Mapping your marketing efforts – interview with James Baldacchino
Maciej: Hello everyone. My name is Maciej Nowak, and welcome to the Osom To Know podcast where we discuss all things WordPress. My today’s guest is James Baldacchino, who has been working in marketing for already 14 years. In this episode, we are going deep into the strategic field and marketing strategy in particular. We discuss common mistakes when thinking about strategy and how to do better. We also discussed launching new service lines and tackle the pricing dilemma. If you don’t want to miss new episodes and keep learning about similar topics as today, subscribe to the Osom to Know newsletter at www.osomstudio.com/newsletter This is: O-S-O-Mstudio.com/newsletter. If you watch this on YouTube, give us a thumb and subscribe to the channel – this means the world to us. Without further ado, please enjoy my conversation with James Baldacchino.
Intro: Hey everyone, it’s good to have you here. We’re glad you decided to tune in for this episode of the Osom To Know podcast.
Maciej: Hi James!
James: Hi Maciej!
Maciej: Hi! Great to have you on the podcast. Thank you very much for making the time, and I would like to go straight into, you know, questioning, if I may say so.
So what’s a strategy that you’re seeing over and over and is bringing better results instead of good, but it’s, you know, over and overused by different people, different companies, and it is the same mistake always and again?
James: Okay. So firstly, thank you for the invitation. It’s a pleasure, it was a pleasure meeting you and it’s a pleasure having this conversation with you. And you went immediately for the heart of the question.
Maciej: Exactly. Yeah. Yeah. To, to keep things going.
James: All right. So let’s, let’s start from there. That’s a good place to start. What’s the best strategy? It’s the, it’s the meat. You, you, you skipped, you skipped the, the, the first plate. You went immediately for the main plate. So, yeah.
Maciej: Yeah. We can, we can get back later.
James: Yeah, the best strategy we see particularly for, for WordPress products or digital products in general, is always going to be SEO content. It rarely isn’t the best strategy to apply. There are certain scenarios where certain clients as SEO content isn’t necessarily the best thing they can do to get their target clients. But in general, if you have a digital product which has a relatively wide reach and where by wide reach, I mean hundreds of sales a year, okay, then you should definitely be doing a SEO content. A SEO content takes a lot of time and a lot of effort, and we can dive into quite a lot of detail there. Takes a long time to pay off, but is also the one channel which consistently brings great results if you are doing it correctly in the long term. There’s a lot of “ifs” and “buts” because you either do it well or it’s better not to do it, because you’re not going to get anything out of it except frustration.
Maciej: Hmm, okay. So, but, but, but you answered the question which I didn’t get ask, which is: what’s a good strategy? And I’m really interested in what you are seeing in, you know, in, in the companies that the company is doing, which is very bad strategy, but it happens over and over like in many different places. Like so, I’m really interested in the anti-, anti-pattern? What’s, what you are see? And you can have a look at it and you immediately see this is bad move, bad toys, an error if I may say so. Is there anything that, you know, that’s yeah, like rolling pattern, you see?
James: Let me take a couple of steps back before I get to that question. I’m going to answer that question, but first, let’s look at the strategy from, from the top. Problem number one is if you don’t have a strategy. So if you are, this is pretty normal, especially with startups or with small companies, that they don’t afford the marketer full-time, so they just try and do everything and they just, I don’t know, do Google Ads there. There’s a million things we can be doing to do marketing. So problem number one is if we don’t have a strategy. Problem number two, and this is, these are very related, is if you try and do everything at once, so you do a strategy, but the strategy tells you or you decide that your strategy is to do everything at once. So you’re going to do 6, 7, 8, 9, 10 channels all at one go. That is also a huge problem, especially if you are starting up. If you are small and you don’t have resources, which is a very common problem. Trying to do everything means you will do, it’s like spreading butter. You are trying to hit a lot of things and you are probably not doing any of them right.
So to answer the question of, of main problems, and we’ll get to the main problems with SEO content. First, you have to avoid those two big pitfalls. And those two big pitfalls are, are usually where, where it starts, where it starts breaking apart. Another problem is doing nothing. And we see this with WordPress. With WordPress, Twitter companies. In the old WordPress 10 years ago-ish, WordPress was a very different environment. It was always growing. It was always exciting. Competition was different. The whole scenario was very different. So it was relatively easy to build a great product and you would have good sales from it. And you would have good feedback, et cetera, et cetera. That like in every other industry in the world, that honeymoon period is over. You must be doing something to push that product. And how do we know it? Because people who have had years and years of successful sales by doing and still did nothing, have felt a pinch in the, in recent years. Have started answering, have started asking ‘why have I suddenly slowed down? Why has my growth suddenly stopped?’ The answer is, so have a strategy. Don’t do everything. Don’t do nothing. The best thing you can do is pick one, two, maximum three things, depending on your, on, on your resources and focus just, just on those. Once you are happy that you are tackling those incredibly well and that you will know exactly what you’re doing and that you know exactly what results you’re getting, then you decide to either continue them or drop them and move on to something else. So that’s from an overall strategy point of view. I don’t know what you think about it.
