So long as your overall marketing budget doesn’t outweigh the lifetime ROI from customers, you’ve built a sustainable business model.

How much are you spending on paid search? Are you getting a solid ROI?

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How and Why I Sold My Software Company, Long Tail Pro

Today, I want to publicly share for the first time that I have sold my software company, Long Tail Pro.

In February of this year I sold a majority share of the company for a significant sum of money, the kind of exit that can have a big impact on one’s life.

I want to share how and why I sold the company in order to both educate and inspire potential software entrepreneurs.  I certainly don’t know everything and obviously companies sell for much more than I sold Long Tail Pro for (I won’t be featured in Tech Crunch anytime soon); however, I’m willing to share what I have learned and hopefully that can be beneficial to a few of you.

How I Built the Company…

I’ve shared the history of Long Tail Pro and the genesis of the idea for a better keyword research tool on my blog a few times.  In particular, for the history of the company up to 2012, you should read this blog post and for a good overview of how I bootstrapped Long Tail Pro read this one.

However, in a nutshell, I came up with the idea for a better keyword research tool because I was building lots and lots of little affiliate sites for myself, and needed a way to find and cherry pick easy to rank for keywords much faster than existing software would allow.

In other words, I had a problem in my own business, and then I built a piece of software to fix that problem. I think there can be a lot of advantages to coming up with a software idea that will “scratch your own itch.”

Because I was not only the business owner, but also the end user, I was able to develop an excellent product from the stand point of potential customers without much feedback from them.  I understood the target market on a very deep level, because I was one of the users in the target market.

I’m not a programmer

I should also be very clear, that I am not a programmer.  I did not code a single line for Long Tail Pro.  I am living proof that you don’t have to be a coder in order to build a successful software company and have a significant exit.

So, how did I build a successful software company when I’m not a developer?  I outsourced.

I’ve written about how I hired and the mistakes and successes that I had with programmers in an in-depth blog post right here.

I basically made the mistake of hiring a really cheap developer and things did not go well at first.  The product was working long enough for me to start selling it and validate the market.  But after about 2 weeks the software “broke” and I had to go back to the drawing board.

After having my source code held hostage by the original programmer, I made the decision to find someone new.  This was one of the best decisions I ever made, and this new developer stuck with me until the company was sold.

I could also go into great detail about how I launched the company and have grown it over the past 5 years.  However, I’d like to focus primarily on the sale of the company and the details behind it.

In general, the business was a success because:

• I introduced a better software offering that the market wanted
• I openly shared case studies about keyword research
• End users regularly found success with the software and shared their testimonials and case studies freely
• I constantly provided value through blogging and podcasting to build my audience
• I picked up a few great affiliates primarily through my blogging/podcasting contacts

The Hard Work Pays Off

I’ve never openly shared how much revenue and profit Long Tail Pro was making as a company.  However, now that I’ve sold most of my ownership stake I’m willing to share a few more details.

Hopefully this kind of data is beneficial to someone considering starting a software company.  Below you will find a graph of the revenue and net profit of the company on an annual basis since the company was started.

The revenues in 2011, the first year of the business, clocked in at about $44,000.  Both revenue and profits have increased each and every year that I’ve owned the company.

I’ve always been 100% owner of the company and so it certainly feels good to look at a 5 year graph and see the growth that has been achieved.  I fully expect the new ownership team to continue the growth trend for Long Tail Pro.

The Story Behind Deciding to Sell

Deciding to sell the company was not an easy decision.  And in fact, I hadn’t 100% decided to sell the company until I received a great offer.

Here’s the story behind how and why I came to the decision to sell Long Tail Pro.

When you have lived through a number of major Google algorithm updates, like I have, you are constantly thinking about what the worst case scenario is.  Long Tail Pro is a software that has to be constantly updated to keep up with changes made from Google.

After 5 years, I started to think that perhaps it would be smart to take some risk off the table.  The risk of Google changing something that I couldn’t fix.  Or there could be other “black swan” risks that I just don’t know about.

In addition, as you can see, Long Tail Pro has always been profitable and financially has a great business to me.  However, after running a business for 5 years, the excitement starts to wane a bit.  I was becoming less motivated to run the same business day to day by the end of 2015 as I had been since early 2011.

(Luckily, I had hired Jake Cain to help keep the company moving forward and 2015 was the best year ever for the business.  Jake continues to work with me as employee on Amazon FBA, websites, and other projects…but is no longer involved in Long Tail Pro post-sale).

So, for these 2 reasons: taking risk off the table and I was just ready for something new was what made me start thinking about selling the company.

Now enters, Rhodium Weekend.

Right about the time I started thinking about selling, I was planning to attend Rhodium Weekend in October 2015.  Rhodium primarily is geared towards people interested in buying and selling web properties.  I’ve attended a couple of times and its a great conference run by Chris Yates.

Chris is someone that has bought and sold lots of web properties and is well experienced in the area.  I reached out to him privately before the conference and simply said, “Hey, I’m thinking about possibly selling Long Tail Pro someday…any advice?”

One thing led to another, and Chris eventually invited me to share some details about Long Tail Pro at the conference in front of a few web brokers for a mock valuation session.

I think it was a really good experience getting valuation advice at the conference from David Newell at FE International, Mark Daoust at Quiet Light Brokerage, and the guys at Flippa.com.

