Agile marketing tactics aren’t just for startups. Kevin Henrikson, veteran of two startups sold to Yahoo and Microsoft for $550M, breaks down his startup marketing strategies which he subsequently scaled for enterprise marketing teams.
Loren: [00:02] Hello and welcome to today’s SEJ marketing think tank. Our biweekly Search Engine Journal webinar. With you today, my name is Loren Baker. I’m your host slash moderator and founder of Search Engine Journal. And today we have a very special guest, Mr. Kevin Henrikson, partner and director of engineering at Microsoft. I’ll let you say “Hi” real quick, Kevin.
Kevin: Hey Loren, how’s it going? Thanks for having me today.
Loren: Absolutely. It’s always a pleasure. Just to let everyone know, Kevin has spoken at our SEJ summit in the past and this presentation is in addition to some of his last great presentations that were very highly reviewed by our attendees. So in for a special treat today. To let everyone know, our official hashtag for the marketing think tank is hashtag SEJ think tank. If you’d like to tell all of your friends that you’re out there currently watching the webinar, feel free to do so on Twitter. We’re going to have the Q&A after Kevin’s presentation. So you’ll see in the go to webinar question box, that’s where you can enter your questions as they come up. We won’t be answering them immediately, but we’ll be going through them afterwards, and Kevin and myself will be answered what we can for you.
[01:26] This presentation will be recorded and the video will be available on our YouTube channel. That’s youtube.com/searchenginejournal directly afterwards. And also when we’re finished with the presentation, we’re going to be giving you a small survey. So if you can take the time to fill that out always helps us make our webinars much better. Also, to let you know there’s going to be two polls that are launched during this webinar. So if you can take the time to answer those poll questions, it helps Kevin with his presentation, and it’s always great information and data to share. So I’ll hand things over to you, Kevin and get started.
Kevin: [02:04] Awesome. Thanks Loren. Appreciate the invite. So today I’m gonna talk a little bit about some of the things I’ve learned kind of bouncing between both large companies and small companies. And some of the techniques and tricks that I’ve kind of come across specifically around growth tactics and how things that we’ve picked up at startups can be applied to big brands and in larger companies. So as Loren said, today I work for Microsoft, I run the engineering team for outlook for non windows, so iOS, Android, Mac. And today I’m hoping to kind of accomplish three things or talk around three kind of big takeaways or big areas of focus.
[02:41] So the first is you think about growth or think about marketing. One is kind of how you have skin in the game. So what is it that you’re putting into this, that you have something at risk or something to lose that makes you a better marketer and also makes you make better decisions. The second is this notion of ROI or return on investment, and whether it’s your time or whether it’s marketing money that you’re spending, you’re making an investment, right? Even if you’re not spending any budget, but you’re spending your time coming up with a plan or building out a campaign, it’s that time that you can’t get back. And so you want to make sure that you’re spending that wisely and have a model or a way to think about that. So as you make tradeoffs or you make decisions, you’re doing that in a smart way where you maximize the value of what you’re putting in to whatever you’re working on.
[03:23] And the final kind of third takeaway is this notion of a quota. And the idea that you kind of set up a plan for yourself but define it in very specific actionable goals so that you can decide, or you can measure against yourself and say, “Hey, did I hit this quota? Did I hit the goal that I said?” And setting very specific goals or in the sales terms, a quota, it gives you a very hard stick in the ground that you can measure against and know that you’re tracking towards your goal, and whether you’re ahead or behind. As Loren said, questions make this much more impactful. So as you listen to the presentation, and you hear things that I say that you disagree with or agree with, I would hope more disagree cause then it adds for a more fun kind of set of question and answers at the end.
[04:07] Please type those into the chat as you think of them, or you can wait until the end and drop those in during the interactive portion of this at the end. But that’s always my favorite part. So I’ll usually try to race through the slides. I talk pretty quickly, but feel free to kind of challenge me and find a discussion. So we’re gonna have a pretty lively discussion at the end of this.
[04:24] So a quick history on me. Like I said, today I work at Microsoft. I arrived there via an acquisition of my company called the Acompli. We built a mobile app that about 18 months ago was acquired by Microsoft and today is called outlook. And so if you go to the app store and download outlook for iPhone or Android, that is the app that my team works on. And if you don’t have it today, you should go try that because it’s awesome. But the kind of the journey of how I got there is actually more interesting. And I think that’s where I’ve picked up a lot of these techniques I’m going to talk about today. So over the past 16 years I’ve worked at three or four different startups and three rather large companies, Yahoo, VMware and Microsoft. So think of the work at a small company called Zimbra, got acquired by Yahoo who then resold that to VMware. Started a company called a Acompli, got acquired by Microsoft. And so I’ve had this kind of trend of every three to five years, kind of switching from a larger enterprise to back to a smaller kind of bootstrapped or venture funded startup.
[05:22] Traditionally I’ve always kind of been on the engineering side of things. So building the technology platform or the R&D organization of a group. But I have a real passion for growth and a real passion for marketing and how that kind of ties to growth. So think of it as growth hacking before they kind of call it that. How do you apply engineering techniques to getting great results in marketing? So, the way I stumbled into this is actually a quick story that I’ll tell. So if anybody remember back, there was this product that Google provided. It was called a Google referrals, and they had the one product in there called Google pack. And one day I was just, I set up a blog for myself and I put some AdSense on it just to see what would happen. And I noticed that people you know, came in and clicked on my ads and I’m like, “Oh, that’s interesting.” And then I started advertising my blog with a very tiny budget just on my name. And you know, noticed that people that would come through ad words would actually end up clicking on AdSense, again, in a very small proportion and it wasn’t profitable by any means. But it was just an interesting notion that you could advertise your site and have people actually come through and then essentially get re monetized by Google. And so as I looked at this further, Google had this notion of products, and at the time they had referral bonuses for two different products. One was kind of signing people up for their advertiser products, would it be an ad sense or ad words. And the third was this thing called Google pack. So this was before the days of Chrome where Google basically was selling or giving away a toolbar they would install. So they had Google desktop search, they had a toolbar, they had Google earth and a number of things that they bundled together.
