The Incredibly Valuable Opportunity Gap Between Relationship Marketing & Conversion Marketing

The sweet spot is in the gap between conversion marketing and relationship marketing

In digital commerce businesses, there are essentially two schools of thought. For the purpose of this piece, I will call them Conversion Marketing and Relationship Marketing.

Whether a business is in one or the other school is largely determined by the promise the business owner was sold at the beginning of their digital commerce journey.

In Relationship Marketing, the promise is this: you can create content that people love, causing them to love you in turn, and causing them to buy what you sell as a result. You create relationships with people through your digital persona and that relationship builds enough trust to prompt an eventual sale.

This promise is predominantly being sold to life coaches, health coaches, bloggers, brand strategists, career gurus, lifestyle mentors, and anyone tempted to create a clever entrepreneurial portmanteau for their title. It’s being peddled (at surface level) predominantly by beautiful women and the men who adore them.

In Conversion Marketing, the promise is this: you can create content that people are in need of, causing them to click on an ad or message with that content in it, allowing those people to become aware of a product you are selling, and then converting them to a customer over time. You fill information gaps with knowledge (via experience or research), put it in front of the right people, and so precisely fill the need those people have that a certain percentage of prospects will always buy.

This promise is predominantly being sold to niche information marketers, agencies, business service providers, and SaaS entrepreneurs. It’s being peddled by guys who made their first millions selling ebooks to Scrabble-tile jewelry makers and gun-hoarding survivalists.

The building blocks between the two methods are virtually identical. However, the philosophies behind them and the procedure for exploiting them couldn’t be more different.

I predominantly work with business owners in the Relationship Marketing school. I primarily network with and learn from business owners in the Conversion Marketing school. My own business has been built squarely in the incredibly valuable opportunity gap between the two schools.

When I talk to people steeped in either school of thought and introduce them to the “prevailing wisdom” of either, they’re floored. They often don’t even realize the other school of thought exists. This might seem crazy–but it’s true. 

If you want to generate more revenue, grow your business in line with your personal values, and still put a lot of heart and soul into everything you do, building your business in that opportunity gap is the only way to do it.

WHY RELATIONSHIP MARKETING DOESN’T MEASURE UP

The core problem with Relationship Marketing is not that it lacks strategic rigor (it does), it’s that liking you isn’t a good reason to buy from you. It relies on manipulating the potential customer into thinking that hanging out with you is in their best interest.

If you wouldn’t charge someone to hang out after school with you to try the newest neighborhood ice cream stand, don’t charge someone to hang out with you online to talk about the latest personal development trend. Liking or hanging out with someone is not a value proposition.

Good, well-meaning people fall into this trap. Every time I see a sales page that’s focused on helping you speak your truth or live your best life, I know that trap has been sprung. If I can’t tell how your product aligns with a customers’ true need or goal, the effect (whether intentional or not) is asking people to hang out with you for a price.

Another big problem with trying to be likable so others buy from you is that you end up changing yourself and your choices to appear more aligned with what your perceived audience likes. This does not necessarily mean just making your hair blonder, your waist thinner, or your yoga mat cleaner. It also includes becoming more vulgar (if that’s your schtick—and there are more than a few of those folks out there), becoming geekier, or telling everyone how much you don’t GAF precisely because you really GA a lot of Fs.

You were attracted to this form of marketing so that you could just be yourself and, instead, you find yourself becoming someone else. Of course, “being yourself” isn’t marketing. Being yourself is being yourself—something we should all be able to do regardless of the ROI on who you are.

Finally, likability doesn’t scale. You will get people who will buy from you just because they like you. Often, you’ll get people to buy from you just because you bought from them. But in the end, if you’re not delivering something people actually need, your offers will peter out and you’ll be forced to find new ways to get the same people to pay to hang out with you.

With incredibly few, unreplicable exceptions, if you see someone who has predominantly marketed themselves or their business on their likability factor that has scaled to mass volume, you can bet they’ve put some serious money, strategy, and analysis into that success.

Have you fallen into any of the traps of Relationship Marketing? Here are some things you might have thought over the years that indicate you have:

  • I can’t email my list any more than this because they might not like me and unsubscribe.
  • I don’t want to write good headlines for my blog posts because people will think I’m just like those other guys.
  • Everything I’ve done so far has been really organic, if I try to get strategic now people will probably leave.
  • I shouldn’t need to advertise—people should just be naturally attracted to what I’m creating.
  • I’m not going to use a popup because if people like my content, they’ll find a way to subscribe.

The truth is that there have been times when I have said or thought these things too. However, because I study Conversion Marketing, I know that each of these things is proven—over and over again—to increase ROI, customer satisfaction, long-term growth, brand awareness, and more.

But let’s look at Conversion Marketing more closely.

THE WILD WORLD OF CONVERSION MARKETING

For our purposes, I’m going to define Conversion Marketing—also known as Direct Response Marketing—as the practice of using analysis and metrics to understand a market, create to their specifications, and scale. 

There are a number of problems with pure Conversion Marketing as well. The first is that most people selling to aspiring success stories in this space are selling a formula or proven procedure for results. It can seem like making $10k every night while you’re asleep is just a 5-step process away.

The thing that’s so seductive about these processes is that there is a lot of good information and strategy behind them. You can learn a lot by immersing yourself in one of these formulas. However, the wholesale execution of that same formula will likely not bring about the promised results.

This is because the creators of these formulas discount their own knowledge and understanding of the markets they’re selling to and, also, other people’s formulas. As an example, Ryan Levesque—creator of the Ask system—has made millions of dollars in unusual niches following the survey funnel system he teaches. However, when it came to a mass launch of a digital program based on the marketing system itself, he chose to incorporate Jeff Walker’s video-based Launch system into his campaign.

Now, I’m not saying there’s anything wrong with this. That was a brilliant approach to the campaign. However, I would bet that more people were paying attention to the quiz and funnel parts of the system than to the way he adapted his own process to better fit his needs.

