Internet Marketing that works, with Neil Patel (Kissmetrics)


Inbound Marketing, SEO

Neil Patel is simply one of the smartest guy in the online business and internet marketing world.

In this interview I chatted to him about what you can do to be relevant online, what businesses should do online in 2012, how to be on top of Social Media and tons of other topics.

Enjoy :)

About Neil Patel:

Neil Patel is the co-founder of 2 Internet companies:Crazy Egg and KISSmetrics.

Through his entrepreneurial career he has helped large corporations such as Amazon, AOL, GM, HP and Viacom make more money from the web.

By the age of 21 not only was he named one of the top influencers on the web according to the Wall Street Journal, but he was also named one of the top entrepreneurs in the nation by Entrepreneur Magazine.

He has also been recognized as a top 100 entrepreneur under the age of 30 by President Obama. Neil has also received Congressional Recognition from the U.S. House of Representatives for his work in the nonprofit sector.

Raw transcription:

Marco: Hello everyone. Marco Montemagno here, the Tech Alchemist and today with me a real privilege for me to have Neil Patel guest at Tech Alchemist. Hi Neil, how are you doing?

Neil: I’m good. Thank you for having me.

Marco: So Neil, I never know how to describe my guests because I had Rand Fishkin, Brad Feld, so many great guys, and I was thinking about how to introduce you properly and I decided to avoid the word legendary because it sounds very old and something of the past, so I would just say if you guys don’t know Neil, just go on Quick Sprout, which is your blog about digital business in general. But I would say you’re very successful with your business KISSmetrics, Crazy Egg. So I would say in my mind, but correct me if I’m wrong, I see you on these two ways, these two main roads, on one side your main business as an entrepreneur, on the other side you are a successful blogger, but also consulting because you have a section of your Quick Sprout where you have consulting opportunities and great testimonials, right?

Neil: Yeah, I focus pretty much all my time on KISSmetrics. Crazy Egg has a self sufficient team, Quick Sprout’s a personal blog, but consulting I do through KISSmetrics, so technically I’m still spending all my time on KISSmetrics.

Marco: All right, excellent. And by the way, you have some great testimonials because I remember when I came on Quick Sprout one of the first times, I saw Michael Arrington, the founder of Tech Crunch and Banhou, I mean, big names, so I think you did a great job of also networking and working great for your customers because having that kind of testimonials is not so easy, I imagine.

Neil: Yeah, it’s difficult to get them, and a lot of people don’t like giving them, but all those people were really kind and they graciously gave me a testimonial.

Marco: Excellent, Neil. I’ll go straight to the point. And the first thing that I would like to understand, and I would love you to help us to understand, is for all the companies running an online business, the main problem so many times is to understand and to figure out what they can do to be successful, which is such a huge topic that you need years to understand these, and tons of money and resources.

But I would like to understand, starting from the analysis, if you follow your-if you have your own framework to analyze a business. So, if a company comes to you and says, look, Neil, we have this website and we’re doing this kind of product or service, where do you start from, I mean, where do you start from to analyze properly a business and what kinds of tips can you give to companies to analyze their own business when they try to figure out how to be successful?

Neil: Sure, so the first thing is you need to make decisions purely based off of data. When people run businesses, they like doing what they want to do, or what other people want to do, or so for and so on. All that matters is what your customers want. Because what your customers want is what’s going to make you money, hopefully, right? If not, you’re in a business that isn’t getting cash flow positive, and you probably shouldn’t continue the business. Assuming you have a good business model, you need to set up analytics. And that’s actually why we created KISSmetrics. So you need to figure out things like your lifetime value of a customer, your churn, your conversion rates, marketing attribution, right? You have to look at cohort analysis, so forth and so on, to figure out what changes should you be making in your business versus what you shouldn’t.

And there’s two points of data that you have to look at: qualitative and quantitative. Quantitative is numbers like analytics, KISSmetrics, Google Analytics, Omniture, the data shows you hopefully what to do. Qualitative is feedback. Think of it as you’re telling me, Neil, you need to change to this, this and this, or I’m not willing to purchase because of this one reason. Analytics can’t always tell you that data. So you need to take customer feedback, which in many cases is qualitative feedback or qualitative data and then quantitative data, combine those two, and figure out what changes you need to make to your business, and then go from there. And then what you do is you test those changes, see what the impact is. Sometimes it’s a positive impact; sometimes it’s a negative, learn from those changes, and then repeat the whole cycle over again.

