The primary goal I have with Conversion Gold is to give you the mental models and concepts that I’ve collected over the years, in hopes that you can apply them to enrich your interests. I don’t often write about the one easy trick, or provide copy and paste swipe files of killer headlines. I want to talk about the concepts. I want to understand why these things work. I’m more interested in discussing principles and strategies than I am in discussing tactics.
In this issue I’m going to back out, abstract a little, and tell you how to grow a website by reasoning from first principles.
One of my favorite little tidbits of information is that Elon Musk’s background was actually in physics.
Long before he revolutionized the electric automobile industry with Tesla, he was part of the team that created PayPal. Long before that, he was studying physics in college. One of the core mental models that physicists learn is called reasoning from first principles.
Regarding first principles, Elon has this to say:
I think people’s thinking process is too bound by convention or analogy to prior experiences. It’s rare that people try to think of something on a first principles basis. They’ll say, “We’ll do that because it’s always been done that way.” Or they’ll not do it because “Well, nobody’s ever done that, so it must not be good.” But that’s just a ridiculous way to think. You have to build up the reasoning from the ground up—“from the first principles” is the phrase that’s used in physics. You look at the fundamentals and construct your reasoning from that, and then you see if you have a conclusion that works or doesn’t work, and it may or may not be different from what people have done in the past.
I have often wondered what we have to learn from first principles about building, growing, and optimizing website businesses. There are tens of thousands of blogs, articles, speakers, gurus, and books that claim to be the one true way to grow your business and become rich.
Are there really that many ways? Surely some of them must be in conflict. Surely some of them must be bullshit.
I’ve spent my entire working life observing, studying, and rolling the dice on growing websites. I’ve read far more of those articles than I care to admit.
After decades of thinking on this, I can only come up with four ways that you can grow your website business. That’s it. They’re reasoned from first principles and they’re tried and true.
Improve the Website
My firmest belief here is kind of a first principle in itself. I believe that the best performing websites are those that most closely match their users needs. Build a website that represents your user, not the business behind it.
This is the most simple description of the target you’re aiming at when optimizing your website.
Make your website easier to use and more people will be able to use it. Make your products easier to understand and more people will understand them. Make your forms easier (and faster) to complete and more people will complete them.
Improve the Message
I define the message as the story that you tell about your product. I believe that the most effective marketing is driven by a narrative. I think that before we make certain types of purchases we tell ourselves, “people like us buy things like this.” The flip side is that we also see certain products and say to ourselves, “people like us do not buy things like this.”
I also believe that people do not buy the best product. They buy the product that they understand the fastest. You can optimize for this by speeding up the time to the aha moment.
(An aha moment is when you get the fundamental utility of a new product or service. You go, “Whoa, this is useful.”)
To create a great business you have to offer something that people want. You’ll sell more of it if you can help more people understand what it is, what it does for them, and how they can get it. Improving the message means crafting it so that it satisfies these requirements.
Get More Eyeballs
If a tree falls in the forest and no one is there to hear it, does it make a sound?
If you build the most user friendly website in the world, with the best products, and the best pricing, but no qualified visitor ever arrives, does it matter?
Nope.
It’s not a matter of getting visitors. Anyone can trick people into visiting their website. Clickbait and FB arbitrage sites have extracted serious value from advertisers on this idea.
Assuming that you are seeking conversion events that require more than a click or a page view, you’ll need to attract the right audience. The right audience are those people who are more likely than the general population to buy your product.
There are a lot of reasons that someone is more likely to buy your product, but there are three in particular that we can do something about:
- They are genuinely interested.
- They know someone else who is interested.
- They may not be aware of it, but they are experiencing a problem that you solve.
These are the people you need to go out and find. Having more of them visit your website should mean that you sell more things.
Finding people who are looking for what you sell is fairly straightforward. Google Ads is a great platform for this, as is SEO. Google Ads is typically not super complex to scale because you know what you’re buying more of. You’re paying for context.
The tougher part is how to impact customers when they’re not looking directly for you, or for what you sell — and that’s at least 99% of the time they spend online. These are visits for which you have to provide the context. This is where I seek to build flywheels that can spin off prospects repeatedly.
This can be as elementary as making sure that you show up in “best of” product category lists. It can also be as sophisticated as defining new problems customers didn’t realize they had — and of course, by solving them.
Increase LTV
It’s cheaper to keep the customers that you have than it is to go out and acquire new ones.
