Episode 62 of Yes, and Marketing
Peep Laja was once voted the number one CRO in the world.
He’s also founder of 2 of the most well-respected companies in the digital marketing space: CXL and Speero.
In this episode, Steve sits down with Peep to talk about:
- What so many companies get wrong when it comes to positioning and differentiation
- Why A/B testing probably isn’t the answer to improving your website
- How his April Fools joke went viral and might have changed the stock price of a public company
- His new startup Wynter (spoiler: Verblio is a customer, and you should be too)
Listen to the full conversation above or read on for the highlights!
Name: Peep Laja
What he does: Founder and CEO of Wynter and CXL. Previous founder of Speero.
Get smart: “A confused mind doesn’t buy.”
An actionable definition of CRO
Conversion rate optimization, Peep says, is about getting more people to take action on your site. He breaks it down into two pieces:
- 80 percent research:
- Qualitative research about your audience and what they want
- Quantitative research about what is currently happening on your site
- 20 percent experimentation:
- Test hypotheses about your users’ behavior
- Determine causality and find the elements that influence your key metrics
And your key metric, by the way, may not be the conversion rate itself. “The conversion rate can be a short-sighted metric,” Peep says. “If you’re only focused on the conversion rate, you might be sacrificing long-term metrics like Lifetime Value.”
Rather than focusing solely on getting people in the door, CRO should focus on getting the right people in the door, so they’ll stick around and keep driving your business’s growth into the future.
3 ways to be different
The number of businesses, especially in SaaS, has exploded over the last decade. What hasn’t kept pace with that growth, however, is differentiation.
“If you go to G2 or Capterra, open up any category and look at the top 20 companies. What are they saying about themselves?” Peep asks. “Most of them are marketing themselves as if they are the only one doing what they’re doing, which is classic sameness.”
According to Peep, there are three ways to stand out in this sea of sameness:
- Innovation: Create a truly better product or service. (“Very few can do that,” he says.)
- Positioning: Be a better solution for (and market accordingly to) a particular segment of your category’s audience.
- Market penetration: Outspend the competition on advertising and buy your audience’s awareness. (“If people know you exist,” he explains, “that’s half the battle.”)
What’s in a name?
“If your brand name is the literal descriptive name, “seoagency.com” for an SEO agency—that’s a stupid ass name because that makes you a commodity, and it’s very hard to build a brand. Stupid names like Google are the way to go because it means nothing at all and it seems weird. But provided that people can pronounce it, write it, maybe there’s some rhythm to it—it can work.
That’s why I rebranded Wynter. It used to be Copy Testing. I thought, ‘Oh, what a brilliant name, I’m just gonna call it what it is.’ But there were multiple problems with it, and I was too naive about this matter. Now, in hindsight, anybody who has a literal, descriptive brand name, I urge you to rebrand as soon as possible.”
CRO as a life philosophy
“CRO started off as a tactical thing, ‘Okay, we have a conversion rate, we have a thousand visitors a month and ten of them will sign up—boom, we have a 1% conversion rate.’ That’s the origin of it, like ‘We need to make our ad budget go further by increasing the conversion rate.’
But today, I think it’s more of a philosophy and mindset on how you do everything. So you explore, you ask research questions, you go seek the data, you formulate hypotheses, and then you validate it. It’s essentially very, very similar to the ‘Build, measure, learn’ lean startup idea. So I look at it more as a mindset that I bring to my marketing and that I bring to everything.”
The challenge of an e-learning business
“There’s a big, big challenge with the e-learning business, which is time to value. So when you’re running an e-learning business, we’re selling mainly as a subscription product. And it’s like a gym membership: I can sell you the membership, but you need to go in and lift the weights. I can’t lift the weights for you.
…So if you have a subscription product in e-learning, the churn rate is notoriously bad. I think the industry average is around 50% a month. You lose customers because people get busy and they don’t make time for learning and so they cancel.”
Clarity is #1
“You should always have clarity. A confused mind doesn’t buy. Different doesn’t mean that you have to use jargon or buzzwords and fancy language—not at all. In fact, there’s strong evidence out there that you win on simplicity: message simplicity, product simplicity, pricing simplicity. All these things have strong competitive advantages.”
One way to stand out?
“Take a fundamentally differentiated position in the market. So, you build a 10X solution for a particular customer segment. Maybe it’s a different job to be done, maybe it’s a different vertical—there are so many different ways.
You can’t really win unless you’re actually better, and you’re definitely not gonna win if you’re objectively worse. So think, ‘For which particular market segment—a well-defined set of customers—can I build a 10X better solution?’ On paper you might not be able to build a better HubSpot or Salesforce—Salesforce does everything, right? But, are they solving well for musicians and writers? Or one-person companies?”
Case study: How to buy your way into a crowded market
“Monday.com is a totally solid product, but is it objectively better than all these other great CRMs out there? I don’t think so. I would say it’s the same and maybe there’s a segment that Monday serves the best, but actually the go to market message is, ’It’s for everyone.’
…However, if you look at their financial reports—2019, 2020—the ad spend is 150% of the revenue. So they’re ridiculously outspending. Because they have a lot of VC money, they can spend more than their revenue on advertising. And classically, if you look at the market positions, they’re extremely stable in a mature category. So whoever was number one 10 years ago, is still number one today, and whoever was number five 20 years ago is probably number five today. There’s very little movement. The only times this movement happens is if you have excess share of voice—if you ridiculously outspend the competition to buy awareness, which Monday has done fabulously. And it’s a classic case study of how you can buy your way in.”
“I think the best brand names mean nothing at all to most people, and you make the meaning.”
“In order to improve anything, you first need to understand what’s wrong with it. What’s working, what’s not working?”
“In the beginning, you know what the problem is, but you don’t know really what the optimal solution is.”
“The main thing is to search for the right people who care about the problem to solve.”
“Something you shouldn’t do as a marketer is say, ‘We’re for everyone.’”
“People have very limited consideration sets.”
“If you’re just like everyone else, it’s a hard life.”