What is your website worth and how to sell it for maximum value

Note from Dan: This is a detailed guest post from website valuation expert, Jock Purtle. I’ve had lots of chats with Jock around the question of what is my website worth. In this post we wanted to delve right into the detail of how to value a site and how to sell it for as much as possible. I hope you like it. Over to Jock.

Each year we produce a valuation report on all the public Internet business sales that looks at what businesses sold for in the last 12 months. Dan happened to mention it in a forum thread a while ago. He had this question:


I proceeded to then ask him the reasoning behind the question, specifically and he came back with this:

“If you invested your life in building an asset wouldn’t you want to track it’s value? People value their houses they check their bank accounts and their stock prices. Doesn’t it make sense to track the value of your business?”

The end outcome over some emails, back and forth was that it is a little more complex than just throwing out a multiple or rule of thumb. While valuations aren’t straightforward because value is subjective, you can apply certain generalizations to valuation based on a few facts. That is what we will be discussing today.

What makes websites valuable?

The main reason your website has value is because a willing buyer looks at it as a way to make a return on investment. That’s it.

You might be thinking to yourself that your website has lot’s of potential, but that’s flawed thinking. Buyers look for their money back in the quickest time possible and will pay a higher or lower amount for a website based on the risk they perceive in getting their money back.

What is also flawed thinking is that the money you’ve invested in your website adds extra value. Some website owners make the mistake of thinking that because they invested $15,000 into the making of the website, $10,000 for the domain name, $50,000 value from the websites traffic then it should be worth an extra $75,000. Which is incorrect. All assets (domain, design, traffic, list) combine to generate profit. It is the profit that gets valued, not the assets.

How website buyers perceive value?

Buyers are usually willing to pay a multiple of the earnings of a business to acquire it. A quick example: a website making $200,000 a year may be valued at a 1x multiple, to be sold at the same 200k. If the multiple offered is 2x, the website will be sold at $400,000.

This multiple is usually determined by the amount of risk involved, so the higher the risk your site holds and the lower the multiple.

So how do buyers perceive the value of a website? To answer that, let’s consider those factors that would make your site a less risky investment:

  • Solid, consistent earnings
  • Increasing growth
  • Automated systems in place
  • Multiple revenue streams
  • Diverse traffic sources
  • A unique selling proposition (USP)
  • Market leadership and branding

Traditional Valuation Methodology

Traditional valuation methodology can be simplified down into three types pf methods. They are:

  1. Earnings multiple – what we’ve just seen. A buyer applies a multiple, usually in the range of 1-3 and multiplies it by the annual profits. If you are working with monthly statistics, the multiple can be in the range of 12-36. Counter wise this can also be a multiple of revenue (total sales) for larger fast growing businesses. However for the average Internet business valued under $5 million, this is generally not used.
  2. Comparable sales – The buyer may decide to find data on sites similar to yours that have sold in the past. This method is not necessarily accurate, but it creates a clear range within which your website should be sold.
  3. Asset valuation – some sellers, or buyers, prefer to look at a website’s value in terms of the assets tied to it. Assets can be traffic, quality of this traffic, a huge mailing list, a premium domain name, a recognizable brand name, or any other thing that can be leveraged to make bigger profits and achieve a quicker return on investment for the buyer. This is usually applied by strategic buyers for sites that are making little to no profit.

More on valuation methods

A traditional business valuer is going to use a discounted cashflow method, which is a future earnings calculation. However because there is such a high level of good will in Internet businesses, the generally accepted methodology is a multiple of earnings.

Remember these facts when it comes to site valuation:

  • A valuation is really just an opinion; so different buyers may not have the same opinion about a particular site.
  • Your site’s real value will only materialize once it’s sold
  • Sellers are usually at fault for overvaluing their website
  • There’s no perfect or correct valuation model that applies to all websites
  • In valuing a site, you are combining subjective and objective tasks
  • Higher quality stats (such as proof of traffic, income) are more likely to result in higher website valuations

Let’s take a further look at the earnings multiple methods, which is the most common method. This approach usually assumes that your website has been in existence for at least two years, since we apply a multiple to the average yearly earnings (earnings being profit not revenue).

How’s that? Since website buyers pay a multiple of the yearly profit (1-3) the same can be done for monthly profit. For instance, a website making $60,000 in profit per year may be sold at 2.5X, which is $150,000.

It’s vital to note that all along, we’ve made references only to the PROFITS, not sales (revenue). It’s the net profit that counts here and it’s easy to calculate it: the total earnings minus expenses. You need to account for the cost of doing business, website maintenance fees, taxes, depreciation, interest and all other expenses incurred. Deduct all of those and you have your net profit.

The multiple to be applied usually varies based on supply of sites for sale and their demand (as you would expect), market sentiment, where you place your listing (marketplace) and even the buyers’ mood! Generally, you should expect a 1-1.5x multiple if your website isn’t very well established, while your established counterparts should expect a 1.5-3x multiple.

Why online automated valuation tools can’t be trusted

The first thing you might type into Google is something like “what is my website worth” when selling. What you will get, is a whole lot of free website valuation tools. If you use something like www.mywebsiteworth.com and type in google.com you get an arbitrary value of $1,000,000,000 (1 billion) dollars. Now we all know this to be way off the mark. So we might then type into Google “what factors determine a websites value” and when we collate all the information we are going to get a long list of different things to look for when valuing a website. Things like domain age, page rank, google rankings etc.

But what these articles fail to identify is the single most important factor in valuing a website and that is the future maintainable earnings of the site.

What needs to be understood is that the assets of the business are only indicators of future maintainable earnings and do not add any extra value to the site. This will be explained more in detail below.

Take for instance what the following tools estimate the value of Google.com:

  • Sitevaluecheck.com – $700
  • Digsitevalue.org – $1.3B
  • Worthofweb.com – $78.6B
  • Dnscoop.com – $2.2B

These automation are poor indicators of value. Google’s current worth is $375 Billion dollars.


Why One Company Is Worth More Than Another?

Let’s take the example of company A and company B and dive into why they have different values.

