Understanding The Great Analytics Gap (and What to Do About It)

Analytics. Its at the heart of every conversion optimization strategy and online business decision we make. But some studies are showing an ever-increasing gap between the information key-decision makers want, and the actionable insights needed to drive business forward. The question then becomes, where are we now, and what can be done about this great divide? Lets take a closer look:

The Beginning of the Gap

According to a survey done by The CMO Survey and Duke Universitys Fuqua School of Business, even at this time last year, spending on marketing analytics was down even failing to meet the CMOs own predictions. Although their share of spending on marketing analytics was forecast to increase over the next three years, the trend was still lower than anticipated:

Marketing budgets spent on analytics fell from its projected amount year after year

In fact, looking deeper into the survey, its easy to see how CMOs could come to a decision like this. The percentage of projects using marketing analytics has gone down since 2012. Year after year, progress has shown to be rather tepid, which begs the question: are CMOs just not understanding the value of the information being provided? Or are analytics really not worth spending on?

The percentage of projects using marketing analytics has remained fairly consistent since 2012

Insightful Answers Lead to More Questions

The answer is neither. A study done by the MIT Sloan Management Review in collaboration with the SAS Institute showed that CMOs, global executives and senior management clearly want more use of analytics:

Management clearly sees the need for better, more actionable analytics data

Two-thirds of executives reporting in the survey admitted to relying more on management experience than what the data showed, and a slim minority reported frequently having all the data they needed to make insightful business decisions. Is it a knee-jerk reaction to rely on ones experience even if it flies directly in the face of what the data shows?

The study showed some interesting points that may have contributed to this feeling of lukewarm analytics reception:

Its Not The Data its What You Do With It Than Counts

As many as 75% of respondents acknowledged that their access to useful, actionable data had increased, and their ability to capture and leverage that data is improving although slowly.

Whats more telling, is that only one in eight of the respondents were deemed to be analytical innovators a term, according to the report, that was given to those employees who were part of an analytical culture fostered by their senior management. This culture highly prized data and insights derived from it, and were more strategic about their use of the intelligence they gathered.

One in eight. Let that sink in for a minute.

Only one in eight people have enough confidence to say that their company thrives on a culture where making strategic, data-driven choices is encouraged. Where gleaning insights from that data is a top priority.

And its not a case of analytics data not being worthwhile, either. A Marketo sponsored report on the future of online marketing showed that investment in actionable data is a smart decision that will power successful businesses well into the next five years and beyond.

Forecast investments in marketing technology include social media, mobile marketing and analytics

As you can see, marketing analytics found itself squarely in third place, only behind social media and mobile marketing respectively. CMOs and other key decision makers know that marketing analytics are valuable. So its not a lack of investment because they cant see the relevance.

Building a Bridge Making Sense of Analytical Data

So weve narrowed down that the cause of the gap isnt a lack of CMO knowledge or understanding, and despite prior questionable performance, spending still remains at an even level despite wanting more investment.

The cause of the gap is a lack of relevant, actionable, easily obtainable data data that can be leveraged across all major channels to provide the kind of insights the CMOs and their analytics team need to bolster sales, build customer relationships and increase customer acquisition. Theres no shortage of information. All of this big data is being collected, compiled and dropped into the laps of key decision makers to try and make sense of it.

Analytical orientation is even being noted as one of the key skills for todays CMOs to possess with creativity taking a backseat:

Strategic mindset, customer insight and analytical orientation round out the top skills expected of CMOs.

So how do we build a bridge between the numbers and information were collecting, and the business-propelling strategies that stem from it?

When Experience Matters Most

This is where management experience that aforementioned knee jerk reaction to data, comes into play. Try as we might to wring measurable, impactful details on our customers from the information we collect, theres just too much interference and noise clogging up the connection. A lot of useless chatter clouding our vision and hindering our ability to move forward.

The bridge that crosses the analytics gap isnt going to be built by digging our heels into the digital mud and going deeper into the numbers. Its going to be built on the value of the customer experience.

The perception of marketing is going to shift. While anaytics are still going to be useful, crunching numbers will only get us so far. Key drivers are going to be more experience-based rather than data-based. Things like:

• Managing customer expectations over their entire lifecycle and not just the acquisition process


• Measuring customer engagement, not just counting how many customers youve gotten


• Cultivating and nurturing customer relationships rather than passing them off to sales and hoping for the best


• Quickly and fully resolving customer issues before they grow and fester on social media

As you can see, these are intangible things that analytics simply cannot measure. But analytics can tell us which channels open the door to drive these types of experiences. So its not about choosing sides analytics or customer experience but leveraging both in such a way that they form a continuous cycle of clear insights that forge a path for the next sales cycle and beyond.

