Using Growth Marketing Tests To 10x Your Results With Noah Kagan

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How To Use Growth Marketing Tests To 10x Your Results With Noah Kagan From Sumo [AMP 088]

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How to Use Growth Marketing Tests to 10X Your Results With Noah Kagan From Sumo

Do you have a product or service that people want? Nothing else matters. Every major company started with a very specific customer, and every business has competition. The easiest way to win is to pick a more specific customer to serve. So, pick a target customer, and be very strict about it.

Garrett Moon, CoSchedule CEO, recently wrote the book, 10X Marketing Formula: Your Blueprint for Creating Competition-Free Content That Stands Out and Gets Results. Fortunately, Garrett recorded the interviews he conducted for the book. In today’s episode, Garrett’s 10x interview is with Noah Kagan of Sumo, AppSumo, and Briefcase. Noah continuously pushes the edges of marketing and growth.

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AMP088: How To Use Growth Marketing Tests To 10x Your Results With Noah Kagan From Sumo
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Some of the highlights of the show include:

  • Focusing on eCommerce has positively transformed Noah’s companies
  • Growth Hacking and Marketing: How to find channels that have not been fully utilized or abused
  • What has helped grow your business? Do what works; go back to the basics
  • Favorite Growth Strategies: Determine what new marketing channels will work; and platform marketing
  • Proactive Dashboard: Has to be controllable; you can’t be dependent on anything
  • As a marketer, what is one thing you can stop doing today? What are you wasting your time on?
  • Noah’s companies perform testing and validation on how they can get more traffic and on-site optimization
  • Use content to grow your business; what’s unique about what you’re writing
  • Social vs. search content; one is short-term, and the other is long-term options
  • Process of understanding your target audience: Which customers have the highest lifetime value? Which have been the easiest for the sales team to talk to?
  • Noah’s companies have made two major shifts when focusing on customers: Qualified sign-ups and content related to eCommerce
  • Revisit pricing and customers; contact customers via the phone for feedback
  • Segment your audience to understand them; but don’t do it too early
  • Find a product you love, and let specific people in the world know about it; help people 1 by 1

If you liked today’s show, please subscribe on iTunes to The Actionable Content Marketing Podcast! The podcast is also available on SoundCloud, Stitcher, and Google Play.

Quotes by Noah Kagan:

  • “It turned out the customer base was so big and so broad that it was hard to actually help people.”
  • “Do you have a product or service that people want? If you don’t have that, nothing else matters.”
  • “Growth marketing…how are you finding channels that haven’t been fully utilized or abused as an opportunity for growth?”

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Transcript:

Garrett:

Hey, everyone, this is Garrett, again, and welcome to another TENX marketing formula exclusive interview. Today I have the pleasure of hosting Noah Kagan. Friend, entrepreneur, he’s the founder of Sumo, which I’m sure you’ve heard of, as well as AppSumo. He’s number 30 at Facebook, number four at Mint, where we worked in growth marketing. He’s just a great guy that continues to push the edges of marketing and growth.

Welcome to the show, Noah. I always think it’s weird to call it a show, but welcome.

Noah:
Thanks for having me.

Garrett:
I kind of buzzed over a bunch of different things there in your background, but maybe just for our listeners, just kind of give a little bit more of an overview. A lot of these guys are marketers, so they haven’t necessarily been involved in startup, so kind of talk about your background a little bit and what you’re working on.

Noah:
Yeah. I came out of college, I was a cubicle monkey at Intel, so I didn’t really … I played with spreadsheets and I ended up just submitting my resume to Facebook, and that kind of got me really into the startup world, this was 10 years ago now. I’m a dinosaur in internet ages. Yeah, it’s been a ride ever since. I did project management there. I did all the marketing at Mint.com when they launched, and then since then I’ve started a few companies. The main ones now are Appsumo.com, which is about a million person email list. It’s kind of a Groupon for geeks, or daily deals or weekly deals for small business owners, and then we launched Sumo.com, which were all the tools we were using at AppSumo to grow. Sumo.com is mostly free email tools to grow your email list.

Actually, we literally, today it’s a little hectic. We just launched Briefcasehq.com, which is a Netflix for software. So, basically, all of our tools are helping the small business owner. Briefcase is basically like, “Hey, you’re a small person. Here’s the tools you’re gonna have to need to run your online business.”

