[INTERVIEW] Neil Patel On The 5 Surprising Marketing Mistakes Online Retailers Make
Are you doing everything you can to convert visitors into customers?
Unless you’re a fan of Neil Patel, the answer is probably not.
Neil Patel is the co-founder of Crazy Egg and Hello Bar. He helps companies like Amazon, NBC, GM, HP and Viacom grow their revenue. He’s a well-known entrepreneur and he’s passionate about helping SMEs get more customers with less effort (and money).
Today, Neil spills the beans on several surprising strategies online retailers are using to jack up their average order value, increase conversions and seduce their visitors into buying.
In this interview/episode, you’ll discover:
- if free shipping is as good as everyone says it is
- how to increase average order value by 20-30% with a simple-but-underused sales strategy
- what offers work best when using pop-ups
- Neil’s strange “geo” tip for improving the response on pop-ups and sign up forms
- why copying what Amazon and the other big ecommerce players do is eroding your revenue
People on this episode:
Mentioned in this interview/episode:
- ReEngager Services
- Quick Sprout (Neil’s blog)
- NeilPatel.com (Neil’s other blog)
- Neil Patel Consulting
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John: It’s John McIntyre here. I’m here with Neil Patel, who’s the co-founder of Crazy Egg and Hello Bar. And he blogs at quicksprout.com. When it comes to content marketing, I don’t think there’s anyone who – in my mind, who really defines it or– Really one of the top experts on it. Other than – Neil Patel is one of the first people that comes to mind. He helps companies like Amazon, NBC, GM, HP and Viacom use content marketing and online marketing in general to grow their revenue. So he’s got some great clients, does some really cool stuff. His blog is just a wealth of information with tons of guides as well. And I thought it would be cool to grab Neil, get him on the show, and have a chat about content marketing specifically for online retailers. And maybe not so much for beginners, but for stores starting to build some momentum and kicking up into the 1, 2 million dollars. And even when we start getting higher into stores that are 20, 30, 100 and what some of the big – really big retailers are doing. So that’s what we’re going to have a chat about today, and dive into that – Neil, how you doing, man?
Neil: Good, how are you?
John: Pretty good, it’s good to connect again, man. I was just saying – before we hit record here – that we’ve done this before on a different podcast and talked about some interesting stuff like helicopters and jets. Which maybe will be a future episode. But Neil, before we get into content marketing specifically, I’ve kind of given the listener a little bit of a background on what you do. Can you give them a bit more of a – sort of fill them in a little bit on who you are and what you’re all about?
Neil: Yeah, so my background’s – I’m a serial entrepreneur. I love creating products that help small and medium business owners, as well as marketers generate more sales from the website. Whether that’s from driving traffic or converting more of the traffic into customers – I just enjoy helping people grow their online businesses.
John: Cool, cool .And would you describe yourself as a content marketing person? Or do you just think about marketing as just marketing?
Neil: I see myself as a content marketing person. But it’s not – everyone knows me for it. Generally it’s not like really what I specialize in, right? I just do all forms of marketing. For example, the one thing that I do a lot of that no one really knows about is – I do a ton of webinars and sales funnels, right? Some people know what they are, some people don’t. But it’s the process of driving a visitor from a website into this whole process that gets them to convert. And think of it as like dating and marriage. If you ask a random person on the street, “Will you marry me?” The chances are, they’ll say, “No.” I don’t care if you’re Brad Pitt. In most cases, they’ll say, “No,” because they don’t know you. But once someone gets to know you, they do a few dates with you. You start doing a few dinners, then you start moving in together. Then you date for another year. And then you ask them to maybe marry you. The chances of them saying yes, drastically increase. The same goes with the web. Everyone expects someone to go on a landing page and be like, “Buy now.” Well if they don’t know you, you’re really going to make as many sales compared to if you built a relationship first.
John: That’s really interesting. So the webinars and sales funnels. So what – are you doing this for your businesses? Or you mean you’re setting these up for other businesses?