[06:58] I think Picasa was also in there, a desktop plan. And everybody who downloaded that, they would pay you as a marketer or a referral fee or an affiliate fee. So think of it today as the moderate affiliate. And it was pretty great that they would actually give you anywhere from 10 cents to $2 based on the profile of the person, right? So if it’s a US based person that they’ve never seen before, they would give you two dollars upon somebody activating and downloading Google pack through a link that you provided. Or if it was more of an international type of approach, it may be only 10 cents in a country where the Google didn’t value the traffic as much.
[07:30] And so as part of that you would go and configure the download and so you would send people to a page on Google that looks something like this. You could pick up the things, you can see there is spyware Doctor, Adobe reader. There’s a Norton, they had a couple other things in there, but the main things they were promoting with the toolbars for Firefox and I. E. Google earth and Picasa. And what we noticed, or I noticed as I was starting to kind of set this up, was that you could actually run an advertisement for Google earth and buy that keyword on Google ad words for a nickel. So you could buy the word earth for 5 cents and send it to a landing page that would then promote Google earth, and somebody would download it through your link and you’d get paid $2.
[08:06] So it was a pretty good kind of motion there. And we scaled that out and had a lot of fun, you know, building this rather big business. I got tons of Google fridges that year until Google finally shut down the affiliate program once they acquired DoubleClick and Performix, they kind of merge them into their affiliate platform and shut that down. But it was my first kind of taste of this example of like super high volume advertising campaigns sent to a very simple goal, which was to get people to download Google earth and then got paid on the outside. And the tools that I built around and the spreadsheets that I built around that to understand the ROI was pretty simple. It was basically like, with the click through rates I had, as long as I could get people to my landing page for less than 50 cents, it would be profitable, because there was a good enough click through rate and conversion rate that that would end up making money on the two dollar kind of backside click.
[08:57] And so I had unlimited budgets and basically had this notion of saying, “Hey, how do I spend lots of money?” I also learned a couple of hard lessons around the days where my web host went down, or I made a mistake in one of the ads and typo the URL and sent lots of money to a place that didn’t get spent. The pain was very real and since I was spending my own money, it was a pretty rude awakening call to find out you spent hundreds or thousands a day on an ad that then was a essentially wasted traffic. So we’re going to pause here for a minute and jump on our first poll. So if you can take a second to pull that up. I don’t know how long we’d like to give everybody, Loren, for this poll.
Loren: [09:33] Absolutely. I usually give everybody up to like the 80%, Mark. So first off, I’ve just launched, “which best describes your role?” Please look on one of the following, director or manager of marketing, business owners slash manager, growth team. I’m not doing anything with growth for agency. So about 40% of you have voted this far. I’ll leave it open till we get to about 80. Kevin, I really liked that last slide because it totally dated both of us.
Kevin: Yeah, I know. The Internet’s been around too long, right? And you remember when Google looked like that. Yeah, this poll is great cause I just always want to understand the audience that we’re talking to and say, Hey, how can we connect with them and how can I provide somewhat more meaningful commentary around the rest of the story here.
Loren: Absolutely. So the numbers are coming in right now. We have about 70% of you that have voted. I’m going to shut down the poll in five seconds. I’d like to really, like I said, get to 80%. So if you take the time and just click one of those dots. Five, four, three, two. Okay. Final chance. Closing the poll. All right, so here we go.
Kevin: [10:35] Cool. Very interesting. So a good mix of folks. Yeah, looks like everybody, most people or 90% of folks are at least doing something with growth or tied into a role that growth would be important to them, or whether they’re directly working on a growth team or not. So awesome. Very cool. Let’s continue.
[11:05] So, what did I learn? And so I think I briefly talked about it before the poll, but to summarize it’s really, really easy when you’re doing paid marketing or any kind of paid campaign to lose money really quickly, right? You know, just as quickly as you can make money, you can lose it. And so being aware of that and having direct sensitivity of that is something that to me really instilled that value of like really understand your campaigns, really test things, have a way of looking at your stats or metrics so it’s very clear if a mistake is made, or if a [inaudible] is made so that you can stop it quickly.
[11:34] Users if you have a need will come and droves, right? And so the ad was so simple, it was literally like, “come see your house on Google earth.” It was such a simple, simple call to action. But you know, thousands and thousands of people click through this campaign cause the interest to go see themselves on Google earth was there and it was a new product at the time, and it didn’t have a lot of distribution, which is why Google was paying affiliates to help them get wider distribution. Today everybody knows about Google maps and it’s one click to see earth. At the time it was a separate program. It was not embedded inside of Google maps and on a website, you actually had to install some software.
[12:08] And then this notion of small tweaks, like one of the cool things we did in the landing page was just dynamically looked up your location and gave you like a blurry image of the kind of region that you were from. So if you were from the United States, it would usually show that if we could narrow it down to a state, we would show that. But it would just be a blurry kind of image of that. And it was just very simple tweak of just adding a little bit of a kind of a personalized graphic that made a huge difference. It basically doubled our click through rate and conversion rate just by having something there that kind of gave the user a little more familiarity with what they were going to see next. And the ability for them to kind of get in the mindset of, “Hey, what I need to do is I need to install this thing and I need to run it, execute it.”
[12:48] But the final thing, I think the most important lesson here was that this notion of affiliate marketing or middleman marketing is hard, right? Like you clearly— the user is on one side and then there was, in this case, Google on the other side, and no matter how great of a business you built, you were kind of at the whims of both of them, right? Google ended up shutting the program down, which of course essentially destroyed this entire kind of revenue stream or this entire marketing plan. But there was— And I owned nothing at the end, right? I basically had bought a bunch of clicks, sent them to Google and then got paid on the result. So I was able to extract money from that or revenue from that during the time that it was running. But you know, at the end I was left with nothing, right?