Again, this was a “mock” valuation session, and I still really had no intention of selling the company.  However, after the conference I started getting people contacting me saying they were interested in buying my company!

In particular, 2 potential buyers were very interested and wanted to talk numbers.  One of the potential buyers (the one that eventually bought the company), hadn’t even attended the conference, but had heard through the grapevine that I might be selling.

I still hadn’t really decided to sell the company and had never officially listed it for sale anywhere.  However, as I discussed details with the group that eventually ended up buying the company, the more I warmed up to the idea.

The Process of Selling the Company

One of the main reasons I went from being unsure about selling the company to feeling confident about selling the company was due to the potential buyers.  I had known the potential buyer for over 3 years and we had done many business transactions in the past.

This was a close online business associate that I was confident would take good care of my company.  As he shared more details about his ideas for growing the company, I could see that we were on the same page and this pushed me over the edge about finally letting go of my company that I had built from the ground up.

Here’s some of the strategies that I wanted to implement before selling Long Tail Pro:

• Take the business to a full SaaS model (make all plans monthly or annual rather than one-time payments)
• Transition from a desktop application to a full online tool
• Improve/Add rank tracking
• Add additional features/tools to help content marketers (I had several ideas here)

After discussing these points with the potential buyers, these were the exact strategies that they saw to improve the business as well.  Knowing that they shared the same strategic outlook that I did, really made me more comfortable with the sale.

Here’s a quick breakdown of the process involved when selling the company:

• I had to gather 3 years of detailed financials – profit and loss statements primarily
• I went back and gathered even more statistics until they were completely satisfied
• They proposed a purchase price and we negotiated price and other details (selling financing, remaining ownership, etc).
• A Letter of Internet (LOI) was drafted and signed (with the help of attorneys)
• I provided logins or screenshots to various pieces of the business to help the potential buyers with their due diligence
• They continued their due diligence for about a month, and I answered LOTS of questions
• After they were satisfied with due diligence, a purchase agreement was drafted
• We spent weeks going back and forth with attorneys and each other to negotiate/edit each point of the purchase agreement and other documents
• On Feb 1st, 2016 the purchase agreement and other documents were signed and the agreed upon portion of the funds were transferred to my bank account (woohoo!)
• The buyer is actually a private equity group with 15 total investors

I have to admit that I was sick of talking to my attorney and accountant after this period of time, but obviously these are critical components to selling the company.  There are lots of legal and tax implications and I wanted to make sure that I had advisors looking out for my best interests.

I was very happy with the transaction, and I know that the buyers were as well.

A Few Other Details About the Sale

The final sales price was based on a multiple of trailing 12 months net income (i.e. The average net income over the most recent 12 months).  I feel like I got a very good multiple.  I had talked to the brokers at FEinternational, Quiet Light Brokerage, and had viewed sale history of other similar companies, so I know the price I received was very competitive.

In addition, what really made me happy about the deal was that I was able to keep 20% ownership of the company.  So, I sold 80% of the company, but get to keep 20% on a more passive basis going forward.

I felt like this was important for me because I still believe in Long Tail Pro and see tons of growth potential.  This allows me to hand off the day to day operations to someone else, but still enjoy some of the potential upside.

I was paid approximately 2/3 of the funds upfront and will receive about 1/3 over the next 2 years.  It’s now been almost 7 months since we closed the deal, and I’ve received the first couple of seller financing payments for that final 1/3 on time and am very confident that will continue for the next year and a half until I’m fully paid that final portion.

In addition, I still own 20% of the company, so I continue to get dividend payments on a regular basis for that remaining ownership percentage (on top of my seller financing payments).  Then of course, if the new buyers decide to ever sell the company after they take it to a new level, I will get 20% of that future exit.

Overall, I’m very pleased with the deal.

My Role at Long Tail Pro

So, you may be wondering how involved I am with the day to day operations of Long Tail Pro.  The truth is that I am no longer involved very much in the day to day operations of the company.

For the first few months, there was certainly a transition period.  However, the new team was able to take over the reigns fairly quickly.  A big reason for the quick transition is because I had automated most of the business already.  So, the fact that I was stepping away didn’t make a huge difference since all the sales, marketing emails, and many other details were already happening on an automated basis.

As part of the deal, the new team wanted full control over the company.  And this is the way it should be, the new team has their own vision and goals and is in full control of Long Tail Pro.  I still offer strategic advice when asked or may point certain things that I notice in the business, but in general, I’m no longer operating the company.

So, this is the reason you won’t see me in the Long Tail Pro Facebook group answering questions or answering support tickets.  This actually is very smart in business terms anyway.  A company is much more valuable if the original owner is not the sole face of the company.

Long Tail Pro is more valuable if it is not dependent on my reputation.  As a result, I am no longer involved in the day to day operations of the company.

What now?

As mentioned, I no longer have any major responsibilities at Long Tail Pro.  I do have some ongoing commitments related to blogging and mentioning Long Tail Pro on NichePursuits.com, but these are very minor in terms of time.

Right now I am mainly focusing on creating and launching physical products to sell on Amazon.  I’ve shared some of my income reports from my Amazon FBA business in the past, and I’m still very bullish on the potential here.

I’ve launched several products on Amazon since selling Long Tail Pro and expect to launch several more before the end of this year.

