Matt is a distribution hacker for 500 Startups, and he specializes in paid customer acquisition, especially on Facebook. He helps a number of companies in 500 Startups and in this interview he gives us the same acquisition advice that he gives them.
→ What is Distribution Hacker
→ How is it different than a growth hacker
→ He helps several companies with 500 Startups
→ How did he learn the skillset of distribution hacking
→ How did he acquire that skillset
→ When should startups think about growth hacking
→ When should they try distribution hacking
→ How to set up campaigns and do funnel optimization
→ And a whole lot more
Bronson: Welcome to another episode of Growth Hacker TV, Bronson Taylor. And today I have Matt Berman with us. Matt, thank you so much for coming on.
Matt: Thanks for having me.
Bronson: Absolutely. We’re so glad to have you. You are currently the distribution hacker at 500 startups. And my guess is most people watching this won’t actually know what that means. So let’s start there. Let’s define the term distribution hacker. So what is a distribution hacker? And also, how is it different than a growth hacker, in your opinion?
Matt: Yeah. Good question. So a distribution hacker has a role at a company where their focus is to grow the product or service through a combination of paid acquisition and funnel optimization. So they’re trying to get the best cost per acquisition for users while increasing lifetime value, which makes it easier to acquire users for more expensive prices.
Bronson: Yeah. No, that’s perfect. So what’s the main difference between that and like a growth hacker? How do you how do you see the two kind of play out there?
Matt: Yeah, in my mind, a growth hacker is more focused on free mechanisms for growth like internal growth. So whether they’re focusing on virality or whatever it is, it’s more free methods where a distribution hacker is focused on external paid methods. And those are the key distinctions. And there’s actually a lot of overlap between the two. You know, with distribution, hacking, funnel optimization, which is it’s free and it’s internal, but it also helps with acquiring users.
Bronson: Gotcha. And so you actually help the startups that are part of 500 startups with distribution the way you define it. Is that right?
Matt: Yeah, absolutely.
Bronson: Yeah. So when you get with them, you’re not necessarily doing product centric things like, oh, let’s gamify your registration flow or something like that. You’re more thinking, All right, what are some paid channels that we can really, you know, execute on? Is that right?
Matt: Yeah, that’s exactly right. There’s definitely some internal stuff that I like to work on, but it all relates back to acquiring more users through paid external methods.
Bronson: Now that’s awesome. I’m so glad that’s kind of your expertize because I want to dove into that. You know, we have a lot of people on the product side that come on the show because that’s kind of normally what growth hacking is. I think you’re right. So I think it would be fun to get into more of the paid stuff because people don’t realize, like, paid stuff works like it’s a huge way to distribute a product if you do it right or it’s a huge way to waste money, right?
Matt: Sure. Yeah, absolutely.
Bronson: Yeah. So. So it’d be cool to get into a little more. Now, let me ask you this. How did you learn the skillset of distribution hacking? Was it through working at a big company that had a lot of paid staff? Was it through your own startups or was it through just reading a lot online? How did you kind of acquire this skillset?
Matt: Yeah, so my first job was actually doing search engine optimization for a media company. And then, you know, about a year or a year and a half after I started that, I discovered paperclip marketing. And instead of seeing results six or 12 months down the line, I was able to see results overnight. So I started playing around with that where I learned most of the skills that I use today was actually through affiliate marketing, which I did for 2 to 3 years. You know, basically a company or a product would come to me with an offer and they would basically pay me to promote their product or service.
Bronson: Okay. Yeah. So I’m sure that’s when you really got aware of the lifetime value versus cost of acquisition because that margin was actually your paycheck when you do affiliate, right?
Matt: That’s exactly right. You learn really quick that way. And actually, in subsequent jobs, I was really fortunate. They they trusted me with with a fairly large budget to acquire users for them. So at the same time that I was applying skills that I learned previously, I was learning new skills at that, the companies I was working for.
Bronson: Yeah. Do you recommend that entrepreneurs that really want to understand distribution and growth and that kind of stuff, would you recommend they take a similar route and maybe go and try to do an affiliate thing? Because then they don’t have to build the product, they don’t have to manage the support. All they have to do is figure out, Could I actually grow this if all the other pieces were done? Do you think that’s a good thing to try for people?
Matt: The affiliate world is crazy nowadays. I know I haven’t I haven’t been in that world for for a few years. It’s it’s a tough road to go down. But I think I think there are still some pretty legitimate ways to promote products out there for affiliate marketing that that are pretty good to test. But I think focusing on products and startups is probably the better way to go.
Bronson: Yeah, no, I think you’re right. I mean, I think the affiliate world, it’s almost like there’s there’s two parts to the affiliate world. I mean, there’s companies like Treehouse and they have an affiliate program. And so you can become an affiliate for Treehouse. They have a legit service. You know, it’s a great start up and you can make, you know, a profit off of it. But then there’s also kind of the seedy underworld of affiliate. Now, you probably don’t want to mess with too much because then it’s just, you know, pushing things aren’t that good to people that don’t really need them.
Matt: Yeah. So, I mean, if, if an entrepreneur wants to learn these skills and definitely wants to get into affiliate marketing, you know, Amazon and eBay, they all have affiliate, really good affiliate. And they’re definitely all above board. And yeah, that’s definitely a good way to go. I would I would avoid the like you said, kind of the the underside of the affiliate, although.
Bronson: Yeah, absolutely. Now, let me ask you this. When should a startup really be thinking about growth hacking and when should they try distribution hacking? Is it one of those things where they’re just always doing both? Is there kind of a period of growth hacking and then you kind of transition into distribution hacking? How do you see those worlds relating in the timeline there?