[13:28] And so I think the piece that I took away the most from that was that affiliate marketing can be great, it’s a great way to kind of test monetization or to understand like what the interest level is. I mean people will be very creative. I’m sure Google learned a lot from the various affiliates that were promoting Google earth or Google pack or the various toolbars for the browsers. And they were able to incorporate that as their core plan. So you as like a business owner or somebody who’s on a growth team or something, when you— I always think affiliate marketing is a great way to kind of go and get crowdsourced advice on your marketing plans, right? So think of it as a way where you can go and spin up a small affiliate program or even if it’s just a referral program, right? You see every big company doing that today. And I guarantee it, if I’m working at a big company, I’m looking at the results or what people are doing from my affiliate or referral network to understand how are they marketing the product better than me and what can I do to my core marketing to actually improve it so that I own that kind of channel and I end up being on the right side of the affiliate game while that middle man marketing kind of, yeah, it goes away.
[14:28] So skin in the game, and this was kind of the main big point that I made, was that would you spend your money on it? Right? And so in this case, I was. I was running my Amex every day and my AdWords account and spending my own money. But whenever I talk to marketers or growth folks today, I’m like, are the things that you built, like the plans or the campaigns that you spun up, if you go to talk to your team, how many folks on your team or in your virtual team that are working with you would spend their own money on the work they did? Would you pay your own salary? Are you so convinced that the salary and the time that you’re spending on a particular campaign or effort that it’s going to pay off that you would actually spend your own paycheck to do that? Would you actually run your own money through the various paid marketing campaigns you’re doing or the vendors or the agencies that you’re using?
[15:09] You know, and that’s something that again, running a small campaign on my own, I was able to kind of have that very, very direct feedback. And again, when we were building Acompli it wasn’t necessarily our money in the sense that we were using venture backed money to build the team and the company. But at the end of the day, if we run out of that money, those last drips of cash were actually our paychecks, right? So every poor campaign we executed every time we went and did a test and lost a few thousand dollars on a marketing test, that was essentially taking away days of life of our company, right? Like the company is kind of set up with this, there’s an end date. Every day you wake up, you know that if you look at your current burn rate of your company, that company is going to run out of money on a certain date. And we had a cero cash date, and you attract that, right? If you hired somebody else and added somebody to the team, you would bring your zero cash data and you’d now be two or three months less in terms of a runway from your company. And so every time you make a hire, every time you go and build a campaign or do something, would you spend your own money on it and do you value it that way?
[16:06] And I think a lot of that is lost when you get to larger organizations or you’re looking at the tactical plan, you don’t step back and look and say, “Hey, am I actually spending this money wisely and would I go and invest in myself?
[16:20] Are the bets you making smart, right? Are they smart and how do you know they’re smart, right? You have a great idea in a thesis and you go and test it, but how much investment do you want to put on that bet before you say, “Hey, that’s going to pay off or not going to pay off”, right? And I think that’s an important thing to think about or realize as you’re going through executing campaigns or thinking about planning new campaigns, right? How do you kind of think about that holistically and make sure that you’re spending the right amount of time with the right amount of expected return. So one of the things we did is we built a spreadsheet and said, “Hey, here’s all these potential campaigns we could run for newsletters or web ads.” And again, this was when we were building Acompli. Different kinds of press outreach and various things.
[16:56] And then what’s the expected payoff of these? how many users do we think we’ll get? How many downloads do we think we’ll get from running this campaign if it’s executed flawlessly, right? And then as we would start to run these, we would compare that with our estimates and say, “Hey every time we ran press, we were actually, we overachieved”, right? Like we never, we didn’t realize like one great article from a news outlet or press would actually generate many more articles. And so we’d end up with, you know investing more and more in press because we found that that had the best ROI for us. Paid advertising in the mobile app space is incredibly expensive, especially when you have a new app that’s still trying to get out there and figure out its place in the world. But in our case, the ability to use press with something that we found out, and that was kind of the smartest of bets we made in terms of growing the small company that we had.
[19:01] And then the final thing is don’t be afraid to fail, right? Like it’s okay. A lot of the campaigns that we ran didn’t work. In fact, most of the campaigns and the things that we did when we were building Acompli or previous to that we were buildings Zimbra, it didn’t work. Zimbra was an email company that was focused on open source and we had a very large open source network of contributors. And one of the things that worked really well for us was speaking at open source conferences. So that worked well. We started going to some other conferences that were more tied to IT administrators or server operators, and those just completely felt, we didn’t get the same level of feedback, we didn’t get the same level of interest in our product because it just didn’t resonate, right? and it’s okay. So we went and tested a set of conferences and spent money on them and paid thousands of dollars for a booth, but very quickly pulled that back and said, “Hey, we learned something there. That’s not our target market. Let’s move on”, right? I think that kind of goes across all these growth campaigns and things. Feel free to take risks and try things. Don’t be afraid to fail, but just do it quickly and then be ready to move on if it doesn’t work with what you want.
[19:59] So another kind of story here, it was tied more around when I was at VMware, was they were launching a VMware fusion five. So this is, if you don’t know what fusion is, it basically allows you to run windows on your Mac or Linux or whatever, but it basically allows you to run a different operating system on your Mac. And the cool thing about fusion was that it was, and VMware in general, was that it was an incredibly popular channel sale. And what I mean by channel sale is that VMware at the time sold very little of the software themselves. It was sold through BestBuy, various retailers and different web stores, Amazon, software houses, some brick and mortar [inaudible] where I was even going to Fry’s and buy the box back in that day.
[20:44] But there was a very small website that we on vmware.com that actually would sell a VMware fusion, but it was a super small focus. And so basically every year this was roughly a yearly released product. They would come out and they’d run a small marketing campaign a couple million dollars, again, small for a large company to go and just advertise the web sale, but just really didn’t track it, didn’t look at it, just said, “Hey we’re launching the new one, let’s go run some ads and see what happens.” And surprisingly didn’t have the tracking because 95% of the sales didn’t come from this web sale. It was really coming from partners and channels. And one of the things they did was added in the tracking. Finally, for VMwork fusion 5, to actually track on a per click basis and per campaign basis how much of this money was going in. And of course to no surprise when you first start tracking something, you find some really, really interesting data or ugly data, if you ask me, that again, 70% or 80% of the marketing spend was completely wasted, right? We were buying these billboards and we were buying airport ads and things like that that just weren’t converting at all. Yet the web advertising that we were doing on a couple of very targeted websites was doing great and all we had to do was shift a little bit of the money over to that. And sure enough, we quadrupled the web sales, and now I think VMware sells, a huge upper percentage of the actual sales are directly through web sales. And they have the benefit of having a direct relationship with those end users of the software versus where when they sell it through a retail store, they didn’t.