Marco: So it’s good to recap that the main starting point is always analytics, start from analyzing your data and then go further based on the data that you get.

Neil: That’s correct. And you also have to look at qualitative and quantitative data, both of those two things.

Marco: Right. Any tools that you would recommend? Okay, KISSmetrics but what kind of tools do you recommend, okay everyone uses Google Analytics, but is . . .

Neil: Yeah, Google Analytics is great basic analytics. I think everyone should use it, it’s free. KISSmetrics helps you get into the advanced stuff like lifetime value of a customer, cohort analysis, churn, marketing attribution, stuff like that, tracking people.

And then the other thing that I would do is use either Survey Monkey or Qualaroo. That’ll help you end up getting qualitative data, like what do people think, they’ll actually tell you their opinions. So if you combine both of those data sets, you should have enough to imply what changes you should be making to your business, so then that way you can maximize your work.

Marco: Right, tell me again the name of the second one, Survey Monkey, okay for doing surveys, the second one, Qualaroo.

Neil: Qualaroo. Q-U-A-L-A-R-O-O .com

Marco: All right. And it’s again for doing some kind of surveys, getting feedback, stuff like that. The other interesting part of your job, Neil, in my opinion, is that you often focus not on how to get traffic or to get visitors, which is obviously important, but on the final result. So I really like the idea to focus on revenues, so how can I get revenues, not how can I be on top of Google to get kazillions of traffic, but then I don’t have any conversion. Can you elaborate on this? Because not so many SEO guys, or SEO experts are focused on this topic. They’re more talking about how can I be on top and how can I have a lot of visitors. But I think your angle is much more interesting.

Neil: Yeah, because at the end of the day, if you get rankings and you’re ranking number one for a lot of keywords, and you’re getting ten times more visitors, if you’re not making any more money, what’s the point? It doesn’t matter how many visitors you get. All that matters is how much revenue you make. We’re all in business to make money, whether we like it or not. And if you’re not, well, you’re a very small portion of the people because if you look at the stock market, most people are judged based on their financials.

So you actually need to go out there and figure out what’s making you money. Because if you can find out what key words drive the most revenue, they may not drive the most visitors, but if they can drive the most revenue, nothing else matters. So my goal is-and I think other marketers should be thinking about marketing this way is, especially SEO, don’t focus on rankings. Focus on revenue.

Marco: How do you handle all this changing happening with [Panda], Penguin, SEO, [inaudible 08:23] We’ve been speaking with Rand Fishkin and also Rand say, “Well, sometimes you just flip the coin and try to understand what’s going on.’ So what’s your recipe to handle all this changing that every day is happening now in the SEO world?

Neil: Sure. So my two cents on that is, I don’t look at the changes that they’re making, I still do look at them, but I don’t really try to adapt my strategies to them. I do what’s called focusing on providing value, content marketing, inbound marketing, stuff like that. Write good content, create good products, keep on educating, you’ll naturally get a ton of traffic and links, leverage social media, right.

So I don’t try to necessarily try to get rankings from a specific key word or not. I’m able to do that as well, but more so I focus on writing such great information that people just want to link to you, they want to tweet your stuff, they want to mention you on Facebook, they want to become your fan, right? Once you do all those kind of things, you’ll naturally get so many people coming to your website that a portion of them will end up converting into customers. And that’s a strategy I end up taking.

Marco: All right. You recently wrote a great post by the way about content marketing and so Tech Alchemist community just go there and check that post where you recap the main points. A very silly, but common question, at least in Europe I would say, I don’t know in USA if it’s still like that, the market for small/medium business, is, “Okay, I want to create great content.” Very good, but probably to create great content, I need a team that’s very resource intense. I need a lot of people doing posts and videos and infographics and so on, so it’s very tough to create it.

On the other side if I just buy Facebook advertising or Google AdWords, I get immediate results with visibility. And often it’s very tough to convince that it’s a good investment for long-term [inaudible 10:40] of content marketing. You can really create great content marketing even if you have a small team? Yes or no?

Neil: You definitely can. And you shouldn’t just do one or the other. If you can make paid advertising work for you in a positive fashion, you should do that as well, right? Paid advertising is great. It’s quick. You’ll get to see negative or positive results right away. And if it works out, keep on doing more of it. If it doesn’t, you can fine tune it and try it again or you can just stop all together, whatever your timeframe permits.