Garrett:
Nice. I love Sumo, guys. I think it’s just a bunch of growth tools, and I think they’re always kind of … For people who haven’t checked it out, there’s all kinds of different ways to build your list, to analyze your site, and just a bunch of really cool free stuff, that works for growth, right?

Noah:
Yeah. I think one of the things I’ve gotten more interested in and excited about, and I think most marketers know it, but it’s hard for us to do it, is just pick a target customer, and be very strict about it. I think everyone has the cliché lines, like, “Yeah, target customer. Yeah, double down on what’s working,” and all these kind of things that we know in theory, but in reality, it’s hard to sacrifice.

But, I’ve seen really interesting results from us, by picking more specific customers, as we’ve continued our business.

Garrett:
When you say, “Hard to sacrifice,” what do you mean? Hard to sacrifice other activity?

Noah:
Yeah, it’s hard to sacrifice money, especially if you’re a small business, it’s easy to be just like, “Oh, yeah. I want that money. And, oh you have money?” It’s hard to say no to that. For Sumo.com for instance, we originally just built email tools for anyone, and then two years ago, we’re like, “Oh, it’s just for WordPress.” That was great, because it got us a lot of growth, but it turned out the customer base was so big, and so broad, that it was hard to actually help people.

Recently, in the past three months, we’ve now been even more laser focused on e-commerce. I’ll tell you man, that’s like, transformed our business. It makes everything easier. It’s made the product better. It’s made the sales team better. Just because everything is focused around one type of customer.

Garrett:
Very nice. That’s pretty cool. I think what we’ll kind of dig into a little bit there, is kind of how you got to that decision. Because, I think, there’s obviously a lot of experimentation and measurement that goes into it.

You said at the beginning, you’ve been doing this a long time. You’ve been doing growth marketing and growth hacking before it was a thing, before it was called growth hacking. How do think about growth hacking and growth marketing? How do you define it yourself?

Noah:
More and more as I’ve been around the internet for, I don’t know, 15 years, give or take now, I don’t think there’s growth hacking, right? It’s like, “Oh, how do I cheat the system?” You see a lot of this on LinkedIn. “How do I get these group people? I can scrape them and I can do some other sneaky thing.” The way that I look at it is, number one, everything is all about number one and that is, do you have a product or service that people want? If you don’t have that, nothing else matters. I think a lot of people get confused with that. They’re like, “How do I fix my marketing?” I’m like, “You don’t have a marketing problem. You have a business problem.”

It’s like, “What is the problem you ware solving? Who is that customer? Where are they?” Is the easy parts. If you have something you assume that people really like or people do love it … Growth marketing, the way I look at it is, how are you finding channels that haven’t been fully utilized or abused as an opportunity for growth? I’m sure there’s a more nice, I’m trying to be politically correct. But, a lot of massive growth comes from, “I figured out a unique business problem and I figured out a channel that hasn’t been tapped before.”

What are examples of that? It’s like AirB&B on top of craigslist, so they spam the shit out craigslist. Facebook, it spammed mailing lists at colleges, that was a big one. You can look at PayPal on top of Ebay, that was anther one that happened. It’s more of like, What channels haven’t been fully maximized on? You know, YouTube probably early on, same thing. Instagram, earlier on. That’s the kind of thing I think is growth hacking, which is, how are you finding channels that other people haven’t fully utilized and you have basically first mover advantage around them.

Garrett:
Yeah, for sure. I think one of the ones I talk about in the book is, as a growth hack, it’s not even necessarily seen as a growth hack, but I’m sure you’re familiar with Groove HQ and Alex’s Blog, where they started talking about their internal numbers and stuff. I think that’s another way to do it, is you start talking about, there’s like a journey to $100,000 in monthly revenue and just kinda open up the kimono. You start doing it in a way, it’s a new channel or you start doing that an existing channel in a way that no one else has tried before.

Noah:
Exactly.

Garrett:
‘Cause you kinda have to add a new spin to it.

Noah:
Yeah, and I mean the one thing we were talking about as we just got started is that most of these growth attempts aren’t going to work. I think people either don’t realize it’s not working or don’t just don’t more of what is already working. Most business owner’s I’ll talk to, including myself and I’ll be like, “Hey, in the past 12 months, what’s helped you grow your business?” And they’re like, “Oh, you know did outbound sales. I just reached out to five people a day on LinkedIn and now it’s growing.” Then I say, “Well how much are you doing of that now?” They said, “Oh, I stopped, because I heard content marketing is a thing, so now I’m blogging al the time, ’cause it’s supposed to be easier.” I think a lot of times, for myself I’ve noticed it’s just, go back to the basics and keep doing what’s working.

