You may or may not have heard that Twitter is rolling out their own official “Tweet” button for content sites, among others, to use for their audience to publish their content into the Twitter stream. A move like this from Twitter is important because it directly effects the many companies that publish Retweet type buttons to blogs etc in order to track and aggregate trending articles across a variety of niches. TweetMeme, arguably the largest of these aggregators isn’t being completely left out in the cold though since Twitter has paid to use some of TweetMeme’s backend code to facilitate this new feature.

Brand or Platform?

The most interesting part of this new product to me however, is figuring out whether or not this product is more about platform or brand control. The investors in Twitter have been saying for over a year that Twitter application developers need to “stop filling holes”. By that they are referring to the innovation coming out of many developer hot beds to fix the obvious gaps within the Twitter ecosystem. While you might think Twitter would appreciate all this innovation from its development community that made Twitter so popular to start with, but in fact Twitter has been gradually tearing apart the development community in order to deliver an end to end experience that consumers love.

This is in part motivated by control influences, but I feel that this is a big play by Twitter to control their brand across the web. If you have been noticing or not, Twitter has been implementing a refreshed sense of design across every product within their portfolio to deliver a clean and simple experience regardless of what platform you are using. This new button is no different in that the design, delivery and aggregration is now all under the control of Twitter itself instead of a 3rd party.

What are your thoughts? Do you think Twitter is being fair with gradually consuming each outlet of their data to control the user experience, or should 3rd parties be encouraged to compete against Twitter itself to add features and usability?

The Good Stuff

What I was amazingly interested in however, was the contrast between the conversions of clicks to leads that stem from a very warm (and large) e-mail distribution list that has a) heard of Shoemoney before and b) has been communicated to by the list owner. Luckily enough, non other than Mr. Jonathan Volk of JonathanVolk.com decided to openly use a Bit.ly link with his e-mail push which meant we were able to peak into the results.

Bit.ly is a great way (mostly because of accessibility and free cost structure) to track the number of times your link is clicked, when that is, where its from (application) and what country. However, when doing a very public e-mail push, you are going to get called out on it from time to time.

Quick Background

So first things first, how did Jonathan Volk build up this e-mail list.. and how big exactly is that list? Jonathan Volk, Jeremy “Shoemoney” Schoemaker, Frank Kern, Andy Jenkins and a laundry list of others all operate in the affiliate marketing space to a certain degree. Because of that, they have a large audience that overlaps with each other and at the very least has a very similar set of actual needs. When Jonathan Volk wrote an eBook about effectively advertising with Facebook and other affiliate marketing promotional methods, he was able to leverage his existing relationship with people such as John Chow, Shoemoney to pump his eBook to a ready, willing and eager audience while providing value in exchange for a nifty e-mail address.

Jonathan decided to chime in on my Twitter conversation with John Chow to make sure it was stated that he pulled off this e-mail list for JUST the cost of 3 iPads as Chow has stated…

But there were certainly more promotional methods than just this for Volk, but tapping into lists such as Shoemoney, Kern, Chow and Jenkins was a good way to capture the low hanging fruit. I know for a fact that he also used some Sponsored Tweets to promote his book to the affiliate marketing space. (side note: I plan on covering Sponsored Tweets pretty in-depth very soon).

The 150x ROI

The rule of thumb in the list building business is that a targeted e-mail list provides about $10 of profit per year for each subscriber depending on how effectively they are marketed to. So to figure out the total value return of this list for Volk, lets do some simple math that rounds up on the cost of promotion and down on the number of subscribers.

Subscriber Value: $10

Subscribers: 10,000

Average Subscriber Validity: 3 years

Lifetime Value of Subscriber: $300,000

Cost of acquisition: (3 ipads at $500 ea. ) = $1,500 + (sponsored tweets0 = ~$500 : $2,000

With these quick and dirty numbers, Volk can expect to get up to a 150x return on his $2,000. Not a bad return at all if I may say so myself!! So what about this particular launch that we have click and conversion numbers from?

Warm & Communicative vs. Cold & Direct

Volks list produced 1,629 clicks over a roughly 1 week period and two mailings out of list that is known to be at least 10k.

Click through ratio? (clicks/emails) = 16.29% or lower for an “active” list

Number of leads generated? 824.