But overall, paid marketing is a very small portion, right. If you look at Google, 30% or so of people click on paid ads, maybe a bit less. 70% or so click on free results. So why not focus on both? Do the paid marketing and the long-term play is the free results. It’s the majority of the traffic. If paid marketing is working for you, you know the free will too, it just takes longer. But there’s a much higher ROI and it’s much cheaper in the long run. Why not just do both and say, “Hey, paid marketing is going to work, let’s do it now, free is as well, but let’s start off with a small budget and ramp it up over the next few years.”

Marco: If you’re running with a very small budget, what would you recommend? Try to go on social media? Try to invest just in advertising?

Neil: It really depends on the company, but typically if you have a small budget I wouldn’t recommend paid advertising because paid won’t work on a small budget, or you won’t be able to scale it unless you have hundreds of thousands of dollars. I would go with just focusing on the social [inaudible 12:26] content because it doesn’t take that much time and effort, it’s free, you can build up your Twitter profile, Facebook profile, you can monitor Twitter if someone searches on your competitor name, and they’re talking about how they hate your competitor, and they suck and don’t supply results you can hit them up and say, “Hey, come and check us out, right. It’s a cheap, effective solution.”

Marco: What I didn’t see you test so much is with videos. I don’t know if I think about-Rand Fishkin is doing Friday whiteboard, every Friday is there with the whiteboard describing SEO stuff. I didn’t see you doing so much video. There is a reason behind it or just you think it’s not a big thing or the effort is . . .

Neil: Video’s great. It works well for Rand Fishkin, the SEOmoz Whiteboard Fridays are awesome. If you haven’t seen them you should check them out. But my whole problem with video is it requires a lot of time. You have to have a video camera. You have to have editing. You have to shoot it. It’s more preparation and post work than for me to just write a blog post. I love to do videos; I just don’t have the time.

And it works out well for SEOmoz because it’s part of their business. If I do videos tomorrow it’s not necessarily going to make me any more money because videos don’t necessarily drive new customers. Blog posts don’t either, but I just enjoy writing, and it’s quick and easy.

The thing that we do that takes a lot of time at KISSmetrics is webinars. So we’ll teach you about analytics, we’ll go through presentation stuff, and we’ll try to do webinars at least once a week, and they’ll be very detailed and long, maybe an hour, and we’ll have people asking questions and stuff like that. But yeah, videos work great; you just have to put in a lot more time and money into it, right, from getting a proper camera, microphone, maybe a green screen, or whatever it may be, to editing and so forth and so on.

Marco: Are you doing webinar also for list building purpose or just because you consider webinar is a good tool for teaching and marketing, is education, and so it’s good for this?

Neil: Both. It helps us fill the list, it helps drive sign ups and we love educating. We first started to educate-the side effects were our list grew, and we got customers from it so we continue to do more and more now.

Marco: All right. So I just would like to go a little bit deeper now in specific platforms where all the businesses are. They have to be on Facebook and Twitter and so on, just to get your main, best tips. I know that you have tons of posts with 55 Things to Do on Twitter and everything, and they’re great, but I would like to get your help to try to find out the best tips and tools for specific platforms.

I would like to start with Facebook. I’ll give you an example. In Italy, I think it’s one of the largest countries in the world for Facebook as a percentage of population. It’s amazing I don’t know why. Italians only speak on Facebook, it looks like. So all the companies, they basically get on Facebook and sometimes they open a profile instead of a page, but I would say normally a company opens a page on Facebook. Nut then when they open a page, they have no idea how to promote it or what tool to use. Is there any specific tip that you can give to a company that has got a Facebook front page and say, OK, guys, do these three things before anything else.

Neil: Sure, so there’s a few things. One, make sure you mention Facebook on your main website. So link to it from your main website, do an email blast to all your past customers or subscribers, whatever it may be. That way you have an audience to start with.

Two, go out there and post on Facebook on a daily basis, about products, education, whatever it may be. Post stuff that you think would be interesting to your customers. Don’t just sell your product.

Three, get creative with your posts. The post could be an image and a caption underneath. It works out very well. Other people are viewing it those types of post go viral versus just plain text posts.

Four, try doing things like contests to grow your subscription base, give stuff away.

And five, make sure you always engage. Respond to people when they ask questions. Comment. If they complain, make sure you take care of them. As long as you do all of those kind of things on Facebook, those five or six things, you should be fine.

Marco: Any tools that you would absolutely recommend if you run a Facebook front page.

Neil: There’s one called I believe Splash Post. I don’t know if it’s out yet, it helps to collect a lot of emails from Facebook. It’s pretty effective.

Marco: How about Twitter, Neil? You have an excellent following on Twitter. Is it the same approach that you described for Facebook? Do you use the same approach or slightly different?

