Some personal news first. In a few weeks, I'm joining a EdTech platform startup called Kide Science as their Head of Growth. If you work in EdTech and/or are working with things like funnel optimization, monetization, and growth, I'd be happy to have a chat over a remote ☕️
Anyway. Here are some of my best reads from this week again:
- The BELT method for FB ads
- Three challenges of attribution modeling
- Four ways behavioral science can boost your conversion rates
- Quick tips: Don't use customer testimonials
#1 The BELT method for FB ads
Why your typical ad buying strategy is not sustainable?
An average FB ad strategy consists of picking targeting and updating every once in a while, testing ad & landing page performance, and some retargeting. However, there are multiple problems with this approach:
- You end up testing too many different factors against each other until the process gets really convoluted
- You'll quickly run out of people who are ready to buy right now (and/or your CPL becomes insanely high)
- You're leaving a lot of money on the table, because we're only targeting people for conversions & using just one or two content formats (e.g. link posts vs. long-form video vs. short-form video, etc.)
- Lead costs can be insanely high by the time you get someone to your sales page, as you're limiting the number of people who will see your ads, to begin with.
Enter a full-funnel approach
Suppose you target all awareness levels and indoctrinate your audience to the problem. In that case, you'll establish an engaged audience and build brand affinity & credibility before trying to get them to buy.
- Adopt a full-funnel strategy and use different campaign objectives and formats to reach differentiated profiles within an audience
- Leverage all targeting options (core audiences, custom audiences, lookalike audiences) for different purposes.
- Drive audience down the funnel, starting with top-of-funnel content (that can be insanely cheap to promote), and work your way down the funnel as people are ready to move along.
BELT stands for Belief, Engage, Lead & Transaction
B for Belief
- The goal is to help your audience understand they have a problem worth solving while simultaneously building brand awareness and authority among your possible future buyers.
- These ads are always on, and targeting excludes bottom-funnel audiences. They will train your pixel for quality future lookalike audiences that you'll show more content, and help figure out who are the most likely to engage with your content and thus should be shown more content.
- With the dollar-a-day strategy, you can both test your best performing content AND force Facebook to find the viewers who e.g., watch your videos for the longest by limiting the budget to just a few dollars a day per ad set.
- Objectives to use: Reach, brand awareness, video views, and post engagement.
- Example: If you're selling copywriting courses online, you could do a 2-minute video about copywriting tips with no CTA.
E for Engage
- The goal is to "indoctrinate" your audience to the problem, product, solutions, and services with "edutainment" content. These ads qualify your audience according to who engages with your content the most (e.g., watches your 5-min videos). The goal is to keep these people in your "indoctrination ecosystem" until they're ready to move down the funnel.
- These ads are always on, and targeting excludes bottom-funnel audiences. If they don't engage, they don't get retargeted, but they're still in the "indoctrination ecosystem."
- Objectives to use: Reach, brand awareness, landing page views, and post engagement.
- Example: A 15-second video about the same topic with no CTA.
L for Lead
- The goal is to help your audience move down the funnel by offering something of value related to your product.
- Objectives to use: Website conversions, Video views, clicks to website, lead ads
- Example: A carousel ad that combines previously viewed videos that says: "Want to learn more about copywriting? Check out this course" with a CTA to the website
T for Transaction
- The goal is to get your audience to buy your product to satisfy their recently uncovered needs.
- Objectives to use: Website conversions, Video views, clicks to website, lead ads, image ads & stories
- Example: An image ad with a sales CTA
#2 Three challenges of attribution modeling
Every attribution model has built-in biases. While poor attribution is still better than no attribution at all, there are a few built-in issues that all marketers should understand. (Note: This post was written in 2014, but the point still holds.)
- Attributed ROI is not true (incremental) ROI: The idea behind attribution is to divide up credit for a conversion amongst touchpoints preceding it, so you can determine what's attributing to revenue. The problem is that some of these touchpoints are impossible to track: offline marketing, existing brand affinity, and brand equity that influences customer decisions, WoM, and so on. The digital marketing touchpoints that led directly to an individual sale only contribute an incremental impact on top of all of these.