Garrett:
Yeah, absolutely.

Do you have, along that line, of finding something that works, do you have kind of a favorite growth hack or strategy? One that you’ve used or one that you’ve seen anybody else use?

Noah:
The two things that I would say, number one is our framework for how we’re actually going about making attempts at seeing what new marketing channels are going to work. I call it a proactive dashboard. I got it from my buddy Dave Hauser, from Grasshopper.com and so literally every week we’re going to assign a text. The person on the team, the content marketing team, they haver to do one email marketing test. We have a full-time promotions’ person, so he just has to do one new promotions test. I think having that kind of regular routine and consistency of testing things, just kind of forces us to find stuff that works. The reality is, most things don’t work.

Almost this whole year nothing worked. In the past, maybe four months two things I’ve noticed have worked for us in our different business units. LinkedIn has been a really interesting channel, where I’m posting things on LinkedIn and getting 50 to 100,000 views and like 1,000+ clicks. I don’t have like a super large following there, so it’s interesting to be like, “Oh, this is all business people, this is a newer channel, there’s something happening there.” That’s definitely been one of the, there’s definitely been a bunch of times to finally find that. We tried Pinterest and Cora and SEO and a lot of that stuff we didn’t really get great results from.

The second stuff that I’m actually getting more and more excited about, is platform marketing. Let’s take CoSchedule is a great example. WordPress is a platform that you guys are marketing on top of, and so I think more people can try to think of how do they dedicate a person or developer or just a lot of their attention to a platform where their ideal customers already are. I think there’s a lot of opportunity around that.

Garrett:
That’s pretty cool.

Let’s go back to this. You said you guys had your proactive dashboard, right?

Noah:
Yes.

Garrett:
Is there new test? Is it once a week? So there’s 52 different things that you tested on that spreadsheet?

Noah:
Yeah, yeah. We tried a lot of different stuff.

Garrett:
So, there were like kind of like two out of 52.

Noah:
Yeah, most stuff doesn’t work. We’ve done even AV tests across our business, you know where you optimize where you put buttons and the colors and all that stuff that you read in blog posts that it sounds like everything works. I always love sharing it, but about 86% of our technical tests just across our business over the years did not work. Just to get people positive affirmation, if most of your tests are working, one, you’re amazing, but the reality of it is, 90% probably won’t work, so just have to go through a lot of them.

Garrett:
I always think about, what’s the risk if you’re not testing at all, right? If you just kinda picture one horse and you’re riding it, if two out of 52 different tests, that’s a success rate, what’s a success rate of just picking one? That’s a pretty big risk.

Noah:
Yeah. I think the only discouragement I would try to give people is that I think a lot of people start doing testing too soon. They don’t have a lot of money they’re making or they don’t have a lot of traffic and they’re like, “Well I got AV test on my way to success.” I just don’t think that’s the way it’s going to happen. I think you should do those kinds of tests once you’ve gone to some scale or size where like a 10% improvement will make a dramatic impact to your business.

Garrett:
Right, for sure, for sure.

When you’re building out that dashboard, how do you determine what makes it and what doesn’t make it on that list?

Noah:
Here, I’ll pull it up right now. We have two, we have one for Sumo.com, we have one for different, each unit. The idea with the proactive dashboard, the reason I love it is that it has to be fully controllable by you. What does that mean? It means that you can’t be dependent on anything, so most of the metrics that we’re looking at as marketers already happened. Revenue, it’s already happened. Paid dues, it’s already happened. This dashboard is solely things that each week that we have full control over and it’s a living tracking, it’s a living dashboard. Meaning, we’ll do things and as we see that it’s not impacting that secondary number or that retroactive number, we’ll cancel them.

Let me go through, you want me to go through a few of the ones that we have currently?

Garrett:
Yeah, that’d be great.

