Consumer Psychology Blog | Bucket List Ideas

December 12, 2014 by Shane Jones

An Open Letter to Managers: 6 Ways to Build Consumer Trust

Dear Managers:

You hold a lot of power. Use it wisely, or risk losing it altogether.

In an episode of everyone’s favorite guilty pleasure, “Game of Thrones,” dynamic Cersei Lannister issues a strong rebuttal to Littlefinger’s assertion that knowledge is power. Armed with men at her command who could kill Littlefinger quite easily, Cersei states instead that, “No… power is power.”

Who’s right?

Power typically boils down to one simple thing, and from a marketing standpoint, that one thing can make or break your credibility in an instant. It’s simple but monumental: perception.

How Do People See You?

Image is everything, right? Well, of course not, but in marketing, it’s huge. To sell items, you have to present them well. Think of supermodels like Christy Turlington and Josie Maran applying glossy argon oil serums to her flawless skin on QVC.

Image gets a customer’s attention, and that’s the critical first step. But what incites that first sale? And what keeps them coming back?

The Power and Psychology of Trust

Trust-based marketing is applauded for a reason – primarily because it works. Sure, certain marketing tactics might win an initial consumer, but disappointment in a lackluster product won’t retain sales. If you want your business to stay relevant, you must make sure that your trustworthiness remains intact. If severed, you’ve lost out on a bounty of future sales, because people appreciate the familiar.

Trust must be earned, and how you market your brand is going to either help or hurt your trustworthiness. Certain tactics can make a huge difference when it comes to growing a customer base.

Admit your mistakes.

Learning how to market your items is sometimes a trial and error process, but that’s a good thing. More often than not, we learn how to do something by first learning how not to do it. When something doesn’t fit a customer right or create the same results shown on an infomercial, acknowledge the customer’s experience without invalidating it in defense.

A bad review on your site is not a deal-breaker, and most people appreciate the honesty — especially when it’s followed by a sincere and helpful response from customer service. Transparency is a vital step to fostering continued relationships despite an initial roadblock.

Entice first-time buyers with promotions.

Everyone loves a good deal, so give it to a newbie customer who might be on the fence about making their first purchases. A 20% coupon code is a great way to initiate this relationship. Many coupon code introductory offers expire quickly — set yourself apart by giving customers additional time if they’d like. Send out a personalized email reminder about their lingering and unused offer, and then ask them if they’d like more time or assistance from a customer service representative.

Reward loyal customers.

Your tried and true customers are the heart of your sales, so treat them well. When building and nurturing this relationship, offer generous discounts and deals for their continued support. Birthday emails and coupon codes, special discounts for posting reviews, and gift card drawings for sharing personal product photos all help grow your business and keep customers happy. Social media is priceless advertising. Use it to your advantage.

Embrace customer reviews.

Share every review you receive: the good, the bad and the so-so. Customers appreciate hearing from other people about how their experiences went, and great reviews only solidify your competence.

Don’t fear bad reviews.. Allow detailed reviews to appear alongside your item, and include that feedback as a whole on the product page. Does a certain shoe run a half size larger than the standard size 7? Have five reviewers mentioned this? Include that information at the top to make sure customers are fully informed with no surprises.

Employ excellent return policies.

Sure, your product is so fantastic that no one would ever dream of returning it, right? Confidence in your product doesn’t mean ignorance of human nature. A customer might buy an item at Loft that doesn’t fit well. If they return the item and find the exact fit that works for their body in the process, you may have created a loyal Loft customer who trusts your company. . So don’t knock a good return policy – one return can lead to a lifetime of sales.

Focus on stellar customer service.

For Christmas last year, I ordered a pair of Ray-Ban sunglasses as a gift, only to learn that the sunglasses were never delivered to my home despite the post office saying otherwise. Luckily, I’d placed my order with Amazon, and the process went something like this:

I initiated a virtual chat with a customer service representative through
I explained the situation
She apologized for the lost item and immediately sent a new pair to me via overnight shipping – free of charge

The entire exchange lasted around two minutes. I was absolutely floored and incredibly appreciative. I didn’t have to jump through hoops or wait on hold for hours. Instead, the problem was immediately and professionally resolved. Consider having customer service that covers more than just a 1-800 number or email. Live chat support makes people feel more connected and comfortable making a purchase.

Building Long-Term Customer Trust

Building customer trust isn’t always easy. It takes time, costs money and requires a lot of extra effort. In the end, though, it’s worth it – and it might be the smartest business tactic any company could employ. Knowledge is power, as Littlefinger explained, so utilize these tips to help strengthen your customer’s perception of your trustworthiness. And don’t disappoint them, especially if their last names are Lannister.

Check out my friend Kayla’s blog if you’re looking for some great content!

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December 4, 2014 by Shane Jones

The Ultimate Guide to Marketing with Video Using AdWords & YouTube

Are you using Google AdWords for video yet? Whether you answered yes or no, be warned that the competition is only growing fiercer.

While the adoption rate of AdWords for video has definitely been more brisk lately, it remains a relatively underutilized tool for online marketers. Let’s not mince words here: online video content has the potential to unseat the TV spot as the dominant form of visual advertising.

In the meantime? Now is your chance to take advantage of this great toolset. And I’m here to show you how to do it.

Why Video?

In 2012, there were 208 billion mobile video views worldwide. It’s estimated that video traffic will make up more than half of all consumer Internet traffic worldwide by 2016.

Video communicates more than you could ever hope to get across with text-based content. While text is fairly one-dimensional, video allows people to hear you, and more importantly, to see you and your body language.

This extra dimension of communication makes videos as effective as TV for branding, with an average 20% increase in traffic to your site.

It also offers greater retention and recall – in fact, up to 5x greater than text alone.

Creating Your Video Ad

Video is a powerful tool for visually connecting with your audience. It allows you to place a physical representation of your brand on the sites they already use online.

Unfortunately, you can’t just go out and shoot a random video about whatever pops into your head. In order to perform well, your video has to be strategic, targeted to your audience, and branded for your company.

But how do you get started?

The answer: you find your big idea.

The Big Idea

There are tons of YouTube creators out there that post videos with seemingly instant success.

Their secret? The big idea.

That’s right. All successful video campaigners start with that great, impactful idea that’s powerful enough to affect the size and loyalty of their audiences. Brands then build out a long-term, repeatable series of videos that play off their big idea, which helps them build and sustain a loyal fan base.

But where do these magical, mysterious ideas come from?

Passion!

As a brand, what are you genuinely interested in? Maybe you sell a product with the goal of helping single mothers, or maybe you’re a non-profit organization that feeds the hungry overseas. Identify your calling, and then brainstorm ways you can use video to tell that story, with your passion as your plot and your brand as the main character.

Case Study: The Man Your Man Could Smell Like

Old Spice’s “The Man Your Man Could Smell Like” videos are a classic example of a successful big idea. In 2010, Old Spice decided that it needed to better target women in its advertisements, since women make the majority of purchasing decisions for male household members.

This brought Old Spice to a challenging marketing question: how do you market men’s body wash to women?

Their answer: market the product benefits as they appeal to women.

Thus, “The Man Your Man Could Smell Like” was born, featuring an attractive male model who is too good to be true; he’s good-looking, buys you diamonds, gets you tickets to “that thing you like,” and rides horseback on the beach.