Another problem with Conversion Marketing is that it tends to teach that data can tell the whole story. Your page views, CPC, CPL, conversion rate, survey responses, etc… show you exactly what to do next, if only you know how to correctly interpret and manipulate the information at hand.

Data does tell you a great deal about your next moves, especially (and this is a huge caveat) when it is the right data interpreted the right way.

However, there is a reason that big businesses with giant marketing budgets and access to incredible amounts of data are hiring anthropologists at an increasing rate:

People are data, too.

For every click, for every lead, for every conversion, there’s a person there. They have fears, desires, goals, and a distinct worldview. The best marketers care about those things beyond the numbers. They know that each customer’s unique experience must influence the way data is interpreted. 

Have you fallen into the traps of Conversion Marketing? Here are some indicators:

  • You (or your team) spend more time parsing spreadsheets than talking to customers.
  • Your offers are full of low-hanging fruit.
  • You make decisions about campaigns or products based solely on data.
  • A/B testing is the only way you decide what works.

Measured against customer interviews and research, any of these tactics is a win. But used on their own, the growth of the business is severely limited.

THE (NOT SO) DIRTY LITTLE SECRET OF DIGITAL COMMERCE

As I mentioned earlier, I’ve built my business straddling the divide between these two schools of thought. The dirty little secret of digital commerce is that so has anyone else who’s made good money online doing something they love.

The beautiful women (and the men who adore them) who espouse the benefits of Relationship Marketing are paying close attention to their conversation rates, cost per clicks, paid traffic campaigns, and survey result spreadsheets. The guys selling to the Scrabble-tile jewelry makers and the gun-hoarding survivalists send personal emails to customers and get on the phone for in-depth research.

Don’t believe me?

Note: None of these references are an endorsement or a disavowal. They’re just references.

Derek Halpern talks about how he conducts phone interviews in this episode of Smart Passive Income.

Danielle LaPorte talks about how GTFL (Grow the F*%&ing List) is the top priority of her business (just after self-expression) in this episode of Profit. Power. Pursuit.

Kimra Luna spends massive amounts on ads and talks about it on Rick Mulready’s podcast.

Brian Clark and team give a weekly masterclass on the intersection between the two schools of thought every week on the Digital Entrepreneur podcast.

When you combine the best of Relationship Marketing with the best of Conversion Marketing, you discover an incredible opportunity. You can be human and run your business with smart practices. You can be data-driven and relationship-focused. You can optimize for profit and maximize for loyalty.

Now, there’s not some vast conspiracy here (that I know of—and I think I would have uncovered that by now). What happens is that you get yourself into an information silo as a business owner or aspiring entrepreneur. You only listen to the Marie Forleos and you don’t realize there’s a whole other school of thought; or, you only listen to the Frank Kerns and you don’t realize there’s a group of people doing things entirely differently.

The popular kids in each of these schools of thought, however, are not siloed. They’re networking with each other. They’re finding out what’s really working for who and why. They’re trading best practices and opening up about their standard operating procedures.

This is the real lesson here.

You have to talk to people who do things differently to get better at what you yourself do. Any information silo in your business will hurt your long-term growth and eventually damage what you’ve worked so hard to build.

After reading this post, your first step is to step out of your information silo. You’ll need to introduce yourself to some new ideas and some different ways of thinking. There are resources for this linked below.

Some of these ideas will absolutely challenge you. Your assumptions about what’s important about the way you create content, offers, and relationships may be upended (no matter what school of thought you find yourself in now).

Remember to keep your personal business values front and center. That doesn’t mean that you ignore information that doesn’t make you feel comfortable or validated. It means that you objectively weigh whether what you perceive as a guiding principle of your business is based on what you truly believe or based on what you’re hoping to avoid to stay comfortable and safe.

BUSINESS RESOURCES THAT BRIDGE THE OPPORTUNITY GAP

 

Copyhackers blog with Joanna Wiebe and family
Being Boss podcast with Kathleen Shannon & Emily Thompson
Perpetual Traffic podcast with leaders from Digital Marketer
Startup Chat podcast with Steli and Hiten
Creative Giants podcast with Charlie Gilkey
Social Media Marketing podcast with Michael Stelzner
Of course, I’d like to suggest my podcast, Profit. Power. Pursuit., too.

Beyond breaking out of your information silo, I want to give you a set of challenges to complete so that you can start to position your business in the opportunity gap, too.

1) Choose 3 metrics to start tracking on a daily or weekly basis. Make them metrics that actually indicate the potential for sales (i.e. Facebook Likes are not a good metric but things like email subscribers, sales page views, or ad click through rate might be).

2) Get on the phone with 3 business owners this month who do things differently than you do. Don’t just compare notes with your friends–make friends with someone new. 

3) For at least 1 month, regularly use content from 3 new sources (I find podcasts to be the most helpful for this–but blogs work, too) outside your comfort zone.

4) Talk with at least 3 of your best customers this month to find out how they’re doing right now. Get curious about them–not how your business relates to them–and ask open-ended questions about their situation.

Just like with any opportunity gap, positioning yourself in it takes intentional behavior and new habits. These 4 challenges will help you do just that.

In the end, remember there’s always more to the story. Whether your mentors or favorite bloggers are in the Relationship Marketing school or the Conversion Marketing school, dig a little deeper on everything they say or write. Ask yourself why and how what they’re talking about works. That’s the ultimate marketing hack.

A Natural Evolution: How Social Media Marketing Expert Laura Roeder Became a Startup Founder

Laura Roeder, founder of Edgar, on Profit. Power. Pursuit. with Tara Gentile

I first met Laura Roeder—the latest guest on the Profit. Power. Pursuit. podcast—at the inaugural World Domination Summit. Of course, she’d been someone I knew “from the internet” since the start of my business. Meeting people in the flesh is different.

She stopped me on the street and asked to chat. We joined some friends of mine at an outdoor cafe table and enjoyed sangria and cheese. We also enjoyed great conversation about running and growing businesses in the online world.

Laura was truly one of the first people I ever spoke to whose interest in regards to business was much more about profit, power, and pursuit than it was about passion.