Noah:
There’s three different teams on Sumo. They’ll have a corrected dashboard, so there’s advertising, content and then partnerships. Advertising has to spend a certain amount and that’s totally controllable by us. Content team or, one more, they also have to do a certain amount of ad variations. You can run as many ad variations as you want, totally controllable by us. I think we want to spend $7,560 a week in ads and we want to do five new variations of our ads each week. Then content team; how many articles they publish; how many headline tests they run; how many email opt-in tests; how many marketing promotion tests and how much ad spend. The whole thing here is that everything has to be controllable by the person.

What we do, after we do this stuff on a weekly or monthly basis it’ll be like Cora for instance, we had to do five Cora posts a week. After, I think like two, I think it was around two months of it, I was like, “We’re not seeing, we saw 1,000 visitors in Cora.” So we’re like, “Okay, that is now no longer on our proactive dashboard. Now lets try another channel for that.” It’s kind of like an ongoing living thing.

Garrett:
Now, is that because you weren’t seeing the activity you wanted from Cora or you just felt like you had enough to look at the test and kinda see what the long term results would be?

Noah:
Yeah, that’s a great question. When do you know to stop it?

Garrett:
Yeah.

Noah:
Some of that’s subjective. What we realized is that we were trying Cora in LinkedIn and for the same amount of time we were getting like 10 times more traffic back from LinkedIn. It seemed to make more sense, it’s like, “Alright, well this is 10 times better.” I think that’s actually what marketers don’t do well and if everyone listening or reading your book, if I can recommend one thing, just think about what’s one thing you can stop doing today. Not something you can add, but just, “Okay, what am I wasting my time on that’s not really doing anything?” We had had an Instagram, for instance, we have 100,000 followers. I swear, we made literally zero dollars from our Instagram account, zero. Either we suck, which might be the case, but I don’t think we totally suck, but the reality is, is that as marketers and business owners, it’s really hard just stop things.

Garrett:
Really?

Noah:
But, that’s definitely, I’m not perfect, but I definitely think that we’re always working on.

Garrett:
You know, I think that’s really really good, because I think we talk a lot about it in the book or I talk a lot about marketing plans and how they’re essentially these plans of saying, “Okay, over the next year these are the five things that we’re going to do in order to be successful.” The problem is you just run them. You just do them no matter what. Whether the results are there or not. Often times, the hardest question to answer is, “Well, what should we be doing instead?” We flipped that around, we used to say, “What do you stop doing?” You kind of are forced then, is that kind of how you think about it? You’re forced to fill in that gap, just because you know, “Hey, we’re not going to do this, we’re gonna fill up all this time. We gotta try something.”

Noah:
Yeah. I think there’s a few different ways of thinking about it, which is one, four days a week do what works and then one day a week you can experiment. As a marketer, I have some major business units, I don’t know major, we have businesses and four days a week I work on that. One day a week I work on OkDork, my podcast or YouTube and just kind of my experiment days and because it’s at a quicker iteration, I can then loop those back into the main business. We’ve seen really interesting results from that. The other thing that we’ve done, might be helpful for other people out there is that on our agenda’s, on our weekly check ins we have a section that’s “What can we stop”, just having that there forces us to be like, “Is there anything we can stop? No, nah. Alright, let’s keep going. Oh, maybe there’s that thing.” Then we actually have space to discuss it.

Garrett:
Yeah, I love it. I think that’s the essence of it, if there’s something you can stop doing that gives you the opportunity to put focus in better areas, why not? Why wouldn’t you do it?

Looking at some of those things, do you have a system that you use to test and validate whether one of those ideas on your dashboard are worth continuing versus dropping? Is there something in specific that you’re looking for and do you decide that before you run the test?

Noah:
No, but we probably should. We probably should have, “Here’s the type of outcome.” I think when we have done that, it’s worked out well, it’s like when we launched the giveaway. Giveaways have been huge for our business and normally we would say, “How many entries are we expecting?” We’ll model it out. Then we can either one, improve it during it or we can be, “Alright, this is not something we want to continue doing.” No, be we don’t have as much of a hypothesis on every single one. For most of the … there’s two types of one that we’re done. One, which is, “How do we get more traffic to the sight?” We can just see how much traffic is coming through UTM. The other types of tests we’re doing are more onsite optimization. How do we optimize to get more email opt-ins? Those would be a weekly test that we’ll run around it.

Garrett:
What does success look like then? How do you guys know when you found something that really worked?

