Forget About Traffic Generation – Switch to the ‘Customer First’ Approach Instead

Shane Melaugh:

Let's launch right into this and let's talk about why are we talking about traffic generation. Why are we telling you to forget about traffic generation?

Hanne Vervaeck:

Because that isn't the most important thing in an online business.

Shane Melaugh:

Right. That's what most people would think, right. In fact, it's one of those things were I bet you if you went to pretty much any site in the online marketing space that has a large audience. Think of your Quick Sprout, Smart Passive Income, go somewhere. There's a large online marketing interested audience. Put a survey or a poll on that website. Ask people what is your biggest problem. What's the thing that you need to make your business work? I bet you that the number one answer is going to be I need more traffic. The number one problem is I don't have enough traffic.

Of course, that's not a very daring bet of me to do this because we have run many polls and surveys asking such questions. This always tends to be the top, or one of the top answers, right. It's always people are always talking about and thinking about. If only I had more traffic.

Hanne Vervaeck:

I have to say, it seems like a logical thing to think about because if you have 1,000 people or 100,000 people coming to your website, rather than 10 people, that should fix all the problems, right?

Shane Melaugh:

For sure, yeah.

We all know that traffic is basically infinitely scalable almost, right. We're all aware that some websites get just unbelievable amounts of traffic. Millions and millions of visitors. It's easy to think, especially if you got something. You know maybe you've got a website that makes $10, $50 or something a month. Then it's easy to say, well, if I had millions of visitors, if I could just multiply this result by hundreds or thousands, then I could go and retire on a beach somewhere. I think that's one of the reasons why we tend to focus on traffic. We want more traffic.

I think there's also another reason. I think that this is a bit of a relic of past years in online marketing because, well, and I was part of this, not too long ago, actually. A few years ago. A fairly viable strategy to make money online was to do the kind of mini site, niche site thing. Where the approach would be, you pick out some keywords, right. You build a website around this keywords. It can be a really simple website. You throw some back links at it. Maybe you pay for some back links spamming service or something. Essentially, what you do, is you just try to get more traffic. You try to get more clicks to your site, then you've got some affiliate links or some ads on your site.

Two things. First of all, like I said, I'm kind of guilty as charged here. I used to do this as well. To give you an example of how extreme this can be, I had a website about paralegal training. I actually don't know what a paralegal is or what they do but I had a website about it. On which I didn't write a single word. I simply paid for some very cheap content filled with keywords. For this website, I had AdSense on it. For this website, the only criteria was well there's a bunch of keywords around paralegal something. The higher I rank for these keywords, the more traffic comes to this site and the more money I make. So there it makes sense. Just more traffic equals more money.

Hanne Vervaeck:

You were actually smarter than I was because my first money online also came from a niche website but I decided to do everything myself and actually go into a website where I thought that I liked the topic and put Amazon affiliate links on there. But yeah, it was the same principle, right. Put on content, have people find it through the search traffic, then make money.

Shane Melaugh:

Exactly. The simple truth is that so this was valid. This was a valid way to look at your business at some point. The valid thing to think was well, if I just open the taps further, if I just get more keywords ranking, more clicks, that equals more money. However, that is simply not the case anymore.

You cannot. There's no way I could build a paralegal website without doing any research on this topic and just pay someone five dollars an article to fill it up with content and get anywhere with that. It just doesn't work anymore.

Hanne Vervaeck:

Well, Google became a bit smarter, right.

Shane Melaugh:

Exactly. Yes, Google kind of wised up to this. The problem is we still have these stories. We still know about the cowboys in the wild west of the internet who did this kind of thing. So that kind of perpetuates. Well, I want to do that. I heard this guy did that five years ago, I want to do that now. Unfortunately, that doesn't work. So there was this niche site boom a few years ago. I think we were still hearing the echos of that boom, which leads to people overrating the importance of traffic.

I guess it's also something that is kind of the easiest way to kind of measure. You know, you install any analytics program, it easily shows you how much traffic you get. That's the first thing it shows you. So it's an easy thing to kind of understand. I get more visitors. It's an easy thing to be envious of. Someone else gets more visitors. It's an easy thing to measure. I think all of these things combined lead to an overrating of the importance of traffic. Everybody seems to be obsessed with traffic.