Over the next 5 years, I watched her business evolve from social media management to social media training to social media software. Her latest venture, Edgar, is a software application that allows marketers to more effectively and efficiently schedule their social media updates.

I use this tool myself and have seen amazing results simply by using its most basic features.

Of course, you can go anywhere to learn more about social media marketing. I hope you come here to learn the behind-the-scenes story of what makes a business like Laura’s really work.

Laura Roeder, founder of Edgar, on Profit. Power. Pursuit. with Tara Gentile

Laura and I talked about how to know when it’s time to change your business model, the role money plays in decision-making and planning, why she chose to turn down millions in venture capital for her startup, and how she manages to grow her team.

Pay close attention to what Laura has to say about personal investment and risk when it comes to growing your business.

Click here to listen to my interview with Laura Roeder, founder & CEO of Edgar, on iTunes.

If you enjoy the Profit. Power. Pursuit. podcast, please subscribe to future episodes and leave us a review!

TRANSCRIPT:

Tara:  Hey, everyone.  Welcome to Profit. Power. Pursuit.  I’m Tara Gentile, your host, and together with CreativeLive, we explore the unique strategies that creative entrepreneurs use to take control of their lives, profit from their passions, and pursue what’s truly important to them.

Today’s guest is Edgar founder, Lara Roeder.  At 22 years old, she quit her first and last job as a designer at an ad agency to start her own business.  She quickly grew a tiny, but thriving, one-woman design firm.  On a quest for scale, Laura ventured into training and information marketing and then into software as a service.  Laura and I talked about the evolution of her business, the value of a great team, and how she intentionally avoided millions in venture capital to build her software business.

Laura Roeder, welcome to Profit. Power. Pursuit.  Thanks so much for joining me.

Laura:  Thank you.  I’m really excited to be here.

Tara:  Awesome.  So your business has changed a lot over the years, and it’s been a lot of fun watching the changes that you make.  You’ve gone from web design to high touch social media management, to social media training, and now you’re into social media software as a service.  How do you know when it’s time to make a change in your business?

Laura:  So this is … This is a really good question, you know.  I was telling Tara, I looked over at the questions you sent, and I really had to think about them, and this is one of those that I really thought about, because it seems very natural at the time.  You know, so I could of thought, okay, let me … Let me reverse engineer how I have made these changes, because they feel like they just sort of evolve, and I think really for me it’s been a matter of having a vision for what’s next.  It’s not so much a larger strategic plan or a this isn’t working anymore, I need to switch.  Although this isn’t working anymore can definitely be an element of it, but it’s usually more that I get inspired for something that I want to create next, and then I see how I can make my business into that, and that’s what I’ve done.

Tara:  Nice.  Where do you find that inspiration?  Because I think it is helpful to say that it’s more about kind of creating that vision, but I think a lot of people actually get stuck on creating that vision, because they don’t know where to find that inspiration.

Laura:  So for me, it’s really been a combination of my own needs in business and customers.  So I’m an entrepreneur.  I love entrepreneurs.  All the businesses that I’ve had, that’s who I’ve served, and for example, Edgar just came out of really my own need.  I had some frustrations with social media software out there that I wanted to solve and something that I loved about social media is just how tightly connected you stay with your audience.  You know, it’s just so easy to go on Facebook and instantly be having a one on one conversation with someone who is your customer or who is your fan or whatever, so it’s really been a combination of solving problems that I want to solve for my own business, and also just kind of looking around and seeing what are other people’s frustrations, what are they talking about, what are they trying to do that they’re not able to do, that sort of thing.

Tara:  Yeah, I think a lot of people try and keep their eyes on their own homework, and I think keeping your eyes on your own homework can actually kind of stifle that … stifle innovation or stifle your ability to figure out what’s next.

Laura:  Yeah, you want to look at yourself, but not just yourself.

Tara:  Right.  So you and I have talked a lot about team over the last few years, and I’m curious, what does your team look like right now?

Laura:  So now my business is totally focused on Edgar.  We’ve been phasing out the training business.  So we have a team of 13 now, and that’s made up of engineers who are building the product, customer service people, a little bit of operations, and a marketing team.  We actually have two full-time writers, which is pretty unusual for a team our size, and I think just shows you how focused on unmarketing and content marketing we are.

Tara:  Yeah, how do you go about finding new team members?

Laura:  It’s difficult.  We’re really, really, really picky, and it’s really important that someone is as strong in skill as they are in culture, so actually, our biggest mistake that we made, when we were sort of evaluating like what went well in the first half of 2015, the hugest mistake that we made is not giving ourselves enough time to hire, because we found that it often takes, depending on the roll, from two to like six months.

Tara:  Wow.

Laura:  Which is kind of crazy, to find the right person.  So now we try to put out job listings a lot early.  I’ve read a lot of things that say, you know, you have to be recruiting, the best people already have jobs, and they’re not going to find job listings.  I haven’t done that.  I don’t know where people find the time to do all this recruiting.  It sounds really good, but we just don’t have time for it.  So we have used traditional job boards.  We’re a remote company, so boards like We Work Remotely have been great for us or Authentic Jobs has a lot of remote jobs on it, so we just put our listings into typical job boards like that, but we try to use a lot of personality in our listing to show you what it might be like to work here just from reading the job listing, and I think that helps a lot in attracting the right people.

Tara:  Yeah, and another thing that I’ve really admired about the way you’ve built your team or the way you manage your team is how objective you are about looking at people’s performance, about looking at what your goals are, about looking at how people work within the team.  What is it do you think that has allowed you to kind of maintain that objectivity and use that as a management technique?

Laura: So something that we say a lot at Edgar is, “Value for value.”  The phrase is something that our head of customer service, Christina, kind of coined. She’s always like, “Value for value.  Value for value.”  And that means that everything has to be an even exchange of value.  So when we are looking to add a tool to our arsenal, we’re saying, “Okay, they’re going to charge us $100 a month.  Here’s what we’re going to get.  Do we feel good about that value?”  And we use that phrase a lot when we talk about anything in our business.  I was just talking to someone about a freelancer that we’ve hired, and we’re like, “Do we feel there’s value for value?  Do we feel like we’re getting the value for what we’re paying them?”  And I view team members as the same way, you know?  They’re people that are working here to contribute value to Edgar.  That’s why they’re here working or us, and that doesn’t mean, you know, I think a lot of people get sort of confused in a team world because they start thinking about their value as a human.

