The Transcript

Attracting and Retaining Customers and Subscribers with Paid Advertising

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Tony Clark: This is The Mainframe. Welcome back, everybody, to the ARC Reactor series. These are our attraction, retention, and conversion strategies, with the reactor piece being how to automate all of this. How are you doing, Chris?

Chris Garrett: I’m doing great. I’ve just got back from vacation. It was an epic road trip, and we saw some very pretty scenery, but I’m glad to be home.

Tony Clark: Yeah. A lot of times you need a vacation when you get back from vacation. We do that all the time when we go to Disney. We end up really needing a rest when we get back because it’s go, go, go all the time. It energizes you, but you still feel like you haven’t really rested.

Chris Garrett: Yeah, it’s mind-expanding. It’s good. I did actually take a sketch pad and some pens and paints, and I didn’t do any of that all. So I’ll have to try and bring it back up in memory and sketch what I remember. It was great. I did actually book tomorrow as a vacation, but it doesn’t look like I’m going to get it, so we’ll see. I’ll semi-work.

Why Paid Advertising Is Powerful, but with That Great Power Comes Great Responsibility

Tony Clark: This is episode 18. We’re talking about attracting and retaining customers and prospects with paid advertising. This is another part of that attraction strategy we’ve covered. In the other episodes, we talked about social, and we talked about traffic and SEO, and this is paid advertising.

This is another attraction strategy, but as usual, and as everybody’s seen as we’ve gone through this series, attraction leads right into retention, which also leads into conversion. Though they’re not separate, this is a lot of times thought of as more of an attraction strategy. You have to have that retention piece or that conversion piece ready — one or the other. Otherwise, the paid advertising doesn’t do any good, right?

Chris Garrett: Yeah. You’ve got to know what’s going to work for your specific audience. You’ve got to know what’s working in your funnels. You’ve got to know your numbers. Really, this is a warning: don’t automate too soon, and also, don’t use advertising too soon, because you’ll accelerate your leaks. You’ll accelerate your loss of income if you put the pedal down before you’re ready.

I had a really good Google AdWords campaign running quite a few years ago. It was promoting magazine subscriptions. We went away around Christmas thinking, This is going to be the best year ever. I’m going to make lots of money. These magazine subscriptions are selling like hotcakes. I didn’t realize at the end of November, beginning of December, people look at magazine subscriptions, but they stop buying them.

My AdWords was still running, and it was one of those things we talk about. When you take your eye off, when you’re away from the wheel, automation just keeps plowing ahead into that brick wall. Fortunately, I got back in time to break even, but it could have cost me a fortune, because people were clicking, and people were going through to the offer, and they were saying no. I was still paying for the clicks. It was still a well-optimized, well-built campaign, but it had gone from super-profitable to the absolute opposite of that.

Tony Clark: That’s a great example, because one of the things I say all the time is that if you look at a funnel in the real world, at the bottom of that funnel is just a hole. If you don’t have anything under that funnel to catch stuff coming through, the purpose of the funnel is useless.

People go into this mindset of setting up a funnel, especially with paid advertising, without having any mechanism, any container, underneath that funnel to catch the people as they come flooding through the funnel. That’s why you end up with people that spend a ton of money on advertising and actually don’t convert very well. Because advertising really is an accelerant for what you’re already doing in most cases, right?

Chris Garrett: Yeah. That’s why Copyblogger actually doesn’t do much advertising. We don’t really need it, and a lot of our experiments are around attraction, as the series implies. We use content to get attention. We use content to reward people for their attention and to bring them deeper into the funnel. We could accelerate that with advertising, and we have done the odd experiment here and there just to keep our hand in, but 99.999 percent of what Copyblogger is has been built organically through content. We haven’t felt a need to accelerate it.

Now, not everybody is going to be in that position. If you are going to use paid advertising, and it’s something to test, know your numbers. You need to know how much a subscriber or a customer is worth to you. That average subscriber value is basically how much you can afford to pay for a new subscriber, but you can take into account lifetime value. Think long-term.