Conversion Ratio? (leads/clicks) = 50.58% HOLY SHIT THIS IS GOOD

Cost per conversion (cost per lead/conversions) = $2.43 per lead, but has a much longer lifetime value

What were my results with my leads generated through advertisements?

I generated 588 clicks over roughly the same period of time as Volk, relying primarily on SponsoredTweets for Traffic with a total cost of $25.86

Click through ratio? This is hard to tell because I just used Bit.ly and we don’t know view/click data

Number of leads generated? 23

Conversion Ratio? (leads/clicks) = 3.9% MASSIVE DIFFERENCE

Cost per conversion (cost per lead/conversions) = $1.12

Summary

What is amazing about the difference in lists compared advertising for lead generation is the conversion of leads into your relevant product, service or affiliate offer. If you have a list that you have build of good will with in the community you are going to see a MASSIVELY better response rate from your audience and a much larger return.

In regards to me having a much lower cost per conversion for this particular push, it is important to note that while Volks cost if confined to this case study alone would be more than double what I paid, he will have the opportunity to repeatedly market to this audience for a return that is many, many times larger than what I may generate through this study.

Building a List

How can you build a list and start cashing in the huge return that people like Volk are reaping the benefits of? Here is a check list of things to remember when pursuing this opportunity.

1. You absolutely MUST provide value to your market (doesn’t matter if it is Dog tricks or Car Cleaning) in exchange for their opt-in e-mail.

2. You need to establish connections with as many people related to your targeted industry as possible. This is going to give you a much wider audience and essentially allow you to cherry pick the most active and highest paying users from your competitors list for years of marketing success.

3. GET YOUR LIST STARTED TODAY. Getting it started as soon as you possibly can allows you to compound your results and start seeing the power of list building, lifetime returns and a “list ATM” that so many affiliate marketers are used to at this stage in the game. If you are looking for a high quality service provider to use, Aweber comes highly recommended and gives you the first 30 days for ONLY ONE DOLLAR.

Click here to get the massive Aweber deal and start building your client base today.

]]> http://thecollegestartup.com/2010/07/24/warm-leads-vs-cold-leads-case-study/feed/ 3 http://thecollegestartup.com/2010/07/06/lebrons-787522-75-brand-in-2-hours/ http://thecollegestartup.com/2010/07/06/lebrons-787522-75-brand-in-2-hours/#comments Tue, 06 Jul 2010 22:09:06 +0000 Travis Ketchum http://thecollegestartup.com/?p=441

We all know that the notion of a brand is enticing, and that people are willing to pay more for a Coke simply because it says “Coke” on the side and not just a random house brand. We also know that when Coke brings out a new product, if we liked the original we are much more likely to try the new product.. emotionally we are tempted to dive head first into products, services, locations etc we wouldn’t have otherwise because of how a brand makes us feel.

What does a brand mean when it is a person though? Does a celebrity have brand value that is nearly instantaneous? The answer is HELL YES they do. For an example look at the Twitter account started by LeBron James.. in a short 2 hour period after sending his first tweet that simply announced he was on Twitter.. he has a staggering 127,225 followers (and counting!!). So what is this brand equity worth? Well if you read this article you might believe that each follower is worth $6.19; and that value multiplied by his follower base adds up to nearly $800,000 in only 2 HOURS.

According to Ad Age, each person who ‘Likes’ a Facebook page is worth $3.60/year which is probably pretty fair if you were comparing the cost of traditional media to the reach of social media. If you think that this size of audience simply can’t be worth this much money, keep in mind that Jeremy Schoemaker (@shoemoney) had roughly 90k followers and PROFITED $50k in about 7 months time on Twitter.. the value is real and so are the paychecks.

How are you building your brand and finding your audience? It is likely worth much more than you think right now.

There is an interesting difference between filling holes and innovation is often the application of the product or service. For instance, the very public issues with the iPhone 4 (which I now own) are ‘magically’ solved by the Apple produced bumper case. The fact that the product solves an issue that shouldn’t even be there in the first place rubs me the wrong way.

Build, Build, Build
In contrast though, there are some real opportunities in similar market categories. For instance I have a burning desire to buy a case for the iPhone 4 that is equipped with a threaded hole compatible with tripod stands.