Matt: Yeah. So at the very early stages of a product, if you’re if you’re trying to still figure out who your demographic is or you, you need additional data to work with. User acquisition is great, but when you’re talking about like larger scale distribution hacking, it’s definitely best to wait until you have product market fit. You know, at that point, you should be basically at a point where you’re about to hit the gas and really just accelerate your growth rather than use distribution to acquire your first set of users. Growth hacking, in my mind, can be used almost the whole time. You should be thinking about, Well, what can I do to get my users more involved in my site, more viral, more referrals, whatever it is? I definitely think growth hacking should be thought about from the very beginning.
Bronson: Yeah. Now you say you should really focus on distribution hacking when you’re about to hit the foot on the gas and you’ve already found product market fit. Is part of the reason that it’s too easy to waste money when you don’t have product market fit with pay per click? I mean, that’s my guess. I don’t know if that’s right, though. Is that the way you see it?
Matt: Yeah. You can acquire as many users as you want with distribution hacking, but if they’re not sticking around, then you’re wasting money. You know, you could be the best distribution hacker and acquire extremely cheap users and get a bunch of sign ups. But yeah, if if they’re not using your product and they bounce or they don’t stick around for very long, then you’re really wasting money. Which is why it’s really important to find product market fit first.
Bronson: Yeah, you know, I’ve actually had some people come on the show and they agree with what you’re saying, but what they will do is they’ll actually use paid to get a few users initially just to test their funnel, but not really to grow because they know they’re not ready to grow through distribution yet. They’re is using it to get some metrics to work with. So I think you’re both in agreement that integrated really put the foot on the gas, you know, stick to some other things. Now, talk to me about a typical day for you at five start ups. This is just one of those questions I ask, cause I’m interested because, you know, it’s hard to imagine, like, what do you do? You know, there’s so many startups there with so many different needs. Are you teaching them in a lecture hall or how to think about pay per click? Are you getting with them and literally, you know, setting up campaigns on their behalf? What do you do there week to week?
Matt: So 80% of my time is actually spent directly with two two startups at a time, and I’m working hands on with them as part of the distribution program at 500 startups. And you know that is in there. I’m setting up campaigns, I’m showing them how to set up campaigns and doing funnel optimization. Then the other 20% I’m actually spending with the different accelerator batches and this is more free form where they can book a mentor sessions with me or just ask questions or if they have, you know, if they say, well, we ran this campaign and we’d love your advice on how to improve it, that’s kind of where I help them there. But, you know, a typical day is going into the office of whatever startup I’m working with, reviewing the data from the day before, the week before, and going from there, making optimizations, trying to find where people are dropping off in the funnel and try and just trying to scale.
Bronson: Yeah. Is it hard because every company, I’m sure, has their own mix of analytics, their own kinds of campaigns, and you have to go from one to the other and kind of like readjust your mindset of what numbers are looking at. How much money have they been spending? Is it hard to kind of adjust to the different startups?
Matt: Yeah. Context switching is has it’s been a challenge, but I’ve gotten pretty good at it. It’s it’s weird. I mean, a lot of the startups are using similar tools. So it’s not that even though their businesses are different, they’re they’re still using similar analytics tools, similar distribution channels. So it’s just a matter of remembering where you were previously in terms of data and what you’ve tried, and that’s just a matter of being organized.
Bronson: Yeah, well, speaking of being organized, you’ve kind of created a really good organizational tool for distribution hacking. It’s a framework, I think is what you call it, somewhere online. And so it has seven things and it’s kind of the seven steps you start. Number one, you work your way through it. And it’s just, like I said, a general framework on what to do and how to do distribution hacking. So what I want to do is I want you to walk us through the seven because my guess is, you know, even if it’s not explicit internally, this is what you’re doing. You know, when you go into these companies, you’re figuring out, you know, what to do next. But the first one, number one, is define your target customers and demographics. What do you mean by that and how do you do that?
Matt: Yeah. So when I mean, when you have product market fit, you actually usually have a really good idea of who your customer is. So it’s it’s more about just writing it on a piece of paper, you know, really understanding who you’re going to go after when you’re talking about user acquisition and more importantly, where they hang out online. So if you have a B2B business and you’re targeting SEOs for a product for that business, Facebook might not be the best channel. So really thinking about who your customer is and where your customer is at the time that they might. Be thinking about using your product.
Bronson: Yeah. Would you be like, you know, kind of brainstorming, like what message boards they hang out on? What blogs do they read? What keywords they talk about? I mean, is that the kind of stuff you’re really wrestling through in the stage?
Matt: Yeah, definitely that and just thinking about who they are when you want to acquire them because people have multiple, multiple personas online. The person I am on Facebook is different than who I am on LinkedIn or what I might be searching for on Google. Okay. I’m, I’m in a different mindset on each of these platforms. So thinking about what’s the right platform for who I’m trying to acquire at the time.
Bronson: Now that’s a really good insight right there because, you know, if I’m trying to target, you know, dog lover, you know, Matt, I might go to Facebook, right? But if I’m trying to target the distribution hacker man, am I going to LinkedIn? And it’s the same. Matt It’s the same profile, it’s the same person. But one of them is going to be successful. Woman may not be because they’re not looking for that kind of thing on one of those platforms. Is that sort of what you’re getting at?
Matt: That’s exactly right. Yeah.
Bronson: No, I never actually thought about it that clearly before. So I’m really glad you said that, because I knew there’s a difference. But it’s like individually we’re different people on different platforms. And so I think that’s awesome to keep in mind. Now, after you’ve defined the target customer or the demographics, the next thing number two is to define the conversion goals and the funnels. So what do you mean by that?
Matt: Sure. So, you know, when you’re doing user acquisition, you have to have a conversion goal, right? Because otherwise if you’re just acquiring users for page views or I mean, the only the only way that would work is if you have a CPM based revenue model. And, you know, user acquisition typically doesn’t work very well for that type of business. But, you know, that that being said.
