The Beginners Guide to Online Marketing

The Beginners Guide to Online Marketing

Chapter One

Written by Neil Patel & Ritika Puri

Be Laser Focused
on Your Customers

At any given time, your company has hundreds of options for running marketing campaigns.

We’re not exaggerating.

You can write blog posts, spend six figures on pay-per-click ads, send newsletters, and tweet to your heart’s content. Within these choices are even more micro-choices. What targeting options and images should you pick for your Facebook ads? Should you develop your blog posts in house, or should you outsource the writing to ghostwriters? How do you choose the right email subject headlines? Should you choose a cost-per-click or cost-per-impression pricing model?

These questions are daunting. It’s easy to get bogged down and feel like a hamster in a wheel. As you move forward in your research, you’ll come across experts who’ll tell you to “just start testing.”

Ignore this advice.

Marketing is strategic. To succeed, you need highly focused goals. You need a framework for a scalable, replicable framework. It doesn’t matter whether you’re a beginner or an advanced marketer — this fact will always hold true. If you run without direction, you’ll end up wasting two of your company’s most valuable assets: time and money.

Step #1 of successful online marketing is an understanding of your company’s exact needs and goals. You need relentless self-discipline. And laser focus.

This chapter is going to take a drastically different approach from most marketing guides that you’ll read. We’re going to start backwards, with the lessons that most experienced marketers take years to learn. We believe that this approach is the best way to (1) move your organization forward while (2) saving time and (3) saving money.

Here’s what you need to know,before you even think about running your first online marketing campaign. This chapter will put you light-years ahead of the crowd.

Average marketers think in campaigns. They work all week, push out a campaign, then start again from scratch next week. That will only take you so far. To get to the next level, you need to start thinking in systems and build a marketing machine. This is the only way to 10x your growth and then 10x it again.
Lars Lofgren Growth Manager, KISSmetrics

Marketing Starts with Your Customers

Every marketing strategy should start with your customer base. Who are the people using your product? What do these individuals value, what do they feel, what products are they currently using, and what will it take to sign them on as paying customers?

Before jumping into your online marketing strategy, have a conversation with your existing customers.

How did they find out about your product or service? What was the process that transformed them from interested prospects into paying customers? What do your customers value or care about?

Chances are that the answers to these questions have little to do with whether your customers found your company online or in-person. What you’ll likely hear and find most compelling are stories about how your business solved some of your customers’ most pressing problems.

Marketing is about human-to-human relationships and can happen through any online or offline medium. At the end of the day, your customers probably won’t remember whether they found your company through a click on a Facebook ad or through a referral from a friend.

How have you found some of your favorite companies, products, and services?

Now, I (Ritika) am going to do something that I do very rarely. I’m going to take off my marketer hat and show you my inner consumer. Let me tell you a story about two companies that changed my life.

  1. ModCloth - An Online Boutique for Women

    In 2011, I decided that I was fed up with department stores. I didn’t like standing in lines, hunting in piles for clothing items that I liked, and wasting my money on items that I needed but didn’t fully enjoy.

    Out of the blue one day, a new boutique opened by my house. I loved everything about shopping there — that the items were inexpensive, that the boutique was never crowded, and that every item in the store was unique. This store embraced every single one of my values as a busy woman. It was the most positive brick-and-mortar experience that I have ever had.

    Later in 2011, I (Ritika) started growing my marketing consulting business. The end result was that I had zero free time. I transitioned to doing most of my errands online. The problem was, I missed that in-store, personal ‘boutique’ experience from my neighborhood store. I told a friend about it, and she introduced me to an online store called ModCloth. I took a look and was instantly hooked — I go through periods of time when I check the website daily for new inventory.

    I quickly took notice of ModCloth’s robust online marketing presence — which makes sense, given that they’re an online storefront. They’re active on social, brilliant through email, and constantly retargeting me through Facebook ads with products that they think I’ll love.

    Even though I live and breathe marketing, what always stood out to me about ModCloth has not been their campaigns. When I sat down to write this guide, I couldn’t think of any particular email or offer that compelled me to make a purchase. And that’s surprising, given that I’m served with ModCloth ads almost every time I log into Facebook. I click on these ads every single day — I can’t resist. I know that I love ModCloth’s ads, but I can’t remember a single one.

