You hear a lot of talk these days about the importance of customer satisfaction, but customer loyalty is the real win. A satisfied customer is necessary, but not sufficient, to be a loyal customer who will come back repeatedly, refer their friends and family to you, and be faithful even when your price is not the lowest.

Not too long ago, everybody thought customer loyalty was dead. Price was everything, and customers would switch suppliers for pennies. I think these tough economic times and social networks have re-awakened consumers to the fact that there is more to a business transaction than price. People are tired of being serviced like a commodity by a faceless computer robot.

Whatever the reasons for the change, and there are many, it represents a big opportunity to the small businesses and startups who recognize it. Building customer loyalty means a first priority on keeping the customers you already have, rather than focusing always on getting new ones.

Here is a collection of seven top tips on how to build and maintain real customer loyalty:

1. Communicate more personally more often. Get to know your customers, and actually call them by name, or even remember their likes and dislikes. With today’s technology, make sure they get a monthly newsletter, a reminder care for a tune-up, or a holiday greeting card personalized just for them.
2. Educate your customers on your business. Today you have the tools, like blogging, videos, and new web technologies, to explain and make your customers appreciate what you do, and how you do it better than anyone else. They haven’t lost interest in cutting costs, so help them understand how you are a leader in this regard.

My company recently faced a tough decision. Like most Internet startups, we wanted to get the word out about our product, but our marketing budget was tiny. We debated whether we should we hire a PR professional/social media guru to help us or if we should spend our money on an online ad campaign. Ultimately, it came down to this: Influence or data?

That’s not to say, of course, that it’s a clear-cut delineation. A lot of press releases, for example, have measurable SEO components, and even the most SEM-dependent company has a Twitter account these days.

But to slightly torture the already beleaguered baseball/business analogy, here’s the deal: very few startups can rely on the “Field of Dreams” method of marketing, and many of us can only afford to pursue one of these strategies effectively. So do we swing for the fences with PR or play small ball with SEM and affiliate marketing?

In the course of making the decision, we talked to a bunch of other folks who have faced a similar fork in the road, and we were surprised to find that even among companies that are in similar stages and have similar products and markets to one another, there’s not much of a consensus about what to do.

So let’s back up and break it down.

Traffic, traffic, traffic. That’s the name of the game isn’t it? Wrong.

Many businesses thrive on great traffic. Websites and blogs that rely on ad-revenue need lots of traffic. Newspapers and media outlets love traffic, but that’s not the end-all of their business. Pageviews is their Key Performance Indicator (KPI). What’s 1,000,000 unique visitors in traffic with an average of 1 pageview per unique? 1,000,000 impressions.

Sounds like a lot right? It is.

But when the KPI is pageviews, wouldn’t you rather have 500,000 unique visitors with an average of 3 pageviews each? That means you have 1,500,000 impressions. 50% more impressions! Which hopefully translates to 50% more ad-revenue.

My company  is an ecommerce site and loves lots of web traffic but our KPI isn’t unique visitors or pageviews though. At the end of the day, what is keeping us alive is sales, so we have to capitalize on the traffic we receive and convert as many visitors as we can into customers. So let’s say we have a 3% conversion rate and get 20,000 unique visitors in one month. That’s 600 customers we’ve acquired. Now what’s going to be harder, doubling traffic or doubling your conversion rate?

The smallest things can increase your conversion rate dramatically, but it takes a bit of work (even with a budget) to increase traffic by 20,000 unique visitors. By increasing your conversion rate, you can effectively double your sales without having to double your traffic.

Author: Shane Snow

Social networking has finally become something valuable for brick-and-mortar businesses. Smartphones and location-based social networks allow users to interact, share, meet up, and recommend places based on their physical coordinates. This real-world connection to social media can mean more foot traffic and profits for business owners.

I had an interesting conversation the other day with a colleague about the challenges he was having with his company’s leads pipeline. He had the contacts, but the opportunities weren’t growing fast enough.