[22:07] So we’re going to pause there for a minute and a fire up our second poll and see if we can get a little more understanding about what you guys are struggling with in growth.
Loren: Absolutely. So the is launching, “What is your biggest growth struggle?” Producing enough growth ideas, finding time to manage and review growth data, consistency of active growth projects, or growth budget. So please take the time to vote. Great stuff, Kevin, by the way.
Kevin: [22:35] Thanks man. No, it’s exciting. Like, it’s something I always— When I get to take a break and talk about things like this it’s really, I always think back to myself as I’m talking through some of these examples. You know, I think back to things that we’re doing this week or things that we did last week where I was like, “wow, maybe we didn’t cut that short enough, quick enough or we should dig in”. So, I’m kind of scribbling notes here on my desk to things I want to check in after this. So it’s always a great reminder. You know, they always say teaching is the best way to learn.
Loren: [23:02] I haven’t seen many billboards for Acompli slash outlook recently.
Kevin: Yeah. We don’t run billboards for that. So it’s one of those things where there’s other ways to advertise for it. And as you would imagine, billboards are probably not the best way that people learn about a new email app.
Loren: Okay. We have about 71% voted thus far, so I’m going to close this down in about five seconds. Please take the time to vote in the poll if you haven’t already. This is really useful data by the way. Five, four, three, two. All right, last chance, one. There you go. Closing the poll and here are the results.
Kevin: [23:40] Wow. Pretty even split. Great. So let’s pause for a second. Actually, you just talk about this. I think the top two seem to have the most popular, right? I mean, basically producing enough gross growth ideas and then just finding the times to go over it. So one of the things that I think we struggle with this too. Finding new ways to kind of brainstorm has been interesting. And one of the things that we’ve done is that at the start of kind of our weekly meeting where we talk about metrics and growth, we spend a few minutes and let people just throw out new ideas in a completely like anything goes kind of way like, “Hey, did we try this or can we try that?” And there’s no judgment. We don’t really talk about them or debate the merit of one or the other. But again, it’s five, 10 minutes. People just throw out what they thought. Something they saw on the way to work. You know, you’re on the commute, you’re on your train, [inaudible] in the Bay areas of San Francisco, you ride a Bike and you see like an ad or you see something [inaudible] as you’re riding up the peninsula, you know, what did you see? And there’s tons of new companies and new startups kind of always coming up and trying different inventive things. And so, we just use five minutes to just say, “Hey, what did you see? What did you think about?” Right?
[24:48] And again, it’s five minutes, 10 minutes max, kind of a weekly kind of growth update. And it’s a great way to just kind of throw ideas together and then a project manager or a smaller group of us will kind of dig into those and talk about them and do some more research offline. But it’s a great way to just start capturing ideas and kind of kind of have a rich backlog of ideas.
Loren: [25:11] It’s also important, and then one thing I’ve gotten from this too and some of your past presentations is the importance of actually taking those ideas and putting them into a process where you’re getting closer to actually launching it, right? Because it’s nice to have an idea bank, but there’s a big difference between an idea that’s written down and something that’s executed. And that’s a big challenge for a lot of entrepreneurs or even someone working in a small business, is that— I know in the world of search, like we’ve had ideas for forever, “Hey, let’s build a marketplace on search engine journal where people can find agencies or consultants.” And we’ve probably pitched that idea around for eight years, and now someone has gone out and built Credo, which is just that and they’re doing great, but they actually took the time to take an idea that probably thousands of people have had and launch it. So that’s also a really big difference.
Kevin: [26:08] No, that’s good. And that’s how I was going to kind of address the second point. Like we use this thing called office 365 planner, which is similar to like a Trello or Asana task management solution that comes with office 365. And what we always— we enter it into that as our backlog. And what we do is we literally ask one question which is, if we wanted to try this idea, what would be the next step? Right? So if you’ve ever read like a Stephen Covey, like getting things done, like it’s all about like, let’s not plan the entire thing out. Let’s just, what’s the next thing? What’s the next piece? We need to go ask a question, we need to go do some research. And being able to crystallize that next step and put an owner on it has been made a world difference, of incrementally everyday kind of, or every week moving the ball forward on a variety of new ideas. And again, don’t try to like completely plan out the whole growth or figure the whole thing out. Like what was it be the next thing to validate whether this is something we could do and whether it’s something we would want to do. So it’s a great point.
[27:01] Okay, so the next point is kind of this notion of ROI is everything, right? So like, you have to figure out whether the investment you’re making, whether it’s time or money or effort from an agency or somebody you’re working with is paying off, or even the folks in your group if you’re managing a team you know, are your team members working on the right thing? And so the number one thing is you have to track it, right? You can’t manage what you don’t track. And so I use this thing called rescue time, which is a very simple little tool that runs on your desktop that just tracks what time you’re spending in various applications around. So it’ll say, “Hey, you’re doing so much time on email, you’re spending so much time on these kind of websites, or you’re spending time on Facebook”, and I just breaks it down. Very simple, right? It just gives you a little pie chart and they send you an email every week that tells you how much you’re tracking. But that just gives me a gut check on like week over week am I spending too much time on sitting in email all day when I should be spending more time writing up plans or working through, or reviewing our backlog or doing something like that?
[28:03] And then on the actual executable you have the goals, right? You’re trying to grow the number of users, you’re trying to grow revenue, or some combination of that. You’re trying to grow maybe leads if you’re in a sales type role or you know, you’re just part of the funnel, you’re not tracking the whole funnel, but you need to have the tracking in place. And so one of the things we did that was interesting Zimbra you know, again, very early, kind of back in the web 2.0 days, is that a lot of our sales came through web advertising and then a very simple trick, which was literally to grab the keyword from each of the ads and pass that all the way down to the Salesforce record. And so now when a salesperson would open up a Salesforce contact or lead, they would see the actual keyword that that person searched on, right? “Oh, they searched on open source email. They searched on calendar, they searched on calendar for iPhone, or email for iPhone”, right? And you would get kind of into the mindset of that person and it gave us this incredible two way loop. One was it gave better data to the sales reps or the SDRs as they went to make outbound calls or talk to these contacts.