Company A
Company B
Business typeAdvertisingAdvertising
Annual sales$400,000$200,000
Annual profit$100,000$100,000
TrendsFlatRoom for growth
High marginsNo Yes
Recurring clientsNoNo
Largest customer listNoYes
TrafficHeavily reliant on seoMultiple source
Income source1 Source3 Sources
Complex to operateYesNo
Low barrier to entryYesNo
Business LevelMatureGrowth stage
StaffHigh turnoverStable
Owner help after saleNoYes
Owner financingNoYes
Owner non-competeNoYes
Brandable domainNoYes
Unbroken whoisNoYes
Quality and diverse linksNoYes
Repeat and direct trafficNoYes
Solid page rankNoYes
High levels of trafficNoYes
Commercial audienceNoYes
Quality contentNoYes
Partnerships and JV'sNoYes
Solid sales presentationNoYes
Easily transferableNoYes
Press coverageNoYes
Affiliate programNoYes
Final sale price$100,000$435,000

What we can see is that by having different value criteria for the same type of company with similar revenues, we get a totally different valuation.

The Not So Good News

Using the example above, let’s say you have a large advertising website with 3,000 pages of unique content, great search rankings for high value keywords and a really brandable domain name. The site earns a net $100,000 per year from banner ads and we use the above valuation of $100,000 based on similar site sales.

  • Yearly Revenue x Multiplier = Sites Valuation
  • $100,000 x 1 years = $100,000

But the seller thinks the site is worth more because of the good domain, all the unique content and the great rankings.

They calculates that to start the site from scratch it would cost:

  • Content – $55,000
  • Domain – $8,000
  • Top Google Rankings – $25,000
  • Total – $88,000

So they think that the real selling price should be:

$100,000 + $88,000 = $188,000

However here is the bad news: $188,000 isn’t the real value. The assets of the business (content, rankings, domain) add no more value than what has already been calculated.

The assets of the business form the structure for its revenue generating capabilities. It is important to understand this principle when valuing your site. Even though it might have for example, cost you 100k to get the site up and running it is no more valuable then what a potential buyer can see the site making in the future.

Why You Can’t Sell Potential

As a website broker that provides a free valuation service, we get a lot of valuation requests and what we see a lot is half finished projects with “lot’s of potential” where the owner has started an online business, got some traction and then dropped the ball.

In both these scenarios, there is very little to no value in the assets because the site is not producing income. A buyer is going to pose the question “if there is so much opportunity why haven’t you gone and taken advantage of it yourself?”.

Don’t be offended when someone values your business at zero if it meets the above criteria.

What has the market been paying for online businesses?

There are two different metrics that the market has been taking into account when buying online businesses. The first metric is the business model (e.g. ecommerce store vs. software business) and the second is the price point or total valuation of a business (e.g. sale price of $200,000 versus $3 million)

For more details check out our:

Price by business model

Price by price point


Summarizing this data, we can see that different business models are selling for different prices. We have a lot of buyers on our database at the moments that are seeking ecommerce stores.

How can I increase the value of my website?

If you are wondering if there’s anything you can do to get more money the answer is a resounding “Yes”! If you are not desperate for a sale, it may be a wise thing to hold on to your website for a little while longer while you improve it’s value.

There are a few the key things you should do to get your website ready for sale, but let’s first take a peek at the variables and questions a buyer will ask during due diligence that can alter a site’s value.


  • Is the income stable?
  • Is the income diversified?
  • What is the cost to profits ratio?
  • Are the finances clean?
  • Is there growth in income?


  • How much traffic?
  • Multiple traffic sources?
  • Quality of traffic?
  • Is there a large reliance on SEO?

Key Assets

  • Email list
  • Contracts with suppliers
  • Contacts
  • Premium domain name
  • Premium quality content


  • What is the age of the website?
  • Unbroken whois history?
  • Technical know-how required to operate it
  • A positive growth trend
  • Strong brand
  • Unique selling proposition
  • Automated processes
  • After-sale support

Other ways to increase value

Setting up some type of seller financing arrangement can help you get more money for your website.

  • Performance goals – you agree that the buyer will make payments on certain milestones being achieved.
  • Support – offering to give them after-sale support
  • Part ownership – if you as the seller still want a stake of the website, the website can be perceived by the buyer to be of higher value
  • Financing – an incentive, the seller offers to finance the purchase
    No competition – including a clause in the sale agreement that rules out you competing in the same market in the future

What Do Buyers Look Like?

Buyers are going to come in the following forms:

  • Corporate – This buyer is generally a successful corporate employee that has saved up some cash and is looking to get out of a job and into their own business. They are specifically interested in buying a website because of the freedom that it allows them.
  • Baby boomer/retiring – This buyer is looking for a) something to fill their time with and b) most importantly a better asset to get them through retirement. Baby boomers are soon realizing that their few hundred thousand invested or saved is not going to last them long.
  • Internet entrepreneur –This buyer either already has an online business and wants to expand or has existing skillset in online business and wants to have there own business.
  • Offline business entrepreneur – This buyer has generally either sold their offline business or are looking for a new business to invest in
  • Institutional buyer – these companies buy companies for a living and are looking for solid investments to add to their portfolio.
  • Strategic buyer – This buyer is generally a competitor, supplier or synergistic buyer that is looking at the acquisition as a bolt-on to their existing business. A small amount of sales happen in this way but when they do the price paid is generally well above market rate.

How To Sell A Website?

Step 1 – Preparing Documentation

The first document that you need to prepare when selling you website is an information memorandum (also known as prospectus or book). This document outlines what your business is, how it operates, how it makes money, where it gets it’s traffic and any frequently asked questions that a prospective buyer will have. There are 3 different sections of information you should have prepared, the general information, legal documentation, as well as the marketing information.