    What I remember is the problem that ModCloth helped me solve — the fact that I had trouble finding unique, awesome stuff. Shopping used to feel like a miserable time-suck, and ModCloth came along and made it fun.

    At the heart of ModCloth’s marketing spend (with me in particular) is a human-to-human connection. And here is a snapshot of what that connection has earned them. All and all, I’ve probably spent $1,000 over the last two years.

  2. Eagle Rock Brewery
    Los Angeles’s Destination for Craft Beer Aficionados

    Los Angeles’s Destination for Craft Beer Aficionados

    Nestled in an industrial Los Angeles neighborhood is one of the county’s first microbreweries. But don’t let the warehouses and car body shops fool you. On weekend evenings, this place is an amazing destination for meeting new friends and enjoying craft beers.

    My friends have been in love with this place for years. But I didn’t find it through a word of mouth referral. I found it through a Yelp search and was instantly amazed by this place’s four-and-a-half star rating.

    Convinced that the company was investing heavily in its online marketing initiatives, I (Ritika) recruited the Brewery’s owners to interview for an article I was writing in Amex OPEN Forum.

    You know what shocked me? Despite Eagle Rock’s massive online presence, they had invested very little in their online marketing strategy:

    I figured that since I found out about them online, they must have been running robust marketing campaigns.

    The truth is, Eagle Rock’s secret marketing weapon was and always has been word of mouth. The company’s owners have devoted their lives to an unmet need in Los Angeles — the fact that craft beer enthusiasts want a local microbrewery.

    Eagle Rock Brewery quickly developed a reputation for its energetic venue, dedicated community, and high quality product.

    And that’s just it. It’s Eagle Rock Brewery’s reputation that fuels the company’s online marketing strategy. What the Internet did was amplify the natural word-of-mouth effect and make conversations stronger.

    Eagle Rock Brewery has an impressive social media following. Their strategy is simple — to keep communication as open as possible with their communities of customers and prospects. It is a single, focused goal.

    And you know what? As one of Eagle Rock’s customers, what I care about most is not how much they’re spending on advertising or marketing. I care about their product and that they’ve made me — in a big way — a happier person.

At the end of the day, it doesn’t matter whether you’re running online ads, email marketing campaigns, or retargeting customers on Facebook. What matters is that your company’s marketing team sets up the right systems to build genuine, human-to-human bonds with the buyers you’re trying to reach. The key to successful Internet marketing is your ability to choose the best possible channels for achieving that end goal.

Develop Your Customer Personas

There is no such thing as a one-size-fits-all customer. Your buyers are highly diverse and will demonstrate their own unique preferences, personality traits, and needs. Your online marketing initiatives need to reach each and every one of these customer segments.

The first step to any marketing strategy is to establish your customer personas.

These are the behavioral, demographic, and psychological characteristics of your buyers. A quick way to get started is to complete the following worksheet.

Start with the following questions:

  1. What are your typical customers’ roles? If you’re selling a B2B product or service, what are their job titles?

    Examples for consumer brands include husband, wife, father, mother, aunt, uncle, grandmother.

    Examples for B2B brands include IT manager, marketing manager CEO, business development manager, vice president, etc.

  2. Do these individuals have decision-making authority? If yes, do they still consult others? If not, who has the final say?

    Understand your customer personas on a personal level by pinpointing their key personality traits:

    Demographic characteristics:
    • Job title
    • Age
    • Education
    • Industry
    • Where they’re located (city, suburb, rural)
    Key professional attributes:
    • Responsibilities associated with this buyer persona's job
    • Highest job priorities/responsibilities in this buyer persona’s direct area of influence
    • The top problems/pain points they’re facing that your company can help solve
    • Several perceived barriers to the above problems
    • What actions the buyer may have already taken to solve their key problems
    • Who do they report to
    • Years in this role

Marketing is very much like public speaking or performing. Even though you are speaking to a big group, you need to figure out the best way to connect with your viewers on an individual level. That means understanding who is in your audience as well as what brought them there.