- Attribution does not account for offline to online effects: Determining the influence of offline marketing on digital channels becomes an issue. For example, paid search is driven by search queries, the volume of which is often driven by consumer interest driven by total marketing efforts.
- Attribution does not account for the influence of external factors: Most types of attribution models do not account for other external factors that influence sales and marketing effectiveness, such as pricing, promotions, seasonality, economy, and more. For example, according to decades of academic research, pricing with respect to competition is known to have 20-25 times greater impact on sales on average compared to the total effect of advertising across all channels.
#3 Four ways behavioral science can boost your conversion rates
There's no lack of intent—there's lack of action. Our environment has a huge impact on driving our decisions, which is why understanding behavioral science will have huge power over increasing your conversion rates.
1. Increase the immediate benefit to taking any action: Forced choice and Present bias
The mobile app Steady helps gig workers track their income. To do this, it needs access to a user's bank account—but this bank-linkage step creates friction. It's a common drop-off moment for users: 92.9% give up during the process. They implemented two changes and managed to increase the linkage rate from 7.1% to 15.9%. How did they do it?
- Forced choices: ask people to "accept" or "decline" the new feature (in this case, linking your bank account). There is now a "cost" to not accepting it, instead of allowing people to skip for the time being.
- Present bias: Focusing a user's attention on "completing" the setup works because the immediate benefit to the user of taking action is higher than the cost of the action.
2. Make people feel like they already own it: The Endowment effect
Livongo is a diabetes management company that made one simple change to their onboarding process that drove a 120% increase in registration. How did they do it?
- The endowment effect: The one simple change they made was switching email phrasing from "Join the program" to "Claim your welcome kit." This works, because when we feel like something is ours, we may value it more. In addition, the opportunity to "claim your welcome kit" is both a more concrete and comparatively smaller ask. People only had to say "yes" to receiving a kit, not joining a program.
3. Lean into existing behavior, and then make it easier: Friction
EarnUp, a fintech app, wanted to help its users pay down debt faster (thereby saving them thousands in interest). How did they do it?
- Rounding up: By framing the ask to pay more than their minimum payment as "rounding up" to an even number rather than paying extra, they increased the number of people who chose to overpay by 40% from baseline. On average, this population would shave an additional two years off their mortgage. We're already rounding up in our minds (you don't remember the exact amount of your bills but rather a ballpark) so rounding up your payment made it psychologically easy for people to do more of what they were already doing.
4. Get commitments on day one: Mental models
To help people get credit and keep it high, Duke University's Common Cents Lab partnered with Latino Community Credit Union to help support borrowers with their loan repayment. They tested a few different ways to build incentives into the program. In the winning condition, a whopping 36% of people agreed to round up their loan payment. How did they do it?
- Catch people when they have the most momentum: The team decided to help people create a savings backstop. If borrowers ever missed a payment, the bank could withdraw from this no-fee fund and avoid hitting a person's credit score or levying a fee. When signing the loan documents, people were asked by the loan officer whether they wanted to round up their payment and put the extra into savings. This was an opt-out on their loan form, so people had to check a box to decline.
#4 Quick tips: Don't use customer testimonials
Instead of regular testimonials, consider using "reverse" testimonials on your website: "I was reluctant to buy product X because I thought [objection], but here's what I realized after using it [benefit]." Stating the obstacles/hesitations that were almost preventing others from buying helps you overcome people's objections. Read the LinkedIn post
That's it for this week. I'd love to know what was your favorite read this week!
P.p.p.s. Connect with me on LinkedIn and Twitter! (Warning: I mainly post memes and rants about marketing, but if that's your jam, let's be friends. I'm also Head of Growth at an EdTech startup and a freelance consultant for B2B SaaS startups, but honestly, I'm more into shitposting than personal branding.)