I’ve actually seen this many times. The assumption is that once an initial outreach has been done to new contacts, the conversion has to happen fast. If it doesn’t, they’re considered a dead lead and the general thinking is that spending too much time on them is wasted effort. This can also apply to leads that convert to opportunities but get stuck in an early stage in the pipeline.

While a strong contact database can be a real asset to the company, tapping into its value depends upon having a good strategy for lead nurturing. The best way to do that is to think like an editor, not a marketer.

The key to success isn’t abandoning these highly valuable contacts, but rather spending time organizing them and building a relationship based on relevant, interesting content.

Think of your job as the publisher of a niche magazine of news, commentary and insights into your company’s technology domain and prospects industry. This allows you to connect to your audience and become their trusted source of information and solutions to address their problems.

Here are some good strategies for publishing your niche magazine and implementing a successful lead nurturing program.

•    Understand and group your audience – Don’t treat your audience all the same. Identify the most common characteristics among the companies in your leads database and group them accordingly. These groupings can be by industry, size of company, key problem they are solving and many other characteristics.

•    Identify an editorial content strategy - Don’t just send e-mail blasts with marketing promotional offers. Report and comment on relevant industry news and events. Understand what industry news is interesting to your audience. Some news merits an immediate, personal campaign vs. waiting to include it in a newsletter.

•    Blog to your content strategy - Blog about relevant news and topics that map to your content strategy. Most companies should be posting a minimum of 1-2 times per week (and, as you grow, even more). The trap companies often fall into with blogging is that they think every post has to be a deep thought leadership piece. If you have this attitude, your blog will die on the vine. Creating this content regularly with variety is too difficult. Blog about anything and everything that may be interesting to your audience. Blog about a new government regulation. Blog about the tradeshow you are attending. Blog about a customer problem that you discussed in a sales call (no names have to be mentioned). All of these things are interesting to your audience and they can learn from them.

•    Promote your content with social media - Use social media to connect in a variety of ways to your prospect list. Use Twitter to promote new blog postings and publish your corporate twitter accounts on your site, in your email and business cards. Create and use LinkedIn groups and have your employees update their status to reflect interesting posts. Whatever social media you are investing in should promote your content.

•    Your newsletter is your magazine – Highlight your top tracking blogs from the month and send a custom newsletter to each contact group. Make sure the content is relevant to them and coordinate any calls to action in the email appropriately. If you have blogged regularly, then your newsletter content is already written – meaning the hardest part of the job is already done.

•    Use marketing automation tools for distribution, lead scoring and follow up – Using marketing automation tools is an absolute must to get the most out of your lead nurturing programs. There are a number of tools that meet a wide variety of budgets and have a range of features. The key is that whether you use Eloqua, Loopfuse or another tool, you need to have the capability to easily manage your contact lists, publish regular targeted content to those contacts, and score and follow up with them appropriately based on their subsequent actions.

Too many companies have valid contact lists that go untapped. Today’s sales process takes time and relationship building. Thinking like an editor and delivering interesting, relevant content to your audience will establish a connection with them, create thought leadership and keep you at the top of mind when it comes to solving the problems you address and they are ready to buy.

Editor’s note: In the following guest post, Fliqz CEO Benjamin Wayne reveals some of the secrets of using video to help boost the search results rankings of your website. Fliqz is an online video platform.

As most search engine optimization (SEO) experts are aware, getting a first-page Google result is harder than ever. Not only do Google’s search and indexing algorithms continue to evolve in complexity, but Google has given over more and more of its search results real estate to “blended” search results, displaying videos and images towards the top of the first page, and pushing down—and sometimes off the page—traditional web results that would have otherwise competed for top rankings.

But where problems arise, so do opportunities. Although Google’s newfound enthusiasm for video has created more competition for fewer traditional search results, it has enabled sites with video assets—even sites that would otherwise score poorly in the Google index—to successfully achieve first-page rankings. In fact, Forrester Research found that videos were 53 times more likely than traditional web pages to receive an organic first-page ranking.

Here’s what a blended search result looks like for the search query “777 built in 4 minutes“:

Those images at the top of the search results are video thumbnails, and today, there’s only two ways to get there:

1. Upload your video to YouTube.

The advantage of this is that you are 100% certain to be indexed into Google’s search engine. This does not guarantee you’ll get a first-page result, but at least it ensures that Google knows your content exists.