We let it distract us from what really matters. The series of episodes are called Forget Traffic. We're literally telling you forget about traffic. I'm not going to tell you it's not that important. This is not ... I'm pretty extreme in this. I want to tell you that I'm totally serious about this.

I have a couple of website. I have two main websites in businesses online. ActiveGrowth and Thrive Themes. I actually can't tell you how much traffic these sites get. I'm serious about that. It's because look, I spend quite a lot of time looking at various analytics and data and split test results and things like that. One thing that I never look at in analytics is the traffic. I simply don't care. Traffic is not one of key performance indicators in our business. It's not something.

And Hanne, you're the head of the marketing team with Thrive Themes. Have I ever asked you to get more traffic? Have I ever asked you about how much traffic we have?

Hanne Vervaeck:

Nope.

Shane Melaugh:

Right. So this is how serious I am. I'm literally totally uninterested in traffic. I'm gonna tell you how that's possible that we're still, you know, that it still works. We have working business, even though we don't care about traffic.

Hanne Vervaeck:

I think there's, you talked about the niche boom site a few years ago. I think we can still see some examples today online of the chasing traffic rather than having another valid strategy in place for an online business. Because the difference is that now it's more on social media, right. The thing is, you can still think about building an online business and being like I will build up a YouTube channel and I will put advertising on my YouTube channel. I will use 10 cents a click for an advertisement on every video. So if I just make 100,000 videos, I might be able to make a living out of YouTube, right.

The same is happening today with Instagram. This is a discussion that I had very recently with somebody who wanted to start an online business. I asked her what she was planning to do. She told me, I'm planning to build my Instagram following. Which you might have, maybe you can imagine my face at this point.

Shane Melaugh:

Yeah.

Hanne Vervaeck:

I was like okay, explain me exactly what you are going to do. She's like, "yeah, I'm going to build up my Instagram following and so I read that once I get over 5,000 followers, or 10,000. I don't even know anymore. Then actually I can go to brands and brands will pay me to put an Instagram post on my profile."

So it's like 20 to 50 dollars, I think, that a brand will pay you to have a post on your Instagram account for that number of visitors.

Shane Melaugh:

This would be like “look at my new handbag”…

Hanne Vervaeck:

Yeah, it's like “oh, see my sports shoes or my new yoga pants”. Yeah, something like that. Product placement. Yeah, exactly. Product placement on Instagram. Then again, it's like wow, you just build up a whole Instagram following for weeks and weeks and months. Then you can have maybe, what, I don't know, five sponsored posts in a month because you don't want to scare away your audience, right? You cannot just put like publicity every day on that account. So it's like you pay to earn $100 with your account. You just spend months and months. It's still not a very viable thing to do.

Shane Melaugh:

Yeah. Yeah. I think also, it's kind of deceptively simple, right. It's like well, you already use Instagram perhaps. You've already, you have an idea of ... Again, like okay, I have followers. If I get more followers, I can get paid. Then you see some Instagram accounts with millions of followers. You're like well they're making out like bandits. Why can't that be me? I think it's this kind of it's an easy thing to grasp.

I'm seeing the same thing more on YouTube because I'm personally, I use YouTube. I don't use Instagram. There's the same thing that the idea of, it's a very appealing idea of the some guys who are just playing video games and recording themselves playing video games on YouTube. They have millions of views and they make a ton of money. Why can't I do that? I can play video games, right. So it's like, it's very appealing idea. It also,

I think a problem with it is also that because the barrier of entry is so low. Taking pictures, putting them on Instagram. Recording video of yourself playing a video game. Putting it on YouTube. Anyone can do it. So it's totally flooded as well. You don't see for everyone who has a large audience and such a platform, you don't see how many other accounts there are who make content that's just as good and they try just as care. Nobody cares and they don't have any followers and don't make any money.

Hanne Vervaeck:

No.

Shane Melaugh:

Another thing about this is that if you're getting paid to whatever, post for ad clicks on your YouTube channel or to post a picture with product placed yoga pants, someone else is actually making a lot more money than you are. Otherwise, they wouldn't pay you for this.

Hanne Vervaeck:

I remember listening to a podcast and that was actually a very interesting podcast about paid traffic. Which is called The Art of Paid Traffic. They were talking about Instagram. This one guy is telling, "oh I had the option of paying $50 for one post, that would be taken down after 48 hours. So they would delete the post. Or I could pay $90 to stay on that Instagram account." At that point, he actually explodes laughing. He's like, "so I think you can imagine the option I chose, right, hehehe."