General information consists of the regular information and is usually the first thing potential buyers will be looking at if they are interested in your website. Here is a short list of some of the things you will be expected to have ready:

  • Fact summary sheet, gives the most important information about the site all on one page
  • Website traffic history
  • Programs that the site uses and how to work those specific programs
  • Security reports
  • Index of every single page
  • Media mentions, such as awards or publicity
  • List of employees

Marketing information is going to be a big part of the buyer’s decision. The marketing information will show them how you brought your website traffic and also how your overall brand is looked at by the public. Some marketing information you should have ready is:

  • Overall marketing strategies used
  • Statistics within search engine rankings
  • Keyword research completed and keywords that have already been targeted
  • Visitor statistics, that includes their demographic information
  • Competitor information and research
  • Sales history and information regarding your conversion rates

Legal information to provide proof of ownership, transfers, history, and all other legal information your buyer might be interested in. Some of those documents are:

Revenue documentation

  • Expense reports
  • Profit reports
  • ROI analysis
  • Any appraisals
  • Any contact regarding the sale

Step 2 – Finding Buyers

Once you have developed your prospectus you will use that to shop your business to buyers. The following places are where you will find prospective buyers of websites:

  • Your private network (friends, family, business associates)
  • Your competitors or suppliers
  • Business for sale classified sites
  • A website brokers database
  • Forums
  • Searching Google for terms like (websites for sale etc.)

Step 3 – Receive Offers

As you approach buyers they are going to have initial questions about the business. You will need to answer these questions prior to receiving an offer. Generally an offer will come in the form of a letter of intent. This is a document that says that a buyer would like to offer $X price at Y terms for the business and by you accepting that document you allow them an exclusive due diligence period

Step 4 – Closing The Sale

Just because you have an offer on a business or letter of intent does not mean that it is a guarantee of closing. You might run into the following problems closing the sale.

  • Your business fails due diligence and the offer is reneged
  • The buyers funding falls through
  • The buyer makes a counter offer that you don’t accept

If you are successful getting to the final stages of a sale the final stage is providing training to the new buyer. This involves generally a 60-90 day process of walking the new buyer through how to run the business on a day-to-day process.

Can I Just Pay Someone To Do This All For Me?

Yes, there are services out there that assist online business owners sell their business. You are either going to hire a broker or a mergers and acquisitions firm to manage this process. Some services these professionals provide are

  • Makes sure that the website is correctly priced.
  • Value your company for you
  • Find Potential Buyers.
  • Educate the buyers about the site and show them all aspects of it.
  • Will assist in the price negotiations.
  • Assists with completing all of the due diligence involved with the sale.
  • Protects the identity of the seller if they don’t want to be revealed.
  • Provides post-sale assistance if it is needed.

Online businesses fall into three categories and each category requires a different skillset.

Small (smaller than $100k)

If your site is valued under $100k it is probably making between $50 and $4,000 per month in profit.

Our recommendations:

Medium (between $100k and $5 million)

If your site is valued between $100k and $5 million it is probably making between $5,000 per month and $200,000 per month ($50k to $2 million yearly net profit).

Our recommendations is digitalexits.com – this is my business so I’m a little biased :)

Large (greater than five million)

If your site is valued at greater than $5 million, then your business is probably making at least $2 million dollars per year in EBIDTA or net profit. At this time it is best that you engage the services of a middle market mergers and acquisitions company. At this level the multiple you are likely to receive is going to be much higher and the demographic of the buyer is going to have more cash and be a more experienced investor.

Our recommendation in this case is foundersib.com.

What do you think?

Let me know if this post was useful for you. I’d love to know what you think about the topic so please reply in the comments below.

The post What is your website worth and how to sell it for maximum value appeared first on WP Curve.

5 Ways to Turn Your Unhappy Customer into a Valuable Resource

There are few things that impact a brand’s reputation more than the way it responds to complaints and unhappy customers. Customer service has always been an important part of developing brand loyalty, in fact it was the center of the business model that allowed companies like Nordstrom’s and Zappos to thrive. And now that the internet and social media give individuals their own platform to publish information about their daily lives, it’s becoming even more critical for companies to provide great customer service.

twitter message British airways

Image credit: http://simpliflying.com/2013/three-ways-airline-marketing-changed-promoted-tweet-british-airways/

It’s easier than ever for customers to publicly share their experiences, and the way you respond to unhappy customers will determine what they say about you afterward. So what can you do to make sure that you properly respond to an unhappy customer so that you both experience the most pleasant outcome possible? And is there a way you can actually make unhappy customers helpful to your business, so that instead of treating them like a problem – you actually see them as an opportunity?

Yes, there is. Each dissatisfied contact has the potential for becoming your company’s best advertisement, a key referral source, and a stealth undercover operative – if you are willing to listen.

Here are five ways to turn unhappy customers into a valuable resource for your business:

1. Make Your Customer Feel Heard.

All complaints are similarly themed – something was supposed to happen that didn’t. A product doesn’t work, a repairperson doesn’t show up as scheduled, an expectation wasn’t met. In any event, your client was inconvenienced or worse. By the time the problem is severe enough for the customer to contact you, they are undoubtedly upset.

If you respond to an unhappy customer by immediately trying to get to a solution, it can possibly backfire and make the customer even more upset. Being unhappy or angry with a company or product puts the customer in a highly emotional state, so the first thing you should try to do is get them into a more agreeable frame of mind.

Often times an unhappy customer actually cares more about just feeling like they’ve been understood. But if you immediately jump to a resolution, the customer won’t feel like you’ve taken the time to truly hear their problem.

We all like to feel that we’re special, so even if the customer’s complaint is a common one take the time to make them feel heard. You can do this by acknowledging not just the facts of the situation, but also how it made them feel. For example “It must have been frustrating for you to bring home our product only to realize it wasn’t the right model for your needs.”

Whether you are the first line of defense or last in line of escalating concerns, every call or message on social media matters, and the way you handle the conversation from the very beginning can go a long way towards diffusing the situation.

While it’s only natural to get defensive when someone is criticizing your product or service, you can mine the complaint for valuable information, and potentially convert a hostile caller into a loyal devotee.

No one is ever going to be more honest with you than an unhappy customer. It also gives you the opportunity to gain valuable insight into whether any internal processes need to be fixed when dealing with customers so make sure to take detailed notes.

Dominos was often the butt of jokes, with many people complaining that their pizza tasted like cardboard. The company tied with Chuck E. Cheese, coming in last place in a consumer’s taste preference survey done by Brand Keys in 2009.

