My first business ideas were absolutely horrible.
It wasn’t that they weren’t going to work for one or two small reasons, there were massive holes in the logic-of-how-this-is-ever-going-to-make-anyone-any-money-ever.
I built an algorithm that tried to predict someone’s personality by looking at their tweets. I considered founding a government defense contracting company to bid on defense contracts. I thought about trying to visually map out all data on Wikipedia.
You get the picture.
Over time though, I began to see patterns in these bad ideas. I started to realize why so many successful people preach about the power of persistence and taking action. If you just continue trying stuff, you’re going to start building patterns in your mind of the types of things that work and don’t work. It’s as simple as that.
Today things aren’t quite as frustrating. I’ve built a couple of successful businesses so I’m more aware of what the common pitfalls are.
I’ve developed four thresholds that every new idea I have needs to pass before I’m willing to invest any significant time or money into it. Whenever I have a new idea or meet with an entrepreneur, these are the first four questions that need to be answered:
1. What burning pain are you solving?
Paul Graham sees a lot of entrepreneurs go through YCombinator and he says that the number one reason a startup fails is by,”not making something users want.” In other words, nobody cares about the problem. If the problem you’re trying to solve is painful enough for a given customer, they’ll be willing to compromise with a crappy solution, that’s the definition of an early-adopter.
About 80% of my initial ideas failed because of this: I didn’t validate that the problem I was trying to solve actually existed. It doesn’t matter if your product solves a particular problem better than anything else in the world, if it’s not solving a burning pain then it’s going to be very difficult to build a business around.
Be clear in your mind about what problem your product or business is solving.
2. What are your analogs?
An analog is an example product or service that people are currently paying for that solves the same problem that your product or service is supposed to solve. Find some examples of people paying right now to solve this problem.
Your product or service can be completely different, but you want to know that people are willing to open their wallets to solve this problem. (There are a lot of problems that are “nice-to-solve” but not “must-solve.”)
An example of an analog would be if I had an idea for a machine that could zap my teeth and they’d be clean for the rest of my life. People buy toothbrushes, toothpaste, floss and mouthwash right now so I have a general idea that people are willing to pay something to solve this problem. (How much they’re willing to pay is another story.)
3. How do you know your solution is better?
If you know that the problem not only exists, but is acute enough that people are willing to pay, now you can start determining if your idea is superior to the existing solutions. The best way to do this is through customer development (AKA talking to your customers).
Customer development is a technique used to help you objectively determine if the people who feel the pain you identified in threshold #1, who may even be using products or services you found in threshold #2, find your solution better. The best way to do this is to actually go out and talk to them.
4. Can you find 10 customers to pay you right now?
Most ideas, even if they’re highly product-oriented, can be made into a service to solve the problem. This doesn’t scale, but the process teaches you everything you need to know about the viability of selling your idea. Don’t get fancy – use craigslist, ebay, your local newspaper, whatever.
Put up a one page static site with a buy button. If you’re a hardware startup, use Kickstarter. Find your first 10 customers before thinking about anything else.
As George E.P. Box said,
“Essentially, all models are wrong, but some are useful.”
There is no entrepreneurship formula that works for everything – but there are formulas that make things much easier. In the process of taking your idea through this four-step process, you’ll learn a lot about the longer-term viability of your idea.
In the past few years, Conversion Rate Optimization has become as essential to a business as SEO. If you’re not optimizing – and your competitors are – you’re missing opportunities to gain new customers.
While A/B testing is one piece of CRO, simply testing different variates of your site against each other is only one way for you to increase conversion rate. For most businesses, split testing will get you an initial lift but won’t go the extra mile to get a higher conversion increase.
Here are 5 more advanced methods for you to personalize your site. To make things easy, I’ve included real-life examples of each along with the software you can use – enjoy!
There is absolutely no question that personalizing your site will lead to higher, sustained conversion rates. Giving each customer exactly what they want at exactly the right moment is one of the most reliable ways for you to generate more sales.
