For this episode of Secrets for Scaling, we spoke with Larry Kim, CEO of MobileMonkey as well as Founder & CEO of Wordstream, the leading industry provider of search marketing management software and services. Wordstream sees a compound yearly revenue growth rate and has more than doubled revenue every year on average since 2011. They earned $30 million in revenue in 2016 alone!
Larry is a thought leader in online marketing and paid advertising and shared a ton of top-notch advice for companies looking to see better results with their online acquisition efforts. Listen to the entire episode here:
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Make product changes that benefit high LTV customers. Wordstream found that their customers who used the product the most and churned the least were using one particular feature. So they pivoted to build their entire product and company around that feature. Aim for a high lifetime value when identifying and building for your core customers.
When pivoting, communication is important. How you communicate a pivot to your team is crucial for keeping them happy, onboard, and focused. Your team may feel that they just wasted a long time working on something. Frame the change in a way that focuses on lessons learned and the new product ahead, rather than “oops, we made a mistake - back to the drawing board.”
Pay attention to what your users are actually doing in your product. Wordstream’s pivot was successful because they had data to back up their decision. They could see what types of features drove higher engagement rates and what functions their users were using. They could see what users were actually doing in their product and what job they were doing.
Get the right metrics and processes to scale sales and marketing together. Two critical challenges for growth are scaling up marketing infrastructure and sales organization so you have enough people to close the leads you’re generating and enough leads to feed the sales team you have. Create processes and structure early on so you can scale later at the right pace.
Be intentional about the content you’re producing. Larry did a lot of competitive research on thought leaders in Wordstream’s space, just as you would for a company’s competitors. He found many marketing gurus making claims but not backing it up with data. His competitive advantage as a thought leader became using data and his engineering background to run analysis.
Content marketing takes value, consistency, and themes. In addition to quality, Larry focuses on producing a post a day. He also adds value through exploring topics in depth and originating new research.
Content promotion strategy matters. In most cases, the content itself is only half responsible for content’s success. The other half is distribution strategy. Be really, really great in one or two channels rather than mediocre in ten. Influential people with tons of followers are going to have a bigger impact on channels like Twitter. Identify the ones that you’re the strongest in and that your customers use. For Wordstream, this is SEO, organic social and paid social.
Setting goals is a team sport. Wordstream combines top-down and bottom-up goal-setting. Leadership will set a goal such as “we need to grow sales by 50% this year, that means X more content conversions, etc.” Then, employees identify the activities that will help reach it together. They then work together to build a cohesive a plan.
A small amount of effort and strategy can go a long way. Wordstream was using the same strategies that most software companies do, such as a free trial. But they decided to offer something that no one else was. They launched their AdWords Grader, which has a conversion rate of 40% compared to the 2% the free trial was converting. Larry said that the company would not be around if it wasn’t for this free tool that took three months to start.
Th Grader has given them a tool to strike up different and more valuable conversations with potential customers. And it creates a sense of urgency because it gives their customers insight on why they need Wordstream. It also allows the sales team to start the relationship with potential customer with data and how they can help improve their bottom line.
Don’t cast a wide net with paid advertising. The biggest mistake Larry sees companies making in paid ads is casting a wide net. He suggests targeting smaller, more interested groups and optimizing based on results. You can do things like target people who’ve already visited your website or create a lookalike audience based on your customers to target people who may have the same needs and match your buyer demographic.