The company listened to its unhappy customers and responded by changing their pizza recipe. They encouraged consumers as well as food bloggers to try their new pizza and to leave feedback through social media. This type of transparency and willingness to take criticism and do something about it generated goodwill towards the company and a willingness for people to give Dominos another shot.


Image Credit: https://www.facebook.com/assistantangel/posts/257746184199

As CEO Patrick Doyle stated in a documentary created by Dominos to show how they listened to their critics, “You can either use negative comments to get you down, or you can use them to excite you and energize your process of making a better pizza. We did the latter.”

2. Do All That You Can to Delight Your Unhappy Customer.

No question, some problems are more difficult than others to fix – a moving company drops a valued antique, a supplier misses a critical deadline, the cable company drops the biggest game of the year. Sometimes, you can’t undo the problem, but you can always find a way to make it up to the customer. The degree to which you do so will go a long way towards converting your unhappy customer into your most vocal advocate.

Going out of your way to accommodate a customer’s needs makes them feel important, respected and in control. Whenever possible, try to give your customer even more than they asked for. By delivering even the smallest amount above their expectations, you can make them feel like they are your most valued customer.

When a customer’s Christmas package was stolen from their apartment building, the customer service reps at popular on-line retailer Amazon.com didn’t point fingers, they went to work exceeding expectations, delivering a replacement order and waiving the shipping charges. Even though the loss wasn’t Amazon’s fault, they fixed the customer’s problem. The news of their corporate generosity made most major newscasts and generated goodwill and publicity far beyond the costs of the package they replaced.

Converting unhappy customers into valued customers will dramatically impact your repeat business. Everyone knows problems happen, products sometimes break and service providers occasionally fail. It’s how you make up for the inconvenience that makes the difference. You distinguish yourself from your competition by the way you make things right. Customers will come back to your brand over and over again when they know you’ll address any problem that arises.

3. Damage Control – Protect Your Brand from Negative Mentions.

There used be a standard formula that said when someone experienced poor customer service they would tell ten of their friends. That was before the internet, smartphones and social media.

In today’s instant-access, multimedia environment, one unhappy client can reach literally thousands of people, sending their complaint about your company viral. Sadly, negative comments seem to be more contagious than positive ones. You’ve probably seen video clips where customer service personnel aggravated situations by their rudeness; by not listening and not resolving the complaint.

Insensitive lingerie and workout wear retailers may always regret the way they respond to customer’s concerns about style and fit. Just take a look at some of the controversy Lululemon generated after the company’s CEO suggested unhappy consumers were probably just too fat to wear their clothes.


Headlines from around the internet after comments by Lululemon founder Chip Wilson. Image credit: http://nymag.com/thecut/2013/11/lululemons-pants-debacle-takes-fat-shaming-turn.html

As you might imagine, those comments were widely posted on-line. There’s no un-ringing the negative publicity bell.

That’s why it is critical that you use your interactions with unhappy customers as an opportunity to turn them around. Unresolved complaints tend to escalate. They get posted to social media pages and more and more unhappy customers join the conversation. The louder the conversation gets, the more the negative sentiment towards your brand will spread to other people in your target market. By providing good customer service and making customers feel heard you can minimize your negative publicity.

4. Build a Positive Reputation.

On the flip side, an unhappy customer that’s transformed into a delighted one becomes even more loyal than a satisfied customer. In other words, we are even more satisfied when we’ve had a problem and it’s been satisfactorily handled than if we never had the problem to begin with. Better still, when a disgruntled client receives stellar customer service they are more likely to tell their friends, in part, because it casts them in such a positive light.

Nordstrom’s built a reputation for exceedingly excellent service, especially the way they process customer returns. Store managers are given wide discretion on how they implement the company’s generous return strategy – supposedly even accepting tires at one store, a product Nordstrom’s doesn’t carry! The story, one of many, spread like wildfire and helped cultivate the Nordstrom brand of individual attention and superior, over-the-top service.

Zappos is another company that has legendary status when it comes to its customer service. Their devotion to providing quality service and listening to consumers has paid off in dividends. They have a legion of fans who can’t wait to spread the word about how outstanding their services are (free advertising) and 75% of their purchases come from repeat customers!

zappos letter

Image credit: http://www.reddit.com/r/funny/comments/mzvio/my_friend_ordered_a_pair_of_shoes_from_zappos/

When you delight your customers by resolving their issues and then exceeding their expectations (see the second tip) your customers will be motivated and excited to share the story. Again, everyone is happy to spread the word about how special and important they are that a company went out of their way to help them. Customers will post their positive experiences to social media which your company can then re-post. There’s nothing like unsolicited, positive, authentic customer testimonials to improve your brand image.

Remember, every initially combative or irate customer contact gives you an opportunity to forge a lasting positive relationship.

5. Seize the Opportunity for Improvement.

Once you conclude your conversation with your now converted, happy customer, your work is not over. Remember those detailed notes you took during your call? Unhappy customers are an invaluable resource for providing honest information about your business, information you need if you want to improve and stand out from your competition.

Each complaint is like having a covert operative working undercover to point out potential problems. The old adage, “where there’s smoke, there’s fire” applies to your business. If one unhappy customer tells you about a problem, how many more have experienced a similar issue and just haven’t called?

By attending to each individual complaint, you can nip potential problems in the bud. Or, if there is a more systemic problem in play, you can address it before it gets any worse. Common customer issues can reveal where your business needs work, and give you direction so that you can continually build a better product or service. By incorporating complaints as feedback for improving your business, you will help even more customers.

Most customers will accept the occasional human or system error. How your company responds to those errors is what distinguishes you from your competitors. It’s easier than ever for customers to publicly share their experiences, and the way you respond to unhappy customers will determine what they say about you afterward.

By truly listening to your unhappy customers you can generate the most pleasant outcome possible. Better yet, you can turn an experience with an unhappy customer into an opportunity to drive profitable change and growth for your business. You now know every complaint is your opportunity to minimize future negative publicity and convert an unhappy customer into a devoted and loyal fan who will spread the word about your superior service.

So the next time you have an unhappy customer on your hands, you can smile and say warmly, “Thank you for reaching out,” and mean it.