Neil: We mainly do it for our own businesses. It works well, and think of it this way, right? So I mainly sell software. Out of all the people who buy software, just like any e-commerce site, maybe 1 out of 100, maybe 2 or 3 out of 100 if you’re lucky may buy. But the majority of your visitors won’t buy. So it’s how do you get their email and then how do you build a relationship and then get them to come back and then buy from you?
John: We can probably touch on some content marketing stuff. I’m kinda interested to hear, if you were talking to an e-commerce, an online retailer that’s doing– They’re established enough. They’re doing say a few hundred thousand dollars a year in sales. So they’ve got the basics down, and they want to grow. If you were consulting with them, what would you tell them to focus on?
Neil: Emails. So with most online retailers, if they collect emails, there’s a huge ROI – from coupons and discount codes to free shipping. Ideally you should be offering free shipping to everyone. That’s a number one conversion driver that we’ve seen. But you can do so much through emails and keep re-marketing. Other thing most e-commerce companies don’t do is up sells and down sells. For example, if everyone bought a coffee table from you, right? On the checkout page, you could offer accessories for the coffee table – rugs, coffee table books etc. Those are all quick up sells that can help increase the average order value size.
John: Interesting. So you wouldn’t– Hey it’s funny, maybe we’ll end up going in a totally different direction here. But this sounds interesting. So when it comes to email marketing, if you were coming in saying, “Well let’s look at the up sells, let’s look at that.” It sounds like looking at that conversion process, assuming they’re getting people to the website. You’d go in and look at what can we implement to just increase that conversion? All the different leverage points where we can set things up, set processes up. Then they’re going to jack that conversion rate up.
Neil: Yeah, you can do the same thing for emails, right? On a checkout process, ideally you want at least a 2 step. If not, you can use software’s like Rejoiner. Where it just tells you, “Hey this is the name, and you know that the person didn’t complete the checkout.” Because then you can follow up with the person and get them to buy again. That usually helps boost sales by around 10%, alright, so that’s one thing. In addition to up sells, down sells for e-commerce. You can increase your average order value size, usually by 27 to 30% – just by adding up sells and down sells. Which is huge, because your margins keep going up as you’re selling more and more products. The other thing that e-commerce companies don’t do is – upon exit, right? Someone’s leaving the site, they haven’t bought anything. Why not offer them coupons, discounts, or something in exchange for their emails. Because you can get a few of those people percentage wise to come back and buy. If you get 1% of them, hey that’s 1% that you didn’t have. If you’re only selling 2 out of 100 people, now you’re selling 3 out of every hundred people. So doing all these little things adds up, and you’ll quickly find that you can double your revenue.
John: Interesting, interesting. So you wouldn’t actually go and focus – ’cause you can’t – like content marketing is, it’s really a traffic– Would you think about that as a traffic strategy or where does that fit into the picture?
Neil: It’s a traffic strategy. It’s a long term one that doesn’t provide a ton of ROI in the short run, but in the long run it will. So what you want to first do is maximize what you have, and then focus on content marketing. Because at least you’re making more money, where you can invest in content marketing and do it right. Due to the fact that you won’t get it all right from at least 6 months, if not a year.
John: Interesting. It’s funny ’cause this is the stage that we’re in with ReEngager right now. Where it’s just getting going as we’re recording this. And so this is interesting – like, “Well do we go and do paid traffic first? Do we go and build some sales funnels and do some webinars like you’re doing? Do we go into – do I start writing a blog post every week?” And the way I’ve been approaching it, is thinking – there’s no point doing content yet, let’s go find a sales– Basically like a sales channel. Whether it’s say Facebook advertising or Google AdWords or on LinkedIn. Once we have that and a proven way to bring in customers, then we take that money and then go hire a content person that churns out that content. That then – that’s then going to take 3, 6 or 12 months to really start generating any kind of traction.
Neil: Yeah, you’ve got it.