Shane Melaugh:

Yeah.

Hanne Vervaeck:

So at this point, this guy is literally laughing with the Instagram account saying, "do you understand how crazy it is that I can buy all this exposure for 90 bucks?" For him traffic was not a problem, right. He would just like for 90 bucks be in front of a huge audience.

Shane Melaugh:

Exactly. So this is part of why we're taking this whole forget traffic approach because it's much better to be on the other side of this equation. It's much better to build a business that allows you to buy these ads from the people desperately trying to build an audience than being one of the people desperately trying to build an audience.

So this kind of build an Instagram audience or build a YouTube channel thing, this is an extreme example of what I would call the customer last approach. So you think about getting a customer at the very end. Again, let me give you a quick example of a YouTube channel. If you look at popular YouTube channels, what you usually see is that on the one hand, they make ad money. At some point, the successful channels usual do some of the of their own stuff. They start selling t-shirts or posters or they ask people to support them on Patreon or something like that. So they usually start finding ways to make money, apart from just the YouTube ad money.

This is really important. If you look at the chronological order of this, they start out. They make all this content all the time. They ask people to like and subscribe all the time. They build their audience usually over years. At some point they're like, okay, I'm making some money here but not enough. Now I have to think of how I can get, how can I think about turning these people into customers. They add some kind of product thing. That's the last thing they think of.

Hanne Vervaeck:

Do you think that maybe like the whole Silicon Valley approach might be also a part of that. Because we've seen this products, like WhatsApp or even Instagram, or whatever. They are like free apps. Building up audience, building up traffic. Then in the hope that they will get bought up, right.

Shane Melaugh:

Yeah. Yeah, totally. That's another. That's actually a good point. The whole Silicon Valley IPO thing, right? You want to get bought. You want to go public. You want to have a huge public offering or something like that. Where it's all about audience size and growth. As long as you're growing rapidly, you're valuable. Your business if valuable. You've not made a cent, you're billions in debt, it's fine, it's fine. You're growing quickly so it's valuable.

Again, this actually brings us to another thing, I've talked about this before. Avoid being in a superstar business. So if you're an Instagrammer, YouTuber, whatever, you have to be a superstar. You have to be one of the very, very few. Much less than one percent. Much less than one percent of people on these platforms that are the superstars that are making good money. Everybody else is poor, basically.

The whole Silicon Valley thing is the same thing, right? You either manage to take off and you become the next Facebook and you make billions of dollars or you just die in obscurity. This is not a good position to be in. You want to build a business where you can be in the middle ground and you're fine. You're making good money in the middle ground. There are many, many business like that. In fact, most are like that. It's just not the ones that you hear a lot of media noise about.

So maybe a more typical example. For people who are listening to this podcast, you're probably not trying to be a famous Instagrammer or YouTuber, but you're actually making a similar mistake, I bet. Because tell me if this approach seems familiar. You start your business, you build a website. You put a blog on that website and you start doing content marketing. You start creating content around relevant topics, around questions people might be asking, around keywords that you've reached. You start doing social media marketing. You post on Twitter, you post on Facebook, you post wherever. You follow and unfollow. You do all this stuff, right, to try and build an audience and try and get people to your website so that then at some point you maybe add an opt in offer to your website, right. So that some people can covert on that opt in offer. They can become your email subscribers, which is great. Now you can get them to come back, right. Now you can build some momentum with your audience.

At some point maybe you already have, or maybe you plan to create some kind of a product. Maybe you want to create an information product or a membership or something. Again, it's a customer last approach. Because you're thinking, "I'm going to build my website. I'm gonna do social media marketing. I'm going to build content marketing. I'm going to do this and that and the other. SEO, keywords, blah, blah, blah. Then at some point, I'm going to have an audience to which I'm going to sell a product."

This, too, is a customer last approach.

Hanne Vervaeck:

You know that my marketers side is really struggling not to scream right now. Not to be like yes, this is important. You have to do this. Because I think the most important thing here is to say that yes, all of these things will be important at some point, but there is one thing you need to do first. Like before starting to do all of this, right.