Tara:  Mmhmm.

Laura:  You know, their value is a human is totally different than the value they add to the Edgar team.  You know, those two really have nothing to do with each other.  I mean, one, all humans are valuable, but you can be a really amazing person, but you know, one, just maybe not have the skills that we need for our team.  So I think that’s where a lot of people get really tripped up is thinking, oh, I don’t want to, you know, I don’t want to let them go because I really like them, or maybe there’s a way to make them work, or whatever, because you like them as people.  I’ve remained on good terms with everyone that I’ve ever let go, and there’s a few on that list, because I am objective, and we do let people go when they’re not working out.  But there’s no one that I’ve ever burned a bridge with.  I’ve helped people find other jobs, and when you’re just looking at it from that value for value perspective, you see where they could add more value to another company, where you’re not serving them by sticking them in a job that’s not really working out for them.  So I think that helps me look at the whole situation.

Tara:  Yeah, and I think it actually probably helps you maintain that friendship and treat people as humans when you are able to be objective about their role on your team.

Laura:  Right.  You’re not saying you have failed in life, you know.  You’re saying we have this need and it doesn’t seem like you’re the right person to meet it, so go find another job that you can really thrive in.

Tara:  Yeah.  I love that.  What systems do you use for managing your team?  Is it software? Is it a particular management technique?  What do you use?

Laura:  Yeah, so this is … This is something we’ve been exploring a lot because we’re getting to that point where we’re getting bigger, but we’re still small enough that we can all stay in touch, and we’ve really struggled with like do we need to put in more systems to have that good framework for when we grow, or are we sometimes overcomplicating things and making things more bureaucratic then they need to be now, so this is definitely something that’s been on my mind a lot lately.

As far as just logistical tools, we use, you know, the same things that a lot of virtual companies use.  We use Slack.  We use Gmail for our email.  For task management, some of use Trello and some of us use Flow, but I think the tools are less important than the style of communication.  So the way that we manage people, we’re really huge on everyone having ownership over what they do, so our team leads we call advocates.  So we call them that because they’re not necessarily the boss of that team, but they’re the person who advocates for that team within the company.  So our customer service advocate is fighting both for her team to make sure they’re happy and just for the role of customer service in the company.  She’s advocating to make sure our customers are served.  You know, marketing is advocating to make that we’re spending enough time and resources on marketing.  So we see those team leads as the advocate for their area, and then each person within the team has total ownership over whatever their tasks are.  So Tom, who writes our blog, the blog is his.  He decides the topics, he writes it, you know, he does the schedule, he makes decisions on how the blog’s going to look and what features it’s going to have, whatever.  The blog is his.  So that’s how we run things.

Tara:  I love the idea of your team leads being called advocates, and I am totally going to be stealing that, so if my team is listening, that is going to be coming down the pike.  I really, really love that.  So let’s shift gears a little bit and talk about money, because that’s one of the things that I’m really trying to demystify with this podcast.  Can you tell me, what’s the role that money plays in the way you plan for your business, especially when it comes to changes in your product or changes in your business model as a whole?

Laura:  So we are a bootstrapped/self-funded, I think self-funded at Edgar is a little more accurate, because we’ve used the profits of the training business to help start up Edgar, but either way, we don’t have capital, and so money is really, really important in planning because everything we do needs to be, not only does it need to be profitable, it needs to be profitable in the short term.  You know, we don’t have this like year or five years of runway to play with, so we are very, very money focused in that is everything that we’re doing adding value that will turn into real dollars of revenue for the company, right?  The company can’t survive without revenue.  So I think that helps us be really focused in so many areas, you know, when we’re thinking about how we want to take the product.  It’s very important to us not to add any features that aren’t going to get us more customers.  You know, unless it’s something that’s really, really important to our customers, it’s a waste of developer time.  So I … I actually … And it makes financial planning really simple, because the bottom line is are we in the black every month.  If we’re in the black every month, we can … there’s no way we can wake up one day and be out of money.  We can maybe not have so much, so much profit, but we’ll never have to worry about this longer term, more complex financial planning.  And that might not be the most sophisticated way to do it, but it’s the simplest way to do it, and we’re very happy with that right now.

Tara:  Yeah, absolutely.  Simple is awesome.  So you mentioned that you are self-funded at this point, that Edgar is self-funded, and you recently wrote about not accepting venture capital to build Edgar.  Can you tell me more about your thought process behind, and basically intentionally avoiding potentially millions of dollars in venture capital?

Laura:  Yeah, it’s a really multi-faceted issue.  One of the biggest things that I was really trying to avoid in not raising money is this kind of raise or die cycle, where instead of being focused on building your product or being focused on your customers, you’re focused on raising money, because that’s kind of the business model that you’ve built for yourself is you raise and you run out and you raise and you run out, and you have to spend so much of your time chasing that fundraising, and that just didn’t sound fun to me.  It sounds fun to me to talk to customers and find out what they want and find out what they love and hate about Edgar.  That’s how I’d rather spend my time.  So that’s part of it.  Having the freedom and flexibility is a huge part of it.  So I had a baby earlier this year.  I took three months off maternity leave, totally off work, I’m working part time now, and my husband is the CTO of Edgar, so he runs, he’s our, you know, Dev Advocate, and he works part time also, and I just don’t know how many funded companies are cool with like the CTO and the CEO both working part time.  It’s not always their first choice.  So I really wanted to have that freedom, that flexibility, and then as I explore more, I’m also … As we grow and we get, I guess, more on the same page as a lot of funded companies, because now we’re almost at $2 million annual revenue, so we’re kind of, you know, a lot of the companies we’re sort of comparing ourselves to do have funding, there’s all these little interesting little things that emerge.  Like when you need to keep raising money, your growth rates have to always look really, really good.  So people do things like have free plans and just grow the free plan as big as possible, because it’s much easier to get users for free, and that keeps their growth numbers up.  Where we’ve done a lot of experimentation with our marketing funnel.