Bronson: You need let’s back up. Why don’t you explain what you just said? Because I know what all that means. I want to make sure that people listening do that. If you have a CPM based business model that, you know, paper click probably doesn’t work. And why is that? Break it down for us real quick.
Matt: Sure. So if the only way you’re monetizing is is CPM like banner ads or, let’s say, pre-roll, whatever it is, your cost per page view is still really low, even if you have high, you know, really high value brand advertisement. So if you’re paying I mean, let’s say, for example, it’s $0.50 on Facebook to acquire one click and they stick around for a maximum, I mean, of, let’s say ten pages, which would be awesome on the first visit. That doesn’t even make sense dollars wise. So you’re still are quite negative on that. And most channels where you’re going to acquire users for cost per click, they’re not going to be anywhere near as low as you need them to be to be ROI positive on a CPM based revenue model. Yeah.
Bronson: Which is why we see CPM based businesses are usually things like blogs and, you know, content because they have a mechanism to bring people in that’s not about going out and paying to acquire them.
Matt: Sure, it’s about getting inbound links which grows your SEO and that that typically is the best channel for that type of business.
Bronson: Yeah, absolutely. Now, sorry to cut you off there. So we’re talking about defining conversion goals and funnels. So go back and talk about that a little bit.
Matt: Sure. So, yeah, you definitely need a conversion goal when you’re doing user acquisition. Other implies you’re just acquiring users for, you know, for whatever reason. So for example, you should, you know, if you have an e-commerce site, the conversion goal should be a sale. If you can even be more detailed than that and say, I want to sell this specific product. Mm hmm. So really understanding how the user comes from the advertisement click all the way through your funnel to the conversion. And knowing what those steps are that you have to define that before you spend any money.
Bronson: Yeah. And do you find that this should usually have a startup, should usually have a really narrow goal? Like you just said, maybe one product they’re trying to sell. Is it is it helpful to be that hyper focused on a goal or do you let it be a little more broader? Does that work? What do you think?
Matt: I think it all depends, but I would say the majority of the time is really good to have just a single or maybe even just a couple goals. But I typically just have one goal and it’s, you know, I guess an e-commerce site might be the exception where, you know, you have multiple different products. But again, the goal is just to sale. Yeah. And if you have a software as a service business and you have multiple tiers of customer, it’s still subscription is the goal. It’s single. It’s a single goal.
Bronson: Yeah. And now with funnels that are leading up to that goal where you actually get to see so many different kinds of businesses and so many different kinds of funnels, I’m interested to ask you this. Do most funnels have about the same number of steps? I mean, I know in the businesses I personally have started in run, there’s usually three or four or five goals in the funnel that’ll get them to what I’m trying to do. Is that normal or are there some companies that 15 goals in the funnel or two goals in the funnel? What does that look like usually?
Matt: Yeah, it it varies. Some some companies that I’ve worked with, the goal is on the landing page and all they want is an email address. And then to other companies, it’s it’s an eight step sign up process where they they’re requiring many fields of information from the user. So it really varies on what the business goal is. Yeah.
Bronson: Does it make it like astronomically harder when you have more steps in the funnel to get a conversion on the goal? Or is it just a matter of the business and it doesn’t matter?
Matt: No, no, you’re absolutely right. Every single step, every single field that you add drives down your conversion rate. It’s just the more work, the more information that you ask from your customers the least, the less likely that they’ll be to give it to you. So, yeah. But then again, when they’re giving you multiple pieces of information and you have a multistep funnel, those users tend to actually be higher value. So even though you convert less of them, they’re worth more. Yeah. So typically.
Bronson: And does it usually make sense if you don’t have more steps in the funnel? It probably needs to be a high margin product. It’s hard for me to imagine a low margin product having a bunch of steps. Is that accurate or.
Matt: That’s exactly right. Yeah.
Bronson: No, it’s good. Is that a lot of what you do? You go into these companies and you try to chop down their funnel as much as you can. Is that a piece of what you do for them?
Matt: Yeah, absolutely. I’m I’m always for simple. So the less you ask from your users, I think is better. It’s kind of a side effect of that is when you’re you’re the quality of user tends to decrease slightly when you require less fuels or less pieces of information from them. But it’s a balancing act because when you require less builds, you convert more users, even though some of them might be lower quality. So you need to figure out what the right balance is between asking too little and getting poor quality users.
Bronson: Yeah, I think that’s a good point you’re making that everything’s a trade off and you can do things on the front end that maybe give you, you know, ten X more users, but, you know, three X more bells. And it’s like, well, that’s a good trade though, you know, it’s like overall the always better, even though if you just look at the balance with like, oh, things are going horribly, like everybody’s balancing now. It’s like, well, you’re bringing in ten times more people, so it’s okay that three times more bouncing, you know? So everything’s a tradeoff. And if we just focus on one number without really understanding the entire funnel, what’s happening after the funnel, then we can we can do the wrong decisions for our business, I think. So I think that’s a really cool point you’re making. Yeah. Now, the next step here on number three is to implement and refine analytics tools to track goals and funnels properly. Talk us through that process. You know, what tools are you using to track the analytics usually? You know, what are some of the hang ups that you find with analytics? Is talk of that piece of the puzzle there?
Matt: Sure. Yeah. So when I when I first started at a company, I mean, the first thing I do is always audit their analytics platform and and just look like how are they tracking things? Is it accurate or are they tracking all the right steps? They’re tracking them properly. Is it is it really organized? Because if you’re not tracking things properly, you’re spending money for nothing. And so, I mean, some of the tools that are that I’ve used in the past are Mixpanel, KISSmetrics, Google Analytics. Google Analytics isn’t great for funnel optimization. I tend to like the more event driven analytics platforms like Mixpanel and KISSmetrics. But yeah, that’s that’s definitely the very first thing I do when I when I first start helping a company. Yeah.