The big idea of this video campaign is that, while your man can never act like this man, at least he can smell like him.

How? By using Old Spice.

This big idea instantly went viral. Since it initially debuted “The Man Your Man Could Smell Like,” Old Spice released numerous videos in a series using that same big idea, including “Boat” and “Scent Vacation.”

Basically, if it drives you and can be represented visually, it can be your big idea.

The Filming Process

After the big idea comes the filming process, where you actually shoot and edit your video.

No matter who you are or what you do, there’s a good chance that this step of the process is the one that gives you pause: you might be asking yourself if you have the time, the money, or the resources to see your vision through to completion.

I’m here to tell you that you do.

To be fair, there are a number of issues that you’ll need to address, many of which are unique to video production. These include:

Script development
Lighting
Direction
Audio and sound
Editing/post-production software

Yes, it does sound complicated. And that’s what will make the final result so much more satisfying. So how do you address all of these factors and make a winning video?

Let’s address the fact that plenty of videos have gone viral over the last few years that were made on a shoestring budget. They just happened to have the right message, or timing, or any one of a hundred other mysterious qualities that made it a hit.

For everyone else, it might just make sense to turn to the professionals for a bit of help. 50Grove is a great site for anyone who’s looking to make their YouTube debut: it’s a directory of professional video producers, all of whom are ready to put their resources and skills to work for you.

And then there’s the DIY solution. If you’re feeling ambitious, you can visit your local hardware store, spend about $100, and build your own lighting kit. The results will look anything but “budget-priced.”

Google AdWords for Video

So now that you’ve established a big idea and filmed your video, how do you show it to your target audience?

You could upload it to YouTube, and then desperately try to point your website and social media viewers to your channel.

Or you could sign up for a Google AdWords account, and bring the video to them.

With Google AdWords for Video, viewers see your ad while they’re watching or searching for YouTube videos or while they browse related web content. This allows you to send a highly targeted message to specific, interested users.

The greatest feature of Google Adwords is that it allows you to promote your video ad in a TrueView system, which means that you only pay when a viewer chooses to watch your ad (as opposed to paying once the impression is served).

This setup allows you to:

Reach targeted viewers (targeted by demographics or by relevant search terms)
Pay only for viewers who choose to watch your ad (so you’re not wasting money advertising to people who aren’t interested in your offer)
Manage your campaign with ease

Essentially, everyone wins: viewers choose ads relevant to them, and you only pay to reach people who are interested in your message (and most likely to convert on it). It also grants you a valuable boost in YouTube views, which increases your virality and sharability.

Google AdWords for YouTube

Obviously, when anyone thinks about online videos, the first thing they think of is YouTube. And with over 4 billion views a day, it certainly has earned that right.

It’s also earned the right to be the center of your video advertising campaign. Through AdWords, YouTube offers various advertising formats to help get your message in front of YouTubers when they’re searching for or watching a video.

YouTube Advertising Formats

YouTube offers three basic advertising formats for video: in-stream, in-search and in-display ads. Here’s a basic breakdown of what each format looks like, how each one functions, and the pros and cons of each.

In-Stream Ads

In-stream ads display in the area where normal YouTube videos run. They play like a TV-style ad before, during or after a user sees a YouTube video.

Viewers see five seconds of your ad and then can keep watching, or they can choose to skip. However, you only pay if they watch for at least 30 seconds or to the end of the video (if your video is less than 30 seconds).

You can change your settings to make your video mandatory (that is, viewers must watch the full length of your ad before they can view their content).

Live Example

For example, let’s say that we were to do a search on YouTube for the famous “Charlie Bit My Finger” viral video. When we get to the page to watch the video, we might see an ad play before “Charlie Bit My Finger” starts. On that ad, we’d see a pop-up that counts down 5 seconds for us, at which time we can click to skip the ad or we can continue watching.

Upside: This type of ad allows you to advertise to a captive viewer. An in-stream ad grants you the opportunity to introduce yourself to potential customers, who may not be familiar with you, and to maintain relationships with your current ones.

Downside: It’s only for a guaranteed 5 seconds. And even though those 5 seconds seem trivial, viewers may grow agitated that they are forced to watch your video at all. They may mute your ad, ignore it altogether, and skip it as soon as possible.

You can either use that 5 seconds to make a case as to why the viewer should continue to watch your ad, or you can use that 5 seconds to do some down and dirty advertising while you have the screen time.

In-Search Ads

While in-stream ads play automatically once a user lands on the page, in-search ads do not play unless they are clicked on.

In-search ads appear in a special promoted section at the top of the video search results page on YouTube and Google video results.

Live Example

Let’s go back to “Charlie Bit My Finger.” On the search results page, we might see that the first two videos displayed are actually video ads. If they interest us, we can choose view them before we proceed to watch “Charlie Bit My Finger.” If not, we skip over them entirely and go directly to our feature video.

Upside: Since people can choose whether or not to play your video, they aren’t as likely to be irritated by it.

Downside: You only gain viewers who are already interested in your brand, which can improve your customer loyalty but really limit your potential for consumer growth.

In-Display Ads

The third format, in-display ads, places your video alongside other YouTube videos on actual video pages.

Live Example

Once we’re done watching “Charlie Bit My Finger,” we might look down the right-hand column of related videos to choose another. At the top of the list, we would see one or two video ads, formatted exactly like regular videos that we could click on to watch.

Upside: Your video is placed right alongside other videos and looks just like them, increasing the chances that viewers may click on it and view it.

Downside: Again, viewers may be irritated once they realize they clicked on an ad and immediately close it.

Google AdWords for Google Display Network

YouTube is definitely an excellent command center for video marketing, but it doesn’t have to be the venue of your entire online presence. There’s another online video experience that can pack a punch as well.

And we’ve almost all been through it: you’re on a website, browsing through products, before you go to another website and see – gasp! – an ad for the site you were just on – possibly even for the specific product you were just looking at.

This all too familiar (and creepy) experience has a name: Google Display Network. It’s an AdWords program designed to promote ads on websites, with the goal of directing interested customers back to your site. And it reaches 89% of all online viewers.

With Google Display Network, you can harness the power of video to create an appealing ad, which you can place on sites that are relevant to what you’re selling. You can also target the people who have previously visited your site, keeping your brand top-of-mind and helping them commit to a purchase.

By showing your video ad to the people who already displayed interest in your site, your advertising dollars go directly to the people who are most likely to convert with you.

Google Display Network Advertising Format

A video on Google Display Network will appear on the side of a webpage (usually to the right) and will often play automatically once a person lands on the page.

Live Example

The screenshot below was taken on Forbes. It was an article about Google ads, and many of the advertisements on the right-hand side of the screen were about – you guessed it – online advertising.

Upside: The upside is fairly evident. Your content will be served to people who are already very likely to be interested in what you’re selling. These tend to be the people who were perhaps exploring the alternatives and will now benefit from a reminder.

Downside: The downside is more-or-less the same as with any other online advertising medium: there’s already a rather limited pool of good will among Internet users, and displaying ads of any kind usually doesn’t help any. Even so, relevant ads are better than ones that are completely off-topic.