We recently did an experiment that did not work out well, so we had a down month, and if we had just been focusing on keeping that growth number looking good, we would actually be much more risk averse, because we wouldn’t be able to take a big gamble like this totally changing our marketing funnel.  We took the gamble, we had a bad month, but now we can fix it, it doesn’t really matter to us what our numbers look like month to month, as long as, you know, we’re doing well overall.  So that’s been really interesting.  I think there are lots of little implications to having your board or having that next round be one of the big stakeholders in your business.

Tara:  Yeah, I really appreciate that you pointed out the difference in priority between your company and one that is venture funded, because I don’t think a lot of people realize that the priority of a venture funded company is growth above all else and growth for the purpose of then raising more money later on, and that it’s not about making money at all.  It’s about making potential money much later on.  And I … And you know, then with your priorities being serving your customers, making the product better for those customers, and generating revenue, and so I think when most people, then, kind of weigh what they want out of their businesses, most people end up on that self-funded track, or they should be on that self-funded track, even if it’s not as glamorous as potentially building a unicorn.

Laura:  Right.  Because, I think for most people, it’s much more motivating to please a customer than it is to please a VC guy.  You know?  I love that our product helps entrepreneurs.  It helps them make their life easier.  It helps them save time.  That motivates me to grow this company.  For me, it would be a little difficult to get the motivation from I can’t wait to pitch this next guy who’s going to really love the idea and is already a billionaire.  Like who cares?

Tara:  Totally.  All right.  So you mentioned that a couple of months ago, you experimented with a change in your marketing funnel that failed.  Are you willing to tell us what that experiment was about?

Laura:  Yeah, it’s really interesting, actually.  So most SAAS companies start their marketing funnel with a free trial.  So you go to the software website, that’s the call-to-action on the home page, start your free trial.  So we had done our funnel differently, but we wanted to try the free trial thing, because we thought, well, if that’s what everyone does, and there’s so much that’s been written about it, there’s probably some merit to this idea.  So we changed our homepage to start off with a free trial, and we’re still experimenting with this as something to play with in our funnel, but there was one extremely clear result, which is the top of the funnel, meaning just the number of people who started with us, gave us their email address, absolutely tanked compared to our old call to action, which was request an invitation.

Tara:  Mmm.

Laura:  We used to have request an invitation, and then you’d get like put in our queue basically, and you’d get access to the software, and so many people would complain about that.  People would be like, “Why do I have to get an invitation?  I just want to buy.  Just let me do a trial.  You know, why are you making it difficult for me?”  But just coming to the site, so many more people were percentage wise were willing to request an invitation over start a trial.  And that makes sense when you think about it, because you have to commit time to start a trial.  You know, you’re not… You’re not always at the point when you’re exploring your options, and I’m ready to sit down and start a trial with a software, but requesting an invitation?  Sure.  You know?  I can do that.  No skin off my back.  I don’t have to do anything.  You’re going to remind me at some point to try you out.  So it kind of makes sense to me that it was lower, but I did not expect it to be so much lower, and it’s just all the more fascinating to me that so many companies I think never experiment with this.  They just assume start with a trial, that’s what everyone else does.  But it’s not the best option for every piece of software. 

Tara:  I just had a huge aha moment.  So that was very exciting.  So thank you for sharing that.  All right, let’s shift gears on money a little bit and talk about a different, sort of a different side of money.  You’ve written in the past about the big, scary check that you wrote to sign up for a program of Marie Forleo’s very early on in your business, and I think that many people, women and creatives especially, have a lot of fear when it comes to investing in their businesses.  How do you know, how do you, Laura Roeder, know when it’s time to dip into a nest egg, a credit card, a personal loan to accomplish something new in your business?

Laura:  It’s a really, really hard question, because I have to be honest, but a lot of it is definitely intuitive of feeling like this is the time. So that is part of it.  I know that’s not super, super helpful, though.  So I would say the more helpful part is just you need to have some sort of idea how this is going to work and how this is going to pay off, and I think early on, you’re often not sure exactly what that’s going to look like, but where people go awry is if you want to invest in something and you don’t really understand how it’s going to apply to you, but you’re just like I just want it and it’s just going to make things better, that’s kind of a red flag that maybe you’re getting hyped up, maybe you’re getting too excited about this being some sort of magical fix, because you need to see how it’s going to directly apply to you.  So basically what I’m saying is you need to have a problem you’re honing in on.  So if you are struggling with your business, you’re not getting enough leads, and you’re like, you know what, I hear all this stuff about email marketing, I don’t really get what it is, I don’t really get what it can do for me, it might make sense for you to invest in service or training to learn about email marketing.  Because you can see, okay, you know what, I know that’s a marketing channel, I know it can help my business, I’m not sure exactly even what that outcome’s going to look like, but I can guess that if I knew more about email marketing, I can see enough examples of how that’s going to do something to grow my business.  Whereas if you’re like this person is offering some business coaching, you’re like, I don’t really know what the problem is that I want to solve with them, I just know that my business like isn’t great and I want it to be better in some way.  That’s often not a great investment, because you’re not clear on what you’re going to get out of it.

Tara:  Yeah.  So this is an interesting issue, because I think often, people are focused on the wrong problems.  They attribute, you know, failure in their business or stagnation in their business to the wrong things.  So how do you figure out which is the right problem to be focusing on at any given time?