Bronson: Do you find that a lot of companies have it set up pretty well when you come in, or is it usually just a complete mess?
Matt: No, it depends on the company, really. Some of them know what they need to track really well. And, you know, some of them need a little bit of help.
Bronson: Yeah. No, it’s good. And then how long do the analytics tools need to run before you feel confident in the data you’re getting? You know, if they’ve been running for a week, do you feel like, okay, yes, I can use that data to make some decisions or do you like it to be running for a month or. What are your thoughts there?
Matt: Yeah, so it’s it’s less the less a function of time and more a function of volume. You know, if you if you have a huge site with a ton of users, then you could potentially have data in a day or two. But if you don’t, you know, if let’s say you’re running a B2B service, then every single customer might be worth a lot, but you might not be getting a ton of data. So yeah, it might take longer to accumulate statistically valuable data. Yeah.
Bronson: Where do you think the tipping point is? I know it’s different for different businesses, but how many uniques do you need in a given, you know, amount of volume to be like, all right, that’s statistically significant. We had 100,000 uniques. I can run with that. Like, is there a number like that in your head that you’re kind of shooting for, even though it’s not going to be exact?
Matt: No, it really depends on the business. Obviously it can’t be ten because a single conversion can skew the data significantly. So if I were to put like a threshold on it, I’d say, you know, 500 would be the minimum, let’s say just a page views for, let’s say a landing page. But it’s really difficult to say like an exact number. You just need to feel comfortable that if you had, you know, five more conversions, is that really going to significantly change your data?
Bronson: And if it will, then you probably don’t have enough data, right?
Matt: Actually, like you don’t want to see huge jumps in your and whatever your funnel goal is.
Bronson: I gotcha. That makes sense. And so after you kind of implement and refine the analytics tools, you get everything tracking. The fourth step is to implement and refine split testing tools, which are, you know, probably similar to the analytics tools, but what are you, what kind of tools to use there to do AB testing? How do you how do you kind of have that set up?
Matt: Sure. So for for kind of front end like display layout changes optimizes grade and you don’t need a developer to to make changes and do split testing anything more complicated than, you know, layout changes or color changes, you probably need something on the back end and, you know, depending on what development platform you’re using. I mean, Ruby on Rails, I use the split gem, for example, that works really well and, you know, connected to whatever analytics platform you use. And you can even build a split testing tool in-house. I mean, it’s pretty easy to do something really simple where it’s just a 5050 split of users depending on whatever you’re testing.
Bronson: Yeah. And then you can even make your program go ahead and implement the one that performed better. And else I mean, you can create it almost automated, you know? You know. Yeah, right. I mean, it’s not that hard. So after you kind of have the split testing put in, the fifth thing is hypothesized channels to acquire customer demographic and set up ads on those channels. So what do you mean, hypothesized channels? It sounds it sounds complicated.
Matt: Oh, no. It actually comes back to the first step where you’re thinking about where you use this hangout online. And this is the step where you’re actually going to say, okay, I believe if I’m selling dog food to dog lovers, where am I going to find them? I’m going to I’m going to say I hypothesize that I’ll find them on Facebook. And if I type in these certain interest keywords and I say I only want 35 to 45 year olds, that is going to work really well for for conversions, for dog food. So really like getting down to the nitty gritty of what you’re going to be targeting. This is the stat for that and you’re just saying, I want to test this.
Bronson: Yeah. And do you find that most companies hypothesis are really close or really do they not understand who the customer is until a lot of different hypotheses and a lot of different ads have been ran? How do you see that?
Matt: No, they definitely no. Okay. But yeah, the companies that I’ve been working with, they have that market fit because they’re ready for stepping on the gas, as we spoke about earlier. So they know who their customer is. It’s just a matter of and they usually have an idea of where they hang out online. So it’s just a matter of defining it and then going out and testing it.
Bronson: Yeah. And then after you, you know, you create the ads and then we’ll come back to some of the more tips and tricks about creating those ads. So we’ll get to that in a moment. But number six is just execute the acquisition experiment. So is that just a matter of you hit go you hit, you know, active on the ad and then you kind of watch the funnel and you watch the analytics and you watch the goals. Is that is that step six.
Matt: Yeah, that’s set up the ads, set up the targeting push go.
Bronson: Yeah. And to see what happens and how long do you usually let ads run for before you feel like you can see if the hypothesis was right or wrong? I guess it’s probably matter of volume again, right?
Matt: Yeah, exactly. That’s what I was going to say. It is it is a function of volume and it depends on the business because if you’re again, if you’re like a B2B business where every single customer is worth $10,000, you only need one customer. Right? Well, you know what I mean. So one customer makes a huge difference. But if you’re getting email sign outs, one customer’s not really important to you. You’re talking about tens of thousands, which start to make a difference in your business.
Bronson: Yeah. And then the final step is to optimize, optimize the channel and funnel or return to step five. So obviously you’re going to look at the data and then you’re going to make decisions based on what you’re finding. What are some of the optimizations that you find yourself making? What what kinds of things would be optimized at this point? Are you adding in new funnel steps? Are you taking out funnel stubs? Are you just changing the targeting on the ads? Like, what are you doing here?