About the Author: Josh Brown is part of the marketing team at Soldsie, a social-selling platform that enables retailers to sell their items over social channels like Facebook and Instagram. You can follow Soldsie on Twitter or Facebook.

What You Need To Know Before You Start A Referral Marketing Program – Who Sends The Referrals?

83% of clients were comfortable providing a referral, yet only 29% of clients actually gave one.

That’s was what Advisor Impact found in 2010 when they surveyed more than 1,000 financial service clients to understand how customer satisfaction & loyalty was translating into new client referrals.

What’s shocking about the relatively low 29% referral rate is that 93% of the people surveyed said they were somewhat or extremely likely to continue working with their advisor & nearly 80% gave a satisfaction rating of 8/10 or higher.

In other words, customers were satisfied but they weren’t referring new business; why?

Happy Customers Do Not Always Mean High Referrals


Partly, it’s because many of the advisors didn’t understand their own customer segments & therefore couldn’t learn more about why or when they were referring new business.

Once Advisor Impact did a cluster analysis to “help advisors better understand and model their ideal client,” it became pretty clear who sent the most referrals.

Referral Scale


image source

After Advisor Impact identified the different clusters, they wanted to learn what separated each group from each other, seeing that all but disgruntled customers were reporting themselves as 97-99% loyal.

Keeping in mind that we’re talking about financial advisor clients & financial planning is big part of that relationship, Advisor Impact found that 64% of “Engaged” clients say they have a written financial plan, whereas only 44% of “Content” clients reported having one, with the percentages dropping significantly between “Complacent” & “Disgruntled” customers.

Written Financial Plan


image source

It was also found that “Engaged” customers received 3-4 (or more) reviews of their portfolios and were taking part of on-going conversations where their advisor was soliciting feedback and asking for actual input.

“Content”, “Complacent” & “Disgruntled” customers each received fewer portfolio reviews and requests for feedback than the group before it. (Read the full case study here.)

Understand Your Existing Referral Analytics Before Starting A Referral Program

If I asked you what percentage of your customers came because an existing customer referred them, would you know the answer?

In an ideal world, your analytics would be configured to track the customers that are buying because existing, logged in customers are sharing links from the a product page, or somewhere within your app (click here to see how this is possible in Google Analytics).

However I’m not naive and I know the world’s not ideal. Even if you don’t have this set up in Analytics, there’s no reason you can’t set up a feedback loop into the tail end of your checkout flow that gives you an indication of how people are finding you.

If Cricket’s Creek Farm in Williamstown, MA can do it, surely you could ask how new customers found out about you, and maybe who sent them, right?


Having this kind of data, even if it’s rough, will provide you with some insight early on as to how referral traffic from existing customers converts. Even without a referral program, referrals are occurring, and you should take steps to find out how they’re finding you. Without pre-existing data, you’ll have no baseline as to how your new “refer-a-friend” program is performing.

Now that we have a referral program, 11% of our customers are sharing with friends!” So what? If it was 11% before you implemented the program, now you’ve wasted money on the software AND you’re losing whatever margin you’re using as the incentive for getting people to share & sign up.

Do You Know Who Is Sending The Referrals?

Who Refers Why Do They Refer When Do They Refer and How Many Do They Refer

Understanding the conversions that come from referrals is only one half of the equation though. If you want a referral program to be successful, you need to also understand who is giving the referral.

In the Advisor Impact study, we saw that it was the “Engaged” clients who were giving satisfaction ratings of 90% and were 99% loyal that were providing the most referrals. What does that customer segment look like for you & can you find out exactly who they are?

If it means asking “Who referred you?” in a qualitative survey for new customers, then matching that against your existing customer base, so be it. Knowing exactly who is sending referrals is going to be a huge help for every other step of the process.

Why Are They Referring New Customers Completely Unprompted?

Once you know who, you need to find out why. One on one interviews, surveys, and other customer development techniques can help to reveal this. When most people talk about Dropbox’s 3,900% growth they focus on referral program being successful because Dropbox gave away free space.

What they’re missing though, was that after many unsuccessful acquisition strategies, Dropbox took a step back and found that many of their existing customers found the platform because of referrals. “Free space” was merely the trigger to get more users to share with their friends.


That’s the key to figuring out a good incentive, really. Find out what is already getting people to share, then give them the ability to get more of what they want.

For example, Birchbox has built an entire business model around sending 4-5 monthly samples for grooming & lifestyle products you may not have known about before. If you like the samples, you can buy full sized versions in their online store. If you really liked the stuff you got, you’re probably end up telling a friend about it.  Pretty neat, right?


Well that’s good, because Birtchbox’s referral program gives you 50 “points” for each friend you refer, and for every 100 points you receive, you get a $10 gift card, which can be used towards buying full sized versions of the products you’re sampling.

In this case, it’s not the “points” existing customers want, but full size products. The easiest, fastest way to get what you want? Refer your friends.

$20 = 2 friends... That's not so bad, right?

$20 = 2 friends… That’s not so bad, right?

But it’s deeper than that. Human beings have been hardwired to share our experiences with our allies since we first stepped out of caves.

In “The Psychology of Sharing” a study by the New York Times, it was found that people share online for a core set of reasons:

  • To say something about their own identity.
  • Enrich the lives of those around them.
  • Build social currency.
  • Gain acceptance from their peers.
  • Support causes they believe in.

Why we share onlineWe Share To Define Ourselves

On a meta level, it’s not about “points” or “discounts” so much as it is about sharing this really cool thing with the people you care about.

The study also found 6 distinct types of sharers, with different motivations for why they share with their networks:

  1. Altruists – People who are unselfishly concerned for the well-being of others.
  2. Careerists – Those who share to exchange ideas & improve their company’s offerings.
  3. Hipsters – Because being ahead of the curve gives you more social clout.
  4. Boomerangs – Sharing for the sake of generating feedback & starting a conversation nobody else is having.
  5. Connectors – Bringing groups of people together through content or deals.
  6. Selectives – Enjoys delivering massive value to small groups, or individuals by only referring highly relevant things.

As you develop your referral marketing program, consider your customer personas and their motivations (beyond “get free stuff”) behind spreading the word about your offer.

When Are They Making The Referral?