[29:02] But it also let us draw a direct line back to the advertising campaigns, right? And so again, there’s tons of tools to do this and ways to do it. And a lot of times it does take a little bit of programming or a little bit of custom engineering to kind of integration to close that loop. But if you don’t have that full complete loop of tracking all of your campaigns coming in. So in the mobile world we use this tool called adjust which is an SDK you put inside your mobile app. And every campaign you run, you give it a unique identifier, whether it’s you know, a web pop up or you’re running an ad or you’re having a referral from another app, right? You want to track that and so you have all these channels and then you just kind of passively are collecting this data and then as you to look and judge campaigns against each other, you can take this notion of saying, “Hey, we’re spending this many dollars or this much money or this much time on a particular campaign. How does that compare against this campaign? Or how does that compare against our organic traffic?” where you organic traffic may be driven by press or some other kind of brand building exercise, right? Should we balance that off against each other, and it gives you that kind of very, very actionable data to go and make that trade off without having to spend a lot of time debating which one’s the most important or which one’s working below.
[30:09] You know, I always had this kind of saying whenever we do paid advertising is that PPC is free. Like, if you’re doing it right, if you have the tracking set up, you should never have budgets on PPC, right? The fact that most companies, especially large companies I’ve work at, set very fixed and rigid PPC campaigns budgets, is that they actually don’t know. They don’t know that a web sale or a particular sale is tied to a specific ad, right? They don’t have that tracking in place to know that this particular AdSense ad or an AdWords ad or you know, campaign that I ran on a private website actually drove a sale, right? And many of this it’s because it’s a complex sale, right? There’s many touch points in the process, but there is a way to understand the value of the lead or value of an opportunity, or the value of a mobile user, or the value of a new trial account on your software package, or whatever you’re selling or whatever you’re working with. There’s always a value, and maybe it’s a fictitious style. You maybe you say, “Hey, a lead we think is worth a dollar. Cause we take all the leads we added up and you know, this many percentage of them closed and our average sale is X.” Like we can map out an equation, right?
[31:13] And so you should be able to have that math, and if you don’t, you should be able to go to your executives or your board and say, “Hey, we should uncap the PPC budget because we’re so convinced that this is working and tracking as well, that we shouldn’t have a budget.” And you shouldn’t have this notion of like, “Oh, we’re only allocating this much to our paid campaigns”, but almost without fail, every company I go to ends up having incredibly limited hade campaign budgets because they don’t actually have great tracking, right? And you know, depending on the size of the company, that limit may be bigger. But the main point was that if you had really, really convincing traffic where you knew 100% competence that a particular paid click would go through and what that was value is worth. You shouldn’t have to have a budget to pay it.
[31:55] And then the other piece that I always track is this notion of a positive ROI, right? It’s like breathing, right? Like once your ROI becomes negative, you’re spending money to lose money and that’s just not a good thing, right? So as a start up, this is like the perfect way to kill yourself, right? If you’re spending more than you know you’re going to bring in and you don’t have a way to get new funding or you’re generating marketing activities that are just massive loss leaders with no hope of like building market share. Cause there are cases where, Hey, you have negative ROI because you’re building market share or there’s some other value that you’re building. But in many cases you see it where you’re spending money and generating tons and tons of leads, but maybe those leads are crappy. Or the customers that they’re bringing in aren’t targeted correctly and end up driving your support costs up, right?
[32:36] So we’ve seen this in the past where we wouldn’t market it to very low end email customer in a previous life about 10 years ago and we were getting tons of leads and tons of signups for all these like one and two person kind of email domains. But the support costs of setting those up was three or four times the value of that customer, right? And so very quickly, it took us longer than it should have, but once we realized it we completely shut off that campaign and just said, look, we can’t service that customer. It’s not profitable at the price point we were trying to sell it at.
[33:06] So one of the things I’m going to talk about here is this notion of a quote because it’s kind of the final big point, right? If you ever ran a sales team or been around sales teams most sales professionals have a quota, right? They’re going to have this many thousands of dollars they need to generate a new business or in renewal business over a fixed quarter. And that target is what they get commissioned on and paid on. If they hit their target, they get 100% of their commission. If they overachieve and get more than their quota, then they will get a bonus or a kicker. If they underachieved then they will not get their bonus or not hit their kind of pay target. But this should apply to your marketing campaigns, right? Like you need to think through and say what is that target? know, just like the best sales teams in the world go and say, Hey, if we’re going to try to hit $1 million in sales, they don’t assign exactly $1 million in quota. They’ll assign $2 million in quota across all the sales reps. And so knowing that some things won’t work out, some will overachieve, some will underachieve. But in the net, most of your planning is optimistic, right? And that optimistic planning ends up is where you end up missing. And so marketing and growth should have the same thing, right? If you say, “Hey, I need to hit 500,000 users in the next quarter.” You should build a plan on how do you get to a 1.5 million or a million, right? Double or triple what your actual goal is knowing that some of those campaigns won’t work out, cause setting yourself up just to hit the 500,000 is more than likely not gonna work.
[34:26] And what we’ve found from our work is that even in the times where you set it to 1.5 or you know, a million, so like three times your actual goal, you still may not get to the 500,000, but if you would’ve said just the 500,000, you would have even gotten to a lower number, right? And so setting big goals, doing the planning and effort to go in and spec out what do you think a target should be or how much you should achieve from a particular growth or marketing tactic is incredibly important. And you need to have very actionable goals with numbers. Not just saying, “Hey, we’re going to go try this thing and see what happens”, but we’re going to try this thing, we’re going to generate this many leads or this much growth over this time period. And then you can chart it week over week, what that looks like.