Matt: Yeah, all of the above. I mean, if you’re looking at your data and you see some glimmer of hope in terms of, let’s say, being ROI positive or even if. You don’t even need to be positive if you’re just finding that these users are really high quality. They love my product. So if you see some kind of glimmer there, you you take advantage and you start to optimize. And there’s there’s two sides to optimization. There’s the ad platform side where you’re optimizing, let’s say you’re targeting or you’re which includes demographic or you’re your ad copy, your ad image, whatever it is. So you’re trying to improve, click through rate, you’re trying to drive down your cost per click. That’s one side. Then the other side is after they actually land on your site, you need to optimize the different steps your funnel. That for me typically means removing fields or split testing, different landing pages, trying different approaches to copy. Yeah, definitely. You need to optimize both sides if you see like, wow, there’s actually some potential for success here. Mm hmm.
Bronson: Now, how closely do you integrate the landing page with the ad? And what I mean is this do you have an ad that pushes everyone to the home page of the startup and then they kind of just get thrown into the normal flow? Or do you create specific landing pages that are really targeted to the kind of people you know you grab from that ad? What’s your view on that?
Matt: My view is that it varies. Sometimes I’ll send it to the home page, but that that’s actually kind of a minority case just because home pages tend to work really well for organic users. People who click from an ad typically want something a little more defined for them, I guess. Mm hmm. So. So sending those people to a specific landing page tailored to, like you said, the ad is is really important. So and something else you mentioned, which is actually really important, is making sure that your your ad and your landing page copy are relevant. Right. So if you’re telling them one thing on on the in the ad copy and then they land on your page and they are confused because it’s selling something else. Mm hmm. You’re not going to get conversions. And if you do get conversions, they won’t be high quality, high value users.
Bronson: Yeah. And just to make sure that everybody watching this completely understands, we’re saying right here, when we create an ad, we have so much granularity, like I’m picking people that only subscribe to this blog to see this ad. So I know the keywords they want to hear where my general organic traffic may be slightly different. So I don’t want to make a home page with those kind of keywords on it, but I can make a landing page that has exactly those keywords. So when somebody gets there from the ad, they feel like, Wow, I found home. This is where I’m supposed to be. They know me. Where do I put in my credit card number?
Matt: Yeah, that’s exactly right. People coming from ads are, you know, if you do the ad well, the ad copy, they’re pre-qualified. They know when they click or even before they click what they’re getting into. So if you have a call to action in your ad, you always should. You’re telling them what to to what to expect on the following page. And that’s that’s really critical. So if you’re saying, you know, click to sign up on the next page and you give them, you know, and it’s not obvious how to sign up on the next page or you’re selling up something completely different. It’s not going to work well.
Bronson: Yeah, you mentioned the word pre-qualified. So I want to ask you one more question about this. Even though it’s kind of a tip and trick when you create the ad copy on the platform, whether it’s Facebook or Google or whatever. Do you recommend putting a price in there in the ad if there is a price? So that way it’s like super qualified and that way you won’t even waste a click unless they know they’re willing to pay some kind of money. Or do you think I’ll sell them later? Let’s ease them into this thing?
Matt: Yeah. So I again, it all depends, right? So all this comes down to testing. I do what I, what I do typically like to do is if there’s a discount or if it’s free or if it’s inexpensive, I do put the price or I’ll test putting the price. But if you have a really high cost product, you might scare away potential customers that you could have got to your site and then you can upsell them over time. Yeah, so high higher cost products. I don’t typically put the price in the ad, but for lower costs or discounted or even free products. I, I like to say that in the ad copy.
Bronson: Yeah. I was just wondering because, you know, you get to see so many of these ads. I wanted to see how you thought about it. So now people watching this, I know some of the questions they’ll have about pay per click, about distribution hacking, because, you know, you do it well. But they’re trying to figure out like, all right, you know, they have follow up questions. So here’s some of the ones I think people want to know. One, how big of a budget does it require to kind of use your system, to use your framework? Do they need like a significant budget to really make this work or can they try it with a couple hundred bucks and just see what happens?
Matt: Yeah, great question. You can definitely try with a low budget, you you need statistically significant data. That’s that’s the most important thing. So. If you don’t if you don’t have a lot of money to spend, if you don’t have a large budget, then really pick and choose what you’re going to target really carefully because you don’t have a lot of money to spend. So you only want to focus on one experiment and you want to say, I want these exact users. This is what I’m going to spend my few hundred dollars on. I’m only going to test two different ad copies at a time because the more variations in ad copy, the more variations and targeting you have, the more money you need to spend to test it. All right. Because it costs more money to get statistically significant data for all the different variations that you’re running. Mm hmm.
Bronson: Now, some of the people that are going to try distribution, hacking, they’re going to watch this interview, they’re going to get inspired, and they’re going to go and buy ads somewhere. Right. They don’t have the experience you have. They don’t have this all this historical data kind of locked away in their head of this worked before. This didn’t work before. Should they just expect to waste a little bit of money at the beginning to figure some things out? Like I said, they go in thinking, I don’t know what I don’t know. I’m going to make some mistakes here. That’s okay. Or can you actually optimize something and get a pretty decent early on, even without a lot of experience? What do you think?
Matt: I would suggest reading, just doing research. There’s some pretty standard, you know, things to implement when you’re talking about ads, like I mentioned, call to actions and especially helps if you know exactly who your customer is. But I think the toughest part of getting started isn’t knowing that kind of stuff, but rather using the platforms correctly. So you might set up an ad, but forget to include your tracking parameters in your URL, for example. Just a random example. Yeah. So learning how to use the platform saves time. And I think that’s probably the more difficult part is, is just learning all the platforms and the better you know them, the more quickly you can iterate on your tests.
Bronson: No, it’s great. Well, it’s a perfect segue way into my next section here. Let’s talk about the platforms a little bit. So what platforms do you typically use? Do you have a go to platform? Do you have a couple or do you just have like tow you pull from depending on the need?