Maciej: Yeah, this, this is a great start to unpack this even more. So, but, but, but I also want to ask you, you know, there are many books, you know, on strategy and if you ask an average, let’s say an average owner or an average agency, let’s say like what, what’s your strategy? What’s your marketing strategy? I bet that if they, you know, you know, if they don’t, if, if they do nothing, they will know. But if they do anything, they will say, I don’t know ‘we run ads’ and I have a feeling that this is, you know, on an execution level, not on the strategy level. So where does this, this, this boundary lies between strategy and executing the strategy? How, how should we think about this?
James: That’s a great question. One of the my background is coming from other industries as well. And it is even more common in other industries just to, just to, to rest assured even more common for marketers or, or people who run companies to confuse advertising with marketing. Advertising is a subset of marketing and because you’re advertising doesn’t mean you’re doing marketing and because you’re advertising doesn’t mean you’re doing marketing right. So you mentioned, you mentioned advertising as, as one of the common problems, and that is a common problem that people think that since they’re pushing out ads, Facebook Ads, Google Ads, whatever – that’s it, job done. But I’m doing ads. Why am I not getting? you know. So that’s, that’s, that’s that, that’s already a problem in itself. But your question is about the difference between strategy and execution. Execution must follow strategy, but the point is, my favorite analogy for this is imagine you are going on a hike and you have no map. Whether that’s Google Maps or a paper map is irrelevant for this analogy. But you are going on a hike in a place you’ve never been to before with no idea what you should be doing, seeing or going where you should be going. And you have no map. No map equals no strategy. Without a strategy, you have no idea where you want to go. You have no idea where you want, where you are aiming to, to, to, to try and achieve. You might not get there, but at least you have no idea what direction you should take to get to those places. You have no idea if you’re missing out on something. You might walk past something and have no idea that you missed it. This is the exact same difference between a strategy and its execution. A strategy sets out your map, your route, it gives you, also gives you things you should look out for to understand whether you’re on the right track. Exactly like a map. So I want to pass through here and I, if I see that I will turn right. A strategy says the same thing. I want to try this channel, and if I see results, I will continue working on it for example. Or my target is to have this amount of growth and I’m going to try and take this road to get there. If I don’t deliver that, then I’m going to pick a different road, sit down again to another, update to my strategy and go in a different direction. So the difference between a strategy and an execution is you can execute all the hell, you can start running immediately if you like but if you have no idea where you’re running though, then, then you’re wasting your time, your resources, your energy, your everything. So this is the key difference between a a, a strategy and, and its execution.
Maciej: So, so it even starts, so this starts even a little bit earlier with setting the goals because strategy should help you reach those goals. And this is also I think problematic because, to understand, where are you going, what do you want in life and, you know, you know, business owners want to do something in life. They are then starting the companies, you know, this is the vehicle of achieving their, their personal goals through, through, you know, business means, let’s say. And then you have this business and you want to take this business somewhere. And this is also a difficult question for most owners. And for teams it’s a little bit different, because someone has to dictate where the company is going. The company is big enough, it has teams, for example a marketing team for example, but for smaller organizations, it’s like the management does a lot of stuff on their own and has to grow the business, dictate the goals and so on. So this is very difficult because the less people, the more they have to do, and this is easy to lose the goal from, from your, from your horizon. So how are you thinking about defining, where do you want to go with the business itself? Because the strategy then has to execute, like, like as you mentioned, it’s a plan of reaching this goal, but you have to know where are you going? What’s your goal then?
James: That’s, that’s, that’s also part of, part of the discussion we have with clients. In my career in marketing over the last 14, 15 years, I’ve worked in marketing the most common across all industries, across all types of clients I’ve worked with. The most common answer to what you want to achieve is growth. Which is everything but says nothing at the same time. We all want to achieve growth of course. But an answer to how you should approach it is, first of all, you really, really, really need to define what you understand by growth. What for, for you – just setting a stupid goal of I want to grow by 20 times in a year. When you know that there isn’t, when you understand that what you’re doing is probably not possible, that achieves nothing. That is an intangible goal, which you cannot, which you cannot measure, which you cannot get to. So first of all, we really, really need to understand why? Why? Well start with asking why. Why are you doing what you’re doing? So, as you said, you’re a small business. Why? Why are you interested in what you’re doing? Many times the question is ‘because I like it’. Because I like, for example, with WordPress plugins I like, I wrote this. I was doing something and I thought this was a great idea. I like it. I have no idea about marketing. I have no idea what I should do. I have no idea how fast it’ll grow or where it’ll go. So what should I do? The answer to that is at least start setting goals you can measure, okay? If you have no idea how big it can get or how small it can remain, start setting things you can measure against about where you would like to be. And these can be tangible things. Like you can say things like: I would like that in a year my plugin grows enough for me to be full-time on it. If you’re just starting up as a side project, for example or in two years, just set an ambition. Okay? And then measure each and every month according and according to the strategy you’re implementing on whether you are getting towards that goal. It might be that in the middle of the year you say, okay, this doesn’t look achievable or the opposite might also be true. We had a, we had clients who, who went in a year who doubled in size as a team because they suddenly realized that they were doing their strategy right. And their plugin was growing faster than they expected. And that’s, that’s great. So if you have no idea at the very, very beginning, set a goal, which is, which you can hook onto something else at, at first, okay? To an ambition you have, over time it will become much easier to set goals. Why? Because you will start understanding much more about the potential of what you’re creating. So it’ll suddenly become much more realistic to say: okay, I managed to deliver 50% growth last year, but that was because I was starting up. I think it is probably realistic to think that we should at least deliver 30% next year. Now how do we get there? And that’s where the strategy comes in. Just to give an example, of course, I’m just throwing numbers here. So it’s only the very, very beginning that it’s sometimes difficult to understand your goal. One crucial thing which latches onto this question, which isn’t exactly the answer to this question, but I hope I’ve tackled the answer there, but it’s worth mentioning cuz they’re very related, is understanding who you are targeting. Who is your customer and what do they want? That is something which is missing from a lot, and a lot of companies, not just WordPress, across, across many industries. And the worst answer you can give any marketer is, a marketer who asks you who is your target client and they tell you everyone. That’s exactly it. Precisely.