Noah:
It just always keeps going, it never ends. If we find something that works, then we’re going to test that again and then we’re going to test something different, so it’s just each week. The thing that I actually do, I don’t tell the team what to test. I don’t come in and like, “This is what you have to do this week.” It’s just, “You have to run a test this week.” It’s more of a mentality of how are we just constantly improving it?

Garrett:
Yeah, for sure. I love that.

I keep thinking about the iteration, the iteration process is very good.

Let’s talk a little bit about content, I know that’s been a really big piece of it. It’s what you’ve done at Sumo, it’s what you’ve done at your own site, OkDork. How have you used content to grow your business? What type of results have you seen from it?

Noah:
Content has been hit or miss, I’ll be honest. When I started with Mint.com, back in the day content was gigantic for us that helped propel the business sell for $300 million. It was definitely one of the major things, besides a very good product. I think one thing I would think about with content is that, how can you work backwards from an audience? How can you work backwards from a read it, sub read it? Where you can just write to those people, Or, how can you just write to a certain site that you know that those people are going to come to you or Facebook group or whatever it is? I think too many times people are writing, throwing it out there and then just praying.

Garrett:
Yeah.

Noah:
Like, “Oh, I hope someone comes and reads this. Find me randomly on the internet.” That’s just not the case. With AppSumo, for instance, content has been zero. We’ve almost gotten zero revenue or growth from our content, while with Sumo.com it’s a significant part of our revenue. For each business, it varies. I can’t always say, “You have to write a blog and you have to do it.” I think the second thing, as I said, you find and audience and then figure out what’s the unique thing about what you’re writing about. Everyone writes these articles now and the bar is higher. We have an image and it’s 3,000 words and there’s a graph and there’s some stupid meme images. I think each person probably has to say like, one of my favorite things is, “What do you have proprietary that no one else has?” What is something that you can do that no one else can do and no one can copy it? If that’s generally the first thing I look at, and kind of with that too, is like, “What are you going to be known for?”

With the Sumo blog, we’ve picked this thing called, Growth Studies, Sumo Growth Studies, which are basically like, they’re really books. It’s 80 page insanely deep dive researched articles around how people have grown and then we’ve also done some data articles, which have done well for us, which is how much email pop-ups or what percent should you be showing a pop-up, all around growing email lists.

Garrett:
Have you guys found kinda some secrets to finding that? Certain topics and angles that you’re putting on your content that really work well for your target audience versus those that might just bring traffic, but not really give you the results you need. I kinda call those, core topics versus parallel topic, which gives you traffic, but no results.

Noah:
I kinda look at it as … I think that’s a great way of framing it. Another way I’ve kinda considered it, is that there’s social traffic and then there’s search traffic. Some of these articles are … These Sumo studies are not generally going to be searched, right? So, it’s Supreme Growth Studies, you know, that’s one of the articles that we put out recently. People probably aren’t going to look for how to supreme grow, but it’s something you’re going to get, send it to your friend, find it, send it another friend. Then there’s going to be more of like our SEO based articles, like How Do Pop-Ups Blah Blah Blah? One is going to have a short term one, and one is more of a longer term one. That’s the kind of the model that we’re using today. The thing that we’ve generally have looked at, is that which articles have driven the most new signups and those two types of topics have been the best ones for us. Major deep dive studies, data articles related to SEO long term stuff and then we basically do those at least on a weekly basis.

Garrett:
Very nice.

We’ve talked a lot about your target audience, it’s come up several times in kind of what you’re talking about and before we started the recording we were talking about a little bit. Can you kind of walk me through that journey of kind of how you got to understanding your target audience for Sumo and what that process looked like?

Noah:
It’s been, man, we’ve been doing Sumo.com for almost four years. The customer has changed a lot, originally the customer was just us. Then it kind of has gone along with our pricing, where we had basic pricing was like buy one time. Then we were like, “Oh, let’s make a recurring.” What we did is pretty, it seems simple now or in retrospect, but we basically looked at which customers turned the least and/or have the highest lifetime value and/or which ones have been the easiest for the sales team to talk to and once again on the phone it’s an easy sale. I think if you work backwards form that, it becomes much more obvious.