Matt: Yeah, so it’s really dependent on the need. But my go to has been Facebook. A lot of the companies that I’ve worked with have been consumer facing. So Facebook works really well. They have a ton of scale there. You know, over a billion users are on there in all different countries throughout the world. Their their platform has become a little more difficult to use recently. It’s just a little complicated, but I still think it’s easier to set up a successful campaign on Facebook than it is to set one up on AdWords.
Bronson: Okay, that’s good to hear.
Matt: Yeah, because with AdWords, you have the quality score issue, which is, you know, people they list all the factors that go into quality score, right? Ad relevance, keyword relevance, landing page, relevance. All these things go into it, but it’s still a black box. At the end of the day, like I when I set something up, I’ll think it’s perfect, but they’ll give me a quality score that is not perfect. Mm hmm. So with Facebook, you don’t really have to worry about that. You just have to know who you’re targeting and then just do testing. So I think it’s easier stuff. And Facebook. Yes. Is my is my go to.
Bronson: Yeah. And just real quick, why does the quality score matter on Google? What does that what does it actually do? Does that give you a lower cost per click or what happens there?
Matt: Yeah, that affects your cost per click. Quality score is is like I mentioned, just the relevance of of all, all the aspects of your advertising. And yeah, it definitely decreases your cost per click. It lets you pay less for the same clicks that your competitors might be paying more for.
Bronson: Gotcha. But since the black box, you can’t really change all the parameters that go into it. I’m actually glad to hear that you say you focus on Facebook because it seems like every six months some company announces that Facebook ads don’t work and then some other company announces that it’s the best thing ever. And so it’s like it’s really confusing when you just read the blog post and you see what everyone has to say about it. So I’m glad that you tackle your go to thing and that you believe in it and it works for you. And so help educate us here. What are some tips and tricks for somebody going to Facebook? They’re setting up an ad. You know, what’s the list of things of like, look, make sure you do this. Please don’t do that. Only rookies make this mistake, like rattle off some of those things that you just know really matter about Facebook ads.
Matt: Segmentation is key. So if you know, if you have a pretty broad appeal product. Segmenting all the different available targeting criteria on Facebook is really important. So knowing that an 18 year old is going to perform completely different than a 45 year old is really critical. So you don’t want to lump them into the same ad, you want to test them separately. So you want to set up two separate ads. And what I actually usually do is do five year ranges of age, for example, like 18 to 24, 25 to 30, whatever, all the way up to however old you think your target demo is segmenting male and female, they typically perform differently, keeping your interests keywords really, really precise. So you don’t want to target a group if, let’s say like basset hounds, and then you also want to target somebody who like swimming right in the same ad. They’re completely different. So you want to say, like, if you’re targeting dog food, you want to say you want to maybe list all the different types of dogs rather than something just completely random. Yeah. So, yeah, those are pretty good ones.
Bronson: Let me ask you a question about segmentation. You know, when you’re setting up a Facebook ad and you know, you start segmenting and you start breaking down the age to a smaller segment, you break down male or female, you break down barriers, single or, you know, undefined, like you go through and you kind of, you know, check the boxes on the right side. It tells you how big the possible pool of people is. You’re going to see this ad sort of be like 50,000, 100,000, 2 million. What number is too big and what number is too small? Because this is something I run into where I’m like, all right, I know what I want to be too huge or I’m not defining it enough what my actual target is. But if it’s too small, I mean, what is one person going to see my ad one time of day and like, that’s not enough to actually do anything. And sometimes I have a hard time spending the amount I want to spend. So what number do you like over there on the right side?
Matt: Yeah, that’s a great question. So for for a rough estimate, I typically like anywhere between 100,001.5 million in the audience. And obviously these aren’t like hard and fast rules, but that’s typically where I like to get in. If you if you have too few people in your audience, you’re not going to have the scale that you need if you have too many. It’s really difficult to find a single ad that is going to appeal to all of them. Right? So your click through rate is going to be really low. And with Facebook click through rate is everything. The higher your click through rate, the lower you’ll be paying per click.
Bronson: Yeah. And let me ask the other question with that too. You talked about segmenting the ages and groups of five and this is kind of the question I want to know and what age do they start having discretionary money to buy stuff that’s is that like the magical number? Because when I go on there, I honestly nor people until they’re like 23 because I’m like, you know, nobody has money until they’re 23. And I just don’t want to show them an ad and have them click and waste my money. What do you think about it?
Matt: Yeah, that’s that’s a pretty good threshold for the age. You know, if you’re only asking for a sign ups, you can you can go lower. If, you know, if you if you have like flash games, for example, just random example, you can get young as young as you want to. And the younger demo actually is typically cheaper because of that reason. They don’t really they don’t really pull out their credit cards. Yeah. So the older you go, the more likely they’ll pull out their credit cards up to a certain point. Mm hmm. And then if it’s, you know, if you’re going really old demographic, then it’s I found it’s actually less likely. That’s from my experience.
Bronson: All right. So give us the other side of that window. So 23 to 40. What are we talking here?
Matt: Yeah. I would say if you’re if your goal is for somebody to pull out their credit card, I would say somewhere like 23, 25, all the way up to, you know, 55 or so, 60 maybe. I think, you know, the Internet and being being used to taking out your credit card and paying for things online, I think more and more people are getting really used to that. So I think that rule is going to be less important later. But for now, you know, I think Facebook only let you go up to 65 year olds anyways. Or you could just say any after that. Yeah.
Bronson: Now, how important is the the image as opposed to the copywriting? Does one trump the other every time in terms of importance, or is it just getting the mix right? What do you think about that?
Matt: Yeah. Yeah, that’s another great question. So image typically affects your click through rate. You know, image is what is going to catch people’s eye and get them to click. Now your copy, the text in the ad is is where you’re going to be pre qualifying like we talked about earlier. So the text in your ad will actually affect conversion rate more often than your image.
