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Transcript of How to Prepare to Sell Your Business written by John Jantsch read more at Duct Tape Marketing
John Jantsch: This episode of the Duck Tape Marketing Podcast is sponsored by Podcast Bookers, podcastbookers.com. Podcast are really hot, right? But you know what’s also really hot? Appearing as a guest on one of the many many podcast out there. Think about it. Much easier than writing a guest blog post, you get some high quality content. You get great back links. People want to share that content, maybe you can even transcribe that content.
Being a guest on podcast, getting yourself booked on podcast is a really really great SEO tactic, great brand building tactic, Podcast Bookers can get you booked on two to three to four podcast every single month on auto-pilot. Go check it out. Podcastbookers.com.
Hello and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch and my guest today is Matt Watson. He is the founder and CEO of Stackify. He’s been a developer/hacker for over 15 years, and he sold his first startup, VinSolutions for $150 million. We’re going to ask him exactly how he did that. He started Stackify to solve the biggest challenge he had as the CTO of VinSolutions, so Matt, thanks for joining me.
Matt Watson: Yeah. Absolutely. Glad to be here.
John Jantsch: It’s always great to encapsulate somebody’s entrepreneurial journey in one paragraph but tell me a little bit about your story, your entrepreneurial story, how you got started with your first business, VinSolutions.
Matt Watson: Yeah. It sounds really good in a paragraph but we all know it was a lot of pain and suffering for several years, right.
John Jantsch: Yeah.
Matt Watson: I first started VinSolutions. Let’s see, at that time I was about 22 years old. I didn’t know the first thing about business. I was always very entrepreneurial. I grew up working in flea markets, and my family was entrepreneurial, not in the tech side of things or anything, but in different ways, and was always working side projects and jobs for people as a developer.
Was doing some side work for a car dealership and another gentleman came by that car dealership just asking, hey, do you know any software developers that can help me with this project, and that car dealership basically made the connection and I was the technical co-founder that somebody else was looking for. I was that hired gun in some senses. Does that make sense?
John Jantsch: Yeah, absolutely.
Matt Watson: It wasn’t really my idea. It was somebody else’s idea and then I sat down with this guy in Applebee’s and said, he explained to me the time he was basically trying to take photos of cars and upload them into the Internet and this was, you got to remember this was 2003, the iPhone didn’t even come out until 2006, people didn’t have digital cameras back then. They were very much a luxury item. It was a different day and age.
John Jantsch: Yeah, they were pretty crappy too. I had one, and photos on it were terrible.
Matt Watson: Absolutely. They’ve come light years from there, that’s for sure. Basically started as somebody of how do we take photos of cars and the pricing and descriptions of the cars, and put it all in one place, but then syndicate it. You can imagine the dealers advertiser on auto trader and cars.com, and their website, and all these different places, and sending that data, in all those different places and updating it every day would be a lot of labor to do manually.
We basically automated that and then the business grew over eight years to do a bunch of different things that were related to sales and marketing for car dealerships.
John Jantsch: Where was the headquarters for VinSolutions?
Matt Watson: Based in the Kansas City area.
John Jantsch: That’s what I thought. We didn’t talk about this ahead of time, but that’s what I’m standing in Kansas City, Missouri recording this.
Matt Watson: Yeah.
John Jantsch: That’s what I thought. In fact, I actually spoke at a conference in Las Vegas for digital dealer. I’m sure you guys had a big presence there.
Matt Watson: Yeah, we would have been there.
John Jantsch: Yeah. Let’s move to Stackify. I said in the intro and it’s funny how many founders of companies start companies because they can’t find something or they can’t get something solved, so they just solve it by creating a company. Would you say it’s fair to say that that was the genesis of Stackify?
Matt Watson: Yeah. I would say that’s the biggest strength and weaknesses, both of an entrepreneur is we’re problem-solvers, and sometimes we try and solve too many problems and get ADD, but I’m a software developer at heart, and been a developer for over 15 years and at VinSolutions is we’re a very high growth company and had every problem you can imagine from the performance of our applications, bugs, and the new features, and scalability.
Just the team, growing very rapidly and just to have the tools we needed to troubleshoot application problems basically and started Stackify really to combine all those tools together. Make them easy to use for developers and make it affordable, and that’s what we’ve done. It’s been six years of that now almost.
John Jantsch: Let me go back to your growth days at VinSolutions. I know one of the things of, you guys grew to fabulous heights, but even that company goes from a million to five million. At what point did you feel like you outgrew your ability, you and your partners, I guess in this case, ability to actually run that company?
Matt Watson: Well, so that’s a good question. Over that eight year, eight years of time, actually some of the partners come and went. The guy I originally started the company with was no longer there. Some new partners coming in, and at the end of it, it was really myself and another gentleman named Mike who was the CEO and I was basically the CTO and I was in charge of the product.