Google AdWords Policies

Google has provided some basic advertising principles that drive their AdWords policies. According to the support.google.com website, all advertising should:

Provide a positive user experience
Be safe for all users
Be accurate and honest
Maintain user trust and privacy
Comply with all laws and regulations
Be compatible with Google’s brand

Here’s a general breakdown of two really important advertising policies for your video marketing campaign: the YouTube ad policy and the policy for advertising based on interests and location.

YouTube Ad Policy

Since it’s such a widely used site, YouTube has the responsibility to ensure that its videos are appropriate and respectful of the general community.

Therefore, YouTube has set some community guidelines so that the site is not abused.

If you are posting your video to YouTube, you must:

Respect copyright laws
Not cross the line
- No sexually explicit content
- No illegal content (such as animal abuse or underage drinking)
- No graphic violence
- No shocking content (such as dead bodies or accidents intended to disgust)
Not use hate speech
Not use misleading descriptions, tags, titles or thumbnails in order to gain views

Any content that violates these guidelines can be flagged for review 24 hours a day, seven days a week. Videos deemed inappropriate will be removed, and the responsible account will be penalized or even terminated.

Your ultimate goal is to appeal to users, not to offend them. Therefore, it most likely wouldn’t be good practice to incorporate any of that content anyway. However, you should still keep these guidelines in mind, so your video can enjoy a long lifespan online.

Policy for Advertising Based on Interests and Location

If you are going to display your video to people based on specific demographics (i.e. your video only plays for people in Boston), you need to follow Google’s policy for advertising based on interests and location.

In summary, this policy states that:

Your Privacy Policy must state any information on use of AdWords features that target by demographic
You can’t use your video to collect or share personally identifiable information, such as email addresses or credit card numbers
You can’t modify or obscure Google’s in-ads notices to disclose interest-based advertising

Basically, if you’re going to target specific groups of people (which can be a smart marketing move), make sure you don’t do anything shady with people’s personal information. Otherwise, Google will pull your ad and your trustworthiness will be compromised.

Measuring for Performance

You can closely monitor your ads’ performance on both YouTube and other Google Display Network sites from the Ads, Videos and Targets tabs of your AdWords account. On these tabs, you’ll be able to view information regarding the following metrics:

Number and rate of views, sharing and endorsements
Quartiles (or percent completion of views)
Earned actions, including earned views, comments, likes, etc.

The Ads Tab – View Your Videos

The Ads tab allows you to do three things with your videos:

Review your video’s performance based on format (in-display and in-stream).
1. Status, impressions, views, and total cost
View your video in all four available ad formats.
View your ad as though you were a general user.

The Videos Tab – Compare Your Videos

The Videos tab shows your video ad performance across different variations in graph format (i.e. comparing your in-display ad performance to your in-stream ad performance for the same video).

The graph is clickable, so you can review particular data segmentation for every video and every format.

The Targets Tab – Assess Your Videos

The Targets tab also shows your video ad performance by demographic. It also allows you to gather statistics related to retention and engagement rates.

This data can help you better understand how many of your users watched and understood your video. It can also relay valuable information on how your videos drive traffic to your YouTube channel.

Success Stories

Here are two stories of companies who used Google AdWords videos to generate brand awareness and increase sales.

Generating Awareness – ResortQuest

ResortQuest manages almost 10,000 vacation rental properties in the US. You might think that a company that size wouldn’t need a lot of help with publicity, but I’ll let John Ellis, their senior online marketing manager, explain it in his own words:

“In a harsh economic climate like the one we have today… it’s essential you’re able to scale back and refocus your dollars on the highest-conversion placements.”

In other words, ResortQuest turned to AdWords to increase awareness of their brand among those who were most likely to take a serious interest in what they offer.

Increasing Sales – Julian Bakery

Located in La Jolla, California, Julian Bakery has a vested interest in appealing to a local audience. They began advertising with Google AdWords because, as they put it, they’re “always looking for new ways to reach more customers.”

And it worked. Julian Bakery has been advertising with AdWords for more than three years now, and they’ve seen their workforce more than triple in size in that time. Their conversions have leapt by 35%, and their vendors frequently tell them “whatever you’re doing, it’s working.”

Conclusion

Online video ads are the new TV spot, or soon will be. Business owners everywhere are waking up to that fact and creating rich online content that complements – rather than distracts or detracts from – the online experience of their target market.

One of the key takeaways here is that – for the time being – there’s less competition in the online marketing realm than in the television realm. The audience is huge, but the idea that producing online video content is prohibitively expensive or difficult has been holding companies back from investing in it on a larger scale.

Which means that this is your chance to make a big impression. Have you used AdWords in your video marketing efforts? Feel free to share your thoughts below.

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November 18, 2014 by Shane Jones

A Startup Focusing on Profitability Won’t Succeed on It Alone

Even when you hire some of the most experienced journalists, there will always be topics that are difficult for them to grasp. Profitability is one of those topics.

When I see journalists conveying that profits are the most important component of any startup, I metaphorically (and sometimes literally) shake my head. Both journalists and entrepreneurs have this mindset that profits are at the top of the startup lists. Don’t get me wrong, profits ARE important. They keep the businesses running. However, so does growth.

Profits and growth have always had a touchy relationship. In order to grow, businesses need a certain amount of financial resources. These resources are needed to cover costs that might not show value for 6 months-year.

For example, if you hire a strategy team of five for $80,000/year each, then you’ll need an extra ~$35,000 per month in order to pay them. Even with an experienced strategy team, deals might not close for up to 6 months.

If you hire 6 sales reps in January at $120,000 / year salary then you’ve taken on an extra $60,000 per month in costs yet these sales people might not close new business for 4-6 months.

Even though this information might seem pretty simple, even the most experienced entrepreneurs tend to forget about it when thinking about profits.

Growing your company is a goal to keep at the top of your list, but you need to remember that hiring more isn’t always the best option. Keep in mind how they’re going to help your company. Will they end up slowing down your revenue? Or does your company have access to funds that will cover temporary loss?

Management Summary:

The majority of companies (98+%) in the world are focused on profits, as they should be. When your company is focused on profits, you don’t have to rely as much on others for funds.

Having leverage when you’re trying to raise funds IS possible. (There are investors that appreciate how you can profitably run a business without trying to expand into a large one.)
Exit opportunities increase. Acquirers (like Google and Facebook) are interested in buying companies that will essentially bring more money to their company. If your company isn’t profitable, they’re not going to be interested. Their goal is to earn profits quickly from their acqui-hire so their acquisition price will be paid off and they can continue collecting.
Focusing on profits will keep your company thriving, even in hard times.

You shouldn’t be focused on profits if you:

Have opportunities to create businesses of a scalable size.
Have investors that are looking to build scalable buisnesses.

If you have an awesome idea, others will notice and try to compete with you. If you’re in the lead, you need to find investors and raise capital ASAP. If you don’t, your idea will be in the hands of someone else’s success.

The Specifics

This isn’t the first time I’ve had this conversation. I’ve come across entrepreneurs of all types, but the ones worth mentioning in this instance, are the newer ones that have reached annual revenues of ~$1 million.

