Archive for the ‘Business & Marketing’ Category

Starting your own business it tough. Every day you run into problems that seem insurmountable. If I had £1 for every time, I had run into something that made me want to scream “ah, we’re fucked, this entire project is fucked” I would have a very viable business.

At every turn, you discover that you have to constantly raise your game and execute at a higher level. It’s like repeatedly being punched in the gut and told to get up and try harder.

Good audio is hard

Take my video courses, for example. I don’t shoot with cheap stuff. I have a full-frame SLR camera and a Rode shotgun microphone that mounts on the top.

But Udemy rejected my videos. They said there was too much echo on the video. By this point, I had already filmed an entire course. I should have used single-piece flow, as The Lean Startup advocates. But, in my defence, I did this originally, and only came up with the idea of also selling on Udemy later.

Nevertheless, I set about recording the video with a lav mic instead. This too failed. To get the focus correct, I need to monitor it on my laptop. But this sends the laptop fan into overdrive, noise that the lav mic picks up.

Funnels gone wrong

How hard is it sell on the internet? First, try giving your stuff away, and see how hard that is.

The answer is really hard. In March, I launched registration for Worfolk Anxiety’s 30-Day Challenge. A month of free coaching: who could say no? A lot of people, apparently. Initial acquisition costs were £10 per person. People would click the ad, read the entire long-form sales letter about what we were offering, and then leave.

This cost eventually came way down, to the point where it was averaging less than £1 for the entire campaign. I tweaked the copy, and the targeting and we saw better results.

Rejected ads

The problems with the funnel only arrived after I had already faced down one disaster. Having designed the ads, set the targeting and built the landing pages I proudly hit submit on the Facebook ads to turn them on.

And Facebook said “no”.

They don’t allow adverts to do with mental health. The reason is that Facebook knows way too much about you. But they don’t want to admit they have way more data on you than the NSA. So they don’t let advertisers mention it.

All of my beautiful copy using personal and friendly language had to be scraped and replaced by cold and impersonal statements. No wonder my acquisition costs were so high.

I could go elsewhere for the ads, of course. In fact, I tried. I went to Pinterest. But a bug in their software meant that you couldn’t create an audience in the UK.

Failed payments

There was one light at the end of the tunnel: someone went through my sales funnel, clicking on a newsletter ad, signing up, completing the double opt-in, hitting the tripwire page and deciding to take advantage of the hefty discount on my book that I offer new subscribers.

And then the payment failed.

Not just failed but failed silently. None of my error reporting picked anything up. Stripe didn’t pick anything up. The session recordings did not pick anything up.

I had lost my first sale on the project, and I didn’t even know why. I tried it with my own credit card, and it worked fine.

That was a crushing day. Luckily, someone else bought it the next day, and the feeling of making your first sale on any project is ecstasy. It’s amazing.

Sailing the sea of troubles

I picked out a few examples of the “oh shit” moments I’ve had over the past few months. But there have been loads more.

Phoney copyright claims against my YouTube videos, holding them hostage. 40% of people not clicking the double opt-in email. Heroku outages. Facebook custom audiences being filled with incorrect data. Bloggers never answering your emails. Apple refusing to give you a sandbox account to test Apple Pay.

Every day you run into things that stop you in your tracks.

But then you find a way a past them. Or a compromise. Or change strategy. Or just pick yourself up, shrug it off, and find a different way to move forward.

This process has to make you more resilient. It teaches you that all is not lost.

Throughout April, Worfolk Anxiety has been running a 30-Day Challenge to help people reduce their anxiety. We ran ads for it and to make sure we got the most out of the ads, we ran three different versions of the landing page as a split test.

But which got the most people to sign up?

(more…)

In How To Write A Good Advertisement: A Short Course in Copywriting Victor O. Schwab lays out a systematic approach to writing killer ads. That process is:

1. Grab attention
2. Show them the advantage
3. Prove it
4. Persuade people to grasp this advantage
5. Ask for action

Each section is broken down into individual chapters. There are a lot of examples. In fact, one of the earlier chapters is just a list of a hundred effective headlines.

There is a lot of useful information in here. More importantly, it is presented in a logical narrative without the distraction of jumping around or confusing diversions.

When it comes to designing your restaurant’s menu, having a deep understanding of customer psychology can be very helpful. Understanding how the human brain works allows you to increase revenue with almost no effort.

Here are 6 ways you can increase the average bill by making small changes to your menu.

Add a larger priced item

Human minds are really bad at considering absolutes. We like to compare two things, instead. In Predictably Irrational Dan Ariely talks about how a marketing firm found a way to sell a $1200 bread-maker: they added a $1600 one next to it.