John: Okay, and so when you work – let’s go back to email for a second, ’cause that’s really what this podcast in general’s about and what ReEngager’s about. So tell me about some of the email campaigns? You’ve got your cart abandonment– Here’s something that’s interesting. I have my own opinion on this, but most stores – let’s say they’re using Shopify, they’re going to get a cart abandonment sequence, and it’s going to be one email. It’s going to be the default – whatever Shopify sends out. There’s going to be no – very little strategy in there. It’s just going to say, “Look, you forgot your order, here’s a link to your checkout.” What would you do in that situation?
Neil: If it’s a Shopify store, what would you do?
John: It could be any store really, ’cause with the various plug ins and things like that.
Neil: With Shopify, I don’t know what they let you do. But I would always make it where you need to click email first. You need to at least do 2 sub checkout. ‘Cause I have seen that in almost all cases, unless you’re a really popular brand – increase sales. And you need to focus on a drip campaign. So if they don’t by, maybe coupon codes. Like look at the margins of your product, right? Does free shipping work out for you? Maybe try countdown clocks, where you give them an offer that allows you to break even, and you can get them to come back and purchase again. You’ve just got to test a lot of different stuff, but it’s all about being creative.
John: Yeah, yeah. How many emails would you send?
Neil: I would usually send 2 or 3, before I stop bugging them.
John: Yeah, yeah. It’s funny, in one of the other interviews we’ve done was with – he’s known in the retail space by his attitude. Thought this was interesting. He’d just keep sending emails until people stopped responding. So I think he’s – the equivalent of his cart abandonment in his business is 6 or 7 emails long, just ’cause that’s when he – it wasn’t until email 6 or 7 that he saw the conversion rate start to drop.
Neil: Yeah, and that makes sense. The other thing you can do, is you just keep sending them until people stop opening them up. All the people that don’t open it up, don’t send them anymore emails. Or the people that do, keep sending them promotion based emails. Rotate it up. It’s like people do re-marketing a lot on e-commerce. This is another big mistake that I see. If I was on a page, I sold a coffee page – and someone added it to their cart but didn’t finish adding it – you can’t keep sending that person back to the same page. Maybe the first time you can, but if they don’t buy again, you don’t want to keep showing them the same ad to the same page. If they didn’t buy it the first time, there’s probably a reason why they didn’t buy. So you’ve got to be a bit more creative on what you show them, to try to get them to convert.
John: Right, so what would you do in that situation? When you say, “Be creative,” what does that mean?
Neil: Like offer free shipping or a discount or a free bonus if they purchase within the next 30 minutes. You can do a lot of cool stuff, it’s just all about being creative.
John: When I chat to clients, it’s often that – like looking at why isn’t someone buying in the first place? Is it a price thing? Are they just – is this a commodity and they can get it anywhere for–? They’re just looking for the best price out of the 5 different stores that they’re looking at. Or is it a luxury purchase like a $30 000 watch, that’s going to get them more clients? Where they’re going to need to educate them or something like that? And in which case, you might want to give them the buyers guide, or something that’s going to help them – how to select the perfect watch.
Neil: Yeah, those all end up working out. The key is, whatever you give them, it has to be of substance or value. Because if you don’t, that’s going to tarnish your brand. But if you go above and beyond by doing what’s best for the customer, eventually you’ll get those people coming back and buying from you.
John: Yeah. I like that. And then how do you approach – I’d be curious about how you – ’cause I know you do some email marketing. How would you approach a nurture sequence for an online retailer?
Neil: A nurture sequence for online retailer – what do you mean by nurture sequence? For people who didn’t convert, right?
John: Someone visits a store, they click around and then they go to exit. At some point there’s a pop up, either when they exit or just after a minute or something like that. They sign up to say – something – for a 10% coupon or a guide or some kind of offer. And then you send them some emails. What would you send them?