Now Its Your Turn

Do you feel theres an analytics gap within your own company or department? How are you taking steps to remedy it? Or do you think that the data has a greater role to play we just havent crafted the right kinds of tools to get the kinds of insights we need just yet? Share your thoughts and perspective with us in the comments below!

About the Author: Sherice Jacob helps business owners improve website design and increase conversion rates through compelling copywriting, user-friendly design and smart analytics analysis. Learn more at iElectrify.com and download your free web copy tune-up and conversion checklist today!

5 Noteworthy Ways to Increase Engagement for Your YouTube Videos (Infographic)

You may have mastered every trick in the book to drive millions of viewers to your YouTube channel. If so, it's great that you have people watching your video.

However, that shouldn't be your only concern. Don't make the mistake of thinking that virality is your goal. Your goal is to engage your audience and keep them coming back for more.

When creating your videos, always remember that you are addressing people, not robots. You must make an emotional connection with your viewers.

According to a study by the National Center for Biotechnology Information, the average time a user spends on a website is only 20 seconds.

The study also reported that the average attention span of a human being, in 2015, was 8.25 seconds, which is even less than that of a goldfish!

This means that people lose interest fast if what they see is boring. Hence, you need to hook your viewers within the first 10 seconds of your video.

So, where does engagement begin and where does it end?

The longer a video drags on the lower its retention rate. Short videos, under 1 minute, enjoy 80% viewer retention. Videos that are 2-3 minutes long receive 60% retention. But, videos that are 5-10 minutes long have only about 50% retention halfway through.

People watch videos for a variety of reasons. Most people (70%) are looking for educational content, such as DIY tips and tricks and tutorials. Some people (67%) visit YouTube for reviews of products they are interested in buying. And, some people (53%) turn to videos for inspiration or entertainment.

A further breakdown of shoppers looking for product reviews shows that:

• 52% of shoppers agree that watching product videos makes them more confident about making a purchase


• 40% of shoppers agree that they would visit a store online or in-person after watching a video


• 46% of shoppers said they would be more likely to seek additional information about a product after watching an online video about it

The bottom line is: Engagement is important for good conversion rates. So, let's examine 5 ways to increase YouTube channel engagement. These methods will help you to not only attract a wider and more diverse viewership, but also retain customers and generate leads.

About the Author: Subrat Kar is the CEO and Co-founder of Vidooly, a YouTube analytics tool for content creators, multi-channel networks, and brands. Before Vidooly, he worked with E-Commerce companies like Jabong and IndiaMart as a product manager. Recognized as one of the most promising young entrepreneurs in India, he is an active participant in entrepreneurial initiatives and forums across India. Connect with him @subratkar.

20 Tools and 16 Browser Extensions to Add to Your Arsenal for 2016

Albert Einstein once said:

"Genius is the ability to focus on one particular thing for a long time without losing concentration."

But I'm sure you'll agree, it's easy to get distracted online.

Sure, you might sit down to work with a plan. But then you open your email or visit Facebook and - all of a sudden - 30 minutes has disappeared.

At times, it's difficult to avoid this.

But there are some great tools and extensions that can help you zone in and get better results.

When I'm searching for productivity tools like these, I want to know that it does one of four things:

1. Increases my efficiency


2. Enables me to be more creative


3. Enhances my productivity


4. Improves my workflow process

That's the whole idea of tools right? If I'm going to add a new tool to my collection, it has to help me be better at my job in some concrete way.

So today, I've gathered together a collection of my favorite tools and extensions that can help you achieve these four goals.

Many of these are tried, true and tested - products that still stack up as the best options out there. But I've also included a few new ones that I've recently discovered and added to my own workflow process.

Think about your daily routine and pick and choose the best tools and extensions to help improve your outcomes.

Begin with any of the following tools, and get ready for a super productive 2016.

Tools

1. Dropbox

For great trusty file storage, sharing, and management, you really can't go wrong with Dropbox. The best feature is the ability to sync your files with members on your team and collaborate in real time.

If you're looking for another option, Box is a suitable alternative. It offers 10 GB of free storage, while Dropbox offers 2 GB. You can increase your storage on Dropbox by referring friends. If you're a Linux user, you'll have to choose Dropbox as Box does not currently offer a desktop program for Linux.

2. Google Tools

This shouldn't come as a huge surprise, but Google's huge range of free tools - including Google Drive and Google Calendar - are still great for getting your workflow organized.