The drawback, of course, is that anyone who clicks on a YouTube result will be taken to YouTube, which may be fine if your goal is branding (i.e., you only care that people watch your video). If your goal is driving traffic, as is typically the case with SEO, this won’t be a successful strategy.

Your other alternative is:

2. Video SEO

Video SEO is a set of techniques designed to make sure that:

• Google finds your video content
• Google successfully indexes your video content
• Google will display your video content when specific keywords are entered as search terms

Here’s how to make it work:

You Need Video Content

Google is fairly flexible in what it considers to be video content. You can use actual video footage, but screen captures, slide shows, animated PowerPoint slides, and other content will work just as well. Google can’t actually “see” what’s inside the video content, so it relies on title and other meta-data to determine what content your video actually contains.

Submission, Not Discovery

With traditional web pages, Google utilizes crawlers to discover and index web content. Unfortunately, Google can’t read Flash very well (although it is trying), and as a result, most video content is invisible to Google’s search crawlers. Therefore, the best way to appear in Google’s blended search results is to submit your video to Google using a Video Sitemap. This is similar to an XML sitemap, but is formatted specifically for video, and only contains information about your video content. It is submitted using Google’s Webmaster Tools.

The most common error in Video SEO is to assume that because you have submitted the web page on which a video resides, that the video content itself is being indexed.

You’ll also need to make sure that you have a robots.txt file on all video pages, to ensure that Google can easily verify that the locations on the Web you’ve submitted do in fact exist, and that they contain embed codes which indicate the presence of a video.

Title and Title Tags

When ranking videos, Google primarily considers the match between search keywords and the video title. Although Google allows you to submit other meta-data such as description and keywords, these currently don’t have much influence on your search ranking. Google likes it when the title tag of the page matches the title of the video, and will give a higher weighting for results where this is the case.

Video SEO is Long Tail

Like traditional SEO, you’re much more likely to see results with Video SEO if you target more specific, or longer tail, search terms. A video titled “Dog” is unlikely to produce a first-page ranking, while a video titled “German Shepherd Police Dog” will be more likely to score well in Google’s algorithm. Since Google can’t determine the actual content of the video, you might consider submitting the same video multiple times with different titles that match potential search terms.

New and Small Don’t Matter

With traditional SEO, the age of a website is an important consideration for Google in deciding its ranking. Google also considers things like the number of pages on the site, and the number of links to the site, along with the importance of the places those links originate.

In Video SEO, none of this matters. This means that even new sites and small sites can compete on equal footing with larger and more established players. Publishers who are too small or too new to even consider traditional SEO can still be taking advantage of Video SEO opportunities.

For the Foreseeable Future, Video SEO is a Winning Strategy

As time goes by, Google’s discovery and indexing of video content will no doubt become more sophisticated, and as competition for video results increases, it will become harder for sites to achieve these first-page rankings. However, the number of web pages still massively outnumbers indexed video assets, and for as long as that continues, publishers will have an opportunity to jump to the top of Google’s search results through Video SEO.

This guest post is by Ash Maurya, a lean entrepreneur who runs a bootstrapped startup called CloudFire. If you like it, check out Ash’s blog and his tweets @ashmaurya. – Nivi

 

What you charge for your product is simultaneously one of the most complicated and most important things to get right. Not only does your pricing model keep you in business, it also signals your branding and positioning. And it’s harder to iterate on pricing than other elements of your business. Once you set a price, coming down is usually easier than going up.

Should I charge for my MVP?

Most people choose to defer the “pricing question” because they don’t think they (or the product) are ready. Something I hear a lot is that a minimum viable product is by definition (embarrassingly) minimal. How can you possibly charge for it?

A minimal product is not synonymous with a half-baked or buggy product. If you’ve followed a customer development process, your MVP should address the top 3 problems customers have identified as important and it should do it well. You can ensure that by dedicating 80% of your efforts to improving existing features versus cranking out new ones.