He was really good at sales and leadership and ran the company from that perspective and I took care of the product to making it work and luckily I was able to grow into it and to figure it out, and looking back. Even today, I feel like I’m still learning as a executive and a manager and the right ways to run a business and do things, and all of those things that just learning on the job. We were lucky enough to just work through it and make it happen.
John Jantsch: Would you say with Stackify that you intentionally said hey this is a problem and we’re going to solve a problem, because I think a lot of people think here’s a solution and we’re going to build a solution and they forget that there might not actually be anybody that knows they have that problem that they solve. I think a lot of companies get it backwards. Would you say that you intentionally build Stackify purely to solve an unmet need?
Matt Watson: I would. The problem we were trying to solve was giving developers access to the data that they needed. That problem is still the problem we’re focused on today, but the way that we solve the problem has actually changed over that six years. The initial solution that we built didn’t end up working very well and we did a little bit of a pivot around that and accomplished the same goal, but ended up doing it in a different way basically.
John Jantsch: Now, obviously nobody’s buying or if people are buying and saying it doesn’t work, that gives you the feedback you need, but do you have any ways that you intentionally stay close enough to customers to understand that?
Matt Watson: Well, I think that’s one of the things I’ve learned over time is one of the things I need to do the most of is talking to our customers and understanding the problems they’re really trying to solve, the pain points they have, what they think about our products, and to my own growth as an executive, and a founder, it’s something I’ve had to learn over the years, because my natural.
In the past, as a developer, I’d rather just hide in the closet somewhere and write code. As a founder of a company, a CEO of a company. That’s not what I should be doing.
John Jantsch: Yeah. That’s actually, it sounds like you made that transition but that’s actually one of the hardest transitions for, and I think particularly technical folks to make. I remember I was interviewing, Guy Kawasaki for the show and he said that of all the entrepreneurs he’s talked to over the years, the biggest challenge they have is managing people because most of them don’t really want to do that. Would you say that that proved true for you that that idea of managing people was a hard skill to learn?
Matt Watson: It is a hard skill to learn and I love our employees dearly, but managing employees is hard. It’s definitely, it’s the hardest part.
John Jantsch: Talk a little bit about how you attract clients today, and whether or not that’s evolved.
Matt Watson: Yeah, so that’s actually was our hardest problem, and if I have any feedback for any other founder is always, you got to understand who your customer is, how you find those people, validating that, how you’re going to find all of them and tell them that you exist. It’s your go-to-market strategy.
That is not the part that I figured out six years ago when I started. It took us three years to figure that out. We do a lot of soul searching around how do we built this product, when nobody knows it exist. How do we get it out to market, and we read a book, and I remember it was called, it was about traction channels, and there was like 18 different traction channels. Do you know the book I’m talking about?
John Jantsch: I think it’s actually called traction.
Matt Watson: Yeah. For example, I have things that are about writing a book, or speaking to events, to going to trade shows, or blogging, and content marketing, and paid advertising, all these different types of traction channels. One of them that was in that book was called engineering as marketing, which make sense to us, our customers are engineers, and so basically the point of that was to build a tool that our customers could use, that they would be searching for this tool.
They will get a lot of value out of this tool, but then that would help them learn more about us and buy our products. A good example of this is somebody like HubSpot who has different website, grader tools, and stuff like that. That people may go to their website and use, and that attracts you to HubSpot and you don’t even know it.
John Jantsch: Yeah.
Matt Watson: That worked well for us. We built a product two years ago that’s been very successful for us. We’ve had over 20,000 people download that free tool that we built, and the key metric there is if somebody has used that free tool, their conversion rate on our paid product is three times higher than those who have not. It was a huge piece of the puzzle for us.
That part of it was great. We saw the issue of how do we get people to know that our free tool exist, and it has grown organically very well, it has a viral effect at this point, but the other thing we really did a year ago was double down on our content marketing, so one of the biggest challenges we have is our customers are software developers.
Software developers don’t have telephones. They don’t want to talk on the phone. They are the first people to complain about any sort of spam and emails mayhem. They use AdBlockers. They’re very finicky about all those sorts of things. How do you reach them? For us, there’s one thing that is always true. When they have a problem, the first thing they do is they go to Google and they search for it.
Our whole focus over the last year has been really on content marketing and when we started this year, we were doing about 40,000 visitors a month to our website and probably 10,000 of those are from one blog post that we did three years ago. That got a lot of traffic, but today we get over 500,000 visitors a month to our website in the course of the years, so we’ve grown that more than 10X this year.
John Jantsch: That’s awesome. Let’s talk about getting a business ready to sell. You sold a business and I’m not sure what the goal is, if that’s the goal for Stackify, but did you get that business ready to sell intentionally or did it just happened because I know a lot of people, at certainly a long-term or maybe even a short-term goal, but I think there’s probably more to it than people realize, isn’t it?