Use the calendar to organize and time block your schedule. Create multiple calendars that you can share with your team. And send both email and popup reminders to ensure you and your team remember key deadlines. Then, create and store all your spreadsheets and documents in Google Drive and share them with your team. If you manage a remote team like I do, this is a great way to keep everybody on the same page.

3. Canva

Images are just as important as written content, and Canva (now with 6.3 million users) provides an easy drag and drop platform for creating professional images and presentations - allowing you to let your creativity shine.

4. Giphy

Giphy is the Google of Gif search, with tools to create your own. Use the handy gif maker to drag and drop your video files (or just enter the video url) and Giphy will create a convenient slideshow for you that you can caption and share. Add some fun into your posts, emails, tweets or pins by adding a short animated gif.

5. Slack

If you aren't already using this chat tool, make it a priority to get your team on it in 2016.

Integrate Slack with all of your favorite apps and tools like Google Hangouts, Trello, GitHub, Giphy, etc. Not only does the app offer the standard chat and direct messaging features, you can break projects, topics or teams out into individual channels, share files and coordinate all your notifications within a central, searchable place.

6. Google Analytics

Google Analytics should be the first tool you install on your site. Setup your dashboard to show you the most important data you want to see every time you log in, like your traffic or bounce rate. And for anyone running online campaigns, Google Analytics shows you which converts the best.

7. Kissmetrics

If you've got some stats, but you want to go beyond what Google Analytics can do to optimize your marketing efforts and put them on hyperdrive, then Kissmetrics is the answer.

Not only does the tool streamline your reports in an easy to understand format, it'll help you determine what's working and what's not with your marketing campaigns so you can zone in and increase both conversions and performance.

8. Moz

Monitor your SEO, local marketing, and content with Moz's powerful SEO data metrics. Get deep keyword insight and link management tools like link analysis. Figure out how to get more info on inbound links and link quality.

9. Breeze

Improve your own workflow - or the workflow of your team - with this easy to use task management platform. Sound like Trello? It is, except Breeze offers more features like time tracking, reporting and a completed task analysis.

10. Basecamp

Whether you need help managing clients with ease or organizing a virtual team - big or small - so that you're all working on the same page, Basecamp will help you get things done. Basecamp offers pricing options ranging from free to $29 on up to $3,000 depending on how many camps you want to set up.

11. Survey Monkey

Running regular surveys is a great way to understand your audience and discover exactly what it is they want to buy.

To get the answers you need, check out Survey Monkey, which offers a free service that includes up to 10 questions and pro paid options for more in-depth analysis.

12. Edgar

If you want a social media management tool you can put on autopilot, this one is the answer.

Edgar stocks up your social media library into buckets like business posts, quotes or anything else you want. Create a posting schedule and tell Edgar what you want, like post a quote every day at 10 a.m. or animated gifs at 2:30 a.m. on Wednesdays. When Edgar is done, he'll dip back to your buckets and fish out posts from the bottom of your pile and keep the schedule going.

13. Viraltag

Image marketing is hot, and Viraltag helps to supercharge it with image cloning and scheduling tools across social media platforms. There's also a handy Canva integration add some text and graphics to their endless library of stock photos before you schedule and send to Pinterest.

14. Buzzsumo

Analyze what content is performing the best across the web by topic or by competitor so that you can create content that's just as great.

You can also use this tool to assess who the key influencers are in a market so that you can connect, get shared, and supercharge your content marketing.

15. Feedly

Feedly keeps everything hyper-organized by transforming your favorite news and social media sites into pocket-sized cards. Load them up when you're ready to get the latest marketing news.

16. Leadpages

Use templates to create professional, high quality sales pages and squeeze pages that'll drive more sales and subscribers for your business. Easily install Leadpages to your Facebook tab to create a lead-generating ad machine.

17. Tagboard

Discover where your market is and find new people to follow by searching Tagboard's collection of hashtags. Type in your competitor's favorite hashtag to see what they're up to, or easily monitor your own favorites to create a campaign around it.

18. Scoop.it

Scoop.it is a must-have content curation technology that connects to your social networks and blog to help make sourcing and sharing great content as easy a possible. Scoop.it turns everyone into a publisher with its mashup of content tool meets social network platform. Select your topics to make boards, add some keywords and "re-scoop" content from others.

19. SideKick

Get powerful insights to track and improve all your email communications. See who opens your messages, who clicks on links, what pages they visit, and view their personal profiles - all from your inbox. Stop guessing if your client ever got your last proposal or who that new guy on the email chain is.