Neil: Sure, it’s like cheap money, ’cause – and I don’t do as much e-commerce stuff. But for me, when we considering nurturing, we’re like (11:56?) or something (11:56?) serviced based business, right? And I’m like – whereas an e-commerce business, you guys call it nurture, but we see it as all the people who just didn’t buy anything. Like where do you send them? But yeah, for those users, once you get the 10% coupon or whatever it may be, you email them. The other thing that you can end up doing is, I would end up shooting them let’s say like a 3, 4 part email sequence. So, if I was selling your coffee table, I could talk about the benefits of the coffee table. You’re (12:24?) sounding like how it’s ergonomic when you put your feet up on it. Like it’s better for your posture or whatever it may be. So start selling benefits. And you want to do the emails based on the products that they looked at. So for example, if they’re looking at cat based products, and they have a cat as a pet, you wouldn’t want to send them a ton of emails regarding dog based products, right? ‘Cause they’re a cat person – usually – unless they’re looking at cat stuff when they actually have a dog, which is rare. Nevertheless, you want to do the email sequences related to the products or services that they are looking at. It gets a bit more tricky, but it converts better. Same with the exit intent. Most people on the exit intent, they just do 10% off. But if they’re looking at the cat based products, your exit intent should be, “Hey, put in your email and get 10% all our cat products.” So then it’s also more targeted to what they’re looking for.
John: Yeah. Set up those different pop ups for – maybe a different one for each category of the site?
John: That’s a cool idea, that’s really cool.
Neil: Yeah, works well.
John: Okay. I mean, what’s something that – this is very tactical. What’s – kind of like, how do we get a bit deeper here? What do you find most interesting, whether it’s a mistake that most people make, or something that most people aren’t doing when it comes to online marketing in their business?
Neil: Especially for – and in general, or e-commerce?
John: Let’s start with e-commerce and then maybe we’ll sort of expand that. Let’s start with, yeah, e-commerce.
Neil: The big thing that we’re seeing with e-commerce is people start copying the major players in the space. So they’ll be like, “Oh, I’m taking my call to action or out to (14:05?) into orange.” I’m like, “Why?” “Well Amazon has it to orange, and look how big they are.” Well just because it works for Amazon, doesn’t mean it’s going to work for you. Amazon has such high brand loyalty that they can do whatever they want. They can change it to green, and they would still make sales. You can’t just copy major players in the space, and expect it to have the same results as it would for them. What you need to do is get qualitative and quantitative information, feedback from your users. So you may end up asking questions like, “Why didn’t you check out? What didn’t you like?” Or, “What else would you like to see on this page?” Just getting feedback. Let’s say it’s a product page. And they may say, “Oh you don’t have enough reviews.” Or, “You don’t have this or that.” Then you want to go and do A to B (14:50?) tests, making those changes and see what impact it has on your sales. Or make changes based off of data, both qualitative and quantitative. One being feedback like words, and the other one being data, like your Google Analytics.
John: Right, that’s a really good point. I’ve even been guilty of that before. Yeah, looking at Amazon or other companies. You look at how they’ve laid out their website, or what they do with their buttons. And then using that to then inspire some page that I’m building or something like that. And – right, it should be all about that data.
Neil: I’ve been foolish too. When I started out my career, I would buy these books that talks about like how to triple sales. And it was just like split tests from across where they’re like, “Oh if you make your checkout like this, and look like Amazon, you’ll get a 20% increase.” And they had a whole list of things. I’m like, “Oh this is all bullshit.”
John: So what do you do now, when you’re– Like let’s say the sites that I’ve seen at your website, right? Let’s say like Neil Patel, you’ve got the consulting page, right? Which I think it’s a great, as far as a sales page goes – I think it’s a great page. So did that come from you reading books about what works for other people? What works for other companies? How did you – what inspired that page?
Neil: Just myself, I enjoy writing and coming up with variations and testing. We had to keep in mind, with that page, it doesn’t work as well as you may think. My conversion rate on it, I think is around 3%. Which is low. I can probably get it to around 8 or 9%, but the quality of the lead would be a lot lower. And due to the fact that I don’t want to go through all of them, I really do focus on making sure that I’m getting only quality, and I don’t get a ton of people who apply.