When completing your buyer personas, imagine them as individuals rather than groups. Step away from traditional market research frameworks that compartmentalize people into standardized, pre-existing categories. In other words, lose the cookie cutter — your core customer segments should be unique to your organization.

Start with real conversations about your customers and prospects. Move forward with an open mind, and don’t make any assumptions. The results you find may surprise you and dramatically alter the course of your marketing strategy.

Here’s an example to consider:

In 2009, Fan Bi started a company called Blank Label when he noticed two consumer problems: (1) department store shirts didn’t fit well and (2) custom tailored shirts were too expensive for average consumers. He launched Blank Label, a custom men’s shirt company, to address that need.

Originally, Blank Label’s team envisioned its customer base to be just like the founders — young men who thought it would be cool to have a customized shirt. What the team found after months of user research through emails, live chats, and intelligence software was that the company’s most profitable customer segment consisted of older men who were doctors, lawyers, and accountants.

In 2011, the company added new features to appeal to what the company’s core customers wanted most. The company also redesigned its website to deliver a more upscale look and feel.


Before


After

We essentially discovered who our core customer was and tried to dig deep with them on what kind of experience they wanted online. That was: a new brand, user interface and close-up photos.
Fan Bi, Co-founder Blank Label via Internet Retailer

These changes boosted the website’s sales performance by 25% to 30% in about a month.

As of November 2012, the company is considering expanding to reach a new consumer segment: women.

Know Your Buyers’ Paths to Sales

Knowing your customers is not enough. You also need a thorough understanding of how their values, behavioral characteristics, traits, and personality traits translate into sales with your company. A key place to start is with your organization’s sales team. Even if you do not yet have a marketing strategy in place, you can start to identify areas where connection-building efforts are already strong. Here are some key questions to address:

  1. What are the most common ways that prospects find out about your company?

    Word of mouth? Referrals?

    Choose marketing initiatives that amplify what’s already working. If you’re noticing significant growth due to personal or professional references, you may decide to implement a formalized referral program to incentivize more opportunities for connections.

  2. What are some of the initial questions they’re asking?

    Incorporate answers to these questions into your company’s marketing messages, sales pitches, and value propositions up-front. Anticipate what your prospects want to know. This strategy will help you build a strong, mutual connection.

  3. What is the typical decision-making process for buying? What kinds of follow-up questions are they asking, and what types of stakeholders are involved with conversations about your brand?

    Expect this process to happen incrementally, over some period time. Your marketing materials should guide your prospects through each stage.

  4. How long does the overall process last? About how much time does each stage take?

    Every marketing initiative should be measurable to assess ROI. You need to make this judgment call at just the right time. If you measure too early, you may not have enough data to truly understand the success of your initiative. If you measure too late, your organization may lose money due to a delay in responding quickly enough. The best approach is to be realistic about your timing. That way, you won’t risk making decisions too late or too soon.

  5. What are common reasons why sales don’t happen? Cost? Lack of fit between your product or service and your prospects’ needs?

    Customer drop-off can happen at every stage of the buying process. By addressing these problem areas, your company will be well-positioned to keep prospects engaged longer.

Evaluate Your Company’s
Conversion Funnel

The conversion funnel is one of the most important concepts in online marketing. It is, in a nutshell, a diagram that paves your buyers’ paths to sales. This concept is so important that even though we’re introducing it now, we’ll be devoting an entire chapter to it (chapter 5) later on.

Keep in mind that conversion funnels vary between organizations and user segments. Your business will likely have more than one.

This tool will help you visualize and understand user behavior at every stage of your marketing. A portion of your website visitors will continue on to reach your final marketing goal. An even bigger portion won’t.

Drop-off at every stage of the funnel is normal. The key is to understand why drop-off happens and to minimize it.

So get together with your sales team, and go back to the drawing board (literally). Conversion funnel diagrams are invaluable tools for piecing together a comprehensive view of your prospects’ psychology and path to sales.

Whatever you do, don’t copy other companies’ diagrams. Your conversion funnel should be something unique to your company that your marketing leads develop in tandem with your sales team — if you’re a business owner or entrepreneur, you’re going to need to wear both hats.