Shane Melaugh:

Yeah. So let's continue on this example to get to one of the key points here. What will happen if you do this and if you've done this you will know that this is true. What will happen is when you start, you do your content marketing and all this. Then you start to get some idea of what works and what doesn't. Some topics you get more comments, you get more shares, you get more traffic. Others you don't. So you start to get a better idea of what kind of content to create. Then when you create an opt in offer, most people won't opt in for it, right? Most people won't opt in for it.

So again, you learn something about okay, some people are interested in this, most people aren't. Once you have people on your email list, if you are smart, then you find a way to communicate with these people to get feedback from them in the form of comments or having them fill out surveys or whatever. So you get some more information from this audience. Once again, you'll see, you'll get a clearer idea of what are these people actually interested in. What do they actually need? what do they actually want?

Finally, when you start selling a product, inevitably when you start selling a product and it's actually about turning people into customers and asking for money in return, you will have many aha moments. You will have many moments where you see, oh this is what people really want. This is what they really need. This is what I've been missing this whole time. These aha moments come inevitably if you sell something and you pay close attention. Of course you can sell something and be oblivious to this. But if you pay close attention and give people opportunities to communicate back to you, then you will have many aha moments.

These insights that you get from customers and from people who are almost customers but don't become customers for some specific reasons, these are the deepest, richest, most valuable insights. What I'm saying is get those insights first because it saves you so much time and saves you so much effort. If you get those insights first, then you can make a better product to begin with. You can make an opt in offer that will convert more people and more of the right people who will become future customers. You can create better content, better website, better messages, better sales material, better marketing material that appeals to the right people, answers the right questions, and so on. So that's why and this is what I call the customer first approach, get a customer first. Get those deep insights first and build your entire other marketing stuff based on that.

Hanne Vervaeck:

I think like if I can add, for me, it's the example you just gave about building a website and starting to blog and making an opt in offer and hoping that what to find out what people actually want. For me the big difference between the approach of having a product and creating content around that to attract customers to that product is the difference between blogging and content marketing. It's the difference between just putting content out there and hoping to please somebody with an entertaining read or creating content that is very specifically made to help you sell. The way to create that kind of content is only if you're super clear on what you're selling in the first place. So you need that offer and those customers first to be able to know what to create at that point on your website, on your blog.

Shane Melaugh:

Exactly. Now, a couple of things. So maybe you're thinking, well, I'm seeing a bit of the chicken and the egg problem here, right, because how do I create a product when I have no customers and I don't have this information yet and I don't have an audience. So how do I create a product and how do I sell it to anyone? Well, we're going to talk about that in just a second.

Let me also mention to you two other things. The first is think about having this experience from the customer side. I'm sure you've experienced this. I'm sure that at some point, you've done some research on maybe some topic or tried to find a solution to a problem and you've come across a piece of content. It just exactly answers your question. Then maybe there's an opt in offer there that is just irresistible. It's just exactly what you've been looking for. So you opt in. Then maybe you get a couple of emails and they are just on point. They talk exactly to your problem. It's exactly what you needed to know. Then there's this product or this service and you sign up for it. The whole thing seems just effortless and inevitable. At no point do you feel like bleh, this bloody, they're spamming my inbox with this nonsense or anything like that. It just flows. You discover this solution and step by step you kind of just slip down this funnel and in the end, you're a customer and you're happy to be a customer because this thing is exactly what you need.

That is what you are trying to create. That only happens, you know, this kind of seamless, effortless funnel only happens based on the insights you get if you go for customers first. It's great when that happens. I hope that if that happens to you, pay close attention to how this feels and what's happening. It's great when you come across a great marketing funnel. When you come across someone else's great marketing campaign. It's such good learning opportunity. I know you're a huge fan of learning this way, as well, Hanne.

Hanne Vervaeck:

You mean I buy a lot of stuff online.

Shane Melaugh:

Well, presumably.

Hanne Vervaeck:

Yeah, no. I think it's one of the very good ways to learn is seeing when yourself you get triggered by this kind of things, right.

Shane Melaugh:

Yeah.

Hanne Vervaeck:

Like when do you click on an ad? When do you buy a product? Why did you buy that product and not the one from the competition? Because many times when we're selling something, we kind of forget what it is to be a customer, which is weird. I think that's a very interesting point. Like you said, it's also you're happy with that product in the end. It's actually like solving a real problem for you.