Maciej: Everyone can use it!
James: Exactly. No, I, so the more targeted you are, the more you understand who your clients are, the better you can do. The better you can grow. The more you can sell. The more you can understand what your clients actually want. The more you can understand where your product should actually go, the more it’s, it’s just happiness all around. The more you can understand actually how big your market is, because you might realize that your target market is a very specific type of people, which is, it doesn’t grow a lot. And that’s fine because then you look at different ways of making revenue, for example. But understanding your audience is crucial to everything in your business. So the most important thing any startup can do in the first year is work extremely hard to understand who the hell is buying it? And why?
Maciej: Mm-hmm. All right. And this is, I think truly what, what people, people are missing. And there is like a ton of content on the internet about, you know, about growth or sales. You know, everyone starts with this. You have to know who are you targeting and how, what are the consequences, you know, of not doing this right? Because, you know, every, it’s like every, everyone knows you should be eating vegetables and no one eats vegetables because no one likes vegetables. Everyone goes straight to. I, I’m generalizing, but you know what I mean. It’s painful to eat vegetables. It’s healthy, like very healthy and this is always a phase, you know: oh, let’s take this one more client doesn’t fit our area of expertise, but maybe let’s start another area of expertise. And now you are diluting your, your, your expertise. So what else can, can go wrong with you are doing too much at once, you know, with too many people?
James: Everything is the answer. So by, at first when you’re starting up, it’s okay to throw a lot of things in the wall and see what sticks. That’s normal. You’re figuring out what sticks and you are not sure and you’re trying everything and to see what happens. But once you understand what’s working, stick to that. The, the, the answer to not knowing who you’re targeting and why they are buying it is that you will end up. Picking what to do with your product just depending on your mood or whoever owns okay, the product mood or depending on the team. You will hear one client give you one piece of feedback and you will say, oh my God, that’s an incredible idea, and you will run with it and ff you hear one client, that’s usually never enough. Sometimes ideas are good, mind you, but, but one client is never enough you are probably losing money if you don’t know who you are targeting. The reason you are probably losing money is because if you don’t know who, who you’re selling to, you don’t know how much they’re willing to pay for it. And this is a common problem. If, if you don’t know what the value of what you are selling is to the people you are selling it to, there is a very strong chance that you are losing money. So yeah, the answer is if you don’t know who you’re selling to and why they are buying it, why are they buying it, why are they interested in the product, then you are honestly wasting your time and resources and you are probably losing money. And it is not a long-term plan for any business. The first couple of months is fine. Try things, see what works. Understand, fine, that’s normal. But as soon as you see a pattern, as soon as you say Hey, something is working, then dive in. Why is this working? What’s going on? Why do they like this? What am I doing right? Okay, what, what do I do to keep going in this direction? So and also remember that growth isn’t always necessarily in one specific direction. Understanding a client might also help you understand what else they need connected to your product. So it’s not necessarily I want 10 of the same customer. Sometimes it’s if you really understand what your customer needs, you might realize that your customer also needs something which is not available, and which is within your expertise and with which connects to your business, and you can suddenly create a new area of revenue for your own business. We tend to think that brain-wise, we tend to think that growth is just multiplying your sales of the same thing. Whereas in reality, growth of a business can come sideways, can come in many different directions. But it all stems from understanding who you’re speaking to, from understanding who you’re targeting.
Maciej: Mm-hmm. And you can also think about this in a way that you are going deep or you are going wide. So you can go with more expertise, tougher problems from the given sectors area than, you know, technology and, and, and you are narrowing this down and being very, very deep and specialized in one particular thing. Or you can go a little bit wider and do many different things, like you can be a headless expert, for example or you can be an agency doing full, full services something like this, like with marketing websites, you know, ads, video, like it’s called 360° agency, I think, something like this, you know? Yeah. Yeah. They do everything. And, and you, you cannot have the same expertise as from the expert, so. Mmm. How does this, you know, translate, let’s say into strategy? Because it can you know, it’s, those are totally different worlds in terms of attracting clients.