Matt Watson: Well, our original goal was to raise capital. We started that company in 2003, and we sold it in the 2011, so you frame up the timing. In 2008, and 2009, we were really starting to grow. We were really hitting our stride, but that’s when the economy went south. That’s also when GM and Chrysler went bankrupt and Ford closed a bunch of stores. We were in the wrong industry in a terrible market, and so we couldn’t raise any capital.
Fast forward a couple years. In 2011, before we sold the business, we had a business that was making $30 million a year in revenue, but we’ve never raised any capital. It had been bootstrap the whole way, and so we were still wanting to raise some capital partly to infuse more cash in the business, because we knew the business was going to continue to grow at a very fast pace.
Our problem was we’d hire a support person today, but they wouldn’t be useful for three months or six months from now, but we couldn’t afford to hire a salesperson six months ago. We could never get ahead of the expenses, so we were really trying to raise some capital, and take some of the chips off the table, some of the key shareholders could take a little money off the table. Ultimately, we ended up selling it for about twice what we thought it was worth and it became hard to say no.
John Jantsch: Yeah. Were there, I guess the one question I had is were there things that you did intentionally that made the business attractive or made it easier to have a transaction or had you really run your business that way? Partly what I’m getting is a lot of people want to sell their business, but it’s actually very difficult for somebody to even valuate it.
Matt Watson: Yeah, we worked with a firm that was out in San Francisco that represented us, and so they ran a big process for us when we were trying to raise capital, to do that round. We were very prepared and we had the craziest forecasting spreadsheets I’ve ever seen in my life with pivot tables within pivot tables, and then another headache, and then another pivot table, however they do that.
I’d say we were really prepared, had all that stuff together. We had a great story. We had a great growth and again it just ended up being worth twice what we thought it was worth.
John Jantsch: It’s awesome. Did you learn some things then after getting out of that, I’m sure you’re like, okay, I’m going to start another business, but this time it’s going to be different and maybe you didn’t say that, but did you feel like there’s some things that you learn in your first go around that you’ve been able to bring into Stackify maybe earlier?
Matt Watson: Well, I would say I learned mostly how not to do things.
John Jantsch: Take a few of those off the list.
Matt Watson: Yeah. This was definitely been different as being the CEO of a company and being the founder. I was the sole founder. I decided I was going to do this on my own and so that was a little bit of a leap of faith as well. I would say things are just so different from one business to another. This type of product. Our go-to-market strategy. How we sell it. For everything that’s radically different and I think what bring forth more than anything is just understanding that it’s a journey.
Things are going to change and move and no matter what you plan, it almost doesn’t matter what you plan, because the plans always change. Just understanding that part of it and understanding being through a startup and the hustle that it takes. I think that’s the number one thing that I learned.
John Jantsch: I always love to ask this question to entrepreneurs. What’s the best thing about what you get to do everyday?
Matt Watson: I love talking to customers, and solving their problems, and getting their feedback. I talked to one of our customers yesterday, and it was just great to get that feedback from him, and he actually worked at one of our competitors in the past, and was just a huge fan of ours. It was just so cool to talk to somebody like that, but then also the fact that he had worked at one of our competitors before. It’s just that kind of feedback I think always makes your day.
John Jantsch: Who does make an ideal client for Stackify?
Matt Watson: Most of our customers are other software development teams. They range across all industries, all geographies. We have customers in over 50 countries, and from little [inaudible 00:17:46] software companies to a cruise line to an airline to companies like Carbonite who does online backup to a magazine. You name it, we’ve got it. It’s really just anybody that has a development team.
John Jantsch: I guess I always love to ask this too. What problem are you solving for them?
Matt Watson: Yeah, the key problem that developers have is that they’re trying to ship their codes as fast as possible. A lot of companies these days do releases every week, some do them every day, and the only way they can do that with any confidence is to have a tool like ours, that can help them find problems with their software, before they release it, during the release, or shortly after the release.
We’re really their eyes and ears to make sure that that release cycle goes really well and if there’s any kind of problem. We can give them all the data that they need to find it immediately.
John Jantsch: It’s not always just a code problem. It’s a device problem or different types of devices. You’ve got mobile devices and Apples, and PCs, and so I mean a lot of the testing has to be, it has to work on all of those, right?
Matt Watson: Yeah. A lot of things these days all run in a cloud, and even though they run in a cloud, that provides ton of benefits. Things like Microsoft Azure and AWS have problems too, so it’s always a bumpy thing and there’s always problems. That’s just the nature of technology.
John Jantsch: Matt, if people want to find out more about you and Stackify, where would you send them?