Laura:  That’s such a great point.  I actually think that is one of the great skills of entrepreneurship and everyone needs to continually hone is solving the correct problem.  It’s like one of those absolute top level skills, and I think about it all the time in the work that I do every day.  Like is this really the problem that we need to solve.  You know, we actually just we got an intern at the company, so we have this list for her, and when I’m looking through the list of what she should do first, I’m definitely thinking about this.  Like, okay, she could do that, but is that really, you know, the active, most important problem in the business now, and the way that you look at it, I mean, this is where looking at numbers is really important.  So looking at just your overall flow of you know leads to sales and then ongoing customers, so that doesn’t have to be anything too fancy, so if you have an online business, it’s just like, okay, how much traffic am I getting, how many leads am I getting out of that traffic, which usually means email addresses, how many customers, and then maybe, you know, if it applies to your business, maybe how many follow-up, repeat customers are ongoing customers.  So once you break down those numbers, you can kind of start to guess, looking at those different conversion rates, okay, out of my traffic, I have .03% becoming leads.  Okay, I’ve read some articles online, I’ve seen a few numbers thrown around, that sounds sort of low compared to what I’ve seen thrown around.  So maybe that’s a good place to improve my business, and a lot of it’s guesswork, right?  Because unfortunately, there’s not this, I wish there was just this index of like this is what you can expect in your business, you know?  Try to hit this number.  Which, of course, we’re all different, so it doesn’t exist, but looking at some of those numbers is really helpful in honing in on where the problem is, and also getting really specific and writing out what’s actually working and what’s not working, because we often have these sort of vague ideas.

Tara:  Mmhmm.

Laura:  Often based on how we spend our time, by the way, and not actually what the outcomes are.  So maybe like you do webinars every week, and you’re like, “I am killing it with these weekly webinars.  These are great.”  But you’ve never actually sat down and been like how many customers do I get out of these webinars?  You know, you just, you just had the idea that they’re, that they’re great, because people tell you they like them and you like doing them and whatever.  So just getting a little more specific with your numbers.  Where exactly are my customers coming from?  Which channels are working?  Which are not working?  I think that’s how you start to hone in on that problem.

Tara: Yeah, I’m so glad that you brought that up, because that is … That’s something I actually hear people get defensive about often is, well, I’m not going to try that because what I’m doing works for me.  Like, well, really?  Do you know?  Have you compared it?  Have you tested it against something?  So that’s really great.  So kind of the theme that I see us honing in on ourselves right now is risk, and entrepreneurship is all about risk.  We’ve talked about risk I think in every single interview I’ve done so far.  So can you tell me a time that you’ve taken a big risk and how that played out for you?

Laura:  Yeah, I mean, I’ve taken so many risks.  So starting Edgar was, which was a huge risk.  So I launched Edgar in 2014.  I had never done software before.  I’m not a software developer.  I’ve never, you know, worked for a software company in any capacity.  So in some ways, like, once you run a business, you certainly have more knowledge about how to do it than people who haven’t, and there’s a lot of base knowledge there, but there also is even more than I expected software specific stuff that you have to learn about how to make a great product, you know, user interface, user onboarding, and when I had the idea for Edgar, I knew that I would use it.  I always thought, okay, worst case scenario, I will use this in my own company.  Even if no one else wants it, I’ll have a huge leg up in social media.  But you know, I thought other people would want it as well, and to invest the time and money in creating Edgar, which was along the same lines as what I’d done before, right?  It’s social media marketing software, but as a whole new business model was definitely very risky, but I was just … I was just really excited about the idea, and I think that was such a huge motivator for me is really wanting to both use myself and show people what I had built.  Just that idea of like people are going to love this.  This is going to be really, really cool, and this is something that I want to see in the world, and really helped me get past all the uncertainty, because there was … I didn’t do like any kind of focus groups or user testing, or you know, make like the fake beta and show people and see what they think.  Like any of the sort of like lean startup stuff that you’re suppose to do.  I didn’t do any of it.

Tara:  Wow.  That’s incredible.

Laura:  You’re like, “That’s the most horrible idea.  Good thing that worked out for you.”

Tara:  Oh, no, it’s just not what I would have expected from you at all, so that’s really, really interesting.  Yeah.  So one thing that I was thinking about in regards to what’s really interesting about interviewing you about Edgar, and actually, maybe before I go on to ask that question, could you tell us specifically what Edgar is, because it is not like really anything else that’s out there on the market, and I say that as a user.

Laura:  Yeah.  So Edgar is a social media scheduling and automation tool.  What’s really different about Edgar that is different from every other tool out there is that Edgar stores a library of all your updates, and then he, we like to call Edgar “he” because it sounds nicer than it, he sends out all those updates, cycling through them over and over again. So with other tools, you create your schedule or you create your queue of content, but it always runs out.  You always have to add more and more.  So the idea behind Edgar is you create this core library of great content and refine it and improve it and repeat it.  So when you use Edgar, he handles scheduling of your social accounts automatically every day.  You don’t have to go in and schedule everything yourself, and it’s a real game changer for our customers, because, I mean, actually, the thing that we get that’s so funny is people are like, “I don’t know if I should tell you this, but I fired someone who used to run social media for me.  I feel sort of bad about it, but you know, I just pay you, and it’s a lot cheaper.”

So it saves a lot of time, and we see massive gains in the traffic that people see from social media, not because we do anything magical, but just because if you’re sending out links to your previous blog posts on autopilot every day, you’re going to have a lot more links on social than you used to just sort of trying to remember to do it yourself, so you’re going to see a lot more traffic.

Tara:  Yeah, I have definitely seen a lot more traffic, and we don’t need to turn this into a plug, but I’ve seen a lot more traffic.  I think it really, absolutely solved a problem for content creators like me and like so many other people out there.

So the question that I was going to ask before I had you talk about that was that I think with a lot of people that we have on, they are more traditional creatives or there’s a very kind of purpose driven, mission driven element to their businesses, and you’ve kind of hinted at the purpose or the mission behind your business, but it’s not as overt as it is in many other business, and so I’m kind of wondering if you could enlighten us as to what you are really trying to pursue through your business?

Laura:  Yeah, that’s an interesting question, because I definitely am different in that way.  I’m someone who loves business.  I don’t actually consider myself a creative.  I just am in that sense of like, oh, your creativity is entrepreneurship, which I know people say genuinely, but that’s just never really resonated with me.  So, and it’s interesting, because this is something that I’ve thought about and actually have sort of felt bad about myself about, because I think, oh, I should be doing some, you know, business that like serves the world more.  But the fact is, I think I would actually be happy, like if you gave me a dry cleaner to run, I would be like I’m going to kill it with the systems of this dry cleaner, and I would really enjoy it, because I love running a business, and so I extra love running a business that helps business.