Steve Blank bakes price exploration right into the initial customer interviews. Price, like everything else, is built on a set of hypotheses that needs to be tested early. Steve suggests you ask potential customers if they’d use the service for free. This is to gauge if the product’s value proposition is compelling at all. You then ask if they’d use the service for $X/yr. How do you come up X? You can simply roll the dice and adjust along the way, or use Neil Davidson’s excellent guide to software pricing to start with a more educated guess. Once your MVP is built, Steve asks you to sell it to your early customers. There is no clearer customer validation than a sale.

Sean Ellis, on the other hand, argues that achieving initial user gratification (product/market fit) is the first thing that matters and suggests keeping price out of the equation so as not to create unnecessary friction:

“I think that it is easier to evolve toward product/market fit without a business model in place (users are free to try everything without worrying about price). As soon as you have enough users saying they would be very disappointed without your product, then it is critical to quickly implement a business model. And it will be much easier to map the business model to user perceived value.”

Both Steve and Sean advocate removing price from the equation — but at different points. Steve removes price during the customer discovery process but suggests you charge for your MVP. Sean removes price from the MVP and suggests you charge after product/market fit. I can see the merits of both approaches and wondered which was right for my product: CloudFire: Photo and Video Sharing for Busy Parents.

Why not use freemium?

On the surface, freemium seems like the best of both worlds: Get users to try your service without worrying about price, then up-sell them into the right premium plan later. However, many people make the mistake of giving away too much under the free plan, which leads to low or no conversions. It’s human nature — we all want to be liked.

More important, we don’t yet have enough information to know how to price or segment the feature set. I made this mistake with my first product, BoxCloud: an early visionary customer called me up and said, “I really like your product and want to pay for it but your pricing doesn’t require it.” After a few more iterations of segmenting the feature set, I decided to forgo the free plan and simply offered premium plans with a trial period. Sales went up and so did the quality of feedback, which I attribute to the difference between feedback from customers versus users.

(Hiten Shah shared a similar story with me around his experience with Crazy Egg. Even 37signals has greatly deemphasized their free plans to almost being fine print on their pricing pages.)

Lincoln Murphy just published a timely white paper on “The Reality of Freemium in SaaS” which covers many important aspects to weigh when considering Freemium, such as the concept of quid pro quo where even free users have to give something back. In services with high network effects, participation is enough. But most businesses don’t have high enough network effects and wrongly chase users versus customers. What I particularly liked in this paper is Lincoln’s recongition that “Freemium is a marketing tactic, not a business model.”

I strongly feel that, especially for SaaS products, starting with free and figuring out premium later (all too common) is backwards. If you know you are going to be charging for your product, start by validating if anyone will pay first. There is no better success metric and it leads to less waste in the long run. Focusing on the premium part of freemium first lets you really learn about your unique value proposition — the stuff that will get you paid. You can then come back and intelligently offer a free plan (if you still want to) with more intelligence and the right success metrics clearly defined. Even if you think you have a one-dimensional pricing plan like I did (e.g. number of projects), you’d be better served testing it with paying users because pricing experiments take a much bigger toll than other types of experiments.

Testing price in interviews

How did I put all this to test? The biggest mind shift in following a lean startup process is going from thinking you know something to testing everything you think you know.

So I followed Steve Blank’s advice and built some pricing questions into my initial face-to-face customer interviews. Because CloudFire is a re-segmented product in an existing market, potential customers referred to competitor pricing. This had to be balanced against the perceived value of our unique value proposition – saving time with faster and easier sharing of lots of photos and videos. Through these interviews I determined that, like their sharing needs, my potential customers valued simple hassle-free pricing and $49/year for unlimited photo and video sharing was a fair price they were willing to pay. That is what I charged them once my MVP was ready.

Testing price on the web

I wanted to run the same set of pricing tests with web visitors that I did during my interviews. Short of split testing a free and paid version of the MVP, which is technically illegal and unfair to paying customers, I decided to split-test 3 different products with 3 different prices:

1. $49/yr for unlimited photo and video sharing
2. $24/yr for unlimited photo sharing
3. FREE for 500 photos

All plans have a 14-day free trial with the exception of the free plan which is free forever. Here are the variations I tested:

Original: Single unlimited plan

This is the simple option I discovered during customer discovery interviews. It served as the control.