In the direct mail world, where I lived for quite a while when I was doing database marketing — if you remember that term — we used to say, “If you are making money on that campaign, you’re actually not trying hard enough,” because that campaign is to get a customer or to get a really, really good warm prospect. You make the money back over time.

That makes it even more important that you know your numbers. You’re really going to get your numbers from doing the organic stuff or by saying, “Okay, I can afford to lose this thousand-dollar budget just to learn. I’m not going to try to get a profit this time. I’m just going to learn what works and what doesn’t work, do some tests.”

Tony Clark: That’s a really good point. Sean Jackson, our CFO, and I were talking about this just yesterday, about the BS metrics that people use and terms like churn and these words that people use. But they don’t actually mean anything when it comes down to how it affects your balance sheet and how it affects your profit and loss statement.

One of the things we’ve always focused on, our main metrics — we joke about it, but it’s actually true — are profit, revenue, and lifetime value. Those are things that actually affect the day-to-day running of the business, growing of the business, and making the business successful, versus just numbers and metrics that don’t do anything. That’s what it really means about keeping your eye on the numbers, right?

How to Get a Good Return on Your Investment of Hard-Earned Cash

Chris Garrett: Yeah. It’s being able to make business decisions. It’s not the vanity metrics. You don’t really care how many people saw an ad. As I said, I’ve got a background in advertising. Awareness is good, and being able to brand through exposure is good. It’s hard to measure. It’s hard to say, “Okay, this is the impact you had on my bottom line,” even though we used to convince customers of the advertising agency that these branding campaigns were adding to the bottom line. We did that because we needed to pay bills.

For your own business, that exposure could be really cool, but it’s hard to make a business decision based on it. Actually, you can be overexposed and annoy the people you’re trying to attract, so don’t do that either. You need to know your numbers. You need to know the right numbers. It really comes down to how much can you afford to spend and how much is going toward return on investment and how much is wasted. The old thing with advertising used to be, “I know half of it is wasted. I don’t know which half.”

You do know now if you track, measure, and test.

Tony Clark: Yeah. This goes back to old Uncle Claude’s book, Scientific Advertising, which is one of my favorite business books of all time. This was back in the late ’20s, so when they discovered that there is a formula to track scientifically what is working with your advertising. That hasn’t changed. It’s just gotten better.

You are spending money, so you need to know what that return on investment is. If you’re not tracking and you’re not seeing what these campaigns are doing and how effective they are, you’re really just throwing money into a hole. That is not something you want to be doing, especially early on.

Chris Garrett: It’s a process of incremental improvement, being aware of what’s going on, and being aware of what works, and trying different things. I guess it’s kind of like going to Vegas. Take the money that you can afford to lose, and don’t spend any more.

The way you get good return on investment is to use proper targeting and to use good measurement, and each service will have its own features and facilities that allow you to do that. It used to be Google AdWords was the king of advertising, and it still is ultra-powerful, because your ad is an answer to a question somebody is putting into Google. They are looking for you or somebody like you who can help them.

Use keywords so that your ad displays based on the keywords somebody puts in. But you could also do things like exact match, so it’s an exact phrase. That will trim out all the fat. Then use negative keywords so that you don’t get people seeing and clicking that are completely wrong for you.

I’ll give you an example. People do a search in Google for even your brand and then a word like warez or free or download because they’re trying to pirate from you. If you use those negative keywords, you’re not going to be paying to be displayed to those people, to get clicks from those people.

The One Social Network That s Become the Advertising Platform to Watch

Chris Garrett: With Facebook, it’s really cool now, and it really shows what Facebook is as a business model. They know so much about us. From an advertising perspective, that’s really good, because we can ultra-target. So you can base it on interest. They’re interested in Dungeons & Dragons. They’re interested in Marvel. They’re interested in hiking. You can do it on geography. You can do it on demographics. You can even target mobile users. You can target mobile users in a certain geographic area who are online at a specific time.