James: This is a, this is a, a great, a great argument about how far and widened what, what you, what you should do and how, how much you should expand so to speak. I, especially if you’re a startup, if you’re small, if you’re start still young and small teams or even on your own the more you manage to focus, the more you manage to zoom in, the more you manage to actually have expertise, the, the more you’ll manage to find areas of growth in my strong belief. For the same reason as a, as what we started, that if you try and do everything at once, you will probably do nothing. Right. Unfortunately. So, so with marketing strategy I believe that the same applies, like for example, I work at Ellipsis, and the Ellipsis, we specialize on strategy, on giving strategic advice and on helping people with their marketing strategies. But crucially, from an executional point of view, we only focus on SEO content. We do not, if we have clients who ask us for help with ads, for example, we have clients who help ask us for help with other channels, but we, we do not execute most of them. We execute SEO content and we have focused on making that process extremely good to deliver very good results for our clients, because we want to make sure that we get that one thing really right. So we are, we are pretty open with people saying look, this is not our area of expertise. If you come to us telling us can asking us if we can help you with that. That’s, that’s, that’s fine. And does that mean we have lost some revenue? Because some clients would’ve paid us to do it? Yes. But was that right for the business? Probably not. So, so understanding why you’re picking that direction and then having a plan of what you want to do with that is, is, is, is, is just the most important thing really. I don’t know if that answers your question.
Maciej: Alright James, so when will be a great moment to start the second line of business? If you are, you know, you, you have expertise in one thing, so, you know, I, I’m also thinking this from the perspective should I be doing what I’m doing since it is going in the right direction? And when do you know if it is something that stopped working because the environment changed? Or you, you saturated the market with your service? And this is the right moment to launch a new service line because this can ruin your first very well working, you know, core business with launching new service because this is new thing you know, you can lose a reputation. A lot of things can go wrong. So how, how to decide, how to think about making this decision? What has to be known to make this decision?
James: That’s an excellent question. So first of all, spreading your risk is always a good idea. So spreading your risk in a manageable way, and not only having one thing, one product, which does one thing and doing that for a very, very, very, very long time is probably not a great idea for the long term. Now I know I’ve just said focusing is important, so I don’t want to sound like I’m going against what I’ve just said. But what is crucial in what you ask there is when you understand when is the right time to move into a second or a third line of business. And that’s exactly the mentality, which you should have as a business owner. The mentality should be okay, recognizing that when things are going well, so the answer is when things are going well with a business and things are really at at a good pace and you know how things are moving and you know you have a team which is moving things in the right direction and you can see steady growth, things are going well. At that moment if you do your homework and you understand your customers really, really well, that could be a great moment to understand what else you should be looking into. Okay? Business, good business tends to bring good business with it in the sense that if you’re doing things right, many times, answering the question of what you should be doing next won’t be that difficult. Especially if you’ve built a business where you have a great relationship with your customers. But the answer to when is when things are going well and you are steady enough, that’s the, that’s the time to start asking, should I also be branching out? And how far should I go? Should I go very far from the core business? Should I just go sideways from the core business? Should I experiment with something completely different? Don’t leave it until it’s, until you are stagnated, because a good business will always pass through tough times. Now, whether they’re in your control or not in your control, is a question mark, but a good business always has good times and always has tough times. So if you start tackling spreading your risk during the tough times you’re probably late. It doesn’t mean you won’t manage, but it’ll mean it’s as hard you’re going back to when you started your original business. Whereas if you do it when things are going well, you can have the comfort, you have the resources to actually start building a side project business – call it what you want – or a side specialization at the right time. That doesn’t mean you have to do. That doesn’t mean you have to. So if you think that if you have a really good strategy and a really good plan on how you’re going to continue delivering your goals for the next few years, then you don’t need to look at that either. As long as you have a vision, the worst answer you can have is I don’t know where I see the company going in a couple of years time. If the answer is, yeah, just remain the same, I can make the same income and everything is fine – that’s probably not a good answer. Not because growth for growth’s sake, but because knowing where you want to, what you want to achieve gives you the scope to build towards it. So yeah, I think that answer is the question there.
Maciej: Okay. And I’m thinking also about this in a way that I’m thinking about the possible scenarios with, with the future of the any given business. There are only three or three scenarios: you are growing – which is fine, you are plateauing and you’re declining. When you are declining this is to late probably. When you are growing, this is great and this gives you the let’s say stability. You’re building potentially safety net to start building something on the site. Again, like you have a day job, you start building something on the site, and then you switch to building the plugin, let’s say. But if you’re a company, this means a new service line. For example, if you’re a plateau on a plateau, it, it is more difficult because, for example, it can mean that you either saturated the market, someone is taking away your business, someone, someone new, a new competitor or there’s something wrong with you. Or the environ, or maybe four option – environment changed. Something is, market is shrinking, for example, and you, you, you are in a plateau. So I’m thinking about this in a way that how a business owner should be thinking about making his or her decision about his or her strategy for the business. Because I’m not thinking about the decision itself, but whether, what should be the thought process behind making the decision how to look at the business from, from this marketing versus strategy, marketing slash strategy perspective in a way to be able to answer the question, what to do with it?