As a new entrepreneur, this number sounds so promising and exciting (which it is!), but deciding to keep your costs low in order to finally hit profitability, might not be the right choice. Of course you want to cut strings with investors, but be patient.

If you’re looking to run a smaller business, put your company on the market within a few years, or attempt to raise VC, then by all means, as you were.

If you’re looking to grow your company, raise VC, but maintain some leverage, be careful. Investors of startups tend to care more about growth rather than profits. I completely understand wanting to be in control of your company, but be cautious that it doesn’t hurt your growth.

If a VC were to see that your company raised $4 million and is now earning $2 million in revenue a few years later, they wouldn’t be as impressed as you’d think.

It would be different if your customer growth expanded immensely (without focusing on revenue), you spent those few years perfecting a stellar, new piece of technology, etc. However, if you were simply trying to show that you could earn a profit, you might want to find other resources to help your company grow.

Understanding Profits

Before going into heavier details, let me go over a few of the basics:

Revenue – Cost of Goods Sold (COGS) = Gross Profit (also called Gross Margin or sometimes “Net Revenue”) – Operating Costs = Profit

When looking at an income statement, start by focusing on the revenue line. Revenue growth is something that matters to everyone trying to understand the performance of their company. When journalists inquire about public stocks, I make sure to tell them if two companies both had $200 million in profits, that doesn’t mean their futures are similar. The first company’s growth in revenue might average around 50% per year, where the second company’s might average around 5%.

If both companies had the same net profit margins, the second company would actually be going further than the first.

Even though evaluating stocks by P/E ratios is typically easier, you also need to use other metrics such as PEG. Both metrics are pretty simple compared to some other financial tools in existence.

Investors Look for Growth

When determining the value of a company, you need to look at the value of all potential cash flows modified to today’s dollar. With dollars constantly losing their value, this will help fast-growing companies keep an eye on their future profits.

When you’re evaluating a company, you’re going to want to evaluate growth instead of earnings. Earnings alone won’t give you an idea of which company is more successful. Also, when you’re evaluating especially new companies, sometimes you should focus on customer growth instead of revenue.

Where is Your Revenue Coming From?

When I’m evaluating companies that have already established some revenue, I’m going to focus heavily on the revenue line. What does this revenue consist of? Is it based off of one single product or multiple? Who is the revenue coming from, many customers or just a few?

Revenue concentration is something to remember. Your company isn’t growing if a select customers are keeping your business running. If your revenue is concentrated on those select few people, it’s at risk and could potentially decline.

You should also try to figure out the how you’re pricing a product, how competitors are pricing theirs, and any expectations for pricing in the future. Fast-growing companies are often destroyed due to lowering prices in order to compete with others selling a similar product.

Revenue Isn’t Enough

Looking at the revenue in dollar terms isn’t going to be enough. In the graph below, you’ll see that even though both companies garner the same revenue each year, the first company’s gross margins are higher because the COGS are lower.

COGS show how much each sale costs your company. If you sell products through a website like Amazon that charges you 30% of each sale, your COGS will be 30% of revenue.

The example above is not as uncommon as you may think. Company 1 is an example of one that directly sells their products off of their website or through a sales team. The second company is an example of one that has to pay a publisher 85% of their revenue for running ads on their website.

This example can also be one of a travel website that gets paid in rewards for selling airline tickets. Companies strive to have higher numbers in their revenue, even though it can be misleading. For example, if an airline website sells $300 million of Swiss Air tickets, that won’t go directly to them. They’ll get paid a fraction of that from booking fees.

eCommerce websites experience something similar. When an eCommerce website sells products, they have to give a higher percentage of those sales to the manufacturers. The actual gross margins of these eCommerce sites can range anywhere from 15-40%.

Don’t All Companies Strive to be Profitable?

No. Let’s take a look at the following companies, which both have 66% gross margins.

Both of these companies look the same after a year. Both companies look the exact same after one year. They increased seed money but lost around $1 million within the first year.

There’s nothing wrong with your gross margins equaling 66%, but the sales aren’t stellar enough to fund their team (marketing, management, strategy, etc.) When it comes to internet startups, a portion as large as 80% of costs will go towards their team.

How do you know which company is better off?

You can’t. Journalists might state that Company A isn’t profitable. However, that company spent $5 million in VC towards growth. The money wasn’t used carelessly, but was used to fund a larger team in order to launch a second product line. The tech, marketing, and business development team were hired to work on launching those products in order to expand their company.

If there was a need for the products they produced, the investment would be worthwhile.

Take a look at years 1-5 for both of the companies.

While Company B looked frugal at first, Company A’s investment in their team resulted in a higher growth rate. At the end of 5 years, Company A garnered $14 million in profits while Company B only made $5 million.

Currently, Company A is garnering around $47 million in revenue/year where Company B is only earning around $12 million/year. As you can see, growth DOES matter.

Let’s take a look at an even more intense situation.

The example of the company above must have raised anywhere from $35-50 million in VC to fund those types of operations. Even though that money would’ve been raised in 2-3 tranches, was this a naïve decision?

It depends. If the growth is as substanstial here as it was in Company A (mentioned earlier), then they would’ve been insane not to increase the VC.

You’re able to increase profits by avoiding investing today’s dollar in tomorrow’s growth.

Journalists that slam Amazon for being unprofitable need to understand this:

Since Amazon is growing at such a fast pace, it makes sense that they’re taking today’s profits and investing them in the company’s growth. Companies that aren’t growing as fast should instead return their profits to shareholders.

In Conclusion: Profitability vs. Being Cashflow Positive

Heading back to the basics, I have to say that investors care more about cash flows than they do about income statements.

For those that have just learned the difference between income statements and cash flows, being profitable doesn’t mean you’re being cash flow positive.

It’s possible to lose out on money while you’re being profitable, even if you thought being “profitable” meant making money.

The design of income statements rely on accounting standards, which are designed to “match revenues and costs in the period for which they should be attributed.”

Examples:

A specific ad network may sell $300,000 in ads. Then, the publisher of the ads will need to be paid within 14 days. The person who bought the ad doesn’t have to pay the network for 60 days.

Even though the person that bought the ad might seem profitable on their income statement, they had to pay $300,000 that they don’t have yet, which results in negative cash flow.

Let’s say that I sold a $1.5 million contract for two years. Even though I’m booking around $63,000 on my income statement, the customer is paying quarterly. This means during the first few months of every quarter, revenue is showing on my income statement that I haven’t received yet.

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November 12, 2014 by Shane Jones

Increase Your Team’s Performance By 48% With This One Word

Technology drastically changes the face of both work and play from one decade to the next. Ten years ago the iPhone was still an idea, and Facebook had not yet replaced chat rooms. Ten years ago internet users were still connecting with dial up and internet videos were avoided because of it.

Due to the not-at-all-slow changes to accommodate technological advances, workflow is accomplished in increasingly solitary environments. More and more people work remotely rather than collectively – at least in a physical sense. I myself, was recently part of a marketing team hired to promote a yoga site. Every single one of us worked via instant messenger, email and video conferences every Monday .

But no doubt, there are plenty of companies whose employees work remotely these days. Woothemes, a WordPress ecommerce and plugins company, is comprised of 30 employees located in seven different countries. Buffer, a social media sharing tool, is also a completely remote and/or distributed team, with team members located throughout several time-zones and countries. Other examples of businesses who operate either partially or totally remotely include Foursquare and WordPress, as well as many other lesser known companies such as 10up, Treehouse, Basho and Lullabot.