Matt Watson: At Stackify.com, which is S-T-A-C-K-I-F-Y dot com, and you can check out our product and look me up and shoot me a message if you have any questions.
John Jantsch: Awesome. Well, thanks for joining us, and hopefully I’ll see you out there on the road.
Matt Watson: All right. Thank you.
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How to Prepare to Sell Your Business written by John Jantsch read more at Duct Tape Marketing
Marketing Podcast with Matt Watson
Podcast Transcript
My guest for this week’s episode of the Duct Tape Marketing Podcast is Matt Watson. He has been a developer for over 15 years and is the founder and CEO of Stackify. He started the company to solve the biggest challenge he had at his first company, VinSolutions, which he sold for $150 million. He and I discuss how to get your business ready to sell.
Stackify provides the ultimate combination of tools for .NET & Java developers to monitor and troubleshoot their applications. They combine application performance monitoring (APM) with server monitoring, app metrics, advanced error tracking, and log management in a single, easy to use platform for developers.
Like this show? Click on over and give us a review on iTunes, please!
This episode of the Duct Tape Marketing Podcast is brought to you by Podcast Bookers. Podcasts are really hot, but you know what else is really hot? Appearing as a guest on one of the many podcasts out there. Being a guest on a podcast is a really great SEO tactic and brand building tactic. Podcast bookers can get you booked multiple times every month on auto-pilot. Check it out at podcastbookers.com.
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3 Steps to Create Content That Turns Readers into Subscribers Like Clockwork written by Guest Post read more at Duct Tape Marketing
Subscribers are a goldmine of marketing potential.
They share your content, heed your advice, buy your products, and tell their friends. They are easier to upsell, more profitable, and more loyal.
They return again and again, not because they have to, but because they want to.
Sadly, knowing the value of subscribers isn’t going to help you get more of them.
Which is why you’re here.
So how do you start mining for gold?
In the world of subscription, emails rule.
If you build an audience on Facebook, Youtube, LinkedIn, or Medium, your success is at the mercy of the platform you’re using. And I don’t need to show you another example of a self-made celebrity who upset their digital place of business at the cost of their career.
With email, though, the audience is yours. No one can tell you what to send, say, offer, or do. And that’s a nice dose of freedom for a growing business.
But email isn’t just the safer option. It’s also an effective place to build a subscriber base.
A study of 605 businesses done by HubSpot, the massive marketing company, found that businesses that collected subscribers by email had 12 times more subscribers than those that used RSS feeds.
To start collecting emails, you’ll need approachable content that you consistently promote to new audiences. And you’ll need to add a dose of incentive.
Here’s that three-step process.
The first step to gaining subscribers is creating approachable content.
Content that attracts your ideal customer, delights them once they click, and encourages them to enter their email address in that glorified empty text box.
But creating content that is approachable is a lot easier said than done.
After all, what makes content approachable? Is it the way you talk? The way you write? The way you design?
Well, it’s a little of all three.
First, let’s take a look at the design of your website. When people arrive on your website to view your content, what is their immediate reaction? Is it one of neutrality, enjoyment, or outright horror?
Imagine, for instance, that you arrived on this website: Gates N Fences.
I don’t know about you, but I’d leave the moment I arrived.
Which means that I wouldn’t read any of the actual content, and I definitely wouldn’t subscribe.
With a design like that, practically no one would.
That’s exactly why you need a website that communicates expertise, confidence, simplicity, and above all, trustworthiness.
And you can do that on a low budget. Just keep your website design simple and include plenty of whitespace. When in doubt, don’t add any extra elements.
Booktrep, for instance, is a low-budget WordPress website that is simple, elegant, and, for those reasons, trustworthy.
Of course, the bigger your design budget, the more intricate your website can be. Just ensure that you don’t overdo it like the good ‘ole Gates N Fences example from above.
Consider something like the BigCommerce blog where its intricate design doesn’t confuse navigation, crowd content, or provoke distrust.
The last thing you want to do is spend hours upon hours creating quality content, only to drive traffic to your website that sows distrust among visitors.
The whole point of creating content is to generate subscribers who will turn into customers in the future.
If you place the unnecessary roadblock of a poorly-designed website or lazy navigation between you and that audience, then your subscriber base, customer base, and thus, revenue, will suffer.
Riffing on that same note, you also need to consider the load time of your website. The longer your site takes to load, the fewer people who will stick around to see what you have to offer.
But a fast website means more visitors, which means more subscribers.
Unfortunately, too many large image files, locally-hosted video content, or HTML and CSS discrepancies can kill your website’s load speed faster than you can say, “But wait! There’s more!”
To check how fast your website is, you can visit Pingdom.
But it’s not just the design or speed of your website that determines whether or not your content is approachable. It’s also the content itself.
Research from Medium, the massive online public blog, found that the ideal blog post takes 7 minutes to read and sports about 1,600 words.