You can upload custom audiences, and that is super, super powerful. You can build a custom audience through the tracking pixels that Facebook gives you, so you can track people who visit your site and who convert. You can also upload email lists, and that’s amazing. You can come down to college-educated homeowners who earn six figures in a certain postal code who go fishing. It’s amazing.

Tony Clark: It’s a very powerful platform, both of those. I think that people tend to get overwhelmed. The one thing I always tell people is that both Google and Facebook want you to be successful with their ads.

Their educational tools that are just right there on the site, the things that Google provides about learning how to use AdWords and how to use their Analytics to track, and the same with Facebook and how to use their latest tools and how to use them effectively, they actually do a really good job of educating on how to use this system effectively, because here’s the thing. The more effectively you use it, the more money you’re going to spend with them. So it’s in their best interest to educate you about how to do this properly.

People always ask me, “Where do I go to learn this stuff?” There’s tons of books and resources out there, but start with Google and with Facebook, and use their educational sources, because they really want you to be successful at this.

Chris Garrett: Yeah, and don’t go using the external third-party tools until you’ve really got the hang of their built-in tools. It’s like I said. You don’t want to be asleep at the wheel. You do need to be driving this, and you need to know how it works and how the decisions you make affect the success and behavior of your customers, your audience, because it’s going to be different to anybody else’s. It’s a feedback loop. What you do causes different people to enter the funnel and to behave differently and have a different opinion of you. That’s really important.

It’s also important to use your tools with the Facebook tools in the right way. A good example of that is to have a different landing page for each ad group in your Google AdWords and also a different landing page for each campaign in your Facebook. That landing page, when paired with your Google Analytics and with your tracking pixels, will tell you a lot of information. You can actually find out from Facebook what those people look like, the people who land on those pages, the people who transact because of those pages. You can glean a lot from it, and it’s a learning process all along. You’ll never stop learning when you’re using these.

Tony Clark: Yeah. This is a really important piece of this, because the attraction part is great, but just like everything else we’ve talked about in this series and will continue to talk about, the retention and conversion are just as important. Now we’re talking about retention and conversion once people click on your ad.

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Ways That Clever Advertising Features Can Be Used for Smart Customer Retention

Chris Garrett: So retention is the end goal of this, and it may be a long, winding road to get there, but really, the end point you want out of this is a subscriber. And then from a subscriber, you convert them to a customer. There are various ways you can use retargeting and custom audiences to achieve that. The number one way you’re going to actually retain is through a landing page that gets people onto an opt-in, right?

Tony Clark: When we talk about attraction, the idea is to drive them forward through the process, right? We’ve talked about that through the whole series. What’s the next step? A great way to do that is sending them to a landing page that allows them to get more information and allows you to communicate with them more. That’s why opt-ins work well for this.

I’m not saying this doesn’t work, because people are effective at sending people to a customer purchase page and having them buy immediately, but one of the things we’ve found to be more effective is to help use the paid advertising to drive the customer further into the funnel and then turn them into a customer later on. That’s why opt-ins are a great way to use that. It’s a great tool and a strategy to bring them into the fold and move them from cold to warm to an actual, true prospect.

Chris Garrett: Also, think about every page of your site as being a potential landing page. Your content, your articles — think of it as a landing page as well as a page of content, of how would somebody convert if they landed on this page, so that you do have the option of testing sending people to content as well as specific landing pages.

I know, Tony, you have some great ideas about how to pair advertising with your landing pages to keep that scent, that end goal for them, in mind.

Tony Clark: Yeah, the idea is to make sure that you never lose track of that scent. Think of it as somebody tracking through the woods. You have a ranger, and you’re tracking, or you have Daryl from Walking Dead, and he’s able to track so well. The way that happens is there are clear markers along the way to allow the person to know that they’re still on the right track, that you’re following a walker or you’re following a live person,...