Tara:  Mmhmm.

Laura:  You know, that’s the part that’s exciting to me about Edgar in particular is that, you know, we save people time, we save people money.  We help them do more of whatever it is they’re creating.  So I kind of see myself as the business … Like I love the idea of me being sort of the more businessy side helping people handle that side so they can go out and do whatever they love to do, and like not have to be on social media all day.

Tara:  Yeah, I mean, the tool itself is all about getting more of other people’s ideas out into the world, right?  And how could that be a bad thing, I think?

Laura:  Yeah, yeah.  And I actually, recently, I’m an executive producer of a TV show now called Eastsiders, which you can watch on Vimeo, go check it out.  And I actually went to their premier party two nights ago, and that was really cool for me, because I’ve always had this dream of maybe like being able to be the business side of a creative venture.  You know, letting people like my friend Kit, who creates TV shows and films and media that I think is really important and needs to be out in the world, I can support him by being like view as that boring business side, is the side that’s fun for me.  So I would definitely like to explore that more.

Tara:  Okay, so you have to tell me, how did that come about?

Laura:  So I live in LA, so I just like know all these people that do all this cool creative stuff.  I mean, that’s one of my favorite things about LA, is people are just always like, “Oh, yeah, and I’m making a movie this weekend if you want to come by.”  Or this afternoon, I’m going to a friend’s photoshoot that she’s just like doing for fun, because it’s a fun creative thing.  I’m like I’ll come bring my baby and hang out.  Okay.

So yeah, I kind of became friends with this group of people that were all actors in Silver Lake and East LA, and Kit Williamson is the writer, creator, star of the show, and it’s called Eastsiders, and it’s just a show about gay men and their friends and families that live in Silver Lake, live on the Eastside, and it’s just like one of those just very human relationship shows, and he made the first season.  He funded it on Kickstarter, he got it on Logo, which is a major TV channel that bought it, so it was very successful.  So I told him, you know, if you ever do another season, I want to be a part of it, because I just really love what you’ve created.  So now it’s real.

Tara:  That is fantastic, and I am so excited to hear you doing that.  I think that’s, yeah, I don’t know what more to say about that.  I think it’s super cool.

So at the very beginning of the interview, you kind of, you said that, you know, you’ve made the changes in your business over the years based on, you know, your vision for what’s next.  So what would you say is your vision for what’s next now?  Even if it doesn’t involve necessarily a change in your business.

Laura:  It’s actually a really difficult question.  You know, I don’t have any sort of overarching plan for my career.  It’s very step-by-step, so right now, the vision is just growing Edgar and reaching more people.  You know, right now, we have about 3000 customers.  Getting to 10,000 customers is really exciting.

Tara:  Mmhmm.

Laura:  And it’s exciting because like we said, those are real people.  You know, all of our Edgar customers are real people.  We just did a survey.  70% of our customers own the business.

Tara:  Wow.

Laura:  So these are really small business.  These are businesses that are so small, the owner is setting up the social media themselves, and what’s so cool about that is that I know that we have a massive impact, you know?  If you’re a one-person business, like, we’re really saving you a lot of time, and they’re people who self-identify as entrepreneurs, which you know, I just love.  So that’s why growing is exciting to me.  One, I get to solve these new challenges within the business of like what does it look like when your team has twenty people, and how do you need to change the structures, and how do you manage that, and how do you hire.  So those challenges are fun for me, and just the idea of being able to help so many people grow their business is really motivating, too.

Tara:  Awesome.  Well, Laura, where can we find you online?

Laura:  Yeah, so you can find Edgar at MeetEdgar.com, MeetEdgar on Twitter and on Facebook, and you can find me @LKR on Twitter.

Tara:  All right, Laura Roeder, thank you so much for joining me.

Laura:  Thank you.

Tara:  On our next episode, we speak to Danielle LaPorte, creator of the Desire Map, and author of the Firestarter sessions about developing physical products from her ideas and paying attention to what you’re fantasizing about as the key to success.

That’s it for this week’s episode of Profit. Power. Pursuit.  You can download other episodes of this podcast and subscribe in the iTunes store.  If you enjoy what you heard, we appreciate your reviews and recommendations, because they help us reach as many emerging entrepreneurs as possible.  Our theme song was written by Daniel Peterson, who also edited this episode.  Our audio engineer was Jaime Blake.  This episode was produced by Elizabeth Madariaga.  You can catch up on older episodes in the iTunes store, where new episodes are added every week, and you can learn more by going to CreativeLive.com.

How to Keep an Eye On What’s Next Without Dropping the Ball: Interview with Sue B. Zimmerman

How to stay on top of what's next without dropping the ball -- an interview with Sue B Zimmerman

I thought I was talking with the “Queen of #Instagram” when I sat down to talk with Sue B. Zimmerman. Turns out, Sue is way more than the Queen of Instagram. 

Her reign over Instagram marketing strategy is only the latest venture in a long line of entrepreneurial pursuits. Sue is actually a prognosticator. She always has her eye on what’s next–without dropping the ball in her current venture.

In a word, Sue is savvy. 

And, her particular brand of “pursuit” is savviness incarnate. At the risk of sounding heavy-handed

If you love staying on top of what’s coming, predicting trends, and riding the waves, Sue will feel like your soul-sister. If you’re not, Sue is an amazing resource for guiding you through those turbulent waters with ease. 

Sue talked with me about her entrepreneurial history–including how she grew a $1 million boxer shorts brand. She shared the challenges of going from handmade to manufactured, selling her products at tradeshows, and dealing with big retailers. 

She also shared where she looks for what’s coming next and how she equips the young people who work for her to be brand ambassadors. We talked about the struggles that come with giving up control and rapid growth. Plus, we talked about what’s next with Instagram and social media marketing in general.