That might sound like a long blog post. But notice how the four-minute marker on that graph doesn’t show much decline?
The real punishment arrives when the reading time is three minutes or less. In other words, you can probably get away with 800 to 900-word articles and reap many of the same benefits.
When it comes to video content, that rule doesn’t apply.
In fact, with video, shorter is better across the board.
You have 10 seconds to grab the attention of a viewer. 33% of people will leave after 30 seconds, 45% will leave by one minute, and 60% will leave by two minutes.
This means that you should structure your video content a bit like a journalist. Start with the most important, intriguing, visceral information, and then gradually include less critical information as the clock ticks.
For pacing within a blog post, consider sprinkling images throughout the piece like I’ve done thus far. This gives the reader a break between blocks of text and makes the article easier to read.
Finally, you can practice empathy within your blog posts to create approachable content.
Be empathetic to the visitor’s concerns, experiences, and current understanding of the world.
Consider how Colin Newcomer starts his blog post on the massive online blog, Smart Blogger.
Here’s what Colin does so effectively.
And that formula makes for an article that readers feel understands them, is trustworthy, and offers valuable information.
A clean web design, fast load time, and optimized content length have a similar effect on visitors.
Which means that people will be more likely to give you their email address.
If you’re not reaching new people, you can’t gain more subscribers.
So once you’ve created that share-worthy content, it’s time to show that content to new audiences.
One of the benefits of publishing content on your own blog is that you still reserve all of the rights to that content — with other publications, that might not be the case. This means that you can reuse the content whenever and however you like.
For instance, you can republish the piece on Medium, Quora, and LinkedIn. Which can be a wildly effective way to gain email subscribers. Daniel Ndukwu writes about how he increased subscriber base by 339% in 60 days using Medium and Quora.
This strategy doesn’t take any extra time, and it gets your content in front of a brand new audience.
It’s a no-brainer marketing strategy that should become part of your regular publishing routine.
Another no-brainer strategy you should use is Social Media sharing. Every time you post a new piece of content, share it on Facebook, LinkedIn, and Twitter with a link to your website.
But here’s the part that might not be such a “no-brainer.”
Tag any friends you think might be interested in the piece of content. Sort of like Shopify content marketer Aaron Orendorff does with his Facebook posts.
Why?
Because doing so won’t just encourage the people you tagged to look at the article. It will encourage all of their friends to look at the article as well.
You see, when you tag someone in a post on LinkedIn or Facebook, that post will show up to all of the friends of the people you tagged. That’s a massive audience increase by just typing the “@” symbol.
By using social media tags, Medium, Quora, and LinkedIn to get your content in front of new audiences, you’ll build a subscriber base in no time.
Some visitors will be more difficult to turn into subscribers. They’ll require more… incentive.
And the best way to create incentive is by creating a lead magnet. Basically, an exclusive piece of content that you only give to those who opt in to your email list.
Aaron Orendorff does this on his website, iconiContent.
This is what his homepage looks like.
Then, if you scroll a ways down the page, this will pop up on the side.
Lastly, if you scroll through one of his blog posts, this scroll-depth-triggered overlay will appear near the end.
To create your own lead magnet, ask yourself these questions.
Then, create the piece of content for your audience, turn it into a PDF, and make it a downloadable resource for those who opt in. Or, you can repurpose a piece of content you’ve already created and do the same thing.
You can use PDF Converter to turn an old blog post into a lead magnet for free.
You know the potential of subscribers.
You know that they represent a goldmine of selling and upselling potential – that they’ll tell their kids, spouse, friends, and coworkers about your business.
That they are loyal, profitable, and revenue-driving.
But you also know that they aren’t automatic.
Building a loyal audience takes work. Specifically, you should focus your efforts on email-subscription, create approachable content, consistently promote that content to new audiences, and build a lead magnet for an additional incentive.
Only then will you dip your pan in the correct stream.
Brad helps SaaS startups create actionable long-form content for a fraction of the price of a content writer. Give him a pug and a pencil and he’s off to the races!
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Chile is building a brand new solar power plant that has some exciting outcome on the future. The plant is expected to provide energy on day and night as well as throughout inclement weather, to power up to 13,000 homes annually. This project will make Chile one of the top solar energy spots in the world.
It is a clear sign that energy storage on large scale projects is developing further with a range of large batteries networks being developed this year within California and Australia. Clean energy expects truly value the energy storage industry and expect it to become even more significant as further renewable energy sites are constructed worldwide.
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Why You Must Increase Your Negative Reviews written by John Jantsch read more at Duct Tape Marketing
Marketing Podcast with Jay Baer
Okay, I’ll admit, the headline for this post probably seems a little odd, so let me explain.
No one likes or wants negative reviews, but the fact is, that’s how you get better.