For Dropbox, the referral typically came shortly after the first run experience.

For Roku, it was 45 days after a new customer had been enjoying the service.


For AirBnb, it was after someone hosted or returned from a stay.

In order to time when you trigger your referral service to have the most impact, you need to understand the window of time where people are most likely to share. 

For instance, I recently signed up for LootCrate, and they told me about their referral program:

  • Right after I signed up.
  • 3 days after.
  • 6 days later.
  • 2 days after that.
  • 2 days after that.
  • One week after I received the package.

When Lootcrate triggers its refer a friend program

Lootcrate email

While that might seem like a lot, I never found it obtrusive, it actually got me more excited about the package getting delivered in the mail.

That actually seems to be the main point of this autoresponder sequence too – just to keep people engaged and build anticipation, subtly reminding them they can share with friends when the package arrives.

Judging by the amount of Twitter shares on Topsy, it looks like it pays off too with the largest spike in shares happening the day the crate is released.

Topsy Shares For LootCrate

The second largest spike is the day after I received an email directly drawing attention to the Referral program. Where there’s a gradual build for the week, it makes me think they were testing which day of the week their list would be the most responsive.

Google Trends backs this up where most searches for “Loot Crate” the brand are happening within a day or two of when the boxes are sent out. (Are friends of existing customers doing research on their own?)

Loot Crate Searches Google Trends

Understanding this referral lifecycle in some cases is the most important aspect to the success of the entire referral program as it allows you to put the right offer in front of the right people at the exact right time.

In another case, Hubspot’s Sidekick prompts active users (those who track more than 200 emails) to refer friends (or pay) whenever they are approaching their “Free” limit.

Sidekick invitation

For the companies that don’t want to spend the $120/year/employee, this referral program is a great way to keep costs down, while also giving Hubspot an “in” to teams that could potentially benefit from their other services.

What If “When” Isn’t A Specific Time-Frame?

It’s not like I’m going to be pumped to share my financial advisor’s number within the first 30 days of becoming a client, or after they’ve sent me 4 portfolio updates, right?

Going back to the Advisor Impact study, they found that the second biggest reason why financial advisory clients were giving references to their friends was a relevant conversation about finances came up. (Think buying a house, selling a business, saving for retirement)

Why did you refer a friend

The problem was, even though 83% of clients said they’d be happy to provide a referral, only 29% were doing so, leaving a huge gap. 

Motivation does not equal actionThe reason for this gap was twofold:

  1. The majority of happy clients weren’t comfortable having conversations with their friends about finances.
  2. They didn’t know how to identify the conversations that could lead to a referral.

See, to clients it was obvious when a friend would say something like “Hey, do you know a good financial advisor?” but were completely unaware that a financial advisor could be useful for their friend of if a spouse passed on, or they wanted to aggressively save for retirement.

As part of Advisor Impact’s action plan, they suggested that financial advisors educate their clients in the broad range of services they provide, so that they can also identify the real world “conversational triggers” that could prompt the referral.

Sidenote: This is quite similar to how Loot Crate reminds you of their referral program in-between box sends, come to think of it.

How Many People Are They Referring?

While the most accurate way of figuring this out would obviously be through a custom analytics configuration, you can get a rough idea of how many friends are being referred through a qualitative survey.

number of referrals sent

It’s important to point out, when we’re looking at the referrer side, we’re not necessarily looking at how these referrals convert (yet anyways) but rather the sheer number of referrals generated, and who is generating them.

If we know that our “Big Spender” & “Frequent Buyer” segments, for example, are also telling lots of friends, we can talk with them even more to learn about why they think their friends are (or are not) buying.

Obviously, if you are able to track the full journey of the referred customer, that’s ideal, because you have a lot more to work with, but when you’re focusing on the referrers, you’re really trying to understand what motivates them to share, who their sharing with, and what could get them to share more.  because ultimately they don’t


Before you jump into investing in a referral marketing program, learn more about who is already sending referrals your way.

Knowing who sends referrals, why they’re sending them, when they’re most likely to send & how many people they send is going to be very powerful information to have before you fully roll out a referral program.

Next week, we’ll look at the other side of the equation, the referee, and see what it takes to get more people clicking on our referral links.



The post What You Need To Know Before You Start A Referral Marketing Program – Who Sends The Referrals? appeared first on ConversionXL.

If You Don’t Think You Need a VP of Product, VP of Marketing, Etc. — Then You Haven’t Worked With a Great One

I’ve read quite a few blog posts over the years.  One of the very best though is this one from Joe Kraus, founder and CEO of Excite — “If You Don’t Think You Need It — You Haven’t Seen Greatness.”

I want to expand upon it here for SaaS.

Joe’s point is that until he’d worked with a great head of product marketing, and a great general counsel … he didn’t even know he needed one.

vice_president_of_awesome_mugI learned the same.  Basically, in SaaS, everyone “gets” that they need a VP of Sales.  Even if they’ve never sold anything before.  Either, they don’t have enough customers, enough velocity, so they magically think a VPS can solve that.  She can’t — as we’ve discussed here.  Or, as founders, we cross $1-$1.5m in ARR, get to Initial Traction, and then realize, we have to scale.  Hire not just 1-2 reps, but 10.  Get to $10m.  And that it’s time to bring in someone that knows.

Either way, we come to this conclusion on our own.  I Need a VP of Sales.

But I’ve found many great SaaS founders take longer, too long, to decide to hire the other VPs.