James: This is why goals are important. This is why goals are really crucial. So the answer to, to, to your question is that if you do your, if you set your goals realistically, if you set your goals in ways which you can measure, measure, if you set your goals in ways which you can really see a pathway to building that by doing the research on whether the market is there. You mentioned that the market might be shrinking. If you’re doing your research on whether the market demand is there, then that should not be a problem for example. Of course things can happen which are beyond your control, but, but if you are doing your homework and if you are adjusting your strategy at, at appropriate times, then you would be able to easily understand at which point your current business will reach a plateau. And you will be able to say okay, if I do everything right with this business, in two years time, I will be running a successful business. But, probably it’ll be on, on the plateau growing very, very slowly. Whereas now it’s growing at 50% air for sake of the argument, it’ll be growing at one, two, 3% just to give an example. That immediately tells you that before you reach that you should, without diverting resources from the master airplane, you should start exploring what else you need to do. If your ambition is to grow further and you know that that’s going to plateau and you’d still want to grow further, because it’s also okay if you don’t want to view that’s, that’s just what you want. you just want to then reach a, reach a point where you just want to turn things around and you want to grow very, very slowly and just keep, keep moving that direction. Some people set that goal and that’s also fine, but if not, then you know: Okay by my projections, and around two years, we will be somewhere here. So at some, I need to make sure that in the next two years I’m also looking, understanding my clients, understanding what they need, and understanding what else I can be doing. Setting goals is crucial, because without it, you’ll be chasing unicorns. You will be chasing the first ideas which come along, you will be, so if, if you know what you want to achieve – going back to the map analogy – if you know what you want to achieve and where you want to go through to achieve it, that will prevent your business from melting down. And it, it’ll also help you go in the right direction for the long term and crucially, to answer your question. Choose when to change the direction, because you are doing the homework and you’re understanding what’s going on. One thing, sometimes things are not in your control. So sometimes like with, with the pandemic, as we saw, many businesses, I’m sure they all had projections. I’m sure they all had goals. I’m sure they all had strategies and it all went down the drain. What you need to do in a scenario which is beyond. So first of all, that was a unique scenario. To be clear, those scenarios don’t happen every day. But in scenarios like that, what you need to do is be able to move fast to change your strategy and to adapt. We’ve all seen stories of companies which moved from, I don’t know, what they were producing before, but they suddenly started producing face masks or they moved from, from data to hand, gel, production, whatever. We’ve seen those stories, because they pivoted and the reason they pivoted was because their businesses allowed them to, just to give examples here. What they, what they did right there was, they were willing to sit down and say okay, we stopped on this and we move on this, cuz otherwise we will, we will, we will flop. Now, those are extreme scenarios, but the point I’m trying to make is when something is beyond your control, like WordPress has moved beyond the function or has absorbed the function of your plugin that is, is, is, is, is slightly beyond your control. You need to be able to predict that in the sense of you need to be able to make sure that you are not suddenly looking at a gap in the ground. So being able to adapt your strategy is really crucial. Long-term goals are important, but they also need regular, very regular revision.
Maciej: Mm-hmm. All right. And I’m thinking also because we talked about the growth and is there any difference when you are looking at a small starting company or a solo entrepreneur, for example, how, how the strategy changes when the company grows? Of course, there are more people potentially when the company is bigger, so there is more room for, you know, different activities. But they are also taking up, you know, this decision energy. You know, every decision is energy consumed. So I wonder how this is evolving when the company evolves as well?
James: So, let me focus specifically on marketing strategy. On marketing strategy one common, one common thing, which happens when, when the company grows, is that companies onboard a marketer. And the worst mistake that a comp, that a company which is growing can make is that if they don’t know what they are looking for, again,
Maciej: Again, goals. Yeah, yeah, yeah. This will be a piece about the goal setting.
James: Yes. So, but even employing a marketer can be problematic, because if you employ, let me give you a very clear example. If your business thrives with SEO content and the growth should be delivered via SEO content, employing someone who is an expert in ads is a problem, because that person will naturally has talents and is excellent in that direction, but that doesn’t mean they fit where you should be going. Alternatively, if you really, really need specialization in ads and you get someone who’s a generalist, who understands marketing overall, but isn’t a specialist in, in, in, in ads in particular, that can also be a problem because, you know, ads are your source of revenue and if you, when you start growing, you therefore need to lean into the direction you want to lean in. So going back to this, knowing what you want when you start growing is crucial. And getting the right people to take you in that direction, because getting the wrong people and not because bad people, they, they can be experts in areas which are not related to your business and that doesn’t make them bad people, but it makes you matching them to that role – a bad decision, which can have long term implications. So, knowing where you want to go is crucial in more ways than one.
Maciej: Mm-hmm. Yeah. Yeah. I also like what you said in a way I’m again thinking on this from different perspective. You have something that is working well for you as, as the business: SEO or ads or you know, some other form of, I don’t, word marketing, you know, recommendations. And you have to diversify because – for example – you are tied to one marketing channel, which might be working for you very well, but at the same time, it’s a huge risk when you cut this, cut this stream, you are that right. Is there any advice you can give to a business that is relying on one, one, one marketing revenue? Because what, what you mentioned with hiring this ads person is, is, is like mind blowing how to think about, you know, it’s not service second service line, it’s second marketing you know, stream, let’s say.