I had this very example with an analytics course because I was trying to learn more about Google Analytics and something very specific about Google Analytics. So I arrived on a website that talked about in a blog post about this very specific thing. The next thing they offered me was well, do you want to learn more? You can take the full course. It didn't even take me 30 minutes to think about it. It was exactly what I needed but that content could not have been created without knowing what the full course was, right, and without knowing the problem that the people had that would actually buy that online course.

Shane Melaugh:

Exactly. So, that's one of those things that if you use the customer first approach, all of your content and all of your marketing and everything else you do can be just so laser focused on getting the right people's attention and leading them down this funnel that just ends up saving you a lot of time.

One more thing I wanted to quickly mention is that if you're listening to this and you're kind of skeptical. What if I don't want to sell a product? Maybe want an affiliate marketer or you want kind of passive income just make money through ad clicks. See I think that's still possible. In fact, I know that's possible, but you have to be aware that this kind of business model where you don't sell something is usually a very long, very slow grind to get anywhere with that. It's something we can talk about and we probably will talk about in future episodes but our main emphasis is always on building a product or service based business where you sell something directly to people because it's a short cut, it's a short cut in so, so many ways.

Let's start talking about well, how. How do you do this? This chicken and egg problem. How do you get a customer first? You can literally get a customer first before you have a product to sell. So how the hell does this work? Well, here's an example comes from Eric Reis, the author of The Lean Startup. It's what he calls the concierge MVP. So a minimum viable product, the concierge minimal viable product. So an example that he gives is where a business has this, they create a website where they offer. It's a very simple website at first. With their offer was like an analytics platform with AI. So you plug your Google Analytics into this platform and it analyzes your data and every day it gives you intelligent actionable insights. So an AI creates these insights for you. It's basically like instead of trying to looking at the data yourself and figuring out what's going on and what you should do, this platform will give you the information about what you should do based on that data. So you can sign up for this. It's a monthly fee and you will get these insights in your dashboard.

What you don't realize is there is no AI. It's actually just a room full of people with Excel spreadsheets, right. They literally look at your data and try to figure out what's some intelligible advice we can give based on this. Then they put this out and they make it look in your dashboard like it was automatically generated. This is happening right now actually. It's happening a lot. There's a lot of AI businesses where you get an AI for something or other, that's not an AI at all. What they're doing is instead of building an AI, which is as you can imagine not an easy task. Instead of building an AI first, they get the customers first because if they get to a point where it's like, okay, there's enough people willing to give us enough money, then we now have some money to build an AI with.

So the other important this about doing this with humans first is that, so you have a room full of people with Excel spreadsheets and you get people to sign up for this service. You can then get information from those people about what they actually want. It's much easier to tell a room full of people, "okay guys, people aren't interested in this kind of thing we've been sending them. They want to know more about this kind of thing." Then everybody does their calculation everybody does things differently. That's much easier to do that to reprogram your AI to do something else, right. So this is an example of how to get customers first. You make an offer and you get people to pay you for that thing, even though your product doesn't exist yet. You gather information about exactly what people want and you do it manually. You do whatever the work is. You do it manually until you have enough information and enough proof that people are willing to pay for this. Then you build the product. That is I think a pretty badass example of what we're talking about.

Hanne Vervaeck:

So instead of using robots to replace people, we actually used people to replace robots, basically.

Shane Melaugh:

Something like that, yes.

Hanne Vervaeck:

In the beginning at least.

I think there was one thing that you said that is pretty interesting. It's the you have to do it manually in the beginning 'cause it's one of those things I've heard before. I think it's been say to you at one point also says, "do things that don't scale.'

Shane Melaugh:

Yep.

Hanne Vervaeck:

Because when you are at the beginning of your business, you actually can do things that don't scale. You don't actually have to worry yet about how would they scale. Like how am I going to be able to scale this because you're not at that point yet. You're still at a point where you can actually manually send an email to every possible customer or get on the phone with them yourself before having to think about how can I actually scale this whole process so that it's automatic without my influence, right.

Shane Melaugh:

Yeah, there's some fairly famous examples of businesses that have done this. One of them is Groupon. So famously Groupon started out with a very simple WordPress blog with the default WordPress theme. They just post everything they did was manual. They posted the stuff manually. They collected people's email addresses manually in spreadsheets. Sent out the offers to the companies that made the group deals and so on. Everything manual before they build the whole platform and before it then scaled, right.

