The long term cumulative impact of guerilla marketing

In December a panel of internet entrepreneurs shared their stories and their keys to success with my BYU marketing and Provo Labs Academy students.

One young woman told how she had teamed up a few years ago with her brother to start an ecommerce site, selling a very unusual niche product. They did almost $1 million in revenue last year.

One student asked her how long it took for her sales to take off initially. Her answer surprised me: she worked for an entire week before she had her first sale.

How many people would work a full week, generate one sale (probably under $30) and still be willing to stick with it? Yes she worked for a full year before generating enough sales were to pay her a living wage.

Now, after many years of hard work, she and her brother are doing very well.

Her story reminds me how important it is to be patient and persistent with your online business. Online businesses almost always start with a small trickle of visitors, a few sales, and then over time turn into a stream of traffic and a river of repeat customers — but only if the founding team keeps at it.

Even eBay started this way. When the auction site was first launched, a small number of checks started coming in. The stream of checks turned into a torrent, all while Pierre Omidyar was working at General Magic in his cubicle. EBay was profitable from the beginning, because
there was really no overhead and the site was incredibly viral and revenue ramped quickly.

But most of the ecommerce sites listed in the Internet Retailer Top 500 (it takes more than $3 million in annual sales to make that list) probably started much more slowly than eBay. But their teams kept promoting their products, they kept at it, until revenue reached the millions.

The most important book I had when starting all of Ancestry.com and MyFamily.com’s marketing efforts was Guerilla Marketing Online Weapons: 100 Low-cost High Impact Weapons for Online Prosperity.

A lot of the tactics are now obsolete, but it is the mindset that matters the most. It’s a rare mindset but a really valuable one.

As my World Vital Records team watches our small stream of visitors grow, I want to remind them how important it is to market our company’s products at every opportunity, in every possible channel, using every possible tactic.

As our marketing team grows, I want every one of them to understand the power of guerilla marketing compounded over time.

Let’s do the math.

Suppose you hire a marketing employee at $10 per hour, and assign her to do guerilla marketing and PR using dozens of online marketing tactics. There are literally hundreds of legitimate tactics.

Let’s say that her first day she gets a link from another site that will consistently deliver 3 visitors per day from now on. This could be a link on a blog roll, or an entry in a web directory, or a link on any other site.

Not a very successful day, right. In eight hours, she cost $80, and delivered 3 visitors and no sales.

With an average conversion rate of 2% and an average sale price of $50, the marketing employee failed on day one. Result: loss of $80.

But imagine that she works every day using guerilla tactics such as posting answers to questions on Yahoo Answers, appropriately advertising on Craigslist, submitting her site to search engines and directories, commenting on blogs and participating in message boards, putting offers up on freebie sites, publishing press releases, syndicating articles, and asking bloggers to review her site or link to her. Let’s say her efforts bring an additional 3 visitors per day from links that are semi-permanent and will consistently generate 3 visitors per day from now on. (Many links have a long life span and therefore individually have a long tail.)

So after 30 days her links are now bringing in 90 visitors per day and generating 2 sales a day, or $100 in daily revenue.

Now all of a sudden the economics start looking really good. She’s generating $100 in sales with labor costs of $80. Depending on the cost of goods, she will soon be a profit center for the company, if she can continue focusing on these online marketing tactics and overcome boredom, and the lack of management understanding about what she is up to.

If she is creative enough to keep finding new ways to get permanent links from other sites that will consistently deliver 3 new visitors per day, then within a year, her efforts will be bringing about 1000 visitors per day or 20 sales per day, which would be $1000 per day, or
$30,000 per month. The second year, her results would be double.

This is how internet companies actually succeed. Ask the founders of Backcountry.com to tell you how they spent the first few years basically getting as many links from other sites as they could (even before it mattered for SEO purposes) and how over the years the cumulative impact of all these links (including from their paid affiliates) yielded tens of millions in annual revenues.

This is how it works. There are employees in every successful internet company (usually underappreciated) who are in the trenches every day, gutting it out, getting a link here and a mention here, and an affiliate here, finding webmasters or bloggers or journalists anywhere who might take an interest in their products, writing new content, finding new keywords to market around, generating some sales and some positive word of mouth, until the cumulative impact of all their efforts is generating a consistent daily stream of sales.

Since most corporate executives (unless they were there from the start) have no idea how this stuff actually happens, they don’t give much credit to the trench workers (such as when Ancestry.com laid off its only affiliate manager back in 2000 when she was merely responsible for personally recruiting 9 of the top 10 affiliates, and generating, at one point, a very significant percentage of the companies new daily sales), and they stop investing in the daily guerilla and online marketing tactics that have this cumulative impact.

When their businesses seem to plateau or peak, they panic and spend more and more dollars on paid marketing, and the guerilla stuff goes by the way side.

You can still be profitable when you are spending money to get every visitor to your web site, but not nearly as profitable as when you use a nice combination of paid marketing, guerilla and viral.

For me and my team at World Vital Records (and genealogy is extremely diverse and viral, so we have a lot of opportunities to spread the word in creative ways) the question is this: how many employees like the one I described above can we find, train, and support, before they are duplicating efforts and stepping on each other’s toes.

If our market can handle one such employee, and she can generate links every day that will bring us 3 clicks per day from now on, then in a year, we’ll have one employee generating the $1,000 per day that I described above.

But if there are enough tactics involving enough web sites from enough countries and we can have 10 employees doing this guerilla marketing stuff, then at the end of a year, this team will be generating $10,000 per day in revenue. That would be better: a $3.65 million annual revenue stream from our guerilla marketing/affiliate marketing team. But what if we could support 20 such employees, or eventually 50. The numbers start looking very good.