  • Why do I need a VP of Product?  My CTO and dev team is building all the features we need.  Maybe just a product manager is enough.”  Fair enough.  But trust me.  That can’t last in the enterprise.  Maybe you can handle the 100 customers and 100 core features you have today.  But at 1,000 customers and 10,000 features?  You just can’t hack it.  You need a true VP of Product to manage it all.   Meet with the customers.  Synthesize it all.  Make you Truly Enterprise.  If you haven’t worked with a great one, you probably won’t get it.  But if you have, you’ll see that magic just happens after Initial Traction.  It seems so hard today just to keep up.  But with a great VP of Product — you’re magically able to somehow serve the needs (often by hook or crook, but somehow) of 100s and 1000s of enterprise customers.
  • “Why Do I Need a VP of Marketing?  I Have Enough Leads.  Sounds Too Expensive for Now.”  Another one I see a lot is, let’s start with a Director of Marketing.  Let’s not go with the Full VP yet.  That would be too expensive.  Can’t I just hire someone to help the sales team?  Manage a trade show?  Of course you can.  It’s not a terrible idea.  But here’s the problem.  95/100, only a VP can really own the whole thing in marketing.  Own a lead or opportunity commit.  Own the number for this year, along with the VP of Sales.  Own getting you from $1.5m to $10m.  If you hire anyone more junior than this, all you get is help at the end of the day.  Help is terrific, and appreciated, of course.  But a great VP of Marketing does so much more.  She gets you to $10m and beyond faster.  And not only more than pays for herself, but carries a huge amount of the load.  With a great VP of Marketing, your business almost automatically grows faster.  With less drama.  And a happier sales team.
  • “Why Do I Need a VP of Customer Success?  Why do I need a real VP now?”  Look.  The bottom line is having anyone good in customer success with even a smidge of experience is about 11,000x better than no one.  The whole key to Second Order Revenue is having the talented, committed bodies in place to work with the customers.  But without a VP … it’s just reactive.  A VP of Customer Success can do just so much more.  A VP of Customer Success can carry a number.  I.e., own growing revenue from the installed base 10% or 20% Year-over-Year.  A true VP of Success can also aggressively attack churn.  And importantly — Almost Churn.  And a VP of Customer Success can put real processes in place.  This is just so hard to do without a true VP.  Individual contributors just can’t implement systems and accountability the same way.  And a real VP of Customer Success will be a true partner with your VP of Sales.  Not just a support function.  And perhaps most importantly, a true VP of Customer Success will recruit an amazing team under her.

Here’s my uber-point:

As soon as you hit Initial Traction ($1.5m in ARR), as soon as it goes from Repeatable to Repeating … you are ready for a VP of Everything.  Of Engineering.  Of Product.  Of Marketing.  Of Customer Success.  Etc.  And of course, VP of Sales.

All of them.

And as long as they are great, they’ll all be accretive.  More on that here.

Even having said that, I get cash may be a limiter.  Other factors may as well.

But it’s not that you’re not ready.  Or more importantly, that you don’t need a true VP yet.

You do.  As soon as you hit Initial Traction.

>> And if you don’t think you need any of the VPs — it’s only because you’ve never worked with a great one.

Once you have … you’ll know.

Family Business

Today we’re joined by returning champ, Matt Medeiros, who hosts the Matt Report show, all about WordPress and business.  His company recently launched Conductor Plugin for WordPress.

But enough about WordPress… Today, we had the pleasure of talking about something not many of us talk about: Doing business with family members.

Both Matt and Jordan have plenty of experience.  Both were/are involved in businesses with their father’s and brothers and we talked at length about the ups, the downs, the ins, the outs, and everything in between when you mix family and business.

The post Family Business appeared first on Bootstrapped Web.

Interview with Maurice Cherry of 3eighteen media

This week I talk to Maurice Cherry of 3eighteen media. Maurice is a busy man, when he’s not running his consulting agency he’s running a podcast, blogging, teaching and being a stand up guy. He’s was also Nusii’s very first customer! Hey Maurice! Thanks for taking the time to answer a few questions for us […]

La entrada Interview with Maurice Cherry of 3eighteen media aparece primero en Nusii: Proposal software for creative professionals..

The 7 Habits of Highly Effective Overlays

Stephen R. Covey was a brilliant author and self-help visionary, but he never worked in online marketing. So, what can he teach us about managing overlay (pop-up) marketing campaigns?

Apparently, quite a bit.


It just so happens that Mr. Covey’s famed “7 Habits” apply directly to what makes an effective pop-up.

But first, I fully understand the reservations many SaaS and e-commerce site owners have about pop-ups. In 2004, pop-ups were the most hated online advertising technique, and much of that residual hate lingers today.

That said, today’s pop-ups are very different from the pop-ups of 10 years ago.

This is mainly because browsers have become much more sophisticated. They prevent the majority of pop-ups from opening in new windows. Instead, most pop-ups now are modal overlays that open within the same window.

So, since they’re not really “pop-ups” in the traditional sense anymore, I will refer to them as marketing overlays in this article.


A marketing overlay by Neil Patel on Quicksprout.com

The way marketing overlays are controlled has changed, too. Instead of being run by outside media companies, they’re now executed by site owners who can take their on-site user experience, audience loyalty, and long-term brand into consideration.

As for execution, technology now permits site owners to be very selective about who is shown marketing overlays and who isn’t. And, personalized messages can be served on a dynamic basis. Also, the timing/activation now is much more sophisticated.

All this has led to marketing overlays generating some impressive results for site owners.

Of course, they’re not suitable for every site. They’re not for every audience. And, what works for one brand won’t necessarily work for another. You may hate them, and that’s fine.

But let’s get back on track.

As Mr. Covey often said, two people with the same abilities, backgrounds, education, and opportunities can find themselves in vastly different life circumstances. And, the reason for the difference usually lies in the habits they incorporate in day-to-day life.

The same is true with marketing overlays.

When done right, marketing overlays are a great way to engage your visitors, drive sales, build massive email subscriber lists, and generate scores of new sales leads.

When done wrong, they annoy visitors, compromise the user experience, and fail to convert people into paying customers.

All campaigns start with great intentions, but it’s the details that separate truly successful campaigns from the pack. Let’s discuss the details:

Habit #1: “Seek first to understand, then to be understood.”

Translation: Before launching your marketing overlay, you need to figure out what your audience values.

Do you know which products are most popular on your site? Did you write a blog post that generated a ton of traffic? Do you have a popular promo? Perfect, because your marketing overlay should include messaging crafted around what’s already popular with your visitors.

Before writing your offer, you need to understand what your audience is interested in. Google Analytics (or whatever analytics system you use) is an excellent resource for determining what your users want to read, buy, or subscribe to.

That covers the “Seek first to understand” half, but you still need to be understood.

Your messaging should meet these three standards: It must be clear to the user. It must be concise. And, it must convey maximum value.