20. Klok or Toggl

The Pareto principle - otherwise known as the 80/20 rule - proves that a mere 20% of our time yields the best results, while the other 80% is often wasted.

Keeping a time log is a great way to increase productivity and focus on the 20% that matters. Here's how I use Toggl to measure the ROI of my content marketing. When you can track exactly where you spend your time, you can discover where to put the majority of your attention.

Honorable mentions:

Using your computer late at night? It could be affecting your sleep (and thus, your health). f.lux aims to fix this problem. The software will automatically adjust the color of your computer screen at night. So, when you turn on your computer at night you aren't blinded by a bright screen. It's available for Mac, Windows, Linux, and iPhone and iPad.

Sitting at your computer all day? Look into downloading Healthier. It will remind you every 40 minutes to do a set exercise. Customize your break times and intervals to fit your work patterns. Currently only available on OS X.

Now that your app arsenal is in better shape, let's check out my favorite 16 must-have browser extensions for 2016...

Browser Extensions

1. Pocket

Download and save content you find while browsing the web and create a personal tagging system to keep it in order - either for personal reference or for sharing on your brand's social profiles.

The great advantage of Pocket is that you can save posts as a download, allowing you to read them both online and offline. You can even email links directly to Pocket to keep everything in one place.

2. Buffer

Buffer is an easy-to-use social media management tool. By adding the extension to your browser, you can add new tweets, shares, and pins to multiple social media accounts with the click of a button.

Adding social shares while you're browsing saves you loads of time. You can also automatically schedule updates to go out at certain times a day, or use the tool's new calendar scheduling feature for even more control.

3. Klout

If you aren't already familiar with it, Klout is a social media influence scorer that helps you follow the right people, as well as track your own status.

Once you have the browser extension installed, you'll be able to compare how different influencers rank on the service, as in the example below from Twitter:

4. Bit.ly

Use this quick-and-easy browser extension to shorten links for social media sharing and gain added tracking metrics for your links at the same time.

Test headline variations across social platforms to see if one gets more clicks than the other. Find the optimal time to post to Twitter, Facebook, and LinkedIn by sharing links across time zones. The analytics you'll get from bit.ly are more than just numbers - use it for actionable insights so you can improve your marketing.

Buffer integrates with Bit.ly so you can get all analytics within the Buffer app.

5. Roboform

If you're tired of wasting time resetting passwords, this extension, which allows you to manage your passwords across the web, could be the answer for you.

Not only can it help you generate stronger passwords, it'll syncs the data you've stored across multiple browsers and devices, in addition to filling out forms.

6. One Tab

Eliminate confusion and overload - and speed up browser performance - by reducing your opened tabs to just one tab.

Oh, and those 25 tabs you had open? Whenever you want to access them, just click the full list and find it, rather than having to open each tab individually.

7. RiteTag

RiteTag is a great social media optimizer extension that helps you instantly choose the right hashtags to add to tweets, Facebook posts and Instagram updates without having to search each platform to see which tag is performing best.

8. Check My Links

Use this handy tool to make sure you've inserted all the links correctly on your pages, and that none of your links are broken.

9. Social Analytics

Go to any URL and get the cross platform stats for all social media networks using this extension. Doing so will save you time in making assessments and comparisons on social interactions.

10. Firebug

If you've got a problem - this extension will help solve it. Firebug facilitates live debugging, editing, and monitoring of any website or blog's CSS, HTML, DOM, XHR, and JavaScript code.

11. Mozbar

This free extension works with MOZ and lets you create custom searches, compare link metrics, highlight links and keywords, quickly expose important page elements, and access other powerful SEO tools.

12. Rapportive

Close the gap between email communications and increase engagement by displaying your contacts' profiles in the sidebar of Gmail.

See their latest tweets, follow them across different platforms and leave notes for future communications - all of which can help deepen your ongoing relationship.

13. Pinterest Pin It Button

Not sure if Pinterest is the right fit for your business? Check again, because Pinterest is driving millions of visitors to websites across multiple niches.

If you're not using it already, create a Pinterest page and then use this extension to start adding pages and posts to your boards.

14. Social Fixer

Let's all agree, Facebook can be a real time sucker.

Social Fixer allows you to filter Facebook to your preferences, removing the junk you don't need, the updates you don't like, and any other stuff that just wastes your time.

Use the tool to set up:

• Tabbed news feeds


• Feed filters


• Hide posts you've already read


• Thumbnail previews

15. StayFocusd

If you simply can't fix and filter social media, it might be time for you to add a tool that limits the amount of time you spend on these sites.

