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Thursday
Aug092012

How To Discover Your Most Powerful Value Proposition Using Pay-Per-Click Ads

Last month I watched two businesses find a more powerful value proposition by using Pay Per Click (PPC) Ads for a short "testing" period.  One test ran for a few days (using a large advertising budget) and the other lasted a week.  Each company had different budgets, but both resulted in the successful identification of what proposition was of more value to the consumer.  Each company's test results yielded much higher clickthrough rates than their original ads, and most importantly, more leads were generated.  

I cannot think of a more efficient way to discover your most powerful value proposition.  Letting the wisdom of the crowds help you decide what value you will propagate should lead to clarity of purpose internally, and more business from the consumer. 

A young entrepreneur approached me last week about investing in his new direct selling startup.  I was skeptical of the market need for this product line, so I recommended he test the market for it.  If there were a sufficient amount of people interested, and if the company could develop that powerful value proposition, then I would be more likely to think about investing in the company.  I used Dr. Flint McGlaughlin's methods to discover whether there was a real opportunity with this startup, and after testing, it showed there was.  

For smaller companies this testing can cost around $1,000.  Larger companies should plan to spend about $10,000.  I like to see how one thousand visitors react to the opportunity either per day, or in total.  Although this might be viewed as expensive, an investment of $1,000 of my cash to be certain of the opportunity is clearly better than a much larger investment in a direct selling startup where my "gut feeling" may be proven incorrect.  

Whether you are simply strengthening your company's value proposition, or testing whether an idea has an audience, using PPC Ads is a great way to start.  Don't do what most entrepreneurs do, which is usually spending the available capital on the product itself.  Test the market first!  If you see people reacting positively about your crazy idea, then it might not be so crazy after all.  

Two Reasons PPC Ads Work

1. The Value Is Isolated

On a PPC Ad, you must boil down your value into its most powerful form.  It must bounce off the screen.  Using words like "30 Day Money Back Guarantee" not only wastes valuable space, but it may also reveal how weak you view your value proposition is to the consumer.  

2. Competition Is Present

This is a zero sum game.  You win by getting a CLICK.  Your are now competing against any company that has targeted the same consumer.  If they are your ideal consumer, why should they purchase from you, rather than any of your competitors?  How powerful is your value proposition?  

You will be surprised at just how many companies "mail it in" instead of constantly strengthening their ad.  Look at every word your competition uses in their PPC Ad.  

Example Search Results: "Dog Food"

Here's an example of a search I did the other day.  I was searching for some dog food for my boxer.  Here are the search results I had to choose from:  

Worst PPC Ads

Both Eukeneba.com & Beneful.com are well known, and good companies.  I have purchased their products.  However, they clearly don't monitor their competitors' ads.  Every other competitor has included a multitude of five star customer reviews.  Testimonials are the "gold bullion" of sales pitches.  If your competitors have them displayed prominently, then you should too.  

Also,  both companies are clearly trying to position themselves as the healthier alternative for your pet.  However, their choice in language is weaker than its competitors'.  More powerful language is needed.  But no matter how powerful the language, the lack of customer reviews makes their ads look weak from the beginning.   

Better Ads

Why?  Both PPC Ads include the search term "dog food" in the Title.  This boldens the search term, and it naturally draws the eye to it.  Also, the customer reviews are in the thousands.  They both show off their Free Shipping offer, and PETCO adds the closest in-store location from where you are searching.

Best Ad

My favorite ad is Petflow.com

  1. 8,494 Five Star Reviews is amazing.  
  2. 30% Off in Headline
  3. Search Term in Headline
  4. NOT Free Shipping, but FAST FREE SHIPPING (specific)
  5. $49+ (specific)
  6. "On your doorstep in 2-3 days" further specificies & builds on their fast free shipping proposition

Landing Pages

Oh, and one more thing.  Using the PPC method in one of my recent market research tests, I was able to collect over 500 Leads in just seven days.  Pretty impressive.  That's why I cannot end this post without mentioning your Lead Collection system.  Don't JUST get clicks, collect Leads as you do this testing.  An inexpensive way to do this is to use HubSpot's 30 Day Free Trial.  You will be able to use this company's product to create landing pages, collect leads and nurture them.  And that could be the beginning of a lead generation campaign.  But that's another chapter. 

 

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