John: Yeah, but so then, what’s on that page then – it’s a result of testing, it’s not from that – you read a book about split testing and then went, “Oh, I’m going to design it like this and put this orange button here, and this layout here.”
Neil: No, it’s – a lot of it comes from storytelling and creating a pitch that made sense to me. In which I’m like, “Alright, I used to be a company – used to hire consultants. What am I looking for? What are they looking for?” And then once I did that and wrote all the copy, then I looked at analytics data to get feedback. Right, are they balancing? Are they sticking? How far are they scrolling down using my Crazy Egg tests? And then I also started doing survey’s on there, like Qualaroo, and that would give me feedback on, “What else would you like to see on this page?” And everyone would say, “X, y and z.” Getting enough of that data helped me fine tune the page, so I was getting more relevant leads.
John: Interesting, interesting. And so we can use the same kind of tools on a – in an online retail, on an e-commerce website. For example, once they get to the checkout, pop up one of those surveys that ask them these types of questions.
Neil: Yeah, you can do a lot of fun stuff, and it all works on e-commerce, and I hope you get feedback to make the right changes. Most people don’t realize that when you’re running tests and making changes, you don’t always make more money – you can lose money too. So if you made changes that aren’t the best for your user – what you’ll find is, your sales will go down, and you’ve lost money in that period of time until you revert back.
John: Yeah, interesting, okay. And then, we’re coming up right on time here. So let’s finish up with – do you have any interesting case studies from say an e-commerce store on something that you changed or did that was an unexpected?
Neil: So I haven’t worked in the e-commerce business in a long time, other than Amazon. That’s the only e-commerce – I only have 2 customers right now. Google AdWords and Amazon. And sadly I can’t talk about Amazon, ’cause they don’t let me talk about what I do for them. I do CRO, I can tell you about. But they won’t let me go into more details.
John: Fair enough, fair enough. What’s the most interesting tests you’ve run in general?
Neil: In general – pop up based stuff on exits with geo targeting in the pop ups. And I found that to convert really well.
John: So that’s like saying–
Neil: So for example, if I’m selling cat food on my e-commerce site, or I have a section, Upon exit, didn’t buy anything or add anything to their cart – and they viewed let’s say 3 pages in the cat food category or the cat category. That tells me that they’re interested in cat based products, but they didn’t find what they want, or there may be a reason why they’re not interested in buying. So I may do a pop up that says, “Hey John, put in your email in the next 10 seconds or next minute,” And I have a countdown clock. “And we’ll send you a coupon for discounts for cat products. Hurry up ’cause we only have 5 coupons left.” And, where are you based out of, John?
John: Metajing (19:41?) Columbia right now.
Neil: Yeah, so I would be like, “We only have 5 coupons left for people in Metajing (19:48?) in Columbia,” right? So when people know it’s going to expire, and the offer’s only relevant to people within that region.
John: Interesting. I’ve seen that before on sites where they have that geo targeting. I look at it, ’cause I know it’s just a simple java script, that just pulls the location. So I look at it, and just seems kind of like a – sort of like a gimmick to me. But it actually works?
Neil: Yeah, works really well.
John: Interesting. So the exit, so the whole point – the whole way of setting it up – you’ve got an exit pop up, you’ve got an offer, you’ve got a timer, and then you’ve got the geo targeting in there as well?
Neil: That’s correct.
John: Awesome, cool. Okay, well let’s wrap it up here, we’re right on time. Before we go, if people want to learn more about you or check out some of the stuff we’ve talked about, where can they do that?
Neil: They can check out neilpatel.com or quicksprout.com.
John: Yeah, happy days, easy. So neilpatel.com’s where that consulting page is, and I’ll link that up in the show notes. I’ll have everything here we’ve talked about in the show notes at reengager.com. Neil, thanks for coming on the show man.
Neil: No problem, thanks for having me.
Intro music by DJ Rkod and George_Ellinas.