Time blocking social media is a powerful way to increase your productivity and make sure you stay on task throughout the day.

16. Window Resizer

Working with responsive design? This is a handy tool you can use to make sure your content looks great across all devices.

This extension allows you to view your content at any size you like. See exactly what it looks like on iphones, tablets, ipads, and even input different full screen resolutions.

You're Ready to Upscale

Well, there you have it - 20 awesome tools and 16 great browser extensions that will help you upscale your year in 2016.

Do you have another tool or browser extension you use to add to this list? Share your recommendations by leaving them in the comments below.

About the Author: Aaron Agius is an experienced search, content and social marketer. He has worked with some of the world's largest and most recognized brands to build their online presence. See more from Aaron at Louder Online, their Blog, Facebook, Twitter, Google+ and LinkedIn.

7 Ways to Get The Sales Team to Use Your Marketing Content

The evolution of content marketing as a discipline has made content creation a core marketing function. At the top of the sales funnel, effective presentations and web site content generate leads and build awareness. Farther along in the buyer's journey, finely tailored content such as case studies and white papers can help specific buyer personas build consensus for adoption of a vendor's solution - shortening sales cycles and increasing the likelihood of a successful close.

That's the ideal. The reality is that a lack of marketing and sales alignment often creates barriers to successful content marketing.

Research by SiriusDecisions shows that sales doesn't even use 60 to 70% of marketing content. That means that about two thirds of marketing's investment in content development -- often as much as 12% of the entire marketing budget -- can be going to waste. Content that should be impacting revenue by helping to close late-stage deals is just sitting unused.

How can marketing turn this around? How can you get sales to use the content that you spend valuable marketing time and resources developing?

To start, be sure you have a successful process set up with your sales organization for identifying, building, and using your content - before you start producing any content.

Below are 7 ways marketing can set up a better process with sales:

1) Know your buyer's journey

Understand who the buyer is and the purchasing process - so you can produce marketing content that aligns with that buyer's journey. Your reps need content that they can proactively use to overcome each obstacle in the buyer's path to successful adoption. Do you know the primary buyer objections and how your sales team typically overcomes them? Do you know the different stages in your sales team's buying process? Do you know what buyer actions move a lead from one sales stage to the next?

Image Source

Understand the sales process specific for each buyer persona, and deliver content that supports that process. Create presentations that address the buyer's challenges and potential solutions, such as case studies that describe realistic scenarios to be relevant to the rep and resonate with the buyer.

2) Be sure your content is buyer-centric

Sales executives surveyed by Sirius say that too much marketing content is product-centric -- focused on selling product features. What sales really wants and needs is buyer-centric content -- content that communicates value that's matched to the needs of specific customer personas. Buyers need sales reps to help them understand how to solve a pragmatic business problem or exploit an opportunity - not just explain Feature A and Feature B.

3) Meet regularly with sales counterparts

At the very least, you need to be meeting monthly, and if you're organization is smaller, even more frequently. Use meetings to share what's working and what's not. Be transparent about the content that's being generated, allow the reps to give feedback - and listen. Why produce content they don't want?

Additionally, marketing should regularly attend sales meetings, to share campaigns and content under development or newly updated content, and deliver the analytics data.

4) Make content easily accessible to sales

Make it easy for sales to get the content you're producing. They should be able to get content right from their desktops. It should be easily accessed from whatever CRM tool they use. If they use cloud storage for materials, the repository should be able to pull content from cloud storage (like Box or Dropbox). Also, evolve in collaboration with sales a tagging and folder structure for content that makes it effortless for reps to find what they need, for each buyer persona and each stage in the buyer's journey (each level of the sales funnel).

5) Understand the metric for success

Understand what sales leadership is directing the reps to do - e.g., make as many phone calls as possible, or send as many emails as possible. If the content doesn't make it easier to hit the goal that gets measured, reps won't see value in it.

6) Deploy sales analytics tools to see what's working and what's not

Sales analytics tools that integrate with marketing automation systems give marketing insight into what a rep is doing with their content. You can see what collateral reps are using most frequently - and the content they're not using at all - and find out why. Is it because the content isn't helpful, or because they don't know it's there?

Sales engagement analytics also reveal how prospects are interacting with your content.

You can see what attachments are downloaded, what pages are viewed and for how long. This visibility gives you understanding into what messaging resonates most with prospects - so you can adjust future content.