In addition, I continue to grow my affiliate website portfolio and have invested in a few sites.  I still really enjoy seeing these websites climb the ranks in Google.

And finally, I am starting to get the itch again to start a new software company.  I wanted to take a bit of a break after selling Long Tail Pro before diving right into another software project.  So, now that it’s been about 7 months, I feel like maybe I should start the process once again with a new product that is exciting to me.

In fact, last week, I just spent a few hours talking to my developer that helped me build Long Tail Pro and discussed a new potential software idea with him.  This idea may or may not come to fruition, but I definitely see myself getting back into the software game in the next 12 months.

I just feel like I’ve learned SO much in running my first ever software company, that it would almost be a waste of all that education to not start and run another software company.

Or maybe I should just take a few extra months off and enjoy the time with my wife and 4 kids!?

Either way, I really like the options exiting my software company has provided me.

I truly hope that some of you out there reading can learn a bit from my experience and feel inspired to go out and create something great that can provide you with lots of amazing options.

The post How and Why I Sold My Software Company, Long Tail Pro appeared first on Niche Pursuits.

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5 Ways Your Fans Can Help Optimize Your Site for Conversions

I’ve been watching Facebook closely for a long time.

I’ve tested hundreds of ad iterations.

I’ve worked hard to build organic reach for myself and my clients.

Here’s what I’ve concluded: Facebook is awesome. But it’s also tricky.

Why? Because the algorithm is constantly shifting, forcing marketers to up their game, readjust their techniques, and reorient their strategies.

Here’s the thing. If you have a social presence for your business, Facebook has decided that your organic reach needs to shrink.

Again.

You know, of course, that this isn’t the first time the social giant tweaked its algorithm.

In June, Adam Mosseri, VP, Product Management for News Feed at Facebook, shared a post that detailed how Facebook was updating the news feed.

The core of the update is to prioritize posts that come from friends and family while reducing the onslaught of content from businesses and other publishers. Facebook wants users to see more posts from actual people, not businesses doing marketing.

The gist of the algorithm remains the same.

But the variability is increasing. Mosseri explained:

It will vary a lot by publisher mostly based on how much of their referral traffic or their reach is based on people who actually share their content directly…

If you’ve got strong engagement from your audience and they’re shouting your name from the rooftops as they share your content, or generate content around your brand, you’ll be far less impacted by the update.

But most of the businesses I work with aren’t enjoying that level of stellar engagement.

This is what it boils down to. If you want to improve your reach and engagement, you’ll need to find ways to leverage user-generated content (UGC) since that’s what friends and family will see first.

What I want to communicate is pretty simple: User-generated content is one of the most effective forms of content marketing available today.

User-generated content is the future of content marketing.

UGC will act as dynamite to your social media presence, accelerate your onsite content efforts, increase engagement, boost conversions, and build up a wall of defense against any algorithm the world throws your way.

Let’s talk about where the rubber meets the road—your fans helping your site become a conversion-generating machine.

Why you should put your money into user-generated content

There are a lot of benefits to UGC, and those benefits can be significant. And that’s primarily because you’re not limited to social media when it comes to working with customers to acquire and leverage it—though that’s where a bulk of your gains can come into play.

Consider for a moment that more than half of the adult users on Facebook have around 200 people in their immediate networks, according to Pew Research.

That social network graph looks something like this:

If the algorithm wants all those people to see content from their connections first, it’s in your best interest to get your audience producing or creating content about you.

And that’s not just for the sake of a little (or even big) boost in visibility.

Consumers fully admit they find branded information from their peers trustworthy—85% of consumers, to be exact.

That’s because the vast majority of them find that kind of content to be helpful when they make a decision about whether or not to make a purchase.

Nielsen’s study on this subject showed that 92% of consumers trust content and the opinions of their peers over any other kind of advertising.

UGC also has influence over that trust, according to data shared by Yotpo:

UGC is the best way to beat an algorithm that wants to topple and bury your promotions amid pictures of babies, beards, and breakfast platters.

But you’re not limited to Facebook in leveraging it.

With variations in engagement time across different social channels, you can see where there are opportunities to use user-generated content to drive up engagement as well as increase consumer trust.

Some brands are having a lot of success on other social channels and digital properties with UGC.

Below are a couple of examples of brands that leverage UGC using different channels.

A touch of wanderlust

National Geographic asked users to capture unforgettable people, places, and experiences that have impacted their lives from their travels around the world. The hashtag campaign (#wanderlustcontest) brought in tens of thousands of submissions branded to NatGeo.

And, of course, among those public submissions were some truly breathtaking and awe-inspiring photos people were all too happy to continue sharing.

Ignite user creativity

Nissan’s luxury car brand, Infiniti, ran a campaign promoting its Q30 model, aiming to leverage the content of its fans to help promote the vehicle. The New Heights contest had users print out a marker card that would display the vehicle in 3D when used with their mobile app.

Fans were encouraged to show off the vehicle in unexpected places by snapping pictures and sharing them with a branded hashtag via different social channels.

These two great examples of building campaigns and visibility from user-generated content had a couple of things in common:

1. They both revolved around contests. While this is a good way to encourage action among your followers, it’s not always necessary to give something away in order to source user-generated content.
2. These two campaigns were actively asking their fans to provide the content.

This aspect—the asking—is the most important part you need to remember.

