Have you ever thought about using a free tool to market your site? I know I didn’t until I read about Moz’s analytics stats and saw that a lot of their traffic was coming from Open Site Explorer, which is their free backlink tool.
With a bit of research, I realized that it wasn’t just Moz that was seeing great results from releasing a free tool. HubSpot was generating lots of traffic and leads with their Grader tool. SEMrush was also generating millions of monthly visitors by offering free competitor analysis tool.
Download this bite sized cheat sheet to know why creating tools can be a better investment than creating content.
But what’s more interesting than the usage data is what I learned:
Everything dies down
Here are the usage stats of the tool during the first four days:
- Day #1: 8,462 people ran 10,766 URLs
- Day #2: 5,685 people ran 7,241 URLs
- Day #3: 1,758 people ran 2,264 URLs
- Day #4: 1,842 people ran 2,291 URLs
The big reason that the tool did better on the first two days is because they were weekdays. Based on the data from past launches, the tool should still be used at least 1,000 times a day once the launch traffic dies down.
Tools have a higher perceived value
Before I launched the tool, Quick Sprout received 1.8 pageviews per visitor and had a bounce rate of 74%. In addition to that, 65% of the visitors were first time visitors, who stayed on the site for 2 minutes and 10 seconds.
After I launched the tool, each visitor viewed 2.35 pages. The bounce rate was 63%. The loyalty of each visitor also increased as the percentage of new visitors dropped down to 57%, and they stayed on the site for 3 minutes and 10 seconds.
Over the years, I’ve been expanding Quick Sprout in many ways. I have created advanced guides, released a forum and tried multiple types of blog posts. None of these things provided as high of an engagement rate as the free website analyser tool did, which shows that people perceive software to be more valuable than content.
More traffic doesn’t really mean more traffic
As I mentioned above, the tool was used a fair number of times in the first four days. But usage doesn’t necessarily mean more traffic. If I didn’t release the tool, I would have released a blog post, and each post generates new visitors.
Although the tool was used 22,562 times, the site only generated 6,301 extra visitors that I wouldn’t have normally received compared to just writing a new blog post.
I also experienced similar results every time I released a new guide. This means that I am cannibalizing my visitors to a certain extent, as many of my visitors are viewing the new things I am releasing, and they are ignoring some of my older pieces of content.
If you are looking to grow your audience, you should continually release new content, software updates and whatever else your mind can dream up. But don’t expect exponential growth as you will be cannibalizing your visitors to some degree, which is fine.
What’s the ROI?
So far I have spent $45,000 building the tool. To finish off the rest of the features will roughly cost me $60,000 more. That means the total cost to build everything I want would be $105,000.
Before I created this tool, I created three other software companies for marketers, and I bought one. Based on my experience of creating products for marketers, I should easily be able to convert 2% of the people who put in a URL into paid plan subscribers at $97 a year for extra features.
Assuming I can maintain at least 30,000 unique people entering in URLs through the system each month, a 2% conversion rate would mean 600 paid customers each month. At a price point of $97 per year, that would generate $58,200 in revenue each month.
As you can see, I would easily make my money back if I decided to charge for a premium version as I am only investing $105,000 into the tool. My monthly hosting cost, just for the tool portion, wouldn’t be higher than $1,146.50, and the cost to support paying users shouldn’t be more than $5,000 a month.
I have no plans charging for the tool or even creating a paid premium version, so in this case, I will end up losing money. But if I wanted to, I could make a healthy profit.
If I had to do it all over again, I would still spend the money on the website analyzer because it has helped to grow my overall traffic and to increase the loyalty of my audience.
If you want similar results, you can add a free tool to your website, but before you do, there are a few things you need to know:
- Simplicity is the ultimate sophistication – there are a lot of popular software products that are old and hard to use, but they are popular because people didn’t have as many options back then. Whatever you end up creating, make sure it is easy to use. Creating a complicated product that is feature rich won’t get you as far as creating a simple product.
- Build for others, not yourself – before you start building any product, you should survey your visitors and figure out what they want. If you build something that solves their problems, it’s more likely to be successful.
- Wireframe before you design and develop – once you know what your visitors want you to build, make sure you wireframe it before you start the design and development process. Once you have wireframes, go back to your visitors and get feedback to make sure you are on the right track.
- Design before you code – I’ve found that it’s easier and cheaper from a development standpoint if you have your designs completed before the development process starts. This way your engineers won’t overdevelop.
- One domain is better than two – in most cases, you are better off launching your product on your existing domain… especially if your existing domain has traffic. My co-founder and I have tried creating tools on separate sites, and they typically haven’t done as well. If you launch your tool on a separate domain name, be prepared to spend triple the amount of time marketing it.
So, what do you think about creating free tools to market your business?
PS: If you haven’t checked out the new Quick Sprout tool, you should give it a shot. Chances are you’ll be impressed. 😉