Advantages of Social Context

Because social context and sharing physical space with members of a team have a natural advantage over remote team work, remote teams may need to be reminded -often in more creative ways – of the same motivational concept that is a naturally present implication in physically shared spaces: that you’re all doing this together.

In a physical office, you can see the faces of your colleagues or co-workers. Engage in chit-chat and small talk. Observe body language and facial expressions at any time. Even learn how many cups of coffee each one drinks per day, or how many bathroom trips they make. These things –even if sub-consciously – all contribute to a team-like environment. While things like how much sleep your co-worker got the night before or what they’re having for lunch may seem like trivial details, it’s all part of the contextual information you can gather about your team just by being physically present. And the more information you have about a team member, the more you intrinsically trust them. This is precisely why most of us initially trust people far less when we meet them online, than when we meet in person for the first time. We simply have no information about them upon which we can base any amount of trust.

A continually nurtured sense of teamwork and team building is vital in a remote environment. Without a sense of teamwork, which often translates to “purpose” behind the tasks and contributions of any given remote worker, they will likely become disengaged, slower and less productive or efficient, and less motivated about the work in general. Who are they working for? What are they working toward? Who is supporting them and vice versa? These are powerful motivators to workers.

As briefly mentioned above, this may require more creative, and sometimes more extravagant strategies. You might hold bi-annual staff workshops or retreats to encourage team interaction and socialization as well as team cohesiveness. Or you may implement daily means of team building, such as a virtual water cooler or “always-on” web cam or even circulating playful pranks. There are productivity tools out there specifically to aid team-building and teamwork, such as IDoneThis and Sqwiggle, which is one of those “always-on” video chat systems I mentioned.

That’s all well and good – but where does this 48%-more-productive figure come from?

Research Results That May Change Your Team Management

Gregory Walton and Priyanka Carr – two Standford researchers and psychologists, studied participants in a case study in an attempt to help indentify what drives intrinsic motivation.

Two groups of participants were all given the same task and instructed to carry out the task in the same work environment – alone in a room. The first group was told that the research was being conducted to find out how “people work together to solve puzzles,” and that each participant would work on part of the “puzzle called the map puzzle.”

The second group were all given the same instructions, minus any mention of working with other participants or working together to solve the puzzle.

When the results were in? The “psychologically together” group worked 48% longer, solved more of the overall problems correctly, and could recall significantly more information than the “psychologically alone” group.

This research really speaks for itself. When you emphasize the “together” aspect of a task or project, it will intrinsically motivate your team – regardless whether they’re all sitting in the same room, or looking at each other through a web cam. In the words of Carr and Walton, “a defining aspect of humanity is that people work together toward common ends.”

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November 5, 2014 by Shane Jones

Why Managers Must Engage the Mind of Every Employee

When it comes to the overall effectiveness of a company’s employees, no one is held more accountable than management. As a manager, you’re responsible for more than the hiring process and performance evaluations — employee morale and engagement are yours to foster.

Strong managers seek to engage every single employee, and it’s no easy task. What makes an employee engage with a company’s mission? What keeps that employee happy to return to work the next morning? With the right engagement techniques, not only will your employees seem happier at the start of the workday, but they’ll also become more productive.

Studies consistently show the importance of employee engagement, but statistically speaking, companies don’t seem to be getting the memo:

Workers Worldwide Are Simply NOT Engaged.

According to a recent Gallup World study, only 13% of employees worldwide report being engaged at work….Only 13%!

The statistics of employee happiness are bleak. An article by the Ivey Business Journal cites these numbers as equating to a “crisis” of employee engagement. When an employee is fully engaged with a company and the work at hand, he or she will work harder, contribute more, and exhibit that rare trait of company loyalty.

Extrinsic vs. Intrinsic Motivation: Which Is Better?

We tend to focus on extrinsic motivational factors to reward employees: financial compensation, benefits and praise. Those are all incredibly important and shouldn’t be sacrificed. Too often, however, we neglect looking at intrinsic motivators, which are motivational factors employees find within themselves. As writer Ross Coverdale explains in his article If Money Alone Isn’t Enough to Attract Talent, What Is?, these intrinsic motivators can include meaningfulness, competency, choice and progress.

Do you know what motivates your employees? As a manager, it’s your job to find out.

What Really Motivates People?

“Of course motivation is not permanent. But then, neither is bathing; but it is something you should do on a regular basis.”
― Zig Ziglar, Raising Positive Kids in a Negative World

Motivation isn’t a “one size fits all” concept. Everyone has a different style, and it’s up to management to both discover that style and foster it. Some employees work more productively as they receive more praise, while others have the opposite response. Some employees’ productivity is closely correlated with meeting challenges and proving themselves, while others shy away from competition.

Don’t make the mistake of only taking only one motivational approach. Offer a multitude for best results, and don’t forget to make motivation a continuous process.

How Can You Better Engage Employees?

When looking for ways to incorporate intrinsic rewards into your management style, consider tried and true methods that provide meaning to employees.

Offer positive reinforcement

Never underestimate the power of a simple “thank you,” a genuine compliment or taking the time to notice individual strengths. These positives may only take a brief moment on the part of management, but they can mean the world to the recipient.

Stay consistent in order to build trust

Nothing confuses employees more than inconsistency at the management level. If employees see that some coworkers are treated differently depending on who they are and what friendships they maintain, this can justifiably be interpreted as an injustice. Your employees must trust you, and the best way to demonstrate trustworthiness is through fair and consistent actions.

Seek employee feedback

Communication will make or break you as a manager. It’s perhaps the most crucial component of your effectiveness, and strong communicators get better results from their teams. That doesn’t mean the loudest managers take the gold, either. Communication is a delicate balance of excellent listening skills, positivity, empathy and honesty. Truly listening to employee feedback is the single best way to connect with them.

Assist employees with their own goals

Ask employees about their own ambitions to see if any special projects or assignments might advance their pursuits. Treat the employee/manager relationship as a two-way street, and take the time to learn about your staff members’ individual interests. You might be able to put some of their skills to use – and allow your employees to more thoroughly enjoy their assigned tasks.

Pose challenges in a manner that lets everyone contribute with solutions

Some employees prefer to analyze an issue before offering insight, while others like to vocally brainstorm in an unfiltered manner. Allow ample time so that everyone has a chance to respond to an idea, and encourage employees to communicate through any medium that suits them, whether it’s via email or delivered in person.

Be flexible

The number one request that Millennials have in regard to their workplace environment is flexibility. Luckily, in these modern times, virtual platforms allow for more opportunities to freelance and work from home. Allowing employees to flex their time to meet personal obligations and scheduling needs is sure to please them, and when they’re at work, they won’t hold resentment over an imbalance in work/life pursuits.

With the right motivational techniques and intrinsic rewards, management can foster an atmosphere of employee engagement. Nothing helps more with employee fulfillment, production and retention – and your company will reap the benefits.

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October 12, 2014 by Shane Jones

Why Your Job Is Temporary and How You Can Own It

The sooner you come to the realization that your job is temporary and there’s no such thing as job security, the sooner you will realize your full potential.