Why? Because the majority of brands simply don’t ask. If you don’t ask for it, you won’t get it.

It’s just that simple.

So, what’s the simplest and most effective way to get UGC?

Ask your users to provide it.

If you want UGC, ask your followers to provide it

Brands don’t want to be pushy, but with UGC, you’ve got to approach it like you approach a call to action (CTA).

With a CTA, you’re telling your audience explicitly what you want them to do. It’s been proven time and again that without a clear call to action, you lose conversions.

But only about 16% of brands take the same approach with UGC, expressing to fans just what kind of content they want to see. Without that kind of direction, consumers aren’t sure what’s okay to share.

In fact, 50% of consumers want brands to tell them what they should include when creating and sharing content.

You don’t need to give away a luxury or big-ticket item when you make the ask, but you do need to ask.

Don’t sit and wait for your fans to provide you with gold.

Here are some of the best ways you can start sourcing and leveraging user-generated content for your brand and social channels.

1. Curate user-generated content with Yotpo

I’ve long felt that Yotpo is an impressive platform for sourcing reviews, engaging customers, and utilizing customer feedback to promote growth.

Now, it’s even better than ever.

Yotpo has stepped up its game with the recent launch of the Yotpo Curation tool.

This tool allows you to collect relevant Instagram photos from fans and influencers, displaying them on a single dashboard.

From there, you can tag products and handle rights management (including engagement with the original user to say thanks), inject the photos into your product pages, and even sell from your timeline.

This simplifies the tedium of trying to manually source user-generated images and lets you quickly benefit from the social proof tied to UGC.

In one survey conducted by Yotpo, 77% of consumers admitted they preferred to see consumer photos over professional shots:

That’s a clear indication of what you should have on your product pages.

Imagine the impact of having quality reviews alongside images showing off your products being used by actual customers.

It would provide a significant lift in conversions when you consider that 63% of customers are more likely to make a purchase from a site displaying user reviews. A study conducted by Reevoo showed that reviews alone, without any other UGC, lift sales by 18%.

The Yotpo tool turns your customers into brand ambassadors right on your product pages, plus you can create your own shoppable Instagram galleries or post that UGC to other social channels.

2. Build a community

When I talk about building a community, I’m referring to a gathering of people. Literal people in online gatherings.

You may view your social channels as individual and separate communities, but they’re really not. At least not without some kind of organization.

There are a lot of ways to build communities, e.g., Facebook groups, subreddits on Reddit.com, or communities built into your website.

A community you create and manage can give your fans a sense of belonging and make them feel connected to your brand. They’ll share a mix of personal content as well as content related to the brand as they engage with one another.

Through this engagement, you’ll see things like images, videos, and testimonials crop up that are ripe for the picking.

That user-generated content feeds back into the community, encouraging others to generate more of it, and it helps anchor prospective customers who were on the fence about making a purchase.

Giant Vapes is one of the largest online retailers of e-liquid for electronic cigarettes. It also operates a Facebook community, roughly 25,000 members strong. Members regularly share the products they’ve purchased, industry news, their opinions about interactions with the company, praise over shipping and deals, and more.

3. Give them customization and unique experiences

Customization provides your fans and customers with a sense of real ownership. They’ll naturally want to share with their friends and family what they’ve created, and you can play on that desire by asking them to do so.

Whether it’s a customized piece of clothing, a bag, or a vehicle, customization often leads to some great user-generated content.

And sometimes you don’t even have to ask.

Scores of people got excited about the announcement of Nintendo’s Super Mario Maker. Players create their own Mario levels to play on their own or share with the community. Fans, new and old, went crazy when it launched, and YouTube was flooded with the creations of streamers, generating a lot of visibility for the brand and the game.

This video has almost 12 million views to date.

In the same vein of creating unique experiences, Hello Games is seeing images and videos of their game No Man’s Sky showing up all over the web, including a subreddit devoted to the game (a user-created community).

No Man’s Sky features a universe boasting over 10 quintillion procedurally (randomly) generated planets, each with creatures and alien plant life different from the last. That guarantees unique content, and fans have been quick to share images and videos of their discoveries since its recent launch.

When you give your audience something they’ve never experienced before and the chance to create something unique they feel they own, they’re more likely to share that experience far and wide. That builds a lot of trust and provides a lift in conversions.

4. The UGC contest

I touched on contests above with a couple of examples, but in recommending this approach, I wanted to add one more because of the success of the campaign.

Back in 2014, Starbucks invited fans to decorate their white cups with customized art. Fans were asked to submit the images through Twitter with the #whitecupcontest hashtag for a chance to win. There were thousands of entries, and, of course, a constant stream of buzz that drove customers to their local stores.

.@Starbucks doodle on your cappuccino #WhiteCupContest http://t.co/37P0ZBZcqd http://pic.twitter.com/uQv3L3n3Rf <put up with crap coffee though?

— damoward (@damoward) September 6, 2014

I’m mentioning this contest specifically because it pulls in elements from my last point: let users customize and do something unique.

You don’t have to have a multi-million dollar budget to add customization to your product line.

Sometimes, you just need to give your customers a blank canvas and set their creativity free.

5. Use videos on product pages

Yotpo can strap a rocket onto your conversions with user-generated images, but don’t let the rocket run out of fuel.

If you can get your fans and customers generating videos of your products in use, those should be added to your product pages as well.