James: So that’s a, that’s an excellent question. And it is a very common problem that people are relying, especially in WordPress, that people rely on one channel and then usually start worrying about it when the channel stops giving the results they, they, they were, they are used to seeing. So very common problem, for example, is people who were selling through their, getting the main revenue through, through premium upgrades for a very long time and they’re suddenly seeing slowdowns. The answer to why they’re seeing slowdowns is not something I’ll discuss at length, but it’s very, probably because of the competition that there is and things are growing in this space and the real problem isn’t Freemius. Freemius isn’t a problem at all in this, in this analogy. The real problem is what you said. The real problem is that you are too reliant on that single channel. So yes, diversification is important, especially on marketing channels, but the answer to everything is always balance and at the right time. So if you are reliant on one channel, that to me says sit down and get help. Get somebody to help you, get somebody to consult on what strategy you should be deploying. Apart from that, that’s doing fine, but what else should you be doing? And what do you need to do? So, so the, what we said before is it might be that you are doing ads and you have an ad specialist who does great on ads and is doing a great job and that’s all doing fine. But that’s still one channel. So my answer there would be, let’s look at what other channels could be working for your business and you, you need to check this really depends on the business and on a lot and a lot of different variables on which channel works best for your business. And then you need to understand as well what you should be doing. Your ads person may not be the right person for that, and that’s fine cuz you can keep them focused on what they’re doing best and you can look at what other solutions you need to diversify your marketing. Diversification of marketing is crucial. What’s also important, to emphasize diversification of marketing doesn’t mean do 20 channels, as we said at the beginning of this podcast. It’s do one, two more. Try them, see what works. Each channel has a different length of time you, you should try it. SEO content, for example, takes a lot of time, but then starts paying off. Ads, on the other hand, you can test for a month, two months and you immediately can tell whether you’re getting a good return on investment or not, for example. And then, then there is easy to switch off. So it really depends. But the crucial is grab one, two channels. So first of all, sit down, get help to, to get a marketing strategy together. That’s part of what I do at Ellipsis. Step two is execute in the direction of those one or two channels. See what works. Give, give it the right amount of time. If it works, keep going in that direction and get more help. If you need to, need to get somebody on board, cuz you know it’s working, that’s fine. If doesn’t – move on to the next. Move on to something else because at least now you know that this doesn’t work for your business and you know why as which is really important.
Maciej: Mm-hmm. And is there any like obvious difference between WordPress oriented companies and, you know, other campaigns from other sectors even in WordPress? This is, this can be a plugin. So product, company or a agency. So providing services. So I guess, you know, this is different, but do you see any obvious differences?
James: Massive ones. But ultimately each industry has, has huge differentiation on, on what type of marketing you should be doing for it. So, just to give you an example, I used to work part of, in part of my career, I used to work in telecommunications. And in telecommunications, the most important marketing strategy is remaining top of mind. It’s a very different goal. The most important marketing goal, sorry, not strategy. The most important marketing goal is remaining top of mind for all the customers. Okay? Why? Because the way that works is you don’t really think about your phone signal until it fails you. So you really need to retain top of mind. So for the moment where somebody’s signal fails, they either like you more or they change to you, hopefully. So depending on the scenario, whether they’re a client of yours or not. So the number one goal of telecommunications companies with marketing is always to remain top of mind. This is why do they do a lot of advertising. This is why they, they, they, they fire the brand big time into, our into our heads. There’s a lot of other things that they do as well. But remaining top of mind is crucial. So advertising, for example, is, is critical. With WordPress that is not true. With WordPress is not remaining top of mind, with WordPress is it’s making sure that you can, your solution can be found for people looking for specific solutions. That’s a very different way of marketing. Doing ads, doing billboards, doing whatever is irrelevant in WordPress of course. But so, so yeah, crucial differences and it all stems – once again – from the goals of the company and understanding your customers.
Maciej: Mm-hmm. Yeah. And speak, speaking of that let’s imagine a situation. There is a young WordPress developer, starting his or her plugging on the side and, you know, oh, sorry. You know, he or she cannot afford the professional services, let’s say of your, of your agency. What would you advise or recommend to such a person? Only starting, you know, with, with, with the project, getting a little bit of attraction. So it’s used by some people, but this is very early. So what that person should be doing, so that, you know, in a year or in a two years time here, she will be able to afford your services, for example, because of the growth.
James: So first two important pieces of homework, which, are, really important. One, is make sure that you are communicating with your customers for all the reasons we just mentioned, and that you are understanding what your customers want, because that will give you very valuable advice in end of itself as to how you can grow. Plus – also has the side benefit of customers recommending you to other people as well, which is an excellent channel live in and of itself but one which you don’t have a lot of control over, unfortunately. Two, is make sure that your, how you’re representing your purpose plugin, your website, whether if you have a Freemius, if you have a Freemius presence, your, your description and how you, how you put it together is really, really focused on what people can achieve, what success people can achieve by using your product. Too many times, plugin websites or, or, or, or product websites say this does that but it is incredibly unclear to everybody else what they can do with it. As in they know it does X, Y, Z, but they don’t know what they can achieve with it. And this is why talking to your customers and getting use cases and putting it, okay, so with this, you can create this and this can grow your business in this way. Okay, so first, do the homework. The homework is understand who’s buying it and why. And two, make sure that the way you are positioning it the way, the way you are, you are putting it is really clear, simple to understand and reflects what, what your product does. Those two done well will already help you start growing. Next step is start understanding where you are getting the sales from and whether you can get more by doing more of what you’re doing, basically. So if they’re all coming from Freemiums, for example can I improve on the Freemius channel in some ways? and there are many ways you can improve on the Freemius channel to get more people interested in upgrading to pro, for example. So start from what’s working and see whether it can work better. If you’re on your own and you have no, this is answering the question of if you’re on your own and you’re just trying to do your best, okay? If you want to go a step further, then try and tackle one more channel. Experiment with something, experiment with a channel, experiment with there’s, there’s a million different solutions you could experiment with. But the crucial thing is don’t try and as I said at the beginning, don’t try and do everything. So only if you have the space. If you don’t have the space, it’s better to understand your customers, make sure it’s positioned and, and described well and that the journey through your website is easy, et cetera, et cetera. And lean into what you are doing right. When you’re at a level of enough growth, then consider getting help, for example, from someone who can help you understand where else you can go.