This doesn’t mean you will be fired or replaced tomorrow. But it does mean that your job could become obsolete sooner than you think — especially if you work with the Internet.

The average person remains at a job for 4.6 years. Long gone are the days of lifelong tenures at the same company. But the truth of the matter is that we are still programmed for loyalty, and we elicit an emotional response at the thought of an uncertain employment future.

Learn to Accept Uncertainty

Do you consider uncertainty to be positive? If not, you should. Instead of getting comfortable with what you’re currently doing, get comfortable with the fact that change is an inevitable part of success. Skillsets and jobs are becoming obsolete faster than ever, so your job might not be around in a few years. As robots plot to take over more and more jobs every year, it’s wise to recognize your impermanence.

Recognize That Your Full Potential Lies in Adaptability

The most valuable skill you can have is the ability to constantly learn new skills. The adaptability to change and the capacity to learn new things will earn you a job tomorrow, not complacency with the job you have today. Those who embrace inevitable change will thrive.

It is true, however, that the world isn’t built for change – just ask anyone in education or politics. Yesterday’s business model has created a paradox for today’s businesses.

On one side of the scale, we have traditional companies that operate on efficiency and execution. On the other side, we have innovation and ingenuity. Although the latter has gained some credence over the last few years, the scale is still tipping in favor of the old school.

Why? It’s pretty simple: Shareholders and stock markets reward businesses that stack cash, which pushes the birth of new business models and innovative ideas to the wayside. The well-oiled machine that is the old-school business model earned its success through traditional policies and procedures, not innovation.

Although innovation has positive connotations, dissecting the semantics of the word shows something raw and unguarded. There is a process that comes with innovation – and it isn’t always pretty. In fact, it can be complicated, messy, and downright painful at times.

Realize Innovation Comes With Risks

Trial and error and non-traditional, forward thinking are synonymous with innovation. It’s that process, which can be chaotic, that leads to the worthwhile outcome of success. Whatever you want to call it – a breakthrough, a profitable new method, or a revolution – it was likely created as a result of progressive thinking. The people who aren’t afraid to ditch the conventional often attain the most success.

Embrace the Crazy

Aren’t quite ready to accept the idea that your job is temporary and tomorrow’s success lies in against-the-grain business models? Let’s take a look at a few pioneers who embraced the crazy and reaped many benefits:

Google — This list wouldn’t sustain much credibility without mentioning the Internet’s most lucrative company. Always inventing and ever-creative, Google doesn’t stop at search, or at wearables with Glass. It also happens to be planning a way to cheat death.
Bloomberg Philanthropies — Seeking to target the most people, Bloomberg Philanthropies uses data to make momentous impact for the greater good. This new way of attacking global problems has positioned the foundation to dedicate $530 million towards overfishing 3 countries.
Xiaomi — The Chinese smartphone manufacturer increased its profit by 150% since 2012, offering quality smartphones at record-low prices while being criticized for its flash sales marketing. This exponential growth is, according to Vice President Hugo Barra, only poised for further increase as the company plans to “show the world its teeth in a major way over the coming decade.”

How to Work Towards the Unknown

If you’re ready to leave the conventional, embrace the unknown, and leap headfirst into innovation, consider the following 6 business tips:

Take a lesson from the startups — Innovation must occur at every level of an organization, and it comes with risks. Just like startups, larger entities must realize that innovation can be a messy process. Failure is sometimes part of the process, but it shouldn’t be punished.

Forget your comfort zone — Exciting new ideas are born when comfort zones are forgotten. When people take risks or consider things from a different angle, the outcome is often prolific.

Listen better — The world today is full of distractions, making it hard to focus both in and outside of work. With so much temptation lurking in every nook of your office, focus on active listening. A colleague, friend, or family member could quite possibly hold the inspiration you need to launch your next big idea.

Question rationalizations — There’s nothing more detrimental than using the excuse “because that’s how we’ve always done it” when responding to a question about your processes. Poke holes in your standard processes, consider new options, and think about the long-term.

Take baby steps — It’s easy to only see the end result when you come up with an amazing new idea to enhance your business model. But it’s not feasible to recklessly risk everything. Smaller improvements will often lead to the large result you’re seeking with a little patience.

Implement constraint, not starvation — There’s a new tendency to take resources away from a project in order to inspire creativity. While this can work at times, people tend to work better under constraint rather than in a void of resources.

Own Your Role in Business Innovation

Each one of us will play a role in the future of business innovation. Embrace the rewarding aftereffects of something a little crazy – it will surely earn you a competitive advantage over your competition and position you for future success.

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September 12, 2014 by Shane Jones

Here’s What Makes You Successful (and No, It’s Not Just Talent)

Stephen King once said: “Talent is cheaper than table salt. What separates the talented individual from the successful one is a lot of hard work.”

Certainly, the bestselling author isn’t alone in this belief. In their influential 1993 paper The Role of Deliberate Practice in the Acquisition of Expert Performance, K. Anders Ericsson et al. argued that what we know as “innate talent” is, in fact, the product of at least 10 years worth of intense practice.

Likewise, UPenn psychologist Angela Duckworth suggested that grit is the ultimate predictor of success. It’s not hard to see why these ideas have mainstream appeal: Anyone can push themselves to work hard and persevere, but not everyone can be talented. So what does it take to be successful?

Talent Still Matters (to an Extent)

Success isn’t just about effort, though. According to a study by David Z. Hambrick and Elizabeth J. Meinz, an individual’s basic abilities still play a role in the performance of complex tasks, even among those who are considered experts in their field. The researchers did concede, however, that in certain fields such as piano, “…working-memory capacity may become less important as the piece is practiced and then becomes entirely unimportant once mastered.”

Above anything, your basic, natural ability — your passion and talent — drives success and mastery of a given subject. We can teach almost anyone about SEO tactics, but it takes a person with a true talent and natural desire to continuously learn, stay on their feet and engage with users to stand out from everyone else.

Your Specific Field of Expertise Matters, Too

But even if hard work does contribute to success, it’s probably not as important as its proponents make it out to be. A research team led by Brooke N. Macnamara dug deeper into the idea of “deliberate practice” as defined by popular science. The team found that it accounted for “…26% of the variance in performance for games, 21% for music, 18% for sports, 4% for education, and less than 1% for professions.”

In other words, if you’re a hardworking basketball player, you’re probably going to fare better than, say, an overly enthusiastic math teacher who’s no better at understanding numbers than his students.

What About Luck?

Yes, luck does play a part in success. According to David Lubinski of Vanderbilt University, opportunity (or a chance to get lucky) should also be factored into the study of human performance, in addition to ability and commitment. Though “luck” and “opportunity” may be difficult variables to measure, most people know it when they see it.

To be successful, always keep your eye on golden opportunities. Being able to take advantage of prime moments or unique situations can lead to some of the most promising business ventures.

What You Can Do

It’s clear that a combination of talent, hard work and luck is the recipe for success. But what if you lack one or more of these qualities? What if you’re not talented, motivated or lucky enough? Does that mean you’re doomed to failure?