Explainer videos are great, but there’s nothing that sells a product faster than a video showing real, happy customers, who are 100% satisfied with their purchase.

Here are some quick stats that show how effective product videos really are:

• 90% of users admit that seeing a video about a product helps them make a purchase decision
• 36% of customers trust video ads; imagine the trust you gain from earned media
• 64% of visitors are more likely to buy a product after watching a video online
• Product videos can increase conversions by as much as 20%

Conclusion

Aside from those five tips, it goes without saying that you should absolutely be using product reviews on your website and social channels such as Facebook.

Leverage that social proof, and find creative ways to team up with your customers.

A large portion of your audience are happy to create and share content for you—they just need to know what you’re looking for.

Tell them how to help, inspire them to get creative, and watch your conversions climb steadily as your collection of UGC grows.

Are you using user-generated content right now to build trust with your audience and increase your brand’s visibility? What techniques are you using, and what’s the most successful?

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Break Out Of A Content Rut – 4 Tips For Fresh Keyword Ideas

One thing I’ve really enjoyed about Niche Site Project 3 is casually following along with some of the success stories many of you have shared on the NSP3 Facebook Group.

In particular, it’s cool to see people like Ada Wilkinson post an update about making her first dollar online ($14.80 to be exact) because I can remember that having that same feeling of excitement a few years ago.

Heck, I can remember how excited I was when my first website had a visit from a person not named Jake Cain. Just the thought that someone else was benefitting from my life-changing advice about baseball stadiums was an extremely gratifying feeling.

Today I am going to share a few tips that can be applied to nearly any site, but I’m hoping it will be particularly helpful for those of you who have moved past the initial surge of content on your site and are now wondering “what’s next?”

I’ve found that it’s easy to hit a wall where you feel like you are tapped out of ideas and don’t really know what else to say on your website that you haven’t already said.

I’ve been in that kind of rut several times, and here are a few things that have helped me move past it.

Finding Keywords For A Keyword Tool

One of the more challenging situations I found myself in was in 2015 when I was pretty much running the show for Long Tail Pro‘s marketing.

One of the things Spencer hired me to do was to breathe new life into the Long Tail Pro blog by creating fresh content that pulled in organic traffic and ultimately helped sell more software.

While I had done that kind of thing for my own niche/authority type websites, I hadn’t really done it as my “job” where I had actual expectations to meet.

It was pretty intimidating.

To make matters worse, when I started doing keyword research for the Long Tail Pro blog I was finding it very difficult to uncover low competition keywords in our market.

Up to that point, I’d never really worked on a site that was in an online technology business.

If I were to start a site in a low-tech niche like “raising chickens” the path to getting organic traffic would probably be a lot easier. I could likely do better SEO, build strong links with outreach, and find those golden nugget low competition keywords because most of the competing sites don’t really think like that.

They just love raising chickens and want to blog about it.

But when you start blogging about blogging… and internet marketing in general – the competition is stiff.

It seemed like every content/keyword idea I had featured a Google top 10 littered with results from Neil Patel, Brian Dean, ProBlogger, CopyBlogger, you name it…

What was I going to write to outrank those guys?

My idea was to shift my focus to some lower hanging fruit that I actually thought we could rank for. Here’s the question I asked to help me discover more keywords for Long Tail Pro:

1. Who Else Can Our Product Help?

The advantage I had was that Long Tail Pro already had a sizeable footprint in the online marketing landscape. Many of the big thought leaders in the space already recommended Long Tail Pro and were affiliates for the product.

So really, if someone was searching more general things about the best keyword research tools or getting more traffic to a blog – they were probably hearing about Long Tail Pro already – even if it didn’t come directly from us.

So I started thinking about it this way:

What kinds of people could benefit from Long Tail Pro but have probably never heard of someone like Pat Flynn?

My answer was very small business owners.

In my experience, many non-tech small business owners are so focused on other parts of the business that the online marketing side of things doesn’t get much time and attention. So the odds of that kind of person going to search Google for “best keyword research tools” were very low. They probably don’t even know what keyword research means exactly.

So what would they search?

Well, I started thinking more general and discovered there were low competition keywords for things like “Marketing Ideas For Insert Business/Industry Here.”

While the search volumes were pretty low, I knew that I could offer a few simple marketing ideas for that type of business – one of which would be the concept of using their blog to get people on their business website.

And oh by the way… we have a software that can help you with that.

By following the same principle, I also discovered some nice keywords around non-Wordpress website builders that are often focused on small business owners. Products like Wix, Squarespace, and Weebly who all have customers that could really use Long Tail Pro – they just didn’t know it yet.

So I discovered that people look for things like “Weebly SEO” and “Squarespace SEO” and what that really translates to is “How can I get more search engine traffic?” – which we could help with.

The end result is that LongTailPro.com did (and still does) rank well for a number of keywords just like this, which have produced a bunch of fresh leads for the business.

Click here if you’d like to check out a $1 trial of Long Tail Pro for yourself…

How You Can Use This

Really this is an exercise in creative thinking. The people who don’t even know enough to be aware of your solution – what kinds of things are they asking?

If you’ve tapped out of keywords for your bird watching site, maybe focus your attention on activities for seniors, things to do on vacation, lists of non-strenuous activities, etc.