Another example is Zappos.

Hanne Vervaeck:

I was just going to ask did you know Zappos 'cause they were pretty amazing. When I read about that, I was really scotched because it's like instead of building this e-commerce platform, so Zappos sells shoes online, right. Instead of building this e-commerce platform, they didn't know yet if people were actually willing to buy shoes online. So they would go to the local shops, take a picture of the shoes, put that on a website. The moment someone bought the shoe, they would actually go back into the local store, buy that pair, and ship it to the customer on the website. They would have no margin in the beginning and nothing was automated. They didn't have an e-commerce website or whatever. They just wanted to see if people would buy shoes online without testing them on first. Yeah, they were actually able to validate this first idea before investing years and having Facebook and whatever, didn't even exist at that point, I think.

Shane Melaugh:

Yeah. I also think a good point here is like these guys were also running a nonprofitable business, right. They were not making money on these shoe sales. It's an important difference between the kind of Silicon Valley type approach where you're also not making money but you're just trying to build and scale and so on. You're like well I guess at some point we'll figure out how to make money. There's a big difference between that and what Zappos did. Where even though they didn't make money on those shoe sales, they were still selling something. So it was very clear how they were going to turn this into a profitable business. Because the moment this is a proven system, we build an e-commerce store, we buy these shoes directly instead of in a shoe shop, right, and that's where our profit margin will come from.

So I think that's also very important. It is okay initially to do stuff that also initially doesn't work in terms of being a profitable business, as long as it's basically based on selling something and not just on the hope that maybe in the future we can sell something.

Hanne Vervaeck:

Yeah, I think that there was another example like this which started out as a service and was then created more like software like. The company would do accounting for entrepreneurs as a service and do it pretty cheaply because the whole idea behind it was to make a software that would be capable of doing the accounting. In the beginning, they didn't have the software worked out yet and they didn't know the exact problems that the entrepreneurs would have. So they started out with doing it all manually. Then created the software after.

Shane Melaugh:

I would say that the most bootstrappy and simplest and the solopreneur friendly approach to customer first is to do coaching. Okay. You can do coaching. Coaching is a great thing that can translate into a future information product, book, online course, perhaps even software kind of stuff in the future.

As an example, this is something I did many years ago is that I would simply get on coaching calls with people about productivity and procrastination. So I would get on on calls with people who had problems with procrastinating too much and wanted to be productive and I would have a conversation with them and help them out on a call one on one. Based on the information I got off of these calls, I then built an information product about productivity and as you can imagine, this can be further developed into maybe some kind of productivity app. A coaching call is something you can do without a team, without any infrastructure, without anything. If you've got a microphone and a Skype account, you can do coaching calls. I think that's one of the lowest barriers of entry to doing product first.

Now, these are some examples of how you can do this. In the next episode we're going to go into more detail. We're going into much more detail and give you examples of how to do customer first.

For this episode the main idea is to change your mind. So to change this traffic first approach really is a customer last approach. It's very common. It's very common for people to focus on a traffic before anything else. While it can work, right, because there are people who are making money on YouTube or on Instagram with authority sites and ad click. It can work. It's a very slow, long grind. It means that you will make many mistakes very slowly and gain realizations about how to do thing right very late in the process. What we're saying is get your first customer first and completely forget about trying to get more traffic.

With the customer first approach, you never have to worry about traffic because your business will grow in a completely different way. Traffic will kind of just come as a side effect.

One of the reasons we want to do this and one of the reasons we want to encourage you to do this is because you get those aha moment insights that you get from interacting with customers. As soon as possible. That is the idea of the customer first approach. That is how you can make traffic and needing more traffic and wanting more traffic a problem of the past in your business.

Right now, what we'd love to hear from you is your thoughts on this. Have you made, do you have an experience with either of these approaches? Have you maybe struggled with the traffic first approach for a long time? Have you gained some insights from talking to customers or interacting with customers? Tell us your stories and also tell us what kind of questions you have so that we can answer them and address them in future episodes.

You can do that buy going to activegrowth.com/one. That will take you to the show notes of this episode where you can find a summary, find all the resources we mentioned and leave a comment to interact with us.