Here’s an excellent example from Gardener’s Supply Company:
The company noticed that it’s conversion rate was low from Pinterest users as compared to other sources of traffic. So, they worked with the team at Evergage to show a personalized banner to each visitor who came to their page from Pinterest and giving them a special offer.
This simple banner saw a 3x increase in conversion!
Generating 10% – 50% conversion increases is not uncommon for personalizing a site. And not only is the conversion lift significant, it’s often sustainable, lasting for years (a lesser talked about fact in CRO is that A/B splits can have a shelf-life and stop converting as highly – that’s a topic for another article).
If you’re interested in personalizing your site, here’s a few resources for you to try:
- Evergage: Generally the easiest to use, with a point and click editor that makes it easy for you to segment audiences.
- Optimizely: Makes it easy for you to create pages based on traffic sources – similar to Evergage but in my opinion not as robust in personalization
- Personyze: Focused on e-commerce. Makes it easy for you to offer different products to different users. different creative, etc. The software is not as easy to use as Evergage or Optimizely but it does have some advanced features for e-commerce.
2. Dynamic Pricing
For any e-commerce business to succeed, pricing must be competitive – I cannot find a clear study on this, but anecdotally I can tell you that your pricing strategy can easily affect your revenue and profit by 10% – 20%. Especially if you are selling a product in a competitive environment, you need to have a handle on your pricing strategy.
Let’s say that you type into Google “laptop case”:
Then, you decide that you want the pelican 1085 hardback case:
Which one are you going to get? This is a heavily researched question, but I’m going to bet that you’ll go with the retailer with (1) the lowest price + shipping, (2) the best return policy, and (3) the best overall brand experience.
Even this simple example raises a number of interesting points:
- How do you price on intent and product? Clearly a commoditized sale (like this case, where the product is the same everywhere) has a far different pricing strategy than an intent-driven sale, where a customer comes directly to your website
- What do you optimize for? Conversion, profit, revenue, etc? Most people will simply say “profit” but this turns out not to be an easy question to answer – simply acquiring a customer will often have benefits (like long term customer value)
For most e-commerce merchants between $500K and $10M in revenue, simply optimizing price for conversion is going to be your best bet. There are a few platforms we recommend for doing this:
- Wiser: Software is easy to use. Unfortunately they do not offer plans for smaller size businesses but they are a great fit for clients with $1M+ in revenue.
- AppEagle: This is a great product for an Amazon-focused retailer. They are not as strong though for retailers who sell across multiple channels.
3. Dynamic Landing Pages
Simply adjusting the headlines of your landing page to match – or closely match – the search query text can boost conversion rate by 10%.
Here’s an example:
Personalizing your landing pages to PPC traffic is a general best practice, and fortunately it’s extremely easy to do this. The best tool for you to use for this is:
- Unbounce: Probably the easiest landing page builder. You can easily create different versions of your landing page and then customize the headlines or background images for different traffic sources.
You could also simply create duplicate versions of the landing page and use dedicated landing pages – many DIYers do this and it’s a perfectly good practice.
Just a one-second decrease in page load time can decrease conversions by 7% or more.
Here’s an excellent graph from Web Performance Today showing how page speed affected conversion rate at Walmart:
I often find when optimizing conversion rate of clients’ websites that page speed is overlooked – not because people don’t realize it’s important, but because people often don’t realize that their page speed could be improved.
Here are a few excellent resources for you to check your website’s speed:
- Pingdom: This may be the single best spot for you to check your website for performance issues.
- GTMetrix: Also a great resource; results will be similar to Pingdom
- Google Page Speed: For developers, Google offers a page speed API that will let you build speed testing into any single one of your apps.
Generally, the best tip for you to optimize page speed is to reduce the amount of code that you’re using on your site or to upgrade to a faster platform (for example, Angular.js, if implemented correctly, can be extremely, extremely fast). This is easier said than done, however, and is a topic for another article.
5. Response Time
For any advertisers who are in the lead-generation business – or even customer support – response time is one of the biggest variables that affects whether your leads become paying customers (or whether your customer support customers end up referring you or not).