7) Realize that sales reps want to personalize content

Even today, sales is as much of an art as it is a science - and sales reps want to personalize their engagement to strengthen the customer relationship. Personalization builds trust. Indeed, Aberdeen Group has found that the best performing organizations enable sales reps to personalize content for their customers. Marketing can't produce content to support thousands of different usage scenarios, but they can provide a library of content broken down - e.g., by industry or product feature or pain point -- as well as guidance, a general overview of the story, and branding compliance instruction.

Using sales email templates that allow for personalization - with marketing-approved key messaging in the email body - can also help ensure consistency.

Stronger alignment around content brings more value to the business

Aberdeen Group research shows that organizations that closely align marketing and sales around creation and deployment of buyer-oriented marketing content experience 21% better lead acceptance rates and 36% higher average conversion rates than more loosely aligned companies.

Sales needs marketing to help buyers through the latter stages of their journey. Marketing needs to step up to the plate to:

• Build content that addresses specific buyer needs


• Put a process in place for content and communicate with sales - so they know it's there and how to get it!

The keys include closer collaboration between these two functions, including regular face-to-face interaction. Remember, marketing may own the messaging, but sales generally has the most immediate knowledge of changing customer needs and pain points. Embrace both perspectives in content development, and deploy tools and analytics to facilitate a common marketing-sales process for content creation and use.

About the Author: Micheline Nijmeh is the CMO for LiveHive, Inc., whose award-winning sales acceleration platform provides deep buyer-based engagement analytics and automated email sequencing. A seasoned Silicon Valley executive, Nijmeh has served as Senior Director, Integrated Global Campaigns at Salesforce.com, where she led the market launch of Salesforce's Chatter and Force platform.

More Trial Users Is Not The Answer For Your Startup's Growth

As a startup, you're not just tight on budget.

You have to get users as fast as possible.

Marketers are often under a lot of pressure to get as many trial users as quickly as possible.

The CEO, investors and your teammates are counting on you to generate demand, regardless of product-market fit.

I'm here to explain why you don't need more trial subscribers.

The 40% Rule

Rule of thumb for reaching product-market fit is when 40% of surveyed customers would be significantly disappointed if all of a sudden they could no longer access that product.

If you already have several hundred or a thousand users, you don't need more until your startup has achieved product-market fit. Product-market fit can be defined as the point at which your target market finds your product attractive enough that you can scale up.

"The 40% Rule" suggests you've reached product-market fit once at least 40% of surveyed customers confirm that they would feel disappointed if they could no longer use your product.

Product-market fit and engagement go hand-in-hand. People are more likely to pay for your product or service if they're engaging with it frequently and it's crucial to their daily workflow.

Customer retention is a function of their satisfaction.

Retention = ?(Customer Satisfaction)

If trial users aren't excited or happy about your product or don't get enough benefits out of using it, they won't return. As simple as this sounds, countless startups fail to address this issue.

Instead, many startups do this:

Image Source

The product development model as presented in Steve Blank's book, The Four Steps To The Epiphany, shows the backwards push marketing steps after building a product.

I'm sure you can see the pitfalls of this approach.

Eliminate Or Reduce Free Trials

What if one day, your team just decided to shut down your free trial accounts that were past 14 days since their sign up date? Would you suddenly go out of business?

No, you'd save money from server costs and force people to make a decision.

It's only when your free trials run out that you know whether the end user found your product worth paying for.

You need to figure out how to improve the engagement of your existing trial users to convert them to paid users.

ConvertKit and Edgar, which today generate millions of ARR, never offered free trials.

I often come across startups that give away free trials for 30 to 60 days. I just don't get it.

Two Exceptions To The Rule

One case where a free trial might make sense is if your startup's B2B software costs $200+/month. In this instance, a 14-day free trial is reasonable. Any longer than that is, more often than not, a fruitless giveaway.

One instance where an extended free trial makes sense is for a startup where personal data storage grows fast as the user engages with the product. Three startups come to mind: Slack, Evernote and Dropbox.

As each user uploads more personal data, the chance that that person will switch providers decreases. Moreover, frequent access to that personal information in the cloud is a necessity for the end user. Users engage frequently with these apps on a daily recurring basis and often need to upgrade to a premium subscription, in order to continue using the service as team headcount or storage needs grow.

Stop Aiming To Be A Unicorn

The venture capital funnel from CB Insights shows the average failure rates of venture-backed startups by financing round. Less than 2% of venture-backed startups ever reach unicorn status.

Neither exception suggests that your startup needs more trial subscribers. We all have a natural tendency to look at unicorns and glom on to their stories as validation for why we can do that.

According to CBInsights, your startup has a 1.28% chance of becoming a unicorn.