This means that you need to treat your customers well. Make sure that your products do what they are supposed to. Make sure that you hold up your end of the bargain. Provide great customer service, whatever that looks like in your industry.
If you do these things, getting repeat business can often be as simple as telling your existing customers about the new thing that you are offering, as long as it’s relevant to what they bought in the first place.
For other businesses, such as SaaS, or recurring billing services, sometimes it’s a matter of reminding your users why they pay you. What value do they derive from your product? What have you done for them lately? Remind them. I like to think of this as a north star metric. It’s the one number I can point to to prove why I’m worth it. In SaaS products, I put that front and center in the dashboard. I want customers to see it as quickly and as often as possible.
There’s also a lot of value in removing friction. Don’t make it hard to continue being a customer. One example of this is offering dunning support. If a customer has signed up for a yearly plan (thanks, ConversionGold yearly members!) you’ll probably have a sizable percentage that has an expiring credit card before the re-bill date. Avoid the frustration and service interruption by reminding those users to update their card prior to the renewal.
Conclusion
These are as close as I could get to first principles. I didn’t include ideation, or creation of the product, but those are first principles, too.
The really valuable thing about first principles is that they can scale down, or up, as necessary. You can dive into “more eyeballs” and begin deriving the first principles of the general idea, or of each individual tactic that you plan to use.
Q&A
Can you expand on this?
I also believe that people do not buy the best product. They buy the product that they understand the fastest.
In order to want to buy something we have to understand how it fits into our lives, and how it has the potential to make us happier.
Most people aren’t creating spreadsheets for full evaluations of every purchase. Most of the time we use shortcuts, which happen to be more on the emotional side.
The general idea is that we’re all competing in an attention economy. What this means is that attention is a scarce resource. It also means that attention is valuable.
It’s certainly comforting to believe that when we buy a product, we do so logically and with intellectual vigor. We want to believe that we define our requirements and we evaluate each potential solution with an objective, critical eye.
The truth is that most purchases are emotional in nature.
We buy any particular piece of clothing not for its intrinsic value, but because it makes us feel a certain way about ourselves as we are, or more likely, as we want to be.
Once an advertiser earns your initial attention, he or she must quickly submit a claim for more continued attention. More attention requires focus and energy, and the brain loves conserving energy. It’s hard to get.
In order to buy something we have to understand why we should. A simplified enumeration of the buying process goes something like this:
- Understand who the product is for.
- Understand what the product is.
- Understand how this product makes life less painful.
- Understand how to get it.
The experience of buying something is largely subjective. One person’s best purchase is another person’s worst. So this obviates most of the “best product” statements.
Sometimes we convince ourselves the best product is the:
- cheapest
- fastest delivery
- one a friend has
- one seen mentioned a lot online
Objectively, almost none of those are indicators of product quality.
The idea of an aha moment makes sense for software utilities, but is it also applicable to ecommerce stores?
Yes, I’d say that it is. Particularly for those products that are made simpler or better through leveraging technology.
Think about a product like Quip. Quip is a mail order toothbrush. You can buy the first one at Target or online and then every few months you get a new toothbrush head and battery shipped directly to your door for a few bucks.
It’s a lot like Dollar Shave Club. Same idea.
The magic here is that it takes about 30 seconds to set this up and it’ll solve your “I need a new toothbrush” problem forever. Getting to that aha moment doesn’t take the full three months before your first shipment, it takes however long is required for customers to understand how the service works and how the problem is solved.
Another way that the concept works is with customizable products. Show a customer that they can have it their way (with a nice preview of what the end product looks like in real time) and they’re often pretty wowed.
How can you tell if your message needs to be improved, or if it is improving through work being done?
I’d ask users, then I’d ask your analytics. I’d also look at online conversations about my brand and my product and see if users are talking about my product in the way that I describe it. Often, this is where you get the best ideas for messaging changes.
Any examples of flywheels for the 99% of time customers aren’t looking for what you sell?
Basecamp is a great example of this. They’re a company that is better known for how they work than the actual product that they sell.
The founders have written books about work and culture, almost none of which even mention the product except peripherally to illustrate how they work on it.
They’re very active and visible in conversations around how work is done, which comes in really handy for selling a product that aims to be where work is done.
It’s extra smart because if you’re the type of person who agrees with them on how the work is to be done, you’ll probably be interested in using tools that facilitate and reinforce that style of working. It also gives them plausible deniability — they aren’t marketers. They’re just passionate thought leaders. :)
