Lesson: Content Marketing with Neil Patel

Step #5 Size Matters: Getting user numbers of significance

When you're doing marketing for your business, you should never shift focus from driving traffic to actual revenue. Instead you should be doing both at the same time. At the beginning, you should just focus purely on visitors and traffic, because without that you can't monetize, and if you don't have enough of a sample set, there is no point in trying to optimize for conversions because you don't have enough data.

But the moment you can actually get to 30,000 plus visitors a month, you should start focusing on both traffic and optimization for revenue. The key metric that I look to to gauge growth is revenue, so if the revenue is growing over a faster pace month over month, to me that's all that matters. When you’re a startup, especially consumer based in the beginning, user growth or acquisition is more important than anything else, then if that's the most important metric and if it's growing at a faster pace month over month, great. If not, then you need to do something about it.

I'm a big believer that you can focus on both at the same time, because you can have different teams. You can have someone focusing on driving more traffic, and you can have someone focusing on optimizing the traffic and converting it into customers. The reason being is if you have a half a million visitors, why would you stop there and focus on converting those visitors when you can try to get to 1 million, 2 million visitors, 3 million, etc.?

And at the same time if you can have another team focused on optimizing how many visitors convert into customers, the better off you are. If you don't have 30,000 visitors a month, it's hard to actually run A/B tests and figure out how to convert more visitors into customers because you're probably not driving in enough volume, so you won't reach statistical significance. You have to keep in mind, if you have 30,000 visitors, you're probably not going to get 500, 1,000 conversions, which would be very rare. You need a large enough sample size so that way you can start testing. If you only have 10,000 visitors, and only 20 of them bought something each and every month, you can't run an A/B test. It's going to take a whole year, if not longer, before you reach statistical significance.

Typically when a company is smaller, you try to make more agile tweaks, you start doing more testing, you can iterate fast. You just try to do many things at once and you see what works. It's kind of like spaghetti, you throw it against the wall and see what sticks. When you're a larger company, you're more established and you tend to already have a lot of revenue. It's small tweaks that actually make huge impacts and changes from a revenue standpoint. So with a large business, the focus is more so, "What can I actually push through" because there is always corporate bureaucracy, that will impact the revenue, and what's the easiest thing to do that will impact it.

When you're small you can do a lot of things like, "All right, let me just do as much as possible, whatever is sticking and working let's just do more of it." But as a large corporation you know you're not going to get 10 things done. You're lucky if you get one thing done, so you better pick the one thing that is the easiest thing to do and has a really good shot of improving revenue.

When it comes to Internet marketing, size is the main variable that determines what you should do. The reason being when you're small, there is less bureaucracy and less employees to deal with. When you're big, things just move slow and you always know there is going to be a chain of command.

If you're dealing with the GMs of the world, the Microsofts, even the Facebooks of the world, you're not the only contractor, you're not the only marketer there, and you’re not the only employee. Whether you want to do it, it doesn't mean it's going to be done. For example, if you look at Google right now, a lot of people are doing what they feel is safe to keep their job. A lot of engineers are leaving Google because they're like, "Wait, this is not what is best for the company, you're just doing this because you know you'll keep and you'll get a promotion." So if you don't play with those politics and play the game, you're not going to get changes done in companies like that.

What matters more between signups or engagements? I would actually say it varies per business. If you're a lead generation business, signups matter more. If you're a product-based business, yeah, if you have a million signups but no one is engaging then they're not getting converted into paid or you're not going to be able to monetize them. So it depends on the business type that you are in. In an ideal world you should focus on signups and engagement.