Maciej: Mm-hmm. All right, makes sense. Makes sense. So this is, this is a great advice for a young starting gun or, or a product, and you, you mentioned free as well. And I wonder what is the role of pricing in all of the marketing strategy? Does it go into like business strategy? Or the place of pricing is in the marketing strategy area, let’s say.
James: Pricing, in my view, is very much a marketing tool in the sense that, of course, pricing is crucial to the business strategy itself, but in the sense that you can get pricing so wrong that you would be ruining all your marketing anyway. And my favorite analogy is, is, is the analogy I, I, I, I you heard me give last time, which is wine. Okay? Wine. Wine pricing is a wonderful thing because nobody understands what they’re drinking. But if the price is high, then you think it’s an amazing way. It’s as simple as that. And I love giving that an energy, and it’s crucial because that means purely pricing on value and not how much it costs you. Cost plus pricing is a thing of the past. It’s on what does it actually give back in value as a product? And that’s why, why I see it as a marketing tool. Because if I have an excellent product, a wonderful product, genuinely incredible product, but I’m pricing it cheap, I might actually be telling people it’s not worth, it’s it, it’s, it’s, it’s not a good quality because it’s cheap. Therefore, it must not be good quality cuz people will judge you with that. So imagine a, I don’t know, a French old wine incredible, a hundred years old, whatever – I’m inventing here – and you see it marked at 10 euros. Your brain will go, something is wrong with it. Whether you like it or not, and you probably won’t buy it. Would you buy it if it were a hundred euroes? If you’re not in the market, no. But the people who are in the market would, and the people who are looking for that a hundred year old wine or whatever it is, then they would consider it. And it’s better to sell one to, to a good client than to sell, try and sell a hundred to, to you know, 10 to 10 different clients, for example. So this is why I think pricing is so, so crucial. Getting back to what I, getting your product, right? The, the, the mentality of if I, if I build it well, they will come, is incorrect. If you build it well, they will come, but you also need to price it well, you need to position it well. And if you price it wrong, everything can fall off a cliff. So getting your pricing right is really important. And to get the pricing right, you need to test. Just test. Just try, just see what happens. Just try and trace it. I, for example, if your price has been static for more than a year, it’s probable that you are starting to make a mistake. I mean, it depends on a lot of different questions, but if you haven’t even tried touching your pricing in, in more than a year, look and look at it and consider whether you should be testing, raising the, the price for the sake of the argument.
Maciej: Mm-hmm. But this is always very tricky in a sense that there is always that stress that, okay, I will rise, let’s say rise because this is the stressful curve, right? Which, when I’m thinking about this is also, you know, the other direction is, should be also stressful when I’m lowering the prices. What will change, right? It doesn’t necessarily means they will, they, I mean, clients, they will buy, they will come, they will know that the price is lower. So the, the upwards direction is always stressful. The downwards is never stressful, whereas it should be as well. So you know, how, how to fight it? And you have to have a full funnel, a full sales funnel to have it to be able to even test it, right? So it, there has to be a certain critical mass to be able to run the test.
James: Yes. Yes. You’re a hundred percent right. And it is stressful. It is very stressful when you raise the prices and you are, I, I completely agree with your statement that it actu, I think it’s more stressful if you, if you lower them, to be very honest. Because if you lower them you are changing your, the positioning of your product so, so, so much. That to me, I get much more stressed about what people will think about my product when I, when, when the pro, when the prices have to go low than I do when I try raising them. Yes. You also need a critical mass to be able to, to, to start testing prices. And there’s nothing I can tell you which will remove the stress of test. That’s just, that’s just a matter, not just the truth. But what I can tell you is be patient and analyze, look at what’s happening, and give it time. Okay. You cannot try change a test and then change it back in a panic with one week. What happens a lot of time is, okay, this is normal. Think about your own patterns when you buy a digital product, or not even not a digital product, but many times if you want to buy something, you are not always a hundred percent sure. So it’s very normal for you to go to the site, look at it. Should I, shouldn’t I? Let me sleep on it. Come back tomorrow. Some people, for some products, depending on everything, takes one day. Some people takes one hour. Some people it takes two weeks. Okay? Depends. So what happens when you raise the price? If I’m in that cycle of, should I, shouldn’t I? Should I shouldn’t I? And suddenly the price goes up, there’s a strong probability that I will not buy it. But that’s okay. But cuz the reason I’m not buying it is because I was considering it, but I wasn’t sure. Like I came, and like I was considering it, the next person will come and start their cycle. And for that person, that’s the price they know. So if you are constantly changing prices, this is confusing and people are, are, are, aren’t sure what’s going on while they’re considering buying your price. And if it goes down, they, they might think: you know what? I, I might not buy it because I’m not sure he was going to charge be double last week. So why, why, what’s going on? What’s wrong with this?