What we noticed, is that we would go and try to reach, let’s say New York Times, and we would be talking to these large publishers. We’d say, “Hey, we’ll help you grow your email list.” It was just as very hard sell, because they didn’t really value that as much as getting more ad revenue, more traffic. Then with WordPress people, like let’s say a food blogger or a mom blogger, they’re great, but they actually don’t make as much money. For them to spend on things is hard for them to look at is as an investment, because it’s hard for them to get the ROI, because they don’t make much money.

What ended up happening was like, we’re like, “Which people, when we talk to them on the phone they’re just like it’s a no brainer for them?” It ended up being e-commerce. The second-tier people could be like SAS people or info-marketers, but the reality was just like, “Hey, we go to e-commerce site, ‘Hey, you sell this product, if we can double the amount of emails you’ll sell this much more product. You’ll make this much more money. Yeah, it’s a not brainer, let’s do it.'”

Garrett:
How did that change your approach to marketing and content?

Noah:
Oh man, it changed everything. That’s a big one, and we’re still working through it, so I can’t … you’re hearing the play by play as it’s going with maybe in six months or 12 months you’ll hear how it ended up working. Originally we’re like, for let’s take the blog for instance, it was like, “Get more traffic.” I think that’s fine, to give people that kind of goal when it correlated to more revenue or whatever the outcome you want is. “Hey content team, this is your goal. Traffic.” They doubled, they tripled the amount of traffic, but our revenue didn’t double or triple. There was a disconnect and non-alignment around the business. As we focus on an e-commerce customer, we shifted it more to, “How many new qualified e-commerce sights have signed up through the blog?” Marketing qualified leader sales, marketing qualified lead, sounds a little too technical for me or too, I don’t know, makes it take away that it’s a human.

The content team has done two things, so now they’re responsible for qualified signups. Not just like getting a million views. I was looking at the buffer blog, they got 1.6 million views this month and only 1600 signups. I was like, “That just seems like a lot of work for so little people to sign up.” I think people need to worry less about how many page views or how many, “Oh, I got this many sessions.” It’s like, “Well, what’s the quality of that?” That’s number one, which is we moved them to, instead of a volume target a quality target.

The second part is, who are you writing for? If you looked at our blog in the first six months of this year, it was literally all over the place. It was, “Grow your email list. Start a business. Social shares. Heat Map.” If you look at it in the past two months, we’ve 100% focused on our customer. Is this an article related to e-commerce? If it is, we write about it, if it’s not, we don’t, or we tailor it to the, or we fix it so it is about e-commerce. Those have been the two major shifts as we focus our customer.

I’ll tell you man, if anyone picks a customer, it’s just so damn nice. It’s like relaxing, you’re just like, “Oh, I just have to serve you and make you really happy and not worry about anyone else?” It’s a hard thing to do, because it means you’re giving up someone else.

Garrett:
I think, one thing, I want to try and paint the picture here a little bit is, it’s just about the learning that was required to get there. I think that’s what’s really interesting to me, right? We started out with you guys launched Sumo.com, it’s like, “Well, we have zero traffic. Now we just need to figure out how to get some traffic.” That’s A number one, you can’t come out guns blazing, like, “We’re going after e-commerce,” ’cause you don’t know. You have no idea, its you’re third or fourth iteration to get there. I always think about this traffic phase, I think it is a phase of business in marketing where you have to have it to understand, but long term it’s not gonna be enough to sustain you.

Noah:
I mean, we started off, it’s funny, I like what you say, which is in the beginning I was like, I just wanted anyone to use what we had. Most of our products, we were actually completely free for the first year and so its one of these things where I think we did a good job of every six months revisiting our pricing and our customer. It’s so funny, ’cause now when I’m talking about it, people are like, “Oh, you just found a customer. Just snap, picked it out.” No, I mean, this took, what month are we in? We’re in November, we basically started looking at which customer to chose, give or take around March. Nine months of like, “Alright, let’s run pricing analysis, let’s go talk to customers on the phone, let’s talk to the sales team, let’s look at which articles are doing really well for us and, which ones aren’t.” It’s definitely a long process.

Garrett:
What types of things did you use to make that transition? How did you look at the data? Were you just trying different audiences and seeing how they performed? Were you talking to people? What were some of the things that you tried in that nine month period?