The one thing people forget when they hang their hat on the stories of unicorns is that these companies found product-market fit, had high levels of user engagement and most established clear sales funnels before they went off acquiring more free trial users.

Again, improve the product, the onboarding experience, and the sales funnel to convert more of your existing users.

If your customers love your product and rely on it to improve their daily workflow, they will serve as your fan club. Your engagement will skyrocket. You won't need to fudge community building or finding loyal users as word of mouth referrals come pouring in.

You can't force user engagement that doesn't exist.

Adopt The Customer Development Model

No marketer-no matter how good they are-can fix a broken product, such as one that few customers find valuable to their daily workflow.

Startups build a product or feature for the sake of building it, not on the basis of identifying their audience's thorny problems.

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A second version of the product development model focuses on building the sales organization without ensuring that the product reaches product-market fit, which can lead to premature scaling.

If you've read Steve Blank's The Four Steps to the Epiphany, then you may remember reading about one of the following:

• Premature scaling


• The use of a product development methodology to measure sales and marketing activities


• The pitfalls of getting the product launch wrong

Startups often go out of business because they rely on the product development methodology to measure all their sales and marketing efforts.

The product development methodology starts with building a product first and later engaging a sales and marketing team to push the product into the hands of the target customer, as opposed to building and iterating a product solution based on your target audience's needs.

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The customer development model requires iteration through the customer discovery and customer validation stages until product-market fit has been achieved before acquiring more customers and scaling up.

In reality, they should use the customer development model and complement it with the product development model.

The customer development model involves iterating through the first two stages of customer discovery and customer validation until you reach product-market fit. Once you've reached product-market fit, then you can scale up, drawing more customers and building company infrastructure.

The customer development model helps ensure you don't scale up prematurely ahead of reaching product-market fit. As a result, your initial set of customers find your product so valuable that they can't help but recommend it to other companies.

Even in 2016, many startups still apply the archaic model of build first, validate last, or "build it and they will come."

Rather than apply the lean startup process, they develop a product no one cares enough to pay for. Worse, it doesn't even solve their target customer's pain points.

The Hubstaff Free Plan Mistake

Hubstaff, a startup for time tracking for remote teams, explained in its post SaaS Pricing: Our Big Free Plan Mistake why startups shouldn't feel implicit pressure to offer free trials to users and that user acquisition shouldn't be seen as a "money making arms race." They gave an insight glimpse into the reasons why free trials hurt most startups and why startups often rationalize them.

From their experience offering a free plan, they found that people take advantage of free accounts and that free users often skirt around the free account limits by signing up for multiple free accounts with different email addresses.

Even IP blocks can't solve this problem because customers have easy access to VPN software, like ExpressVPN.

Hubstaff also found that if someone values a product, they would pay for it.

If existing users aren't engaging with your product on a frequent recurring basis, then your product doesn't solve a hairy enough problem for the end user.

Two other takeaways:

1. Free users tend to invite more free users


2. Paid products carry more value in the consumer's eyes

I came across a blog post from ConversionXL that explains how not requiring credit card info during the free trial signup processes resulted in a lift to paid subscriber conversion rates.

It's important to take the company's business model in context relative to yours and assess whether that product is 10x better than a substitute.

If your product is easily replaceable or doesn't solve a big enough customer pain point, people will be less willing to pay for it.

Avoid acquiring more trial customers until your existing customers love engaging with your product every day and find it invaluable for their use case.

Get The CEO To Acquiesce

If your startup is struggling to break even, convince the CEO to stop acquiring trial subscribers. Refocus your team's efforts on optimizing customer happiness with the right product feature set.

What are some factors that drive marketers to seek more trial subscribers?

• Investors include a subscriber performance milestone with a liquidation preference in the equity agreement.


• The C-Suite wants hockey stick growth so the company can raise additional capital at a higher valuation.

Even if marketers question the CEO or investor's judgment about trial user acquisition, it often doesn't change their minds. I've experienced it before. Founder CEOs can be pretty stubborn. Not because they don't mean well but it's often difficult for them to admit when their product isn't great.

As a result, the marketing team is forced to find more trial subscribers. It doesn't matter whether people actually find the product useful.

The venture-backed company CEO isn't worried about monetization in the short-run because "more trial subscribers" is the resolve for faster growth. This couldn't be further from the truth.

The truth is, you don't need more trial users...

... You need a product that solves a big need for your customer, not one that results from C-Suite groupthink.

If you care about your company and team, avoid letting your CEO put the company out of business. Sooner or later, your team will have to face the music and recognize that any underlying product engagement issues must be resolved first, or your team won't exist.

