If 4% of untargeted people who land on your site become good users of your service, have you found product market fit for a particular niche?
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We get a very solid amount of new visitors to our consumer entertainment content site every month (think video, music, etc.). Most people who land on our site come from un-targeted, social network referrals, or from press. We are converting about 4% of those people into great and vocal ongoing users of our website (returning, spending time consuming more content, Tweeting our content a fair amount). We need rapid user traction to raise more money. Should we use our limited tech resources to continue refining the product hoping to convert a higher percentage of the people who hit our site into solid users, or to implement tools and campaigns aimed at marketing toward the profile of people who like what we already have built?
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Answer:
First off, if you're looking for a quick increase in customers, the tl;dr answer is "marketing." And here's why: I think the answers you want would come from the following questions: Where are my best customers coming from? What's the best way to get more of them? In order to answer those, you'll need more insight into the visitor -> customer experience. It seems like you already have a hunch that social referrals and the press are high-converting sources of traffic for you (both fall under the category of "social proof," by the way). So the next step is to figure out what parts of your site are causing them to become repeat customers, then double down on that. I'll back up for a minute and state the philosophy behind this approach. The assumption is that people don't just impulsively decide whether or not they'd like to become your lifelong customer. There is no roll of the dice that decides that. Instead, visitors see certain types of content or interact with your site in a way that resonates with them. Thus, the key to creating more repeat customers is to find the common paths that are creating awesome visitor experiences and front-loading that for everyone. In short: to replicate the customer, replicate the experience. If you don't already know what that awesome first experience or "aha" moment is for your customers, you still have a few options. If you're a small company, I'd highly recommend simply talking to your customers. Call up (yes, over the phone) a handful of your best customers and ask them how they found you and what they like about the service. Do a full-blown interview on them and record everything. Doing about 10 of these will put you in good shape because: You'll know exactly why a customer became an evangelist You'll know how to keep that customer happy You now have a testimonial you can use in your marketing material If you have a large percentage of customers, check out the tools that are now part of (disclaimer: I work there). There's a handful of very awesome ROI-based reports that can show you exactly what is generating revenue, engagement, etc for the entire lifetime of a customer. You honestly can't get them anywhere else.
Jonathan Kim at Quora Visit the source
Other answers
You need to do both but in an iterative manner - ever heard of Lean Startup (http://theleanstartup.com/)? The basic premise is that you actually use an intelligent approach to development that progressively attracts and maintains an increasing number of users. You will find that you will need to constantly adapt to novel, often unforeseeable, directions in response to user feedback. You will also find that you can maintain tighter development and marketing cycles and avoid costly missteps (not missteps in general - just the cost of this errors!). Finally, Lean Startup is very attractive to investors and fully embracing and using this model could really help you land investment money. I am not an expert by any stretch but I would highly recommend that you go to the website link above and read through their literature.
Ken Tola
I don't think so. You've seen good results when you get new users from word of mouth or from press. That doesn't mean that you will get good results from users acquired via other channels. I would recommend running some campaigns to start trying to get data about how good the traffic from other channels is. I think 4% is potentially good but it depends on what kind of product it is. If you were selling software, 4% conversion would be great. If you're a social network, 4% probably isn't good enough to take off.
Kevin Peterson
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