In a perfect world, everything your business does makes the customer smile, but I don’t know too many businesses that live in that world.
In reality, it is quite likely, there are many things your business does that are confusing, irritating and surprising – the problem is that it’s also quite likely that you have no idea what those things are.
By encouraging and rewarding people to give your feedback at every turn, you can learn and hopefully fix things that do not serve – without this mindset you’ll go blindly out there wondering why you can’t keep your best customers happy and loyal.
My guest for this week’s episode of the Duct Tape Marketing Podcast is Jay Baer, founder of Convince and Convert, and author of Hug Your Haters: How to Embrace Complaints and Keep Your Customers. We discuss customer service, the nature of complaints in today’s market and the basics of improving your customer retention.
Baer explains why so many businesses despite negative feedback and why you can’t afford to do so. In Hug Your Haters he relates a story of a marketing officer who claimed that her number one current objective was to triple negative reviews. Now, while that may seem like a terrible thing to do on the surface, the point is she was simply going to encourage and involve her customers in the process of helping them get better – and that’s the lesson this book teaches so eloquently.
Customer service is the new marketing!
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AdWords for Local Businesses written by John Jantsch read more at Duct Tape Marketing
We all want to grow our business, and no matter what industry you’re in, the truth of the matter is that digital space matters. This isn’t to say you shouldn’t care about providing an excellent experience in the real world. Obviously, that should be at the core of everything you do because that’s what’s going to turn a one-time customer into a long-term champion. Even so, more and more customers are going to be looking for you in the digital space, and that means you need to be smart about what steps you take to reach them.
I don’t know about you, but the first thing I do when I’m looking for something, anything, is pull out my phone or crack open my web browser and jump straight to Google. This is, of course, fundamental to Google’s business model, and the reason that the first place any business should look when they’re thinking about digital is to AdWords. However, it’s not as simple as just flipping a switch and waiting for the phone to ring.
Instead, let’s dive into how AdWords works, how you can use it, and why it’s such a great choice for local businesses looking to reach local customers.
Ever since the earliest days of online search, when Google competed with Yahoo, AltaVista, and Ask Jeeves—and Bing was just a glimmer in Bill Gates’ eye—search engine optimization (SEO) has been a keystone for marketers looking to reach their audience online. While a lot of conversation around this topic can take the tone of people looking to find loopholes or exploits in search engines via reverse engineering, at its core it’s really just recognizing the fact that any piece of digital content that you put out needs to balance being useful and engaging to your audience and being easy to find.
The key to all of this is the keyword, a flag that helps Google understand that you just might be exactly what a user is looking for.
If you haven’t already done your homework, and even if you have, the best place to start when you’re launching an AdWords campaign is with keywords. The good news is that Google actually provides you with a free tool to do all the research you need to get started, via their AdWords Keyword Planner. Regardless of whether or not you actually go forward with a paid campaign, you’ll get actionable information for building and refining a highly targeted keyword list.
Once you’ve logged in and given the Planner the info it needs about your site, you’ll be presented with a bunch of options for potential keywords you can bid on. Give special attention to the Locations setting: You can target specific ZIP codes to give your results a local focus for potential customers or clients near your business’s address.
Starting a campaign can be as simple as setting a budget, combing through your options, and dropping in some ad copy, but there’s more to the story. You’re looking at a list of words that Google thinks are relevant to your website, so it’s better to pull out the magnifying glass and make some observations.
Now you have this list of suggested terms, and you need to figure out what to do with it. The first thing is to get rid of anything irrelevant— stuff that maybe pops up because of how your products are named or something recurrent in your copy that actually isn’t relevant to your business. On the flip side, you want to use the “More like this” option to get more suggestions for keywords that look promising to dive even deeper into choices for your campaigns.
Then, it’s time to put them into action and collect some data on them. We need to learn more about how these keywords will actually work, so we’re basically going to hop on Google and make some observations. Because search gets customized based on your history, it might be a good idea at this point to bring up an Incognito window so you can get a clearer picture of what’s going on for the average user.
Take the most promising words and phrases from your list and run an organic search. Pay attention to everything! What AdWords posts come up? What does the front page of organic results look like? Are they mainly proprietary or third party? What words or phrases show up consistently in the results? How are the organic results titled? These kinds of things can help you identify what your current site is doing (and not doing) and make improvements. The other thing to pay attention to is what is happening with the autocompletion of the phrase, as targeting these narrower phrases can help you carve out a niche with relatively less competition.
Hopefully, all of this research helps you narrow down your list of keywords to some prime candidates for what will actually accomplish your goals. The next step is to take a step back and really think about how these pieces of the puzzle fit together. What is the intent behind a particular search term or phrase? Think about the person behind the keyboard or holding the phone. Is their query oriented towards just doing research, or is it what someone would search if they’re actually looking to make a purchase? If someone Googles “best locksmith number,” for example, they’re probably going to make a phone call to the first legit-looking place that they can find in their area. Really put yourself in a buyer’s shoes and you should be able to whittle down your terms to a useful selection for your business.