Customer Acquisition Cost and User Engagement are Inversely Proportional

The chart illustrates the inversely proportional relationship between Customer Acquisition Cost and user engagement shown as recurring site visits.

Customer acquisition cost, or the price you pay to attract a new customer, increases as user engagement decreases. To keep things simple, let's define user engagement as the number of recurring visits per unique user.

The cost of acquiring new customers goes down as word of mouth referrals increase.

Word of mouth customers tend to be much stickier than customers from other referral sources. So not only is it more expensive to acquire customers with fewer word of mouth referrals, non-word-of-mouth referral customers exhibit higher churn rates.

To confirm this, professors at three business schools teamed up to research the word-of-mouth effects in estimating customer lifetime value.

In short, they found that word-of-mouth referrals are more valuable than other types of referrals; their lifetime value is higher because customer churn is lower. Furthermore, customer acquisition costs are lower with higher word-of-mouth referrals.

Without high word-of-mouth referrals resulting from high user engagement and customer happiness, it becomes impossible to reach escape velocity, like Slack or Stripe.

On Virality

Virality can mask poor customer development.

Embedded viral loops are a misguided cure-all for chronically low word of mouth referrals.

Startups attempt to force trial subscriber acquisition with viral loops and other gimmicks. They hide any user engagement problems, providing an excuse for a product that doesn't solve its target customer's pain points.

One of my favorite quotes about virality comes from Laura Roeder's Observer article, Why I Don't Want My Startup to 'Go Viral':

"Word-of-mouth is like the stable, grown-up big brother of virality. Steady job, less impulsive, takes showers."

Weak User Engagement Is Killing Your Startup

With a few hundred or thousand existing trial subscribers, acquiring more trial subscribers is not the answer to unlock growth.

Your team's energy should be spent on customer discovery.

Install Kissmetrics and Hotjar. Collect as much data as possible about your trial users' in-app engagement. Setup custom reports in Google Analytics. Get serious about visitor and user segmentation.

Understand your users like never before. Let Kissmetrics show you where you're losing customers, who your best customers are, how they're using your product, and where to find more of them. Request a personal demo to learn more.

Figure out why your users are not revisiting your site on a regular basis.

Here are some possible reasons why they aren't engaging with your application:

• Is there a missing feature or capability that better addresses their daily workflow needs?


• Are users getting stuck at a particular stage of the conversion funnel or onboarding process?


• Do your transactional emails turn off subscribers, leading them to filter them out from their inbox with an email rule?


• Is your site speed or data reporting causing subscribers to leave and never return?


• Do users struggle to understand how your application works or what the benefits of using it are? Maybe they need better onboarding education or how-to help tutorials to learn how to use the interface as it applies to their specific use case.


• Does the user interface cause visitors to flee the second they're inside the app?

Where To Go From Here

Diagnose poor user engagement with cohort analyses.

Segment cohorts by demography, geography, traffic source, landing page, exit page, cohort size (day, month, year), date range, device and more.

Make a short list, call up your trial users and ask them what their day-to-day struggles are.

Revisit your customer personas. Email them surveys. Do everything you can to understand what the fundamental challenges are in their daily workflow.

Incorporate this into your "user engagement benchmarking toolkit."

A couple ways marketers try to get trial users to engage with their platform:

• Email users asking them to return but if the product doesn't provide much value, they'll struggle to convert them.


• Incentivize customers to leave their trial early or try a myriad of other tactics to get them to convert.

At the end of the day, if they convert to paid customers for the wrong reasons, you will see high churn and refund rates. Conversion rates won't matter.

Conclusion

Most trial subscribers are tire kickers, never to return to your website.

If your startup has a few 100 or 1,000 unconverted trial subscribers, your team should spend less time finding new ones. Focus on improving user engagement. Develop the right product feature set that solves your users' biggest workflow challenges.

That's what Edgar did off the bat. With their queue feature, small businesses and bloggers no longer waste social media updates. Their auto-refilling queue frees up their customers' time that was otherwise wasted.

Build one invaluable product feature that solves a big problem for your existing customers. Avoid wasting time and capital acquiring trial users to mask weak organic growth.

Address user engagement issues before going on a shopping spree for more trial users.

About the Author: Cody Lister is the founder of MarketDoc, a blog and digital marketing agency that optimizes pay per click advertising campaigns for high return on ad spend from search and social media. Grab his free user engagement checklist and get step-by-step marketing formulas, case studies and insights for explosive startup growth. Follow him on Twitter.