Listen to the latest episode of Profit. Power. Pursuit. and pay special attention for the ways that Sue has created and empowered a community to spread her message.

Click here to listen in iTunes.

Go Back to the Start: How Chipotle is Redefining the Fast Food Market — and what you can learn!

When you think fast food, you think McDonald’s, Burger King, and, maybe, Wendy’s. If you want to get “ethnic,” you might throw in Taco Bell.

Try as they might, these companies can’t get you to equate eating fast food with eating healthy. You go to them for two reasons: cost & convenience. And maybe you don’t go to them at all.

And that’s just my gut.

Using my amazing powers of deduction, I would guess that there’s a larger percentage than average of people reading this blog who just wouldn’t go to a fast food joint for breakfast, lunch, or dinner. You’re not in that market. You’re not a customer. You drive by not through.

Fast food has a bad reputation.

The fast food market is fairly finite. While new McEaters are born every day, the group of people willing to eat that food remains basically the same. New people aren’t being “converted” to fast food every day. Those that are do so out of necessity not out of choice.

That means, to grow profits, companies like McDonald’s and Wendy’s have to vie for a bigger piece of the pie. They choose a specific segment and they go after it. They release a new product to court a new segment of customers. They pick up a few more crumbs.

Hey, I thought this was about Chipotle?

Right. So Chipotle comes along. It’s fast food. Straight up. Unless it’s horribly busy, I can get my food in a Chipotle faster than I can at Wendy’s.

Here’s the difference: I choose to eat at Chipotle.

Why? It tastes good, first & foremost. Second, it’s real food.

Did you see this commercial during the Grammys? I couldn’t believe my eyes. That could not have been a cheap ad spot.

Cultivate a better world, says Chipotle. I buy it. Their meats are sustainably raised. They use as much organic produce as possible. It’s a story and an idea I’m willing to buy over & over again.

Chipotle entered the fast food market but it didn’t allow the fast food market to define it. Instead, it generated value (environmental sustainability, health consciousness, deliciousness) that brought a whole new customer base into the fast food market.

What does that kind of growth look like? With 1230 US stores: “Chipotle stock is up 50 percent on the year and over 500 percent over five years, far outperforming the market as a whole or the restaurant sector in particular. They announced last week that revenue grew 23.7 percent in 2011, with an 11 percent increase in same-store revenues. Restaurant operating margins are more than 25 percent,” according to Slate.com.

Those aren’t numbers to sneeze at.

Chipotle has taken a strong stance (anti-factory farming, for one), doubled-down on constraints (1 menu, few choices), and upped the ante by consistently delivering great tasting food. In doing so, they’ve created a legion of new-to-the-market fiercely loyal fans.

Principled choices lead to massive profit.

Click to tweet it!

So the question to you is:

Have you backed down from principled choices because you fear the wrath of the existing market?

Are you allowing your competitors to write the rules of the game? Or are you writing your own?

Are you afraid that stating your beliefs and injecting them into every aspect of your business will turn customers away?

Are you simply following the standard strategy? Or are you generating new value through purpose-driven choices that attract new customers to you & your business alone?

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Only a few days remain to get in on The Art of Earning LIVE Virtual Ticket! Build a business on your principled choices, creating value for you & those you serve. Get all the info here.

Bake a Bigger Pie: What social media has to teach about You Economy business – or – Top Ten lists be damned!

My social media consumption is at an all time low. At best, Twitter & Facebook are boring. At worst, they’re perpetuating the model of business that got us in this economic mess to begin with.

All I see is formula headline after formula headline, 6 ways for this and 3 tricks for that. They all promise big returns. They are almost (and I’m only saying that to be nice) all fluff.

The bits of brilliance are few & far between. But they’re enough to keep me around.

Radiant self-promotion doesn’t bother me. Scrambling for a just-slightly-bigger piece of the pie does.

Let me explain.

It’s not that organizing information in an easy-to-read way is bad. I could do a better job of that myself. It’s not that writing clever headlines is bad. It’s not.

What is unfortunate is that this trend means solopreneurs are simply resorting to what corporations have been doing for years, going after their competitors instead of bringing more customers & value into the market.

“Now hold up!” you might say. “How is a formula blog post going after a competitor?”

Excellent question. You don’t have to slam a competitor or blatantly try to steal traffic, sales, or customer loyalty to be playing the competitive advantage game.

Competitive advantage is the name of the Them Economy game.

They try to eek out a percentage point here, pennies on the dollar there. Sure, it works. But for how long? They see the market as finite. There are only so many eyeballs — better optimize my business to attract the highest percentage.

They are going for a slice of the lifestyle design pie, the handmade marketplace pie, the travel hacking pie, the minimalist pie, the app pie, the self-publishing pie. They’re not bringing new customers into the fold. They’re not offering new ideas or fresh perspective.

They parrot others ideas in the hope that speaking the same words will yield the same results.

They show up in your Twitter stream to claim what’s theirs.

They see innovation at an end. Sure, the chips get smaller & the resolution gets brighter — but new? Nope, not right now. They don’t see new ideas around every corner, new opportunities for advancement just over every horizon.

They are more concerned with their social media strategy than they are with making your life better, easier, healthier, more connected, or more meaningful.

It doesn’t have to be this way. We don’t have to buy it.

And we don’t have to rely on carving out a bigger piece of the pie for ourselves at the expense of others.

You Economy businesses know that the market is infinite. Click to spread the word! It is only limited by their ability to invite customers to the table.

You Economy businesses know that it’s not a matter of capturing a piece of what already exists but about creating something new, uniquely you, and in service of others. Baking a bigger pie leads to the greatest success.

You Economy businesses create welcoming spaces that use meaning, relationship, and experience to provide multidimensional value to a wider audience. They propose new ideas and invite others to participate in making them whole. They connect people to ambitions greater than any individual company or person could hold for themselves.

And yes, you can do this 140 characters at a time. Try it.

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Want to learn how to craft a business that gives back more than it takes while leaving you wealthier than you could ever imagine? That’s what I’m teaching at The Art of Earning LIVE. Grab your virtual ticket today.