One word of caution is to be connections-minded. Whatever you do, don’t get bogged down by anatomical details. The conversion funnel describes a process, but more importantly, it’s a lens into the human-to-human relationships that your company is building with your prospects. No matter what you read or what advice you hear, remember that you are always, absolutely, and undoubtedly talking about people.

Conversion funnels are just as much about emotions as they are about logical decisions. Make sure that you evaluate, analyze, and pay close attention to both.

Know Where Online Marketing Fits In

Companies leverage online marketing to accomplish the following types of goals:

  1. Build brand awareness about products, features, or services
  2. Engage prospects at both ends of the interest spectrum – when they’re most intrigued and when they’ve gone cold.
  3. Grow business with existing customers and clients.

All three of these aims funnel into the end goal of customer acquisition and growing revenue.

Here are some examples to explain what we’re talking about:

  1. ModCloth runs a be-the-buyer program to help educate customers about new products that they’re thinking of launching. This is a strong way to build engagement and inform customers about new products and services in a compelling way. It’s a strong strategy for letting your customers define your brand.

  2. ModCloth is retargeting me (Ritika) with new products in my Facebook feed. It’s because I haven’t stopped with them in a few months, and they want to re-earn my business. ModCloth ads tend to amplify when I visit their site for the first time after a dry spell. They’ll show me the exact products I spent time browsing (to compel me to buy).

  3. Here is how ModCloth strives to maintain an ongoing relationship with existing customers. After a purchase, they’ll send customers an email to review the product. They also share a reminder that customers who invite friends will receive a $15 discount off their next order. That’s an awesome incentive to spread the word and drive growth for the company. Smart move.

Your marketing plan should cover as much of steps 1,2, and 3 as possible. You may want to address these initiatives increments depending on the position of your business. For instance, if you’ve launched a new company, it will be a higher priority to build awareness. Once your business has matured a bit, you may want to focus on growing business with existing customers or re-engaging cold leads.

Every single marketing campaign should have a causal relationship to revenue. Oftentimes, marketers aren’t sure where to start. With so many options, strategies, and tactics to consider, how do you truly know what’s best for your company?

The answer is simple:

Where does that marketing initiative fit in with your pay to user acquisition?

If you can’t find an answer to that question, you probably shouldn’t waste money on that particular initiative. And if it’s free?

Remember the golden rule: time is money. In marketing, nothing is truly free. Every strategy, initiative, or campaign comes at a price, which is usually an opportunity cost.

Each type of marketing goal will have a distinct conversion funnel and success metrics to measure. We’ll explore these topics in chapter 2. Right now, we want you to have a basic understanding of the three ways that online marketing builds connections with your target customers.

The goals that we’ve described apply to all marketing mediums and channels. At this point, you may be inclined to think that pay-per-click is the best option for building brand exposure (#1) and that email marketing campaigns are the best option for re-engaging cold leads (#2).

The reality is that you can’t think of marketing channels in absolute terms. There are some options than will produce better results than others, but not because one strategy is intrinsically better than the other. What matters most is how each strategy complements and translates into results for your unique business model. Your goals are bigger than the marketing mediums and channels that you ultimately choose.

Some options will work better for you than others. Not sure where to start?

Look to your customers and prospects for answers. Are these the types of people who are likely to engage with PPC ads? Do they respond well to blog content or have time to engage with your company over email? When pinpointing the right strategies to achieve your marketing goals, the key is to start with your audience and work backwards.

Key Takeaways

  • Marketing starts with your customers. Before launching any campaign, make sure to do your due diligence to truly understand what your customers want and need. Remember that they are always the top priority. Why else does your business exist?
  • Beyond prioritizing your customers’ needs and values, make sure to understand the path they’re taking to sales. That means paying attention to your company’s conversion funnel, a topic that we’ll review in chapter 5.
  • Ignore marketing experts who tell you to ‘just start testing.’ This is an over-simplification that will end up costing your company time and money. Instead, you need to start testing with a plan. And that plan should completely revolve around your company’s prospects and customers. No exception.