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In episode #632, Eric and Neil discuss why you shouldn’t copy your competition. Tune in to see why past techniques may not work for you today.
TIME-STAMPED SHOW NOTES:
- [00:27] Today’s Topic: Stop Copying Your Competition
- [00:38] What worked for your competition won’t necessarily work for you.
- [01:17] The problem with content marketing is that there is now a lot more competition.
- [01:40] Whereas Neil had success within the first three months, it would take people a year to do the same today.
- [02:18] Costs of paid ads have gone up and bigger brands drive prices even higher.
- [03:00] What people were willing to spend years ago, was a lot less than you would have to spend today.
- [04:00] Just because one tactic worked for another company, doesn’t mean it will work the same way for you.
- [04:15] Dropbox referral programs worked in the past, but they probably wouldn’t work now.
- [04:50] If you’re in business to make money, you should do something else.
- [05:03] You have to be three steps ahead of everyone; think about what will be popular in the future. Spot trends.
- [05:40] Take chances and shoot for the moon.
- [05:50] That’s all for today!
- [05:53] Go to Singlegrain.com/Giveway for a special marketing tool giveaway!
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Full Transcript of The Episode
Eric Siu: Welcome to another episode of Marketing School. I'm Eric Siu.
Neil Patel: And I'm Neil Patel.
Eric Siu: And today we're going to talk about why you should stop copying your competition. Neil, what are your thoughts around this?
Neil Patel: What works for your competition, because the chances are they're older than you and they've been doing it longer, won't necessarily work for you. For example, I get a lot of other friends who own ad agencies hitting me up being like "Hey Neil, you guys do an amazing job with content marketing, we want to dominate on Google like you. Can you please guide us, tell us the strategies?"
And then I'm like "Well, first off, are you willing to go at it for a few years without making a return?" They're like "Yeah, yeah, sure, as long as I know it's there in the long run."I'm like "Okay, are you willing to spend 100 to 200 grand per year?"And they're like "Ah, that's a lot, I'd rather spend a little, get some results, and then go from there."
The problem with content marketing is when I started, there was very little competition, so if you got going, within two to three months you would start seeing results. No, I'm not saying you're not going to get some traction within two to three months, but you're not going to get what I got in the first three months.
To give you a rough idea on how easy it is when I first started, what I got in the first three months, if you do everything that I was doing, you'll probably get those results in the first year. In other words, it'll take you four times longer to get the same results that I got if you're in the same industry.
That just shows that yes it still works, but it takes longer. And that's with a lot of channels. Facebook used to be easier to leverage, now the algorithms are harder and harder. LinkedIn, it's getting harder on there as well. Twitter, again, getting harder on there, same with Instagram.
So what works for your competition won't necessarily work for you, especially with paid ads. Eric you do a ton in paid ads, what's changed over the last three or four years in paid advertising?
Eric Siu: Not much.
Neil Patel: Will costs go up?
Eric Siu: Well yeah, costs always go up.
Neil Patel: They're more competitive.
Eric Siu: When the big guys come in they drive everything exponentially higher. Like once Coca Cola starts going really hard, then you have things sky rocketing even more.
Neil Patel: Have you noticed that the old guys are able to pay a lot less because they've been kind of grandfathered in with a higher quality score and things like that?
Eric Siu: It's like every channel, yeah.
Neil Patel: Exactly. So if you go in with pay per click now for a new campaign, you do way more pay per click than I do, in the first 30 days does it cost quite a bit more than, you know?
Eric Siu: Yeah, it costs way more, and eventually the algorithm figures things out and it becomes cheaper.
Neil Patel: Correct, but years ago did you have to spend anywhere near that amount to figure things out?
Eric Siu: No.
Neil Patel: So, it's like what people were willing to spend years ago to make it work, it's a lot less than what you're going to have to spend. So what works for your competitors won't necessarily work for you, and Dropbox is an amazing example of this. If you want to do traditional paid advertising to acquire users, which they tested out, it was costing them 2 to 300 bucks years and years ago when they first started.
So they stopped and they did that referral program, and that's how they grew. They got creative, and if they just took the traditional route, they wouldn't be a multi billion dollar company, they probably would've been bankrupt, because it wouldn't make sense to spend 2 to 300 dollars to acquire a user who spends 60 bucks a year.
Eric Siu: Yeah, and to build on Neil's example around Dropbox, I remember when I was at this company in the past, when I came in already our developers had built in something where they're like "Yeah, we have this Dropbox referral program." And there was really no rhyme or reason to it, other than the fact that that thing was very heralded, and that was what worked for Dropbox.
And in fact I saw a lot of other startups trying to build that in as well, but that referral program just didn't work out as well. So you have to think just because it works for one company in one different niche doesn't necessarily mean it's going to work for you, because you have to think about it. For Dropbox, people are incentivized to give these invites out to other people so they can get more free space, right?
And so when you create a referral program and you're going to send someone an Amazon gift card for $5, maybe nobody cares, right? But also Dropbox was the first one to do it, so they got the first mover advantage, and they're in a different niche.
Just because you see something working somewhere else, and you see these growth hacks on these other sites, people giving these case studies all the time, doesn't mean it's going to be for you.
Focus on what works for you, and if you're going to look at your competitors all the time, I guarantee you're going to continue lagging behind, they're going to be continuing to be looking ahead, they're going to have their vision, they're going to be able to be the trailblazers and you're just going to be copying behind. And that means you're always going to be behind them.
So I'm pretty sure you're not in business to be behind, and if you're in business to just make money, well, then maybe you should be doing something else.
Neil Patel: And the last point from me is, as Eric was mentioning, don't just copy. What he was alluding to is you need to be ahead of them. And we want to be ahead of them, you have to stay two to three steps ahead. Not one step, two to three.
So don't just think about what they're going to be doing next, or where their industry is going, you need to be like "All right, in the next few years, here's where the industry's going, plus here are the big popular channels that are up and coming. And we're going to start testing these out, or here's what people haven't tried. But they have in five different industries and it worked, but my industry is archaic and nobody's willing to take risk. So we're willing to do this."
You have to be willing to roll the dice, take some gambles, experiment, and try something different that your competition hasn't, or else you'll never surpass them.
Eric Siu: Yeah, 80:20 rule, or 20% of the time, or maybe even 10% of the time you take these moon shoots, maybe 5% of the time. And the other percent, we focus on what actually works. Now, the bigger you get, maybe you can take more risks, who knows, but anyway, that's it for today. Go to singlegrain.com/giveaway to check out our marketing tools, and we'll see you tomorrow.
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