If you can win those keywords, you have an opportunity to put bird watching on their radar as something they might enjoy, and then turn them into a reader and/or customer.

2. Siphon Celebrity Attention

When searching for keywords, being able to think like your searcher is critical. A lot of people want to emulate celebrities in one way or another, and I’ve found that understanding that idea can really open up a bunch of content ideas you may be missing.

For instance, your fitness website may never rank on page 1 for something like “get 6-pack abs” but I’d be willing to bet there are people looking to get abs just like a certain celebrity.

So they might search things like “Get abs like Channing Tatum” or “Spencers Haws’ ab workout” since both Channing and Spencer are well known for their washboard abs.

If you can do a little research and put together a nice piece on how they do it – you’ll have a much easier time ranking and picking up that traffic than you will with a more generic keyword.

This is an idea I first heard about in the context of YouTube on the DigitalMarketer blog.

They were featuring the strategy of a successful YouTube basketball channel called ILoveBasketballTV and one thing they did was create different videos for all the different player-specific searches like “how to shoot a basketball like Steph Curry.”

What you’ll find is that if people are searching these things on YouTube, they’ll also be searching them on Google.

In fact, I went a little deeper into this strategy with Ryan Spadafora on one of our coaching calls and how he could apply it to his site about being a better baseball player.

How You Can Use This

I’m guessing your niche has celebrities at some level. If so, use them to your advantage! Maybe it’s just a post here or there or maybe it becomes a whole category or series of posts on your site.

How to fix my hair like ____________

How to run fast like ______________

How give a speech like ____________

You get the idea.

3. UberSuggest

In the world of free keyword tools, Ubersuggest is probably my favorite.

In fact, it actually would be a fantastic resource for finding ideas you can use that involve celebrities or notable people in your niche.

Ubersuggest simply takes whatever you type in and then produces a list of all the auto-complete suggestions for that phrase. I’m sure you noticed that search engines do this for you as you’re typing:

Ubersuggest will take your phrase and then pull the suggestions for every letter in the alphabet, so you are usually left with hundreds of ideas that you may not find in the keyword planner:

If you run a blog about decorating for events, this kind of list would be perfect to run through a keyword tool and find out how often each one is searched.

Even if you have an idea like “how to decorate for a pool party” that doesn’t show much search volume but your gut tells you that it’s something your readers would be interested in – go for it anyway.

The most popular post on my baseball stadium website is focused on a keyword that showed “0” monthly searches at the time that I wrote it. However, I knew there had to be more people than me looking for tips on taking kids to a baseball game so I wrote it anyway.

How You Can Use This

This one is pretty straightforward – just jump over to Ubersuggest and start typing in the first part of common questions or problems in your niche.

Maybe your DIY site has a popular article on “How to build your own smoker” – go get suggestions for “How to build your own” and see what other kinds of projects people are looking for.

4. The YouTube Override

A minute ago I shared an example of where I ignored keyword search volume for a gut feeling.

So it caught my attention when I read Chris from RankXL talk about his strategy for basing blog posts off of popular YouTube videos. He calls the idea “YouTube Curation” and pretty much says that he’ll find blog post ideas by doing searches on YouTube related to his niche and then looking for videos that have a lot of views and/or a ton of upvotes – showing that people liked the video.

Chris figures that if people are finding the video on YouTube and it’s well received – then it makes sense to do a blog post on his site about that same topic. Chris says “I rarely do separate keyword research when writing articles through YouTube curation. I don’t care if it says 0 searches in the Keyword Planner” 

In other words, even if your keyword tool says that topic isn’t worth doing – let the success on YouTube override that and do it anyway.

This strategy can be especially helpful if you have a niche with a bunch of tutorials or demonstrations showing people how to do things. If 200,000 people have watched how to make their own mosquito candle, then doing a post about DIY mosquito candles is probably something you should consider – no further analysis required.

I’ve used this strategy quite a bit for one of my sites in particular, and it has produced traffic and social shares from blog posts that were relatively quick to create. I’ve also used a few of these in emails I’ve sent to my list, just because I felt confident that it was something they’d enjoy checking out.

How You Can Use This

Simple – go to YouTube and start searching for topics that your audience would search. You should start pretty general and see what kind of videos come up. From there, start checking out the videos that get the most views as well as videos that were recently published and are already picking up traction. Those could be good topics to cover on your blog.

When it comes time to create content, you can even embed the YouTube video into your post if it supplements your writing. Just work on creating an even more compelling title than the YouTube video and focus on building content that your readers will enjoy.

Wrap-Up

If you feel like you’ve said all there is to say or if you’re in a content rut of some kind on your site – I hope some of these ideas will help you find fresh keywords and start creating new content that your audience will truly enjoy!

I’m sure some of you have your own ways to bust out of a slump when it comes to content, so please feel free to share what works for you in the comments below.

The post Break Out Of A Content Rut – 4 Tips For Fresh Keyword Ideas appeared first on Niche Pursuits.

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9 Psychological Insights I Use When Designing a Pricing Page

Let me be upfront with you.

I’m not a web designer.

I work with some amazing web designers. I know a few things about web design. But when it comes right down to it, I’m not a designer.

What am I? I’m a marketer.

Why am I talking about designing a web page, specifically a pricing page?

Here’s why. Web design and marketing overlap. A lot.