Noah:
Phone calls are great. I think people, especially on internet, we hate talking to people that’s why we do internet businesses, but if you can get on the phone … What I’ll do now sometimes, is on some signups, I’ll just call them. They’re like, “What are you doing?” I’m like, “I’m just talking to you.” They’re mind is blown. You learn a lot, like, “How did you hear about us? What are you hoping happens?” On one qualitative side, it’s just talk to a bunch of customers. You can kind of tell who’s excited to give you money, who’s not canceling, how they’re benefiting from it or not. I would do the qualitative side. On the quan side, it was pretty straight forward, if you look at our turn rate to LTV, the e-commerce customers have no problem paying some money and then the turn was very little because once it’s set up it’s just good to go for them.

A mom blogger, a food blogger or a dad blogger, whatever, garden blogger, they’re great, but in terms of the value that we provided, it wasn’t there for them. We do have a free offering and they can use that, but in terms of the paid sustainability of our business it wasn’t happening. The same thing on the super high, those people were canceling. At the end of the day, they’d be like, “Alright, we’re not paying $2,000 bucks a month for some share buttons, it’s not worth it for us.” That’s hard, ’cause you’re like, “Oh, no. Please don’t leave me. Dad, no.” It’s like you can’t serve all of them really well.

Now that I’m looking forward into the market, there’s a lot of different tools, everybody’s got competitors, that’s one thing I’ve definitely become much more clear on. Every restaurant has competition. Every business has competition and I think one of the easiest ways to win is just picking a more specific customer to serve. If you want to be like us, we help people grow email lists, but we’re on e-commerce only. There’s probably some room like OptinMonster on the WordPress market or there’s Bounce Exchange on the super, I think a ripoff, expensive market. It’s like 10,000 a month for pop-ups. I think the more you kind of carve out those niches it becomes easier and you probably do it to the market that you like serving. I like serving real businesses, I don’t like serving entrepreneurs. That’s kind of the market we started working towards.

Garrett:
I like it. I like it a lot.

One question I have and now we’re going to get kind of deep is, how do you go about segmenting your audience in the first place to really start to understand them? If you’re just taking inbound leads, people that are just coming to your blog, signing up for an email list, maybe jumping in a trail, were you guys doing that manually? Did you develop ways to automate that in anyway?

Noah:
We haven’t done a great job of it. I know there’s a lot of tools. I think people get too excited about segmenting and doing tools way too early. No, we haven’t done a phenomenal job of that. Right now, the sales team and the marketing team and the product team, it’s pretty black and white, it’s like, “Is this product? Is this sales call? Is this marketing article? Is this Facebook ad? Whatever it is, towards a qualified customer or not?” If it is, we do it and if it’s not, we don’t. We pretty much, I mean, we did it on a pretty much, pulled the rip cord right away on all those things.

I will say though, it takes like a month to actually fully adjust and were’ still, maybe not a month, maybe a few months to actually fully adjust moving towards targeting a customer. You have to be strict, ’cause you know a person on my team was like, “Hey, well I still want to do this one ad to this person, ’cause it drove a sale.” I’m like, “Is it for our qualified customer or not?” She says, “No.” I’m like, “Come on, come on. Let’s go.” You have to be a little strict about it. We do weekly check ins on it to see how we’re performing on it against the goals. It’s definitely, it’s a process.

Garrett:
Absolutely, and like you said at the beginning, it’s hard to say no to money, right?

Noah:
It’s hard, especially if you’re just starting out. When you get big it’s easier, but what I’ve noticed, it’s almost and this not like I say, but like people don’t get it or maybe I don’t get it, but every major major company started with a very specific customer, every major company did. Google, they did research for PhDs, Facebook, Harvard, Dell, the UT campus; Microsoft does developer tools. Everyone started out super narrow and then they went wider, but that’s still, you kind of lose that in the grand scheme of things.

Garrett:
I like this, I think we’ve kind of gone full circle. We’ve talked a lot about, you’re just testing ideas, you’ve got two out of 52 that worked, now to where kind of used that learned. Everything you’ve done along the way to kind of really refine and find the target customers that’s gonna work and gonna help you scale. I think that’s really cool and I think that’s a mindset of somebody who’s combining business and marketing. It’s all one system, right? You’re a founder and marketer. You do that very naturally. For somebody that’s more traditional in marketing, what do you think are some of the mindset changes that they might need to make or just ways to approach their work that will help them do that as well?