I also know that I can’t be the only one who has this need because the picture quality on the new handset is equal to a flip cam and mid-level point and shoot camera. So why is there no product on the market? Time & Demand.

Time after a product launch is logical, and eventually goes away. But what about demand? I mentioned that there must be some level of demand for this based on quality, audience and usage. However gauging actual demand for a product is a daunting task and products that don’t fill holes cone with an added level of risk.

So is your product or service filling holes or innovating? If it’s filling holes, how can you more clearly define your value proposition?

By the I wrote this entire post on my new iPhone

Today on TWiT Live, Digg founder and overall Angel investor Kevin Rose talked about a number of interesting things. One of those key things however was a sneak preview of long awaited and anticipated fourth version of Digg.com; which frankly is quite cool but the real question is how will the audience react? Only a few short years ago, this type of revision would have blown the doors off of the competition, but now it feels like more of a catch up release rather than a serious innovation cycle. Don’t get me wrong, the updated Digg is incredibly clean and just feels polished. The love for Apple, and admiration for their design ability by Kevin Rose  is far from hidden in this release; but much like the release of iOS4 this release of Digg feels stunning yet underwhelming at the same time.

The Vision(ary)

If you own an Android based phone, or have been using the Internet since before 2007, then there is a high likelihood that you have heard about Kevin Rose somewhere. Kevin received much of his press attention after bolstering Digg out of the gate with democratizing news for a tech and web based audience. The idea was simple, elegant for the time and solved an inevitable pain in the marketplace of reading the really good off-beat news that just wouldn’t be on the home page of CNN or similar news sources. Kevin quickly became entrenched with other successful ventures such as Revision3 (which just celebrated its 5th birthday a few days ago) through popular shows such as Diggnation and others. He also played his cards with Angel Investing to help get new and exciting start-ups into a (hopefully) stable development cycle and keep pushing innovation forward for the tech industry as a whole. Now, however, Kevin has picked up the reins once again as the CEO of Digg to really focus on the value proposition, positioning and ways to keep his once game changing service relevant for the world of Facebook and Twitter.

The Positioning Statement

How do people share things today? That is probably one of the first questions that Kevin asked himself as he took a look at why users chose to come to Digg and share stories, view new content and explore categories that interested them. He recognized why there is an addicting quality to the Facebook Newsfeed, realized the entrenchment that Facebook has and that there are areas of improvement as to how people consume content, not just statuses. Facebook uses an algorithim to decide how many people ultimately see your posted content based on projected engagement levels, as opposed to allowing all content to be pushed to people who essentially “opt-in” to see what you have to say.

Twitter on the other hand is able to avoid this lack of visibility seen inside of the Facebook ecosystem because users who you follow have all of their content pushed into your feed. However, the issue with this model, according to Rose is that “You may be interested in the articles of Tony Hawk.. but not that he just dropped his kids off at school”. The idea of authority figures within interest categories is being sought out, but Digg v4 hopes to solve the clutter of Twitter yet still have more promised visibility to your follows than Facebook.

Taming the Social Graph

In 2007 at the Facebook F8 conference, Mark Zuckerberg would not stop talking about the “Social Graph” which is now unfortunately one of the most overused buzz words today. However, the idea of a network effect through the people you know and who follow you may never have the same value proposition as what Kevin is proposing with the new Digg v4. The idea that quality content has the opportunity to surface within interest categories gives it a much needed enhancement for the ability to spread. This means you are going to see not only higher targeted content, but more of it; and both of these factors lead to a better internet experience.

So while Digg is going to have to work in order to please their current audience as well as be inviting to new “average” users (read: not hordes of geeky males), I think that the upcoming version of Digg fills a very real need within the marketplace. Additionally I think they are doing it in a way that truly comes with differentiators that matter to users when comparing the service to Twitter and Facebook (as well as Buzz or Wave if you actually use those services). The fact that services now have to clearly state their mission and work extremely efficiently to deliver value, is a strong indicator of the competitive times. Gone are the days of the “do everything” start-up approach that had worked so well for many, including Kevin Rose. Instead we are seeing a shift to niche level services and aggregation tools that allow each component of the web to be the best it can possibly be, and in the end, the consumer wins.