When you get into a discussion about web design, you can’t help but talk about psychology. And when the page being designed is a pricing page, psychology plays a huge role.

What kind of psychology? Customer psychology.

Customer psychology is the study of the way people think, act, decide, and make purchases.

It has everything to do with motivation, mind tricks, color, placement, filtering, eye tracking studies, and, yes, web design.

That’s why I’m confident in my ability to design a great pricing page.

I constantly A/B-test my pages to make sure I’m choosing the most optimal design, and most of the design choices you see throughout my web properties is based on simple psychological principles.

Psychology is common in marketing and design, regardless of the industry. Look at a casino, for example.

Every inch of that building, from the carpet and floor designs to the signs and turns was designed to psychologically keep people in the building spending money, not focusing on time and outside responsibilities.

Web design is the same way. And when it comes to the pricing page, these psychological principles are extremely important.

Here are a few of the tactics I use when designing pricing pages—one of the most important steps in your conversion funnel. 

1. Devalue money in the viewer’s eyes

Since we’re on the subject of Las Vegas… Another trick casino owners use is the idea of mentally devaluing money.

When you step up to a table, they exchange your money for chips.

Why? There are several reasons. One is that it makes it easier for dealers to count, but it also detaches people from the value of their money. It’s easier to gamble away two chips than $2,000.

A lot of people are in debt, and, while it’s great that you run a business, you need to get people to stop thinking about their bills.

The average user who looks at your pricing page might have in the back of their mind their consumer credit card debt.

Maybe you’re not running a casino. How do you get people to stop thinking about their debt problems and instead focus on the value of your product, regardless of the price?

Let me give you an example.

Cornell researchers recently partnered with the Culinary Institute of America to research this concept of devaluing money on restaurant menus. Two different study groups were given two different menus, one with a dollar sign next to the pricing and one without.

The group given the menus without the dollar sign spent more money. Why? Because they weren’t put off by the high $ price.

One example I’ve shown elsewhere is this pricing page. Notice the small dollar signs?

That’s not a mistake.

The same thing is happening here:

The dollar sign serves as a trigger to remind people of the value of money. What they should be thinking about is the value of your product.

A simple removal or minimization of the dollar sign will make your pricing page more compelling, more powerful, and more psychologically potent.

2. Color-coordinate everything

Research from the US National Library of Medicine and National Institutes of Health indicates colors are perceived in different ways by different people based on experiences, genetics, context, and other factors.

Still, there are brands of every kind that use specific colors within their logos.

If you’re at the beginning stage of building your company, choose a color scheme that matches the emotion you’re trying to evoke.

There was a time when Geocities ruled the web and websites commonly looked as though they were drawn by crayons. Thankfully, we’ve progressed, so basic black text on a white background is considered standard for text (with a few exceptions).

Headers and buttons, however, can vary greatly. Amazon uses a yellow color for the “Add to Cart” button on its pricing pages.

Walmart uses a red-orange.

Best Buy utilizes bright blue and yellow for different options.

Whatever you choose, make sure it speaks to your brand and is consistent all the way through to avoid confusing customers at a crucial step.

3. Size matters

Size does matter when designing a pricing page.

Here’s the simple truth. You want people to see the important parts first because that’s what needs to stick with them the longest.

Let me go back to this pricing page to show what I mean:

What’s the first thing you look at when you see this page?

Probably the center column, focusing on the “Growth” package at $400 a month.

Why? Because it pops with a vivid blue against a very light gray backdrop.

Plus, it’s bigger than the others. Size is important. It’s also centrally located.

All of these are key differentiating features that psychologically emphasize the importance and superiority of that plan.

Where exactly does size matter?

• Headlines
• Call-to-action buttons
• Price boxes (as pictured above)

As explained in Psychology in Action, larger fonts make messages enter our brains faster as we don’t have to struggle to see them.

This split-second difference of time and attention puts the page into a logical and cohesive, Feng Shui-like, order for browsers.

4. Limited time offers

If someone thinks their time to act is limited, they’re more likely to take action quickly rather than delay it.

Several studies have looked at how limited time offers affect our brains. Sites such as eBay and Groupon have practically built empires on the concept.

Essentially, it boils down to supply and demand.

When you create scarcity, the perceived value of an item goes up. It’s called a theory of psychological reactance, which explains why we hate to miss out on a golden opportunity when presented with it.

You’ve probably heard of fear of missing out, or FOMO, right? Same idea, different angle.

Amazon uses this technique to great effect with constant inventory reminders on every item: “Only 10 left in stock – order soon.”

It’s a great call to action.

Even though we know one of the world’s largest fulfillment centers will definitely replenish its supplies of literally everything, will it happen soon enough? Can we wait and will it be more expensive next time?

Dr. Eldar Shafir, from Princeton, and Dr. Sendhil Mullainathan, from Harvard, explored how people’s minds work when they feel they’re lacking something. The perception of scarcity leads them to make mistakes or bad financial decisions, spending more money than they should.

Psychology Today’s author Shahram Heshmat notes,

Scarcity orients the mind automatically and powerfully toward unfulfilled needs.

It also motivates us to prioritize our choices, e.g., we’re more frugal with toothpaste when the tube is close to empty, and we rush to purchase a product or service to obtain a deal.

5. Discounts and VIP membership

People love feeling like they belong. Costco, Sam’s Club, and AAA are just a few of the memberships you can get these days to feel like you’re part of a country club.