Noah:
I was trying to think about what I would recommend for everyone. I don’t think I’m actually a great marketer and I don’t even know if I’m that great at running businesses. I think what I’ve actually done really well is I find products that I just love. Then it’s my responsibility to go tell the world about it, not the world, but the right people in the world about it. That’s what I do in marketing, I’m not a genius marketer or anything. I just like, “Oh, that’s a cool product. Oh, that person probably needs to know about it. Now, let me do whatever it takes to make that happen.” I think for other people out there that want to improve their business or marketing acumen, I think the easiest easiest thing, besides finding a product you love, is go help people one by one. I think it’s a common misconception I’ve seen in marketing and in business where they’re like, “I gotta scale and I’m gonna spin all these Facebook ads and I gotta trey to figure out Reddit, or I gotta do content or PR,” or some other thing.

If you kinda come back and just go one by one, either do live chat, do phone calls, do in person, do a manual service, I think that really helps you understand the customers better, helps you understand your business better. I think long term that’ll help you do really well. I still talk to some of the, literally the first AppSumo customers, his name’s Ruben from BidSketch.com, we talk almost every week. This is cool, I mean, I think sometimes with internet you kind of disconnect that you’re helping a real person. It’s not just an email address or a stripe invoice id. I think the more you comeback to those one on ones, it really builds up your skillset.

Garrett:
I think that’s great. I think you said … Here’s what I would take from that, you can tell me if you agree or disagree. I would say the biggest thing there is you said, basically, is, “I don’t know.” I said, “What’s the mindset you have to have for growth?” And you said, “I don’t know. I don’t know all the best marketing techniques. I don’t know all the best business techniques. I approach my work as if I don’t necessarily know, so I’m going to have to try a lot of different things. I’m going to have to talk to people every single week to keep me focused and to help me figure out what the next stone on the path is.” Right?

Noah:
Yeah, that’s one of the things that’s funny. People recognize me a little bit, I guess I have some attention. People are like, “Oh, you know this stuff.” I think one of the things that’s helped me do well is I generally just don’t know it all. I think if you can keep that mentality of being, not completely naïve, but naïve and humble, I think it served me well so far. I think it’ll continue, yeah, I’ll just keep not knowing things. We’re working on Shopify lately and I just reached out to people and like, “Hey, can I talk to you? Or, can I pay for consulting? And, can you just each me?” It’s been fun and people are like, “Oh, don’t you know Shopify?” It’s like, “No.” I think when people start thinking they know everything, they know all the marketing channels or they know all the stuff, it just always works, it’s probably when they start losing.

Garrett:
Absolutely. I think that’s a great summary. Just keep not knowing things. I think it’s a great takeaway from … Keep not knowing things like Noah Kaagan. How about we just end on that. Right?

Noah:
Yeah.

Garrett:
No, it’s been really good. I think that’s awesome. I love how you’ve kind of taken us through kind of those early traffic days into kind of focusing on a very target customer and kind of doing it with that mindset of, “We don’t necessarily know it’s going to work, but we have a system and a process for figuring things out.” I think as long as you have 52 things that you’re going to test a year, you’re going to find a few gold nuggets in there. There’s probably some good 10% wins along the way, too. Right? With some homepage AV test that just worked. It’s not the big win, but it was definitely a nice improvement and step on the journey.

Noah:
One thing that I can give to everyone out there that’s just like, it’s kind of a stupid one Garrett, but I do this a lot, is that I step on the scale and I think that when we’re feeling fat or if we’ve eaten a lot in a weekend or cheat meal or whatever, we’re like, “Oh, I’m not gonna look at the scale.” I have a scale right in my bathroom and I’m always stepping on my scale. The point for everyone out there is just like, if you’re doing something and you do it every week and you’re honest with yourself, it’s almost impossible not to improve.

That’s kind of what we do with all of our metrics. A lot of the stuff doesn’t work and we just keep going and keep stepping on the scale.

Garrett:
Absolutely love it. It’s really good stuff. Thanks Noah for being on the show. Where can people find more out about you if they want to learn a little bit more?

Noah:
The two companies and now three, we have a third one coming out, I guess just born today. AppSumo.com, if you’re a small business owner and you want deals on products, check that out. Sumo.com, free tools for email lists. We just launched the Briefcase HQ. A lot of this is like me in software format, me and a bunch of people in software format. If they want to check me out on podcast or YouTube, just search Noah Kaagan. I got a podcast on YouTube channel.

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