Yesterday I talked about the number of “moving parts” that a business may have can be a huge turn off to investors. So what exactly does it mean to have a lot of moving parts in your business? Well to put it simply, moving parts can be related to a chain; this is because each “part” of your business that is required in order to create revenue or work, then each chance you have for less than expected results to occur. When this happens, much like a chain the weakest link can be your undoing and ultimately lead to business failure.

Business is a lot like logical reasoning, the most simplistic answer is usually the right one so do your best to create simplistic value that everyone can understand. For example, instead of trying to be “The new Digg + Yahoo – Flickr with Facebook Intergration” just try to do one simple thing, but do it EXTREMELY well. Examples of this streamlined business example could be things such as Groupon. This start-up company does one thing (creates group initiated coupons), but does it so well that is essentially printing money for its investors that is has snatched up a staggering 1.35 BILLION dollar valuation only months after launch. It is now on a war path to acquire other businesses and disrupt the entire coupon market.

Keep in mind that Twitter recently received a 1 Billion dollar valuation after being in business since 2006, and while the idea behind Twitter is simple, the revenue model is still being defined. Given that, a key to success for a simple business is a model where only a few functions take place, but they make sense financially for everyone involved. If you were to list all the features of your tech related start-up, how long would that feature list be? 10? 20? 50? History has shown us that business with less than 10, and closer to 5 are the ones who have the highest chances to succeed.

So what is the value is paying someone else to help you gain control of your brand across the social web? The immediate result is that none of your competitors or impostors can operate under your brand name. Imagine if a service like this has snagged the Twitter handle of “jt” or a similarly short and “premium” handle before the service became incredibly popular?

Kallenerg notes their connection to Vaynermedia which is a sweat equity partner in the sense that Gary and AJ Vaynerchuk, as well as their entire team have teamed up with Kallenberg for equity in exchange for pure effort to help build his business. This relationship has appeared to work out well for him so far as it is a match to his DNA. When asked what drives him, Kallenberg responded with “At first I did consulting out of necessity and quickly realized that being creative and working with great people is what I wanted to do”. His drive to also create a greater impact for people and society is admirable and fits in nicely with the increasing trend of young, tech oriented entrepreneurs using innovation for the greater social good.

From a competitive standpoint, Kallenberg notes that due to their high quality control, but still outsourced business model they are able to beat their competition by roughly 45% and still deliver the same top notch service for his customers. Being from the Pacific Northwest originally, this unique model found him some media coverage in the NW Business Monthly and other localized publications.

So as another entrepreneur, what can you take away from Aaron and his success in growing Claim.io to supporting over 300  social sites across the web? A big takeaway should be should be a common occurrence at this point is that firms who invest in people as both their customers and their management team do well in the long run. Claim.io in particular is an interesting business because not only do they believe in caring about people, but the service in fact promotes the personal connection that so many brands could benefit from, and by extension help other businesses care about their customers in a similar way.

Check out Claim.io and see if it is the right fit for your business.

As if Twitter wasn’t a hard enough sell for the majority (which I still argue it hasn’t successfully accomplished yet) but now these developers are actually hoping that users will be willing to take the time and effort to launch at least one of their apps to announce their presence at their favorite restaurant or pub. But where are all the users? The best performing location app currently only has 1.5 million active users… Twitter? 75 to 100 Million at best, but Facebook has a staggering 400 Million active users with their largest growth in mobile and has pushed them into the #1 visited site in the United States, even surpassing the Google Network. It also is not secret that Facebook is planning on pushing their own location based services that do use new and interesting ideas, and not just feature cloning obsessions like they have had with Twitter for the past two years.

QR Codes: Little barcodes more or less that hold bite sized information that scanners can easily recognize. It has been rumored that QR codes will likely play a large role in Facebooks location strategy and could solve one of the major loopholes that current location applications have which is that they are easily gamed by “checking in” to a ton of places you haven’t actually visited. By integrating QR codes business could not only run specialized promotions but could more easily track the progress and success of their online promotions to drive real, tangible revenues to their brick and mortar establishment. Facebook is now cashflow positive with their powerful self-serve advertising platform and will be getting hungry to show business the value that their profiling data can create when coupled with real world “gaming” that drives revenue.