[35:07] Each channel think of that as a strategy. Just like in a big sales team you would say, “Hey, we have the enterprise sales team, we have the small business sales team, we have the inbound sales team, the outbound sales team.” Think of that as your campaigns, right? Think of these as a strategy and manage them individually and say, “Hey, are each of these behind or ahead?” Cause maybe halfway through the period you’re like, “wow our web campaigns are just not doing what we want but our paid campaigns are doing more than we expected.” You can shift focus midway kind, double down or triple down on the ones that are working the best and defocus the ones that aren’t working with, again, that goal of being incredibly aggressive and looking for the maximum success inside of the timeframe that you’ve set up for yourself.
[35:49] And again, this kind of notion of fail fast, right? So if you’re tracking these things as individual units and not just saying, “Hey, our growth numbers are walking up and we have seven different channels that we’re advertising in or trying different growth campaigns that we’re running.” If you are not measuring them individually, you can’t go and cut off the bad ones and kind of cut bait and say, “Hey, we’re good. We’re going to let that one go and then try again later or just stop investing there and let it run on its own because we really want to go focus on the big ones that are going to give us the biggest sale.”
[36:16] So to summarize kind of the three beams we talked about today, the big charters was, Hey you’ve got to have skin in the game, you gotta have a way that you are committed. Whether it’s you putting your own money and just having that mindset in the back of your head, is that the activities you’re taking, would you spend your own money on that? and just use that as a simple kind of gut check of if you’re doing the right thing, this notion that everything has a cost, right? And so you need to have a great ROI model in your mind, of the time you spend, but also the money you spend on various campaigns. And then finally, this notion of kind of oversubscribing or having a quota so that you can really do a great job achieving those numbers and you know, whether it’s a small company or a big company the same kind of techniques kinda play out over and over again.
[37:00] So that’s the end of my presentation. If you have questions, I’d love to kind of take those now and Loren can help pitch those up to me. And we will go from there. You can reach me on Twitter at Kevin Henrikson or got to go from this.
Loren: [37:14] Absolutely. Thank you, Kevin. Always good stuff. And yeah, we have about five or six different questions. No one called you out unfortunately. But maybe that will happen after the fact. So question number one, rule of thumb, how much budget should be set aside for experimenting?
Kevin: [37:39] I always think it’s somewhere between a third and 25%, right? And I think and when you say that people say, Oh, that’s way too much. But what I think of experiments is I think of things where you’re not 100% confident they’re going to work. And so of that 25% or 33% kind of a third to a quarter, some things you’re going to say, “Hey, we have a 50% chance that work.” Some things you may have like a 2% chance that worked, but if they do, they’re going to pay off. And so I think I would taper it based on what’s the profitability is and make the bets appropriately, right? So invest in the ones heavily where you think there’s a higher chance, and then invest less in the ones where you think there is a lower chance until you start to see that they may work or not.
Loren: [38:18] Makes total sense. And overall from all of your internet marketing efforts. And I would say possibly, and let’s just look at accomplishing outlook. What got you the best results? Social media, email marketing, SEO content? So all of these are fairly organic here.
Kevin: Yeah, from us, from our point of view, the number one best result was from press, right? So having a great content strategy and either doing guest posts with press, but most of the actual traditional press, like going out and talking to reporters telling a story. But the key there to do great press is to not just write a press release and send it out and hope you get it. It’s really to look at what those people cover and understand what they cover and have a story. Like what is it unique about your story? Like, nobody wants to know about some new startup doing X, like there’s a million of those and you can just go read them off tech crunch every day, 20, 30 new startups launch and get funding or whatever. but what’s your unique perspective or unique opinion on it, and how do you get that to generate a great press story that they can tell. And so by far for us press and kind of traditional press was by far the best.
[39:30] I think second to that was a much more in product and native experience where with every person that signed up for accompli or outlook, the signature would basically say send by outlook or sent by accompli. And that link would link back to the download Link. Again, think of things that are in your product and make sense whether or not you know, going to be too aggressive. But there’s things that people were actually proud of it, especially in the early days when we had the beta as a closed system, people had to kind of apply to get in and there was a lottery system. They were like, “Oh look, I have Acompli” and it was kind of like a badge of honor, right? And we only made it that sense and that works really well for us.
Loren: Cool. Yeah, and I remember you had a social media campaign writing, which to put Acompli in your main iPhone dock, right?
Kevin: Oh, rock the doc. Yeah. So we figured out, as you would imagine if everybody pulled their phone out today, right? There’s the four or five main icons you have in your doc. Like those are the apps that you’ve deemed the most important to yourself. And we made this ask to people and said, “Hey, we think Acompli is great. We think outlook is great, rock the doc. Send us a screenshot of you having our app in your dock.” And knowing that once people put those apps down in their dock, the usage of them as a daily user are incredibly active user just skyrocketed. And so it was a great campaign and people had a lot of fun. And we actually, there was a secondary benefit that we learned from that is that when people would post a screenshot of their homepage, we would see the other apps that they used. And so it actually gave us great insight into what other apps our target user used. And then from that we were able to go out and in some cases generate partnerships with other apps and say, “Hey you, you also use our app. People are in the same community. We should work together on either doing a joint press release or maybe an integration.” And so it was a great kind of starter for us to go and have that data to go share with our partners and part of our BD efforts.
Loren: [41:07] That’s super cool. And what still frustrates me to this day with traditional Gmail is that you can’t launch an invite on your Google calendar through Gmail anymore. Remember back, you used to be able to just hit an icon and do it, and then you guys pretty much launched that feature right after they took it out.
Kevin: Yeah, I was the same way. Like to me that’s a huge feature, when I get an email from somebody like, “Hey, can we meet for lunch?” I can send my available times. And then they say, “Hey, we want to meet at one o’clock on Tuesday.” I can respond right back with an invite, right in line in the email. And yeah, it’s an incredible time saver and yeah, it’s something that Gmail and outlook didn’t have before we kind of brought that into it.
Loren: Very cool. Very cool. So what’s your advice as far as investing money in the social media campaigns? You know, is it worth it for you to try to, do you think it’s worth it to try to grow your overall growth and reach when you’re not necessarily getting that initial return? And for example, adding things like Facebook boost or Facebook ads on top of what you’re typically doing from a social media perspective.