Neil: Yeah, very similar. Promote it on your website, email it out to your list, put valuable tweets, engage a lot more, so you have to tweet at people, follow people that you respect and engage with them, create lists, try to get on more lists, hit up people who have the lists like direct message them, and see if they can end up adding you to them. But I would just do-if you just do those things, you should be fine.

Marco: Excellent. And another topic that I was curious about. I saw you and I think you were one of the first that I saw online testing with retargeting, and I was wondering if it’s something you would recommend when you’re doing advertising or how was going your experience with retargeting?

Neil: It works out very well, so I think it’s worth spending money on.

Marco: Okay. Is there a minimum budget that you suggest for it?

Neil: No, you can start off at a hundred bucks a month and then go from there.

Marco: All right. Excellent. I think was one company that you were suggesting.

Neil: That’s correct, I use

Marco: So, just a couple minutes more, and then I’ll let you go. I know you’re super busy. But by the way, where are you now, San Francisco?

Neil: I am in Seattle right now.

Marco: Oh, Seattle! So you’re there with Jeff Bezos and Microsoft and everyone there. For an internet marketer, so if I think about a company and they try to promote themselves, again, there is any tool kit, any specific tools that you would recommend to all internet marketers? Because you say, “Hey, you absolutely have to use this one in 2012 to be successful.” The most recent ones that you are testing and you’re very happy with, are there any in particular?

Neil: Yeah, actually I just did a blog post about it. It’s called 10 Mission Critical Tools That Every Online Marketer Ought To Use or something like that, or 10 Mission Critical Tools For Every Modern Online Marketer, and I’ll go through the ten tools that I recommend people use.

Yeah, my top three are IFTTT because it lets you do statements like if then, if that then this. And pretty much you can do stuff like, hey, if my competition posts something, text me or email me. If I do a blog post, make sure it automatically goes out to Twitter, Facebook, Pinterest, so forth so on.

I’d say my number two tool is KISSmetrics so that way you can track the lifetime value of your customer, churn rate, so forth and so on, because if you’re not tracking those metrics, you’re not measuring your business based off of revenue and profit. All that matters is making those numbers go up to the right, and KISSmetrics tells you why your numbers are going down or up and it tells you what’s causing it and gives you actual insights that you can end up taking.

The third one would be HootSuite and HootSuite lets you easily manage all your social profiles. So it’s a pain in the butt these days to manage them all, but with HootSuite it does it in a really easy fashion like you can schedule your tweets, your postings on Facebook, so forth and so on, but it makes life really easy to manage all your social profiles.

Marco: I’m interested in how politicians are using now the internet social media stuff. And I’ve been watching Obama and Romney really going crazy with all the kinds of social media tools that they could use. I was curious about your opinion about how they’re working online, they’re working good, they’re working bad. What’s your opinion from your point of view from an Internet marketing point of view?

Neil: Yeah, it’s working out good. It’s easier to get the message across these days because of all the social profiles out there. So I think it’s great that they’re able to communicate with people, they have a team that’s managing it. And the best part about the whole social web is it lets them know what’s happening or let’s people know who are interested in the candidates what’s happening in real time versus waiting for them to come on TV and do the debate or whatever.

So I think it’s great and the way they’re using it is they’re telling everyone to follow them on Twitter, on Facebook, MySpace, whatever social sites that are out there that they want to use. And they’re sharing not just what their views are on politics but they’re sharing facts about their everyday lives so that way you can get to know them a bit better, relate to them and hopefully vote for them, which is what they’re trying to do.

Marco: Last question, Neil and then I’ll let you go, I promise. What’s happening next in Internet marketing because probably everyone says, okay, now it’s coming, I don’t know Pinterest and then new tools, new platforms. Do you see any particular trend or wave that is coming in Internet marketing in the next six months, one year, or still let’s move on the same platforms, and we’re fine like that?

Neil: I think it’s the same platforms. I think the biggest change that you’re going to see is, search is going to be more localized, and there’s going to be more of a merge between social media and SEO. It’s going to become more of the same thing. [Say you want] content marketing, it’s all part of the marketing strategy and bound SEO to social media about searches are going to take more of those other factors into play when they’re ranking websites which is going to make it harder to gain through search engines.

Marco: Neil, thank you so much. Neil Patel at KISSmetrics and Quick Sprout. Guys, go just to check all the great job Neil is doing and good luck and keep in touch forever. Thank you.

Neil: Yup. Thank you for having me.