So the real question that you would have to ask if you were an investor, are applications like Foursquare and Gowalla really with the millions that have already been poured into their technology? Granted they have pushed innovation within social media and opened up a can of worms that could be extremely popular when correctly combined with business side promotional efforts, but with the big blue Gorilla in the room (Facebook) where is the end game? How would you see yourself exiting this scenario in a profitable way? Obviously social media icons such as Gary Vaynerchuk and Kevin Rose are very bullish on the idea of location based applications, and both have been angel investors (Kevin somehow was able to invest in both Foursqaure AND Gowalla, not quite sure how that works).

What do you think as a consumer? Are you willing to use a secondary application just for checking into physical locations? Do you even care at all about doing this unless it offers some kind of virtual coupon, discount etc that is instantly redeemable? Or would you instead rather see all of these types of innovations rolled into one monolithic service from Facebook where most of your real world connections are hosted anyway, with the opportunity to push certain events into your public Twitter stream?

This past weekend for the first time in quite a while I had the opportunity to get a little hiking in, it was fantastic! As I was climbing around Kamiak Butte I remembered why I loved hiking so much back in High School as an Eagle Scout. It wasn’t necessarily the exercise (even though it is common knowledge I could always use it ) but the fact that I forgot how friendly people on the trail usually are, a lot like people in the boating world are. It seems like whenever you are out trying to enjoy the same thing as everyone around you there is an unspoken rule or respect and acceptance because you are “one of them”.

This same ideology is what is behind marketing genius Seth Godin’s book “Tribes” where the idea of a group who is passionate about the same things we are. This unspoken acceptance and perceived quality that this group offers is something that social media is seriously lacking. Why does the average person think that Twitter is just a bunch of status updates about “eating lunch” & “using the bathroom” has more to do with the platforms inability to effectively to consistently connect people who have similar interests in passion. Is it possible to find the right people on Twitter? Absolutely, but you must be actively and consistently seeking out those people based on keywords or singular recommendations. Alas, there is no “genius playlist” for the sea of users on Twitter and that fact is what leaves most users feeling a little empty while using the service.

Ning has become one of the largest networks you may have never heard of because they understand the value that users have with a real community that focuses on a branded and focused method of delivering content that people care about. If you are passionate about a particular type of bicycling then there is likely a Ning network around that exact topic for you to participate in, and if not you the ability to create and moderate that community so that other people can find you and participate in your community.

How do you think Twitter and other social networks (including Facebook Fan pages) could change the user experience to connect users with meaningful groups, pages etc.?

Do you want money? Duh, yes. How about the chance to win a brand new Tesla? Who could say no?

The idea of big prize giveaways are an age old practice that Las Vegas has been using for decades. {Anybody remember the National Lampoon where they win the Dodge Viper?} Jason Calacanis, the founder of Mahalo among other things has recently put snagged the Twitter handle @auto for automotive related posts. So how do you drive (no pun intended) a ton of followers to a new handle, and make sure they stick around for the long shot? Here is the Jason system:

1. Have established success at building business
2. Have enough money you can buy two Teslas (at put on order)
3. Make people TRUST you, and that you are not a fly by night scammer
4. Get some of the more influential people on Twitter to retweet the contest
5. Voila! Instant follower growth, and likely won’t even have to give away the car!

Jason has built up his personal brand with loads of credibility, in todays social networking credibility most certainly holds the highest value. This point is driven home when you consider that according to Twitter (via @neilpatel) there are over 15k “Social Media Experts”, and in reality they don’t know anymore about the space that your boss who also thinks they are an expert

So what exactly is his catch, and what is the most likely result?

To win the Tesla, you must first become a follower of the @auto account (the car would only be given away to one of the followers). Secondly, @auto has to become the #1 followed account on Twitter beating out @aplusk which would currently require in the neighborhood of 4 Million followers.

The likely result?

It is doubtful that @auto is going to become the number one followed account on Twitter even with titans like @kevinrose retweeting the challenge along with blog support. However, what @jason is likely going to end up with is a heavily followed account of over 1 million users… for essentially free. I believe that he would honestly give away the serial #85 Tesla S that he has pre-ordered because 4 million followers is worth that much, even @shoemoney with 85k followers was able to bring in close to $15,000 in one month due to clicks on advertisements to other peoples content. As any good marketer knows though, if someone else is willing to pay that much for clicks from your feed you are the ultimate sucker because the clicks are worth more than what they are paying.