Kevin: [42:15] So what we found was, and you know, we’re a tiny, like as a company, right? We were a tiny company. Nobody knew our brand. Nobody really heard of us other than kind of our coworkers or our friends or our spouses. But what we found was that we actually had the most success, you know, as we would get press, we would retweet or share those on Facebook and then we would promote those. So we were basically promoting articles about ourselves written by other, more famous third parties. Like the verge would write an article, or tech crunch would write an article, or somebody like ink magazine would do a detailed— or wired magazine would do it. As we would get these articles, we would go and promote those. And so we found the most success using our handle to kind of retweet and repost things and then put paid budget around that. And that ended up building about this second level like authoritative links of saying, Hey, these are links that other people are writing about us, because us just tweeting things wasn’t that active.
[43:03] I think the one thing that we did do on social that was kind of cool is that as people would post their doc or as they would comment to us on Twitter, we have this kind of badge thing where if if you posted, and I noticed you’re from Germany, and we would post a cool picture of Oktoberfest. And if you posted and your from Canada, we would be like, “yeah, we love Canada too.” Like we would always respond back with like something very personal about that person’s Twitter account. You know, you can read it off two clicks into their Twitter account. And then put a little image up and we’ve found those got retweeted and shared it. And then it almost— people wanted to come and interact with our handle just so that they would see what badge they would get. Like, Hey, you’re in a rock band. And some were funny, right? Especially where we would Google somebody’s name and it would match like a famous artist or it would match somebody who was not them, but somebody who had a likeness of them, and we would retweet it back and they would really get excited to see like what we came up with. So that was one little trick that we did. And again, it was kind of to build a little bit of social buzz. But by far the biggest payoff was promoting other stories that were written about us.
Loren: [44:05] Yeah, I totally agree with that as well because you know, when people follow you on social, the last thing they really want to see is you constantly tooting your own horn. And if you can have a trustworthy publication doing that for you, it’s not necessarily just showing off, but it’s also the, “Hey this person that entrepreneur.com wrote this and we’re featured” and hey, you’re educating the user at the end of the day. And it does add that layer of trustworthiness. I’m not sure, I don’t see a lot of companies doing this, but one that I do see doing it in my Facebook feed is a company called Elysium. And if you’re 40 and over in male, you probably see their ads show up in your Facebook feed. But they’re an anti-aging supplement company, right? But all of their advertising is from articles in the New York times and USA today and US health and news mentioning their company. They hardly ever do a direct a sales component from it.
[45:17] And now they’re probably retargeting after the fact or whatever it may be. Maybe targeting their ads to those specific publications. But you know, what they’re doing is, first of all, people in the industry can’t advertise as much as a normal company going on Facebook, but at the same time, they’re building that trustworthiness right around the product, around everything else. So if I see more companies outside of anti aging companies do that, I’ll definitely take some snapshots.
Kevin: [45:45] No, that’s a good call. Yeah. It’s that whole kind of like associated with kind of marketing, right? where you get that basically you’re one step away or one level away, but you’re using a more validated source to kind of be your major mega megaphone.
Loren: And then like personally, like if I ever get picked up, I’ll be like, “h, I totally forgot. I talked to this reporter”, a humble brag in USA today, or whatever it is. And then people like it, share it, etc. They love that stuff. So, I rather see a company share where they’d been picked up or mentioned more so than what they’re always talking about on their own blog. Okay. So, rule of thumb in the world of SAS, how far out do you look at retention? Sales are great, but what about churn? So how has churn rate and retention of the customer been part of your overall strategy? And what highly effective campaigns or channels have you used that have had a lower retention and high churn?
Kevin: [46:52] Lower retention. Okay. Got it. So I mean, so there’s a couple, it really depends on the product, right? So if you’re like a SAS product where you have like a yearly renewal cycle, clearly you want to look at like your renewals over that, you know, one year period. But, obviously that’s an incredibly late signal in terms of being able to fix things. And so what we do from a mobile app perspective, is most people look at their 28 day or one month retention, depending on how you’re measuring. So either four weeks or you know, just a straight 30 day and that gives you a much tighter granularity. But if you notice most apps, if you draw the line back and you just look at the one day retention, you see most of your drop in the first day, right?
[47:29] So most mobile apps today have a drop off in the first day. And so you can do a lot of optimization and a lot of testing and get feedback the next day to improve your one day retention. Cause every time you improve your one day retention that just has an accrue value to your one month or then obviously your one year retention. So, that’s kind of the way I look at it. For mobile, it’s really, you know, you look at one day and 30 day. For like a software kind of SAS package, you look at it kind of like whatever the return rate is, if it’s a monthly type fee, then you want to make sure that you’re getting usage and retention over that month so that people renew every month. If it’s a more yearly type plan then you want to look at it over a longer period.
[48:07] We found in terms of like, and I think the question was, you know, where’s the high churn low retention? I think you want the opposite, which is high retention, low churn. I think what we’ve found is that the ones that retain the most are the ones that were the most targeted coming in, right? So when you run a really broad base, you know, think of the banner in the airport or the, you know, “Hey, this thing is going to do be sliced bread for you.” And you have like the very broad wide net of like “this Apple solves all your problems”, Like that may attract lots of users because you’re making a very broad plain, but generally those users churn very quickly and you see that right in the one day, right? You’ll see like, they’ll come and check it out, they’ll poke it, they’re like, “Oh no, this isn’t what I thought it was”.
[48:50] We ran some ads like that around like, you know, best way to best app for travel. Because hey, you know, accompli and outlook works so well when you’re a mobile and you’re traveling, we have optimized a bunch of things around, you know, being on a crappy wifi networks and optimized data usage and all of these things that we were sending it to like this really broad travel audience, but you know, yes, we’ve got some engaged users there, but the churn was incredibly high, right? But then what we found is we’ve got retention almost to double just by saying, “Hey, the best way to do email when you’re on the go”, right? So again, still kind of targeting that on the go traveling user, but on the go could be to mean, “Hey, you’re just commuting to work in the morning. You’re coming on the train or you’re going through a tunnel and you’re going to lose signal.” Like, “Hey, the app still keeps running and keeps everything offline. It works smooth for you.”