Variation 2: Multiple plans

I segmented the product into 2 offerings: unlimited photos+video and unlimited photos only. I wanted to test price sensitivity and gauge interest in video sharing. Not many people I interviewed were currently taking lots of videos but they all wanted to be taking more.

Variation 3: Freemium

This has the 2 plans from above along with a limited free plan. Yes, this is a freemium plan. I wanted to measure if a limited free plan would disproportionately drive the right type of traffic (busy parents in my case).

Variation 4: No Price During Introductory Period

I added a fourth variation to test Sean Ellis’ advice on removing price till product/market fit, but I tested this differently. I was not comfortable offering the full product for a price and for free at the same time. So rather than including this page with my A/B tests, I instead tested it with new parents I interviewed.

The Results

First Place: The original single plan — second place in conversions and best overall performer. Surprisingly, the original page was the best overall performer.

Second Place: Variation 3: Freemium – most conversions but second place overall. Not surprisingly, the freemium variation drove the most conversions but only outperformed the original by 12% and had the lowest retention. Referral stats combined with random polling/emailing revealed a majority of the users that signed up were just curious (and not parents).

Third Place: Variation 2: Multiple plans – least conversions and worst overall performer. People reacted least favorably to the two paid plans.

Non-starter: Variation 4: No price during introductory period. Parents I interviewed did not understand the introductory period without explanation and were reluctant to try the service without knowing how much the service was going to cost. Probing further, they weren’t willing to invest the time building up web galleries and inviting others only to find that the service might be priced out of their expectation.

What I learned

It does pay to align pricing with your overall positioning. Our unique value proposition is built around being “hassle-free and simple” and people seemed to expect that in the pricing model as well. A lot of our existing customers were already paying for their existing sharing service so the leap from free to paid was not a big one. While Sean suggests removing price before fit for consumer facing products, he suggests always charging for enterprise customers to gain their commitment. This is another case where pricing needs to be explicit. Using Cindy Alvarez’s model, our customers appear to be Time-Poor, Cash-Rich. Offering no-hassle free trials was sufficient to remove the commitment risk. Money back guarantees might be another way to further lower this risk.

The biggest lesson learned, though, is how accurate my initial customer interview findings were, compared to all the hypotheses that followed. Pricing is more art than science and your mileage will vary, but whenever possible get out of the building, talk to a customer, and consider testing price sooner rather than later.

What do you think? Why do you think these variations finished the way they did? What other variations would you like to see us try? How else do you think we could increase conversions? I’m looking forward to discussing your responses in the comments.

The problem with hiring an arsenal of top sales and marketing executives when you don't have a proven customer model is that you're likely to burn through all that funding you worked so hard to get. Steve Blank's latest post entitled, It Must Be a Marketing Problem is a cautionary tale about a company that continued to scale up without knowing the needs of their customers.

Blank describes being called into a company for "a marketing problem" only to find that neither the company's marketing department nor sales team had left the building to find out the needs of consumers.

He writes, "Missing the sales numbers had nothing to do with marketing...Neither the CEO, VP of Sales or VP of Marketing had any idea what a repeatable sales model would look like before they scaled the sales force."

Between the 10 sales and marketing staff, the company had made decisions based only on site metrics and early audience research that consisted of feedback from friends and family. In other words, they were developing their strategy in a vacuum.

To ensure that you know the needs of your customer, Blank suggests you test your customer problem hypothesis through real world observations. Once you have real world observations, customer demographics and a firm knowledge of the competitive environment, then you're free to begin experimenting with new tactics. Tactics are validated through concrete sales. When you determine what is driving your growth and you make those new sales, the idea is to map the process and hire others to help you execute.

For a more complete look at Blank's model for customer development check out this article.

As for the idea of having a "marketing problem," sometimes the biggest question isn't how to position your product, but determining its value to the end-user.

via readwriteweb.com