Everyone wants to be a VIP, so offering VIP membership bonuses and discounts encourages customers to keep spending money at your business. Instead of buying just one roll of paper towels, you can subscribe and save.

Or buy 10 and get one free.

These promotions increase clicks because, as Ian Newby-Clark explains in Psychology Today,

We are social creatures who yearn to be included. We want to be a part of the group and strive for goals set for us.

It’s like a drug: belonging to something bigger than yourself provides a sense of purpose and meaning to our lives.

Marketing Profs has a great article describing how the inclusion of fans into a community motivates them to support a brand both as customers and ambassadors. I suggest you take a look at it as it’s a great read.

As psychologists point out, our social identity is defined by the groups we belong to. This is why Xbox and PlayStation fans, for example, are so prone to debating their platform’s superiority.

The NFL, along with all other major sports organization in America, uses this psychological principle to its advantage.

Fans show up sporting their team’s colors and mascot costumes because it makes them feel like they belong.

Above: Seattle Seahawks fans surround a Cleveland Browns fan Sunday, Nov. 30, 2003, at Seahawks Stadium in Seattle. (AP Photo/Ted S. Warren)

6. Offer tiered pricing

As Talia Wolf points out,

Tiered pricing opens the door to all sorts of psychological techniques.

Hyperbolic discounting occurs when different pricing models provide different benefits, allowing us to personalize our shopping experience. Dropbox employs this technique:

Choice-supportive pricing, anchoring effect, and the decoy effect can also be employed to your advantage. With tiered pricing, anything is possible.

Amazon has about a dozen varieties of Prime combined with rewards cards, affiliate bounties, and subscription services to give you payment options beyond just “cash or credit.”

Tiered pricing is becoming even more popular these days with the growth of the software-as-a-service (SaaS) business model.

By subscribing for longer terms, people know they can often save money and thus seek out these types of deals.

Rational choice theory is a framework to model social and economic behavior. It states individual actors choose the option that maximizes their interests and provides the greatest benefit.

A tiered pricing model provides customers with purchasing options that are all, ultimately, with you.

7. Doorbusters work

Retail has long utilized doorbusters to get people in the doors. These savings are responsible for Black Friday leaking further into Thanksgiving every year. Once you have people in the door to buy a low-priced item, you can upsell them better, more expensive products.

Any pricing page should also have a “recommended” and “similar” section. These personalized offers help lead consumers to buy the right item for them, increasing trust in your e-commerce brand along with the ROI.

It should be noted, however, you should avoid the classic bait-and-switch scam that will get you in trouble with the FTC and ruin the reputation of both you and your brand.

It’s also worth mentioning that many analysts think Black Friday is about more than just the doorbusters.

Professor Jane Thomas at Winthrop University says:

It’s more of a tradition than anything else. People ritualistically line up at brick-and-mortar stores the Friday after Thanksgiving while a growing number wait for Cyber Monday the following week online.

There’s also a psychological difference in the way we perceive prices such as $13.99 vs $14.00. The item priced at $13.99 is more likely to sell because even though it’s only a penny short, it’s $13 and change instead of $14.

Although consumers initially hit a website looking for a cheap deal on SEO services, soon they realize they’re also missing social media, video, CRO, PPC, and many other aspects of marketing.

They want more.

That’s the value of the doorbuster.

The initial doorbuster brings them to you for a killer deal. You get them in and then convert them to buy more stuff.

8. Get smaller yeses first

Much like with the doorbuster sale, you want to lead people by convincing them to agree to smaller things before hitting them with the big ask.

Zendesk does a great job of leading customers through smaller yeses first:

While the option is there to buy, Zendesk wants you to try the free version first because they’re confident you’ll come back as a paying subscriber once you’ve experienced the platform.

Who doesn’t like free stuff?

By convincing customers to say yes to the smaller ask first, you make saying yes to the bigger ask much easier.

It’s all part of the psychology of negotiation,

explains Heidi Grant Halvorson, PhD.

Making the pie bigger for everyone increases the maximally efficient outcome 79% of the time.

You don’t have to necessarily give out anything for free either. As explained above, even month-to-month subscriptions are a smaller ask than a year-long contract, so providing different levels of the same offer will do the trick.

9. Provide choices

As explained above, offering both payment and product choices is a great way to improve revenue on pricing pages.

A customer is buying a TV, do they need a warranty? Cables? A stand or mount? A DVD Player, home stereo system, or Chromecast?

Give people options for bundles, add-ons, and other available sizes, colors, and brands. But don’t give them so many options that they get overloaded.

In 2000, researchers S.S. Inyengar and M.R. Leper conducted a study allowing supermarket shoppers to sample the different flavors of jam available for purchase. The test compared the impact of having 24 jam flavors to choose from versus having only 6.

Only 3% of those who sampled the 24 flavors went on to purchase the jam, compared to 30% who sampled only 6 flavors.

Too many options will inhibit your customers’ ability to make a clear decision.

Conclusion

Psychology is important in web design and marketing. How people perceive a brand is directly impacted by the appearance of every landing page, including the pricing, checkout, and confirmation pages.

By A/B-testing different versions of those pages, while implementing the psychological principles discussed above, you’ll be able to optimize conversions and revenue streams from your online marketing.

What psychological techniques help you design your web properties?

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