[49:38] And those, again, we basically doubled it just by tweaking that campaign a little bit to be less, kind of like broad based focused on anybody that travels to really be focused on people that are trying to get work done on whether it’s they’re commuting, whether they’re actually on a trip or they’re on vacation.
Loren: So it sounds like the difference between being a Pied Piper and a Pokemon go is making sure that one, you’re setting up that sense of timing, right? Free Trial, free for a month. Hey, let’s do a notification that you only have like X amount of free DocuSign’s left for the month, or you’re about to run out of this or you’re about to run out of that, etc. And then two, understanding which of your markets are churning and addressing that in your initial marketing collateral, right? Marketing message. So [inaudible] out there beforehand, and not set the expectation like, “Oh, you only use this when you’re on the plane or in the airport, etc.”
Kevin: [50:35] Yeah. You want to basically capture the end user intent and the better and the more accurately you can depict that upfront, the better off you’ll be with people sitting and staying on your product.
Loren: Absolutely. One question from Ryan is, any advice using web marketing to break into international markets?
Kevin: [51:01] So what we did is we went and looked at some of the top international markets that we wanted to get into. And the main thing was, in our case, we were doing a mix of paid and press campaigns, and what we actually did is we ran paid campaigns, targeted it at writers and press analysts internationally. So we tried to get the attention of press by basically retargeting them by friending them and connecting with them on Twitter and then retargeting them on Twitter and sending sponsored posts translated into their language. And so what we would do is we would take, you know, Spanish for example, or Portuguese, and pick some of these top countries, Germany, France, and target the writers of the big magazines or the big kind of web community sites, and use that to target them. And then be able to engage them with our handle and Twitter, and then from that go and actually do campaigns. And again, once you get them to write an article about you or covering you, then go and run, again, a localized version.
[52:02] So like, Hey a big German new site wrote about Acompli, then we went in and spun up a social kind of web campaign around that, using that article in German about like, as the way to get there, right? Cause again, you know, getting the translation just right as a non native speaker and through these translation houses generally isn’t good. So we could do that with small pieces of texts like Twitters, tweets, little Facebook messages. But then once we kind of get an article that’s written by a native speaker in Germany, then you can build a campaign around that because now you have a great kind of proof point that somebody else has talked about it, and you’re able to kind of use that as your kind of jumping off point.
Loren: [52:35] Yeah, you can really build upon that and once you get it out there and just blast it accordingly. So that’s really smart. Going through the rest of the questions right now. Oh, here you go. How did you initially grow your email list?
Kevin: [52:52] So it started off with literally friends, you know, posting it on my own social media, all of the kind of the two or three co-founders did the same thing. And so that kinda got us into the hundreds, you know, just by posting our own friends group and saying, “Hey, we’re building something interesting.” Put up a really simple webpage. We used this thing called kickoff labs. It’s kind of like a Launchrock page, where Launchrock page you can enter an email address and we’ll notify you when it’s ready. And so that was kind of the first phase that got us into the, maybe I’ve learned a thousand email addresses. And then, we went and scoured the internet for all of the places that can of like, there’s a lot of places that are like beta lists and startup lists and places where you can post like free trials or free betas.
Loren: This was for [inaudible]
Kevin: [53:38] Correct. So, we ended up launching our Android app on product hunt, but before that we launched with [inaudible] didn’t exist. And so we basically went and loaded up a bunch of campaigns and all these startup places and we bought some very cheap ads. Like, there’sa ton of cheap ads up there where you, if you have a new product that’s for beta or to try, for a few hundred bucks or 50 bucks they will post a little ad in their newsletter or post a little ad, and each of those would get, you know, a few hundred to a couple thousand new signups. And the key thing that we had is we had this notion of referrals. And so what we always told our subscribers when they signed up and said, “Hey, thanks for signing up. If you want to get moved up higher on the list, here’s your unique URL to publicize it.” And so we had some people that were generating hundreds of additional referrals by re promoting it to try to get themselves farther up in the list. And then every week we would add like another 50 people to the beta early on. And then we started adding a hundred a day and it started the scale. But using that notion of kind of scarcity got people to re promote it for us. That was the one trick that we used. That got us around, I don’t know, 8,000 to 10,000 email addresses before we finally went live.
Loren: [54:46] It’s amazing how all of these things like the old refer a friend scheme or whatever, and also the marketing and the SIG file work. And sometimes it’s so overlooked, right? From a marketing perspective. Like, I know when I started using accompli, people would write me saying, “Hey, when are you available?” And I’d just immediately send back all of these times and they’d respond, “Oh my gosh, how’d you do this so quickly?” And then I’d just be like, “check my SIG file.” And then like you know, Yahoo mail, Yahoo sports, all of that launched off of emails SIG files. So, it’s very overlooked, yet something that— it’s a marketing space that people are seeing on a daily basis.
Loren: [55:34] Cool. Alright, if you wouldn’t mind, I think you have one more slide in your deck, which is about our next presentation. So thanks a lot, Kevin. I appreciate you taking the time and I’m sure the SEJ marketing Thinktank does as well. We got a lot of great questions in. If we didn’t get to your question, we’ll be answering them afterwards and sending out that email accordingly. Just to also remind everyone we will be placing this video capture of today’s Thinktank on our YouTube channel, as well as doing a recap on search engine journal itself.
[56:11] So again, Mr Kevin Henrikson. Thank you so much. Really appreciate you making the time out of your busy day to be with us today. And everyone stay tuned for in two weeks, on October 5th Kelsey Jones, executive editor at SEJ is going to be doing a webinar on how companies can utilize Snapchat for social media marketing and other ways as well. So, we’re going to shut things down here today at the Thinktank, just to remind everyone that’s still with us, right after we end the presentation there will be a short survey. Please take the time to fill that out. Any feedback that we receive helps us make this better in the long run. So one more time. Thanks again, Kevin. It’s been great.
Kevin: [56:55] Appreciate it. Thanks for the invite. Take care. Bye Loren.