Bronson: So image for an image, they convert for a copy.
Matt: Exactly. Yep.
Bronson: Now, that’s great to know. And now we can’t get into all the details of copy because it’s so unique to the to what the product is and who the audience is and what words they want to hear and what things turn them off and what things don’t. But let’s start. This is the one really high level one will do, male and female. Right. Is there any kind of things that you should be putting in the copy when you’re targeting women as opposed to men? Like, do all the clichés hold true or do you just have to test and see?
Matt: Yeah, test and see. There’s just kind of a standard set of things that you should be doing in your ad for both male and female. In terms of segmenting male versus female, I think it’s all about testing and what works for your customers. Some of those standard things, like I mentioned, Call to Action is really important, including the words free or discount. If that’s applicable.
Bronson: Putting you should include those.
Matt: If it’s applicable to your product, if it actually is free or if it actually is discounted for certain users, that’s great.
Bronson: What kind of call to action should you put in there? Like, click here now, that kind of thing.
Matt: Basically, you want to tell them what to do and or what to expect when they do that. So a combination of both is the best for Facebook. I usually say something like Click here to sign up, click here to subscribe, get it today, maybe put some time pressure on it. With with Google AdWords, you can actually say the word click. So you have to think like you could just say like tell them what they’ll be expecting on the on the next page for Facebook. You can I mean click telling them the click typically works well. Yeah.
Bronson: Now that’s great. Any other tips and tricks with with Facebook, you know, of setting up a campaign or monitoring a campaign, just anything? Well, one of things you mentioned was setting up the URL to correctly track things. What kinds of things is I? Here’s what I want us to do. I put one thing in the URL. I, you know, I know you can have like four or five how many different parameters you want. I just a one keyword, you know, question mark equals whatever. Something I’ll remember is that bad practice should you make it, you know, a little more technical than that and really break it down? What do you do there?
Matt: No, it’s good that, you know, to do to do any type of tracking like that is great. So something really important to do is to make sure those parameters that you’re using in the URL. What I like to do is keep those the name of the parameter or the value, the same as the ad name, same as the campaign name. So when you actually see clicks and conversions in your analytics platform, you don’t have to dove in and look at each URL in Facebook. You can just say, Oh, well, the ad with this name, which matches this person who converted on my site, it’s all the same. So it’s really easy to keep organized like that when you have your ad name and your parameters the same.
Bronson: Yeah. And just at a high level, like I’m assuming people know this, but a lot of people probably don’t know that, you know, these analytics platforms actually look at the URL and can do interesting things based on what data you’re putting in the URL. So just make sure people listening this are clear. You know, you’re creating a URL to your landing page, but you’re adding in data in that URL that doesn’t affect the landing page at all. It’s still just clicking through the landing page. You’re going right to where you would have went. The only difference is now you can figure out after the fact how it performed when you’re looking at your analytics, right?
Matt: Yeah, that’s exactly right. So like you mentioned, when you put a question mark and then a value, it doesn’t change the landing page at all. It doesn’t change where they go. It just passes additional pieces of information. So out of the box, Google Analytics looks for something called UTM parameters, and the format is usually UTM underscore, and then it’s either medium or campaign. Basically just defining where that click is coming from. Yeah. What I typically do with Mixpanel or KISSmetrics, I think KISSmetrics does it out of the box as well is I make sure that they are looking for those parameters as well. The same exact one. So you don’t need to add seven different parameters. You can just use the same ones for all your analytics platforms.
Bronson: Yeah. Now that’s great. And it really does help tracking after the fact. And then, you know, then you can compare lifetime value, cost of customer acquisition. Now you have the data because if you don’t put those parameters in there, you’re stuck with Google Analytics. Just telling you that came from Facebook and it’s really hard to figure out what has happened and you probably waste a ton of money.
Matt: Yeah. And when you put that exactly when you when you can tie the ad to the user and then which is especially important is tying them to the lifetime of their usage of your product. That’s critical because then you could say, oh, look, Facebook users actually have an LTV twice as much of my organic users. So you can actually spend more money on on users coming from Facebook.
Bronson: Yeah. Because they might actually have the same amount from Facebook or Google in week one. But then later, Facebook people stay around. So you can spend twice as much on Facebook and get the same ROI. But you wouldn’t have known that unless you tie the campaign all the way through to the use of the actual customer. And so, yeah, I think you’re absolutely right. That’s awesome. Now, besides pay per click, you also help companies with other things related to growth because like you said, it all kind of comes together at some point and you’re probably just helping them with with a lot of different things. You know, you’ve already talked about Funnel quite a bit, but online it also says that you help companies with their email lifecycle marketing. What is email lifecycle marketing? Just to make sure I’m on the same page with you here.
Matt: Sure. So email lifecycle marketing is typically defined as there’s two aspects of it. There’s trigger emails and then there’s drip emails. Drip emails are the the emails that you probably get from a lot of companies when you sign up for them. They get dripped out over time and they’re usually informational emails or upselling email. So like the first one on day zero. So when you first sign up will be the welcome email like, Hey, thanks for signing up for the product. And then maybe on day three you’ll get another email like, Hey, here’s some advanced features. Then maybe day seven, you’ll get another one saying, Hey, we have a premium service, why don’t you check it out? And so those are drip emails. Triggering emails are slightly different. They get triggered by user actions on your site. So a good example of this is funnel abandonment emails. Let’s say you have a five step process in your funnel and the user gets to set four and then leaves. Good thing to do is to email them 24 hours later and say, Hey, you’re almost done signing up. So that that is what a trigger email is. And the purpose is to try to get them to come back and complete whatever action that they started.