Not necessarily. You can’t do anything about things beyond your control), but you can:

Know the boundaries of your “circle of competence.” In his 1996 letter to his shareholders, billionaire investor Warren Buffett encouraged shareholders to invest only in companies that they understand inside and out. That way, they’re more likely to gain the stock returns they want. By the same token, it’s more rewarding in the long run if you focus on maximizing your strengths, rather than trying to overcompensate for your weaknesses. As Mr. Buffett put it: “The size of [your circle of competence] is not very important; knowing its boundaries, however, is vital.”

Adopt the “lucky person mindset.” Luck can’t be easily quantified, though Prof. Richard Wiseman did conduct a study on it back in 2003. He found that “lucky” people tend to be more relaxed, resilient and skilled at finding opportunities right under their noses than “unlucky” people.

Learn something new every day. According to Stanford University psychologist Carol Dweck, people either have a fixed mindset or a growth mindset. People with fixed mindsets believe that intelligence and talent are unchangeable, and therefore don’t bother to develop either. People with growth mindsets believe the opposite, and are usually the ones more likely to succeed in life.

Define success on your own terms. So far, we’ve used the word “success” to mean “financial wealth,” because that’s the most common and most quantifiable, definition. However, it can also mean “contentment,” “happiness,” “peace,” or a combination of all of the above. If you’ve already achieved your own definition of success in spite of everything else, isn’t that enough?

When it comes to success — whatever your definition is — talent isn’t everything. And neither is hard work. Knowing how to seize opportunities, maintain a natural passion for your field, and build on your expertise will help you meet your goals.

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August 12, 2014 by Shane Jones

Forget Value Propositions. It’s Now a Value Conversation

The digital marketing paradigm continues to shift to reward the faster, the easier, and the more accessible. But what about the more human? Although businesses constantly evolve to stay in the game, value propositions have remained largely unchanged. It goes a little something like this: Companies offer their products in hopes that consumers will siphon through the sales funnel and make a purchase.

But we all know it’s a lot more complicated than that. And we can all do a lot better than the worn out “here it is, do you want to buy it?” value proposition.

This is where the focus needs to shift from simply selling a product to engaging consumers in authentic, meaningful conversations.

Unforunately, many businesses unknowingly sidestep the chance to provide something truly “valuable.” As Harvard Business Review puts it, businesses today must “rethink their attitude to value creation, at times backtracking to the very issue of what ‘value’ actually means. Such situations take place beyond the traditional model of buyer and seller.”

This implies that something needs to change — and marketers everywhere would be wise to reconsider the effectiveness of their value propositions.

Redefine Value

As marketers began to rethink the definition of value, the idea sprang forth to offer something valuable for free, in hopes that it would pay off in the future. After all, free content builds brand loyalty, right? Sort of. This type of strategy posed its own problems and now marketers are once again forced to rethink the process.

Some advocate for paywalls or similar solutions with set firm prices. While the success of these attempts is debatable, it’s clear that we’re still missing something: an innovative approach to monetizing digital content and offering something truly valuable.

A meaningful conversation or a deep, investigative look at an issue or topic will help ensure your position as a thought leader in your industry. Furthermore, it will bring back an element of humanity to your brand, enabling you to explore a new definition of value. And your customers will appreciate your effort.

**Consumers Will Pay For ‘Real’ Value**

Consider for a moment your favorite free apps or free content producers. Regardless of their purpose, you appreciate the app or content and would likely protest if it were to disappear tomorrow. Now, consider if there were any missed marketing opportunities in your interactions with the app or content. Ask yourself the following questions:

Do you love the service so much that you’d be willing to pay for it?
Did the creators miss an opportunity to sell you on an upgrade?
Are you loyal enough to the brand that you’d recommend it?
Have you written a review of the service, product, or content?
Have you reached out to engage with the creators to ask questions or praise them for their quality work?

If you answered “yes” to any of these questions, you probably agree that consumers will pay for real value. Conversations, not propositions, are at the heart of this value.

Be Sure to Respond

To provide this kind of value to your customers, let them know you care. Start a conversation and see where it goes. More importantly, respond to them when they reach out. A customer left hanging after he or she begins a conversation with you is a missed opportunity.

Multidimensional views of value are the way of the future. Breaking free of the old model begins with businesses that are ready to engage with their customers in new ways. Consider the following unconventional ways to involve your customers in the process of doing business together:

Share knowledge in an attempt to exchange something beyond monetary value. Think of the greater good of your industry. Make it clear that you’re not trying to sell them on anything and that you’re interested in an honest exchange of information or conversation.
Let them set their own prices. Yes, this is actually happening – and it has the potential to be very effective. There are different ways this can be done. Consider delivering the product, then allowing customers to price it as they see fit. Or ask customers to justify their prices with reasons or consider implementing fairness ratings.
Evolve to offer something even greater. Amazon’s Jeffrey Bezos is fighting all odds as he purchased The Washington Post for $250 million despite its 44 percent decrease in revenue over the last few years. His plan begins with offering The Post as an app, for free, on every new Kindle Fire HDX. Most would have walked away from such a venture, but Bezos is opting for evolution.

Spark Conversation

Remember to rethink the definition of value as you progress toward meaningful, authentic conversations with your customers. Slow and steady wins the competitive advantage over your competition. With a little patience, an open mind, and dedication to sincerely engaging your customers in meaningful conversations, the conversions — and sales — will follow.

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July 12, 2014 by Shane Jones

The Three Phases of Startup Growth: Traction, Transition & Growth

With any kind of business in the start-up process, there are three phases it will go through in order to grow:

Traction
Transition
Growth

During each individual phase, the goals, metrics, volume, channels, optimization and team differ. In order to efficiently work through these phases towards success, you have to pay close attention to these differences and plan your actions for your product accordingly. Follow these three phases to ensure success.

1. Create a Grip: The Importance of Traction

“That’s one small step for man, one giant leap for mankind.” Compare the famous words of Neil Armstrong with your product. The traction phase is Armstrong’s first step on the moon — once he made that first step, he found different things to examine. So when you make that first step with your product, there will be a world of opportunities available to you for exploration.

Goal: You essentially want to put your foot in the door. You want your market segment to find your product attractive. Without this, the last two phases can’t occur.

Metric: The measurement we use here is the retention rate of the product. There’s no point in continuing your efforts with the product if you don’t have a strong retention rate. You can create a retention curve like the one below in order to get a clearer understanding of your audience and how large it really is.

Volume: Be cautious and don’t go overboard when targeting customers. You want to understand your product/market fit, but ou don’t want a large influx of people to bombard your product. A few people will be enough because you’re still in the early stages with limited resources

Channels: Here, you’ll want to find 2 or 3 channels that will help with the steady volume of customers. There are several different types of channels that you can experiment with in order to find the perfect one for your goals.

Optimization: Look at the big picture. Focus on the big changes that could help your product, such as changing your target customers, as opposed to the miniscule things — such as which font you use on the website.

Team: One isn’t the loneliest number, or at least not in this case. At this particular moment, you should only have 1 person thinking about these phases. This person should be thinking about these phases and stages almost non-stop. If needed, find part-time help on the side.

2. Implement a Transition: Move Forward in the Right Direction

The transition phase could be compared to what NASA did after receiving all of the information from the first steps on the moon. Basically, you take the information you receive from the first phase and build on what you have to take it to the next level.