And it all starts with just 3 visitors a day.

PS. I just thought of a new metric for guerilla marketing. We all use unique visitors, unique visits, page views, and sales. But what about this: unique daily referring domains. I wonder if anyone has ever used that.

A guerilla marketer or a team of them could keep track (this would be an easy report in Omniture) of the number of unique domains or unique URLs that brought at least one visitor each day. If the team is doing their job and getting enough attention and links from other sites, this number would grow every day. This would indicate how horizontal their efforts.

Of course a good online or guerilla marketer will try to get prominent links on high traffic web sites that will generate hundreds or thousands of visitors per day; but my point is that you don’t have to have huge wins like this to succeed–you can do it with small wins every day over a long period of time.

15 Comments

  1. Funny that you mention referring domains. Our highest quality traffic always comes from referring domains. I am sure that trend will continue. When all is fair and equal, friend by from friends (or they by what friends refer them to), when all is unfair and not equal, friends still by from friends. I know that when a family member or a blogger that I trust refers me to a domain, I sign up almost without hesitation.

    Great Post!

    Team FamilyLearn

  2. Paul,

    Your post really opened my eyes to doing business on the internet. I have a modest genealogy blog where I’m trying to make back my hosting fees by using Adsense and becoming an affiliate for various sites like yours. I never thought of it before, but whenever my blog was mentioned on other sites I had a spike in visitors. However, the number of visits would decrease after a few days. I did use google’s adwords for awhile, but the cost increased quicker than the revenue.

    Your post made me realize that I have to become more active with guerilla marketing on other genealogy sites and blogs in order to keep visitors coming and clicking on my ads…and the best part of that approach is it will only cost me my time. I’ll give it a shot and see what happens…won’t quit my day job though…

    Your post gave me a little internet business education in language a retired soldier and history major can understand…many thanks.

    Tim Agazio
    http://www.genealogyreviewsonline.typepad.com

  3. Paul, my favorite post! After being in the online business world for awhile I have built an online store to learn more about ecommerce ( http://www.LDSstock.com ). What a great feeling getting two orders in one day, it was so exciting! Especially when you are sleeping 🙂 I had a thought…..instead of just affiliate programs…..what about a link program where bloggers and internet marketers can go out and get links and traffic to a site and get paid residual income for it. You could have hundreds, even thousands of people working for you and only pay them on a long term basis. You could set up online training and materials to help them succeed. What do you think?

  4. What an amazing post. There is incredibly valuable info in here for anyone looking to build a profitable business online (or offline with a strong online presence).

  5. Paul,

    I have really enjoyed reading your blog lately and I especially like this blog post. I recently started my own website http://www.onestopgps.com and I got my first sale last week. I made a total of $3.33 but the satisfaction of my first sale out weighs any profit. Anyways, I just wanted to say thank you for this article and for all the great ideas. I’m currently a BYU student studying Information Systems and I plan on signing up for your Internet Marketing class next semester. Thanks again for all your help!

    Nate – Aspiring Internet Entrepreneur

  6. I have to agree with Tim, David and Nate! This is amazing insight. I too just started up an online store, it’s a LDS gift store called, LDSstock.com. And I can’t wait to implement some of the strategies that you discussed here. Thanks Paul!

  7. I think one of the best ways to generate viral and word of mouth traffic for a website is to just give your users what they want. I work in the b2b space, marketing to engineers. I know that engineers need product specs and CAD drawing to to build machines, engines, etc so I give them product specs and CAD drawings. Just putting these things online generated a lot of direct to site traffic that can be assumed a byproduct of engineers sharing their experience.

    A good listing of what Engineers want can be found in this article on Marketing to Engineers

  8. Theresa

    GREAT post! Regarding “daily referring domains” — our group at Stanford uses something like this to track referrals to a free resource website we provide for entrepreneurs http://edcorner.stanford.edu — we use tools like Google Blogsearch to monitor the growth in links from blogs, which have had a tremendous impact on our traffic. (By the way, you and your readers might want to check out our site for its podcasts and video clips of tips from Entrepreneurial Thought Leaders.)

  9. This is one of the better blog postings on guerilla marketing I’ve seen. You are right on about tactics and mindset. Things change so quickly now that what worked six months ago isn’t going to work today. I don’t have an online store but if you like music you might like my site.

    http://soundcrank.com.

  10. […] I figured that each blog had between 10 to 100 readers (obviously some have much more), so each comment I left would put my site in front of another 10 to 100 people. This was a really interesting exercise for me as it really helped me understand the landscape of the employment space, understand what thought-leaders where thinking and reading, and helped me get “one more subscriber” to JibberJobber. While we have thousands and thousands of people who have subscribed over the last year, I still consider each and every subscriber as a victory, a hard-won customer. You can learn more about this tactic from Paul Allen’s post The long term cumulative impact of guerrilla marketing. […]

  11. this is an innovative way to segment user traffic and to quantify it. Referring sites are important and a long-term source for traffic. However, I wonder how effective a single post really is? Or would you have to keep posting to the same sites in order to build a conversation thread?

  12. Oh, by the way…my site is http://www.gazhoo.com. We launched a month ago and have about 100 visitors per day. However, I find that articles like this provide a lof of reassurance to people like me.

    thanks for the write up.

  13. Thanks for confirming some things for me. I get so caught up in getting fast links today and I don’t put enough effort into getting long term links. Thanks for the reminder!

    Sean

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