Maciej: Crazy people can’t count on them.
James: Yeah. Yeah. So, and that’s, there is a point on, on sales there as well to be made. But the answer is raise a price. If you come to razor price and let it go, let it go for a month, let it go at least. My favorite is at least two months, sometimes three, depending on your product. Of course, if you can afford it. At first you will see a dip. This is going to happen because of what I just explained. But don’t panic is the answer. What you need to do is then after that month or two, look at what happened. Look at how many units you sold, what your average order value was, so how many what, what price people paid for, how many, how many units were bought, and whether actually your, you’re, you’re at a better place or not? Trust me, it’s very difficult for me to describe it, because it, it varies so much depending on the product, but if you do your analysis right, you will suddenly understand. Cuz if you look at traffic, you look at price and you look at revenue and you look at units sold and you put all this information together and you build a picture, it’ll suddenly become very clear whether your price test was a good idea or not. Just looking at the bottom line isn’t enough of an indicator because you might have raised the price and for some reason at that moment, interest in the product fell off, fell off a cliff and you might blame the price. So you need to analyze, you need to put it always into context. And that’s another thing. Change one thing, don’t change five things. Change the price and that’s it. Don’t change the product and the price and, and the features and the tiering and the… Change one thing, change the price so that you know whether, whether the price is influencing what’s going on or not. Cuz otherwise you won’t be able to tell whether it was the price or whether it was the tiering or whatever it was.
Maciej: Yeah, you, you cannot pinpoint this to one, one variable that’s changed. This is easy for the product where you have, you know, dashboard for product versus price versus traffic, you know revenue and this is very easy for digital products, you know. Very like, grateful playground to, to work on the pricing with the agency, for example. So the other part of the WordPress community, let’s say, comes from not only products, but from agencies. This is much different where the sales process is longer, and the bigger the project, the longer the process, the decision making process, like 10 times more variables to take into account when making the decision. Is there, how, how, think about pricing there?
James: Well, that’s, you’re first of all, that’s extreme, you’re extremely right. It’s completely different way of tackling your pricing and the way of tackling your marketing strategy as an agency. My answer is, is, is a simple one. It’s the value you are bringing to your clients. With an agency, it is problematic if you are delivering a lot of value and you are delivering at, at a low price. Because you might be attracting people who are interested, who are not the right fit for, for what you can do and for the amount of work you achieve. So in an agency needs to be much more picky and much more strategic in what type of client it wants to attract and make sure that the pricing reflects that. To use the same analogy if you want a company, if your type of work at let’s, this is the difference between a tiny agency 1, 2, 3 people and an agency which is much bigger and doing bigger projects. A 1, 2, 3 people agency possibly can do, I’m generalizing of course, but is interested in helping James set up a newcomer store for the first time. Because it’s a low price and James doesn’t know and it’s a new client and coming in. Whereas a big agency 20 people, 30 people, whatever, who is, who is focused and specialized in a particular area, probably doesn’t care about James as a client at that point and not because of cruel, but because it just doesn’t fit their business model. And that’s okay. So that means the pricing is wildly different because what they care about is a different business person who runs a much bigger website and wants an agency’s help, for example, or needs to come in from another platform, for example. So pricing really, really, really restructure as, as should be structured around the value your agency is bringing to your target client. As you can tell, it’s always the same story. It’s always the same story. Yeah. The narrative is always the same. It’s always who you’re attracting and what value you are giving to them. So, but different parts of the ecosystem have very different ways of looking at it. Yeah, true.
Maciej: Yeah, true. You have to find your perfect client where, who, who will be happy with the level of service you are, you are providing. And there are clients that are not necessarily interested in like perfect development. They are, they, they will be happy with something that’s, you know, displaying some content this is fine for them.
James: So look, be able to say no to clients you, which don’t fit what you want. That’s really, really crucial business advice. Be able to say no and also be able to really say: okay I made a mistake with my pricing with that client, but at least I learned from it. That’s fine. Let me apply what I learned now and move, move forward with the times, and that’s okay.
Maciej: Yeah. Yeah. Learning mindset. I like this much. I like this very much. Yeah.
James: My, my favorite time is putting it is I enjoy being wrong, because that means I’m going to learn something today.
Maciej: Yeah, yeah, yeah. You, you, you, you have to keep it positive. You know what, what else is left? Yeah.
James: Yeah. This is, of course, I don’t enjoy being wrong all the time, but I like learning so, so…
Maciej: Yeah, exactly. Exactly. I like the spin very much. And, you know, with, with this positive, you know, thing the, the, the podcast comes to, to the end. And I thank you very much for, for, for sharing all of your knowledge, and I enjoyed this conversation very much.
James: Thank you very much. It was a pleasure. And thank you for the invitation.
Maciej: Yeah, my pleasure. My pleasure. Thank you, James and see you around.
James: Thanks a lot.
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