Bronson: Yeah. And you can see how powerful that is because you’re getting a reminder about something you almost completed in the example you gave. How do you set them up or use a mixed panel to set up your event based emails or using something else usually?
Matt: Yeah, I use Mixpanel. They have a cool feature called Notifications. You’re already sending them all this data about your users, so you use that data to set up the rules, the logic for your emails. I’ve tried some other ones, so user Fox’s great send with us is great. Mm hmm. Yeah, there’s. There’s a bunch of tools out there. It’s actually there’s a lot of startups doing this right now, and it’s actually a really interesting space. Email is definitely still undervalued at companies. Yeah.
Bronson: Why do you think companies undervalue it? I know. Personally, I’m just wondering why.
Matt: Yeah, I think I mean, this is my theory is because a lot of a lot of these companies are run by engineers. And, you know, I am a and I get a ton of email from a ton of different companies. So it’s kind of annoying to me to get, you know, ten emails from a company in two weeks. But people outside this bubble, like people outside the tech industry, they don’t receive even a fraction of the amount of emails that you or I would receive. So when they see an email from a company that they signed up for, they actually really like it. And I think engineers or techies are used to thinking about it, as you know, from from their own perspective, where I don’t really like receiving email, so I’m not going to say that. So I think that I think that thought is changing, though. Yeah.
Bronson: No, I think you’re absolutely right. Now, do you recommend that most companies have drip and event based emails? Is it usually best practice to have both? Or is are some companies just need one or the other, do you think?
Matt: I would say it’s great to have both. Again, it’s going to it’s going to vary depending on the product. If if your customer base are hardcore engineers or hard core techies, probably. We don’t want to send them a lot of emails. Right. You want to be very sparse of the emails you send them, but if you are, it will take it back to the dogfood example or let’s say you have another service, whatever it is. Know, Facebook sends a ton of emails, you know, for for their customer bases, other types of customers. That’s fine.
Bronson: Yeah. What are some of the best practices about email in terms of maybe, you know, content or does anything you’ve learned that like by teaching us this, we’re going to have better emails and better click through rates, that kind of stuff?
Matt: Sure. Keep it simple. Have a single have a single call to action. Mm hmm. Track the emails. Really? Well, make sure you got those UTM parameters on those emails as well, because you have a single link in the email and it’s the same as an ad. You’re trying to track the click and you’re trying to see what they do after the click. See, I keep it really simple. What I’ve seen work well. And actually, Mixpanel suggests this is putting your brand name at the beginning of the subject line.
Matt: Yeah. So that I think because when people sign up they, they are, you know, they remember your product and then when they see that in the email, they notice it and they’re more likely to click. That’s just a theory. Yeah. I think also really personal emails work well, so make them not seem automated. Mm hmm. Or sending them from a, you know, an individual. So, like, I would be sending an email from Matt instead of from, you know, whatever company I work for. Yeah. So I think that works really well also.
Bronson: No, it’s good. I think I need to change that on growth factor. Right now, it’s coming from team at Growth Hacker TV. I think it’d be better if it came for me when I send out the weekly updates of new episodes. That’s a good point. I’m probably going to implement that.
Matt: Yeah, I think. Sorry to interrupt. So I think that it really depends again, it depends on the content of the email. If, you know, if it’s a transactional email or if you’re telling them like, oh, hey, you just did this action on the site, then it makes sense to send it from the team or from the company versus like if you’re asking them, you know, for let’s say to fill out a survey or something, are like, hey, can we, can we chat about what your experience is? It’s better to come from an individual.
Bronson: Yeah, that’s great. And then one side note, you know, we talked about building these URLs for people that haven’t built them just by hand. Now we just build on my hand and it’s easy, but they can go to Google URL, build or do a search for that. And Google has this really great tool. You just type in some of the parameters and then it creates the URL. And once you do that for a few times, then you can just kind of ran it off and do it yourself. But it helps carry out the training wheels to get you going, tracking things, right?
Matt: Exactly. Yeah. That’s a great tool to use for for somebody starting to learn about parameters. Yeah.
Bronson: No, that’s awesome. Well, Matt, this has been a great interview. I have one last question for you here. What’s the best distribution hack that you’ve ever implemented? Or maybe the best thing within, you know, one of the ad platforms that we should know about to really achieve distribution hacking? Well, it’s one of those silver bullet tips you have.
Matt: Something that’s been working really well for me lately is something in Facebook called a lookalike audience. And what this basically is or how it works is you take your current customers and let’s say you have 10,000 customers on your service and you get their email addresses and you can actually upload them to Facebook and add something called a custom audience. And then you tell Facebook, create me a lookalike model. And what it does is it takes the list of email addresses, find the find those users on Facebook and then builds a list of really similar users based on demographic interests. And you can go from having a set of 10,000 potential or, you know, your current customers to having millions of potential customers that are extremely similar to your current customers. And that that has been working really well for me lately.
Bronson: Yeah. And where do they find that tool that.
Matt: Yeah. So this is all done within the power editor. The power editor is actually it’s a pretty complicated tool. They’ve they have a lot of stuff and there are a lot of really cool things buried. But on the left side of the power editor, there’s something called custom audiences, and that’s where you’ll find it.
Bronson: Oh, that sounds awesome. It’s almost reminds me of, like, retargeting. It’s like a way to get ID people that are super qualified, not just kind of qualified. Now, that’s really great. Yeah. Well, Matt, this has been an incredible interview. I mean, there’s been so much here to take away in terms of distribution, hacking and pay per click stuff and the email stuff. I mean, it’s really a great overview of kind of what you do and there’s a lot of stuff here that we can imitate and learn from. So thank you so much for taking time out and coming on the program.
Matt: Thanks very much for having me.
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