Lead Response Management did an impressive study showing the best time to follow up with leads and how your speed affects response.:
- If you call a lead 5 minutes after they email or call you, your chances of reaching them are 100 times better than if you call them 30 minutes later.
- If you call a lead in the first hour, your chances are 10 times better than afterwards.
Of course this can be difficult for international-based lead generation businesses, but for businesses in a real need – say for example, an auto accident lawyer, where there is urgency – being the first person to respond to a lead can often seal the deal.
Here are a few resources for you to try in order to improve your speed management:
- Infusion Soft: One of my favorite CRMs and has an excellent marketing automation solution that will let you auto-respond to leads immediately. If you choose to automate your response emails, be sure to personalize them.
- Aweber / Mailchimp / etc: Any decent email marketing software will have auto-responder features built in.
For higher value sales, I would recommend trying to respond to as many leads as you can yourself, but for high volume lead-gen, an automation solution might be best.
About The Author
Andy Hunt is the founder of UpliftROI.com. He’s got years of solid experience in conversion rate optimization and digital marketing in general.
Are you depending on Google to keep sending you traffic? What if you stop ranking so well? Or your site gets a penalty? Maybe you are paying for traffic over and over. Why would you want to do that? You could be capturing each visitor to your list and keeping them there. That is what auto-responders do.
By offering a series of useful email messages to your visitors you can get them to give you their email address and keep them coming back. The best way to grow your list is to offer something of value. At one time most people used eBooks. The problem with that is the high percentage of subscribers who download what you offer and then immediately unsubscribe. If you send the same information as an autoresponder series, your subscribers have to stay on your list.
This works – but many are not doing this as well as they could. Think about the emails you receive. Personally, I read the short ones as soon as I open them. But the long ones I often save for “later” – but that “later” never comes. I bet many other people do that, too.
Goal: Get Your Emails Opened
The goal is to get your emails opened. By sending really short emails your subscribers will be more likely to open them. They may not do this consciously, but subconsciously they’ll associate your emails with “short and painless”. That is what you want. Their goal is to get information in easily digested bites.
Your goal is to keep them opening or at least wanting to receive your emails so when they are ready to buy what you offer they remember you. Search traffic converts because people use it when they’re ready to buy. If they remember you they won’t need to search – they can just click on your link in your emails.
Remember to ALWAYS include a link back to your site!
Simplify the Process
What is easy gets done more often. The best way to create your autoresponder series is to use a template you can edit each time. That way your header, logo, slogan, social sharing buttons, and links to your social networking accounts are already in place. You just edit the text.
Email solutions providers are making templates easier to use. There is a video about autoresponders that explains the many features that are now built into templates. If you make your messages flow in a sequence, your subscribers will be more likely to be happy to receive them. Here’s also a quick and sweet intro to autoresponders by ProBlogger.
One way to do that is to write a how-to and then break it up into small sections. Or you can make a list of priorities in order and write each one separately. Do whatever works best for you. Remember to always focus on what your potential buyers want – NOT what you want.
Give your subscribers what they want to receive and you can keep them on your list reminding them to choose your company. Over time you build trust that increases conversions. Do this consistently and your profits will grow.
Studies continue to show increases in the percentage of email being opened on smartphones. Make sure you have updated all your email templates and landing pages to work on mobile devices.
Do not assume they work. You need to actually test them on as many devices as possible. Verify that the header, images, and videos resize correctly. If they don’t you will need to update your site with new code, a new theme, or plugins.
Click on the social media accounts and verify they take your readers to each specific social account. Test every social sharing button – or at least the major platforms – and ensure that it works as expected. Configure shared tweets to include your Twitter username and make sure images share properly on Facebook, Pinterest, and LinkedIn.
Repeat Visitors Are More Likely to Buy
Building your list, setting up autoresponders, and creating actual relationships with your visitors can turn missed opportunities into leads and sales. You must keep them coming back to buy.