When the only bread-maker is $1200, people wonder if they need a bread-maker. However, when you place it next to a $1600 bread-maker, people compare the two to see which one they want. And usually, decide on the $1200 one.

So, if you have a $30 steak that you are struggling to shift, add a $50 steak. People are reluctant to buy the most expensive item on the menu. But next to a $50 steak, a $30 one seems far more reasonable.

Put expensive items in a box

Putting a box around an item draws the customer’s attention to it. This makes them more likely to order the dish. So, if you have something you want to sell, such as high mark-up dish, put a box around it.

Desserts are usually high markup, so these make an excellent choice. However, you can put a box around individual dishes as well, and it produces the same result.

Re-do your wine list

Customers cannot tell the difference between cheap and expensive wine. Study after study has shown this. So, as long as you are selling them a decent bottle, their enjoyment of it will be primarily driven by how much they pay for it.

Many customers will order the cheapest bottle of wine. So make sure you have plenty of markup on that. However, another large selection of customers will order the second cheapest bottle of wine.

This is because they do not want to look like they are going for the cheapest bottle, even though they do not know what wine they want. Therefore, you want to ensure that the second bottle is a high markup item as well.

Finally, as we have already learnt, adding a more expensive item to the menu drives up sales of cheaper bottles. So make sure that you have at least one bottle of $300 on there.

Add more “for two” dishes

One of my local Thai restaurants has appetisers for £7. Or you can get the platter for £10. Per person. And there is a minimum of two people. So, in reality, you are paying £20.

But the menu doesn’t say that. It says £10 per person. Most people never do the maths and think “£20: I could get three of the other dish for almost the same money.”

Add to this mix the fact that couples are some of the least price sensitive customers. After all, who wants to look cheap on a date? No wonder the chateaubriand is so often priced for two.

Centre align your prices

If you put all of your prices in a neat little line, with everything right aligned, you make it very easy for the customer to compare prices between dishes.

But, of course, you probably don’t want to make this easy. Because, if you do, people will choose cheaper options. This is a shame because the more expensive items on your menu are worth the money, right? Centre align the prices so that customers consider each dish on its individual merits.

Reduce the number of items

Having two many items on your menu is a bad thing for two reasons.

One is that quality suffers. You need to be turning your stock over. If nobody is ordering the dish, the ingredients will sit in your walk-in for longer, they won’t be as fresh, and you will have higher food costs.

It also makes it more difficult for customers to decide what to have. In The Paradox of Choice, Barry Schwartz talks about a store offering free samples of jam. They found that when they offered six choices, customers bought more jam than when they offered 22 choices.

What was going on here? Customers found it difficult to choose between 22 choices. The stress of making that choice (it might sound silly, but it is stressful!) made them less likely to buy a full-sized pot of any.

Your menu is the same: if you want customers to enjoy the experience more, you need to make it easier on them. They might think they want more choice, but the research shows it makes them less happy.

Summary

Follow these six simple ideas, and you will be able to increase the average cheque size. Understanding customer psychology is the key to running a successful restaurant. The answers are not always intuitive, so it is important to look at the evidence.

When creating Facebook ads, you can choose a variety of campaign objectives: website traffic, clicks, conversions, purchases, leads, page likes, the list goes on.

For most campaigns, you will be choosing between clicks and conversions. Some people have suggested it doesn’t make much difference. But my testing disagrees. We’ve seen a large amount of difference between who clicks and who converts.

The audiences are different

Over at Restaurant Psychology we have a survival checklist to help restaurants owners create a great experience. It is a pared down version of my book Why Restaurants Fail – And What To Do About It. To promote it, I launched a Facebook ad.

It’s not a fancy design. I tried fancy designs, and this converts better.

To start with, I wanted to make sure everything was working and that people responded to the advert. So I set up a campaign with the objective of clicks. The audience responded well, and we achieved around a 3% click-thru rate, which is pretty kick-ass for Facebook.

What is perhaps more interesting though, is that it was predominantly women who were clicking on the ad.

What happens when we changed the objective?

Once this was done, I set up a new campaign. This one had the objective of getting conversions. That means it was optimised for people to sign-up to get the checklist, rather than just click on the ad. Facebook went to work and found these people.

And they were different.

Despite the fact that women were more likely to click on the advert, they almost never signed up to get the checklist. They made up 62% of the clicks, but only 4% of the conversions.

What is going on here?

Facebook is very good at predicting what a user will do. Scarily good.

And it knows that, for example, women are more likely to click on my advert, while men are far more likely to sign-up when they do click on it. Therefore, it delivers the advert to a very different audience based on what campaign objective I choose.

What objective should you choose for your campaign?

What objective you pick will depend on what you want to happen. If you want clicks, choose clicks. If you want conversions, choose conversions. But make sure you know what you want before you launch the campaign because it does matter.