Another important reality to consider for small businesses is that you have competition, and they probably have very similar goals to yours. While it’s natural to feel like you’re the smartest player at the poker table, the truth is that what you don’t know can hurt you, and you don’t want to be surprised by pocket aces. You need to look into what your competitors are doing so you can copy the good ideas and leverage their bad ones.
When you’re going through possible keywords to invest in, make special note of any time your competition pops up. Pay attention to the ad copy and titling they’re using, and compare it to both what the search term was and how it looks next to the organic results. If you put yourself in that buyer mindset, does it actually appeal to you? It’s easier to see things objectively when you’re looking at something that you haven’t made yourself, but make sure to take careful note of your observations and then ask yourself if your AdWords copy really is better, or if you’re falling for the same traps.
Beyond some simple observations, you need to know if your competitors are doing something you haven’t thought of yet. If they’re staking out keywords that are perfect for your local business, then you should make sure that you’re able to throw your hat in the ring, too. Luckily, there are tools to help you get a complete picture of what your opponents are doing.
SpyFu is the classic option for competitor keyword research. It’s the second generation of GoogSpy, and it’s an excellent way to get the information you need to see everything that’s going on with other businesses. All you need to do is enter a domain and you’ll get a report showing your competitors’ top organics, AdWords buys, and your competition’s competition for these terms, plus a whole slew of other useful information.
When you’re looking at a SpyFu report, there’s so much data available to you that it can make your head spin. Side-by-side across the page you’re looking at you get to see their organic search performance and estimated value vs. their AdWords performance and estimated monthly budget. The key here is that it gives you an idea of what their AdWords spending and performance is like, relative to their content marketing efforts, which helps you understand what their strategy may be. What you need to be thinking about is why they’ve chosen to commit to the keywords that they’re paying for, and how that might fit in with how their organics perform.
As you keep digging into the report, you can look at where they share keywords with competitors and where they occupy exclusive real estate (again, for both paid and organic). This can give you an idea of how they’re focusing their efforts in terms of a broad versus a narrow strategy in a particular area.
SpyFu will also analyze a company’s buys and those of its competitors, and let you know where there might be space for you to invest, and which other competitors have bought AdWords space for those terms as well.
Put it all together, and you’ll have a complete picture of what the AdWords terrain looks like, which will help you make some informed decisions about how you want to approach your own strategy.
Before we go forward, we need to take a moment to make sure the simple math checks out. With digital advertising, it can often be easy to lose track of what your ROI actually is while you focus on “winning” the digital scoreboard. The fact of the matter is that there are some keywords where there’s just no chance of being profitable, and you want to make sure you know what the situation is before you invest your time and money in something fruitless.
Since AdWords comes down to how much you pay per click, you need to understand what your maximum cost per click (CPC) is so you know whether or not it’s worth it to pay Google’s CPC. This ultimately comes down to your website’s conversion rate, your average profit per customer, and what kind of advertising profit margin you’re shooting for. While this seems like it’s getting a little complicated, Kissmetrics explains that it really comes down to fourth-grade math:
Max CPC = (profit per customer) x (1 – profit margin) x (website conversion rate)
Basically, we’re calculating how much you can pay per click and still hit your profit margin goal, considering your website’s conversion rate. So, if you make $100 per customer and you want to have a 40% profit margin with a 5% website conversion rate, you’re looking at a Max CPC of $100 x (1 – 0.40) x (0.05), or $4 per click.
Keep in mind that for something like conversion rate you’re going to have to hedge your bets based on how good your data is. The more data you have the more confident you can be in that number, and on the other hand, if there’s more uncertainty you’ll probably want to play it safe with a more pessimistic projection. You’re paying per click, so you want to ensure those clicks ultimately translate into growth. If you do your targeting right, you’ll be able to bump that conversion rate, which will allow you to have a higher Max CPC and put even more valuable keywords in play.
A brief aside here to talk about how important it is to track conversions on your website. Knowing traffic numbers and how people get to you is all well and good, but at the end of the day, what keeps the lights on and the doors open is actually making the sale. There’s a way to track conversions via AdWords by getting buyers to a checkout or receipt page with embedded code, but the simpler way is to use Google Analytics and then plug that data into AdWords. This lets you keep track of not only what’s going on with AdWords, but also other sources of traffic and conversions.
On the subject of conversions, one key for local businesses is that someone can still be converted without necessarily clicking through. For many places, an inbound phone call has a very high chance of becoming a sale, because it usually means a customer has finished their online research and is now trying to get something done.