Goal: This is when you start to pinpoint and interpret different growth levers that are catered toward your particular business. You’ll learn what can positively impact your business and what doesn’t.

Metric: During this phase, you should watch and understand your Cost Per Acquisition and Life-Time Value. If you have been receiving the necessary data, this metric should be straightforward.

Volume: Your small influx of people should now get larger at this stage. Make sure your retention rate is still up to par with the amount of customers visiting your site or store.

Channels: In the first stage, you chose several channels that are best for your product. Now it’s time to focus in and choose the most effective. If it’s already effective, build on it and the growth rate will continue increasing.

Optimization: Instead of placing all of your attention on the big picture (or macro optimization), start switching your focus to the smaller picture (or micro optimization).

Team: This is the time to switch from just 1 person and start building a team with specific positions and job duties to help with growth.

3. Make Small Changes With Large Impacts: Maintain the Growth of Your Company

Armstrong walked on the moon, NASA received the information, but now what? The answer is fairly simple: they want to continue to expand their goals and success levels after walking on the moon. During the third phase, you’ll want to increase staff and support — make small changes that create big effects.

Goal: The growth levers from the transitioning phase that you started pinpointing? Start tweaking them and make them fit your exact needs.

Metric: The spotlight is still pointed toward growth rate, but this shouldn’t be your only focus anymore. Since growth is now occurring, you’ll want to look at your payback period. You’ll want a shorter payback period in order to have a better investment.

Volume: Pretend this is Poker and you have a royal flush — you go all in. With volume in mind, you’ll want to get as many people as you can to create noise about your company or product.

Channels: Do everything you can with the channel you have to fulfill its full potential. This channel will handle most of your growth. See what other channels are out there so you can create diversity among them.

Optimization: Because you’ve focused on macro since the beginning, it’s now time to focus solely on micro. Small changes can also yield large results.

Team: With growth comes expansion. You’ll want to create more positions on your team so continued growth and success is possible.

Applying the Three Phases

Flippa is a site that allows you to buy and sell websites, domains and mobile apps. When considering the traction, transition and growth phaes, Nick Kenn, the GM, chose SEO as his growth lever.

Since he knew his audience and how SEO would help target them, he managed to create and grow a company that dominates 70% of the marketplace. Kenn has a selective team of only 20 members who he hand picks by a series of different interviews. He has recently added a portion of the site where users (over 500,000 registered) can also buy and sell mobile apps.

By focusing on niche markets and offering unique services to his customers, Kenn has taken the three phases and managed his growth and success accordingly.

Finding Success

So how can your startup find success at every stage of the game? Think about how each phase influences the next, and understand the steps you have to take for each one. If you invest the time and resources to understanding the growth process, you can create a successful business or a product that appeals to a large market.

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June 16, 2014 by Shane Jones

Marketing Strategies: Appealing to Multiple Personalities

No two people are the same, so why should we market to them in the same way? Each customer has a specific set of desires, feelings, and interests that advertisements cannot accommodate like a “one size fits all” t-shirt.

By applying psychological research of different personality traits without the need for dual diagnosis, you can increase consumer output.

Five Factors of Personality

Psychological studies have shown that we possess about five different personality traits that make up who we are and define our actions. These categories are:

Extroverted: characterized by assertiveness, energy, and pleasure in the company of others

Agreeable: characterized by compassion, cooperation, and the ability to trust

Conscientious: characterized by self-discipline, achievement oriented, and organization

Emotional Stability: characterized by the ability or inability to remain calm, invulnerable, and relaxed

Intellectual (also referred to as openness): characterized by imagination, innovation, and curiosity

We exhibit certain behaviors more than others and are therefore more inclined to partake in something that matches our interests. For example, an intellectual may be drawn to bright, energetic colors, while a conscientious person is more impressed with how information is organized.

Personality can go deeper than the obvious marketing devices we use today, such as gender and cultural differences. Appealing to our inner profile establishes a sense of understanding and persuades us to purchase a product because the marketer “gets us” on a personal level.

Marketing strategies can be more effective by catering them according to what drives us and what we think will benefit our emotions, thoughts, and goals. Advertisements should recognize each of our wants and exploit them.

Three Ways to Change Your Marketing Strategy

How do you advertise your product to a personality trait? There a few ways to do so that are listed below.

#1: Read your audience

It is no secret by now that sites havesoftware they can use to track what you search or type and then pull up advertisements that grab your attention. This is a good example for what marketers can be doing to understand their audience and change their advertisements based on consumer behavior.

Even if you don’t have special software to filter through someone’s Facebook page or Twitter account, you can still observe their comments and reviews to figure out what kind of information they are looking for in your product. What changes do they want to see? What do their comments reveal about their personality? Then adjust accordingly.

Even as you are performing a presentation to new clients, observe their reactions as you present, and don’t be afraid to change your tone or content. Think of yourself as a lump of clay, and your audience does the shaping. You must be flexible and ready to meet their needs in order to sell a product.

#2: Produce motivational content

A study conducted in Psychological Science examined how personalized advertisements of the same phone appealed to different types of people. An ad catered towards extroverts highlighted the excitement of the new phone, while an ad for the emotionally unstable promoted its safety and security. Both proved to be effective when targeting their individual audiences.

Clearly an advertisement depicting excitement and going to parties would not work for introverts, and that personality type would have lost interest immediately. This is because we are all different. Not all advertisements can provide the same motivational tactics, especially for something as widely used as a phone.

To bring in all consumers, all the benefits of a product should be examined. It’s like when you’re tailoring a resume for a certain job. You’re showing what you have to offer someone and how you would benefit the company. What parts of your product would appeal most to an agreeable person, an intellectual?

The Mercedes-Benz advertisement below is a smart example of an ad that appeals to multiple personalities.

There is an idea that we use either the left or right side of our brain, but Mercedes-Benz promises to use both for the best possible product. Consumers can appreciate the inclusion of different traits, especially with the use of first person.

We might look at the words, “I love the familiar. I categorize. I am accurate” or “I am creativity. A free spirit. I am passion” and say to ourselves, “Yes! That is me, exactly!” This ad is full of motivational content.

#3: Blend facts with imagery and layout

Different people like to see different things, so how can you possibly combine all of the attractive elements together? Simply do not restrict an advertisement to just one personality trait.

Flyers would be a good example of this. Their mission is to attract readers at first sight from the design and/or images, and if this task is complete, readers must be able to glance at the information and know the what, when, where, and why in a matter of seconds.

In such an advertisement, you might include attractive, original imagery that provokes and delights, appealing to extroverts and intellectuals. Cool colors might be used to appeal to emotional stability. Then set the facts or statistics up front and center for a conscientious person who just wants to get in and out or for an agreeable person who is looking to build trust.

The same tactic applies not just to flyers, but commercials, internet ads, and email messages. The more styling elements you combine and meet the motivational needs of consumers, the more personalities you will please. The important thing to remember is that it makes sense, like the Mercedes-Benz advertisement.

In conclusion, consumers like to feel as if companies know and care about them, and what better way to do this than by appealing to the core of what makes them who they are? By remembering the five personality traits when developing your marketing strategies, you can have a greater effect on your audience.

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