So, how do we factor this into our tracking?
One option is a third-party tracking platform, which will help you keep track of more than just the inbound calls generated via AdWords, and gets this data into analytics. If you’ve done any amount of work on boosting your local search SEO (and if you haven’t, you should), you’ll know that a vital component of that work is making sure that there’s consistency across all of your listings, particularly for your name, address, and phone number (NAP consistency).
Because of this, you want to make sure the platform you choose is able to work with your actual phone number and not a special number just for tracking (although that still happens on the backend). Some good ones include CallRail, KeyMetric, and Infinity, but you can also browse through the full list of Google Analytics partners to find something that suits your business’s needs.
If a third-party system just isn’t in your budget, there’s baked-in call forwarding and tracking as part of AdWords, but you’ll have to miss out on other valuable data you can get from tracking all sources. This makes it harder to understand how big a role AdWords is playing in getting people to pick up the phone, but small business marketing budgets are a reality we all need to live with. In this case, install their snippet on your website and get what information you can.
You don’t get a lot of space to make your pitch on AdWords, so you need to make sure that you do what you can to really reach out and grab your audience. In many ways, this is Marketing 101. What is your unique value proposition? How do you make someone an offer they can’t refuse? How do you make yourself seem like a safe bet?
The challenge with AdWords is that you only have two 30-character headlines, one 80-character description line, and a link to do all your marketing jujitsu. The good news is that you already know one thing, which is what your user is looking for. Going back to our locksmith example, you know that if someone is looking for a locksmith they probably have these kinds of questions in mind:
So, how do you address all that with only two brief title lines, a short sentence, and a link? The key is to pack as much information into all four of those lines as you possibly can to address your customer’s most urgent questions. Here’s some copy that tries to address all those questions:
Boise’s Trusted 24/7 Locksmith – There ASAP, Top Rated on Yelp
30 Minutes Or Less, No Hidden fees, Flat $50 Rate, Satisfaction Guaranteed
www.boiselocksmiths.com/here_to_help
Contrast that with this listing, which I pulled from Google (with the location and URL modified to not call them out directly):
Need A Locksmith In Boise – We Can Help Call Us Now 24/7
Fast And Local Response · Quality Locksmith Service · Only $19 Service Call
www.locksmithsolutions.com/Locksmith/Dispatch
This example has a couple of red flags, especially the words “ $19 service call.” What about paying the locksmith? How much will this actually cost? “Local response” also implies that this company isn’t local, which is confirmed by their generic URL. If you click through to the landing page it’s also generic, confirming our suspicions that it’s not actually a local company.
Segmenting is all the rage in marketing because it lets you create more individualized campaigns that will appeal to specific groups of customers that you’re trying to reach. If you do household repairs, a pitch that’s going to appeal to first-time homeowners will look very different than one that’s tailored to someone trying to get their house in order so they can sell. We talk a lot about segmentation in mailing lists, but the idea also applies to AdWords campaigns via the concept of ad groups.
Basically, you want to break up your keywords into ad groups that make sense together. You don’t have a lot of space with AdWords, and you need to make sure that your message really grabs your audience’s attention. Again, it’s about putting yourself in the mentality of what the intent is behind a keyword search and creating a message that appeals to that intent. A good rule of thumb is to limit yourself to no more than 20 keywords per group.
We talked briefly about landing pages in the locksmith example, where a dubious listing led us to a super generic landing page that tipped us off to the fact that the company in question wasn’t actually local. Another takeaway from that example is that customized landing pages for each ad group can make a huge difference in your conversion rates. This principle is well known to email marketers, and it also applies to AdWords as well.
Landing pages are simply a must for online marketing. You establish trust, answer any questions a visitor might have, and drive them to a strong (and precisely placed) call to action. There is so much to be said about making (and tweaking) landing pages that drive conversion but for the purposes of this guide, it’s enough to say that you should customize them based on what each ad group’s mentality is going into the search.
As we learned, there’s a lot you can do with the limited space you’re afforded for AdWords copy, but you also have some options for giving even more information via AdWords Extensions. If you’ve set up this feature, your ad is ranked high enough, and Google thinks it will improve your performance, extensions will add things like a call button, location information, links to specific parts of your website, and more. These features mean your ad takes up more space on the page, which is especially important on mobile. Extensions are free to add, so make sure you take the time to configure everything—when the cost is free, you already know it’ll pay off.
But the best reason of all to use Extensions is because they make your add look bigger and more prominent and that alone can lead to better performance.
At the end of the day, the important thing with building an AdWords campaign is that you are able to put yourself in the mindset of someone trying to get help with a problem—a problem that your business is ready to solve.
If you are able to focus on all the different mentalities that might lead a customer to consider giving you a call, you have everything you need to make a great AdWords campaign for your local business.
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