In other words, “Please give us your email address” isn’t going to cut the mustard. You need to tell users what they’ll get out of it.

Here’s a good example of an overlay with lean, value-laden copy:


Note that the CTA button focuses on the value of submitting your email address, not the function of submitting (e.g., Join Now, Subscribe, Submit). “Get My $5 Off” conveys a clear benefit. Also, there’s barely 20 words of text.

Additionally, it’s a good idea to explain what the visitor is going to continue to get after they enter their email. What can they expect to receive from your future emails?

Habit #2: “Put first things first.”

Translation: Effective marketing overlays don’t overthink the task and don’t ask too much from a user. Customer relationships have stages that need to be built upon.

If you’re serving a “buy now” offer to first-time visitors, you may need to take a step back and put first things first.

The majority of web users don’t buy on their first visit. However, research states that 75% of abandoning users do intend to return at some point to continue the buying process.

That means you need to be flexible with your offer and serve different messaging to different user segments. With first-time visitors, you may need to “buy them a drink” before trying to close the sale.

A first-time visitor is better suited to an email signup. Once you have their email address, you can use that to provide valuable information as you build the customer relationship.

The principle of “first things first” also applies to your design and copy. Don’t get too cute or overthink the task at hand. Effective overlays grab attention by conveying value – plainly stated – without distractions.

Habit #3: “Think win-win.”

Translation: If your “$5 Off” offer isn’t converting, change your “ask” to an email signup in exchange for something valuable to your users.

There are all types of “wins” to be gained from adding a marketing overlay to your site: You can generate immediate gains to your bottom line. You can fill your funnel with new leads. And, you can build valuable lists of subscribers for your content marketing efforts.

The trick is finding out what type of offer works best for your traffic. Sometimes, it’s just not feasible to grab quick sales.

Here’s an example from Gr8fires.co.uk, an online retailer of gas and wood-burning stoves. With a long sales cycle, they decided against trying to grab quick sales with a marketing overlay. Instead, they offered users something truly valuable – an installation calculator.


In exchange for an email address, Gr8fires’s calculator tells visitors exactly how much their stove installation will cost.

Also, given the value placed on email subscribers these days, building your email list may be just as valuable as grabbing discounted sales.

Be flexible about how you get value. Small wins are still wins.

Habit #4: “Begin with the End in Mind.”

Translation: Since your end-goal is to generate leads, sales, and signups, you must target pages with the potential to generate results.

This one seems pretty simple, but you’d be surprised how many websites are getting it wrong.

Your marketing overlay can’t appear on just any page or be associated with just any offer. It needs to be placed on high-traffic pages, and it needs to promote high-value items to your users.

To find out which pages get the most traffic, open up your Google Analytics and run a traffic report for the last 12 months. It will look something like the example snapshot below:


This will show the pages the majority of your users visit, which likely will be your home page, landing pages, and main product pages.

Next, you need to determine which of these pages sell your high-value items. What are you looking to sell? What’s popular with your users? Promote the items that people are there for and the items that move the needle for you.

Habit #5: “Synergize.”

Translation: Your goals must align with the user’s goals.

Bryan Harris of Videofruit recently published a great article on using analytics to construct marketing overlays around high-traffic events.

That post ties in directly with this habit: synergizing your goals with the user’s goals.

Simply put, your marketing overlay will generate the best results when users want to do the same thing you want them to do. And, analytics is the best way to find out what they want to do.

Once you know what your users want, it’s time to ask yourself whether your goals line up. Is this a product you want to promote? Is it an email list that’s valuable for you to build?

If your users value products that don’t have strong margins for you or subscribe to mailing lists you can’t monetize, your goals are not synergized.

Effective marketing overlays find synergy between your goals and the user’s goals.

Habit #6: “Sharpen the Saw.”

Translation: You must optimize and refresh your offer over time.

All online marketing tactics require a certain measure of optimization to be effective, and marketing overlays are no different.


Image Source

A/B testing is a great place to start. That’s a given.

But there’s more to optimizing marketing overlays than conducting tests. Are you paying attention to trends and making sure your offer is current? Are you watching your competitors and borrowing ideas?

All offers eventually go stale, so periodically refreshing and updating your offer (and presentation) is key to maintaining effectiveness.

Habit #7: “Be proactive.”

Translation: You need to get your marketing overlay in front of visitors before they leave, but without disrupting their user experience.

When you launch your overlay is just as important as the contents of your offer.

If you launch too early, you may interrupt users on the path toward your desired action. Launch too late, and a good chunk of users will leave before they see it.

There are 5 ways I know of to activate your marketing overlay:

  1. Upon entry
  2. Upon exit
  3. After “x” number of page views
  4. Scroll-activated
  5. Time-activated

Which one will work best for you? Only your tests will tell.


If you’re planning to launch a marketing overlay on your site, remember that the details are what separate successful campaigns from those that fail to generate returns.

When done wrong, marketing overlays do little more than annoy visitors.

But, when done right, they engage visitors, drive sales, and build massive subscriber lists without compromising the user experience.

About the Author: Angus Lynch is a “conversion copywriter” for Rooster, a user engagement tool that utilizes exit-intent technology to increase leads, sales, and signups for marketers. He also is a writer and conversion strategist at Crowdvert, an award-winning conversion rate optimization agency.

10 Ways to Make Your Online Community or Forum More Active

10 Ways to Make Your Online Community or Forum More Active

Running an active online community or forum isn’t easy. The natural tendency for forums is to start strong when everyone is new and excited, but to dwindle over time as people lose interest and move on.

We know first hand. Before the Fizzle community, we had this exact experience. We started three different online communities (two private, one public) that followed this same pattern. Strong start… slow fade to ghosttown.

The Fizzle community is a different story. Now after about two years in, our forums remain vibrant, engaging and useful to our members.

People who join Fizzle like to say they “come for the courses and stay for the community.” We have over 79,000 total posts from a community of around 1,350 current active members. Many of our members check in multiple times daily. The community is the watercooler of conversations for so many people who have no one else to talk to about the ups and downs of self-employment.

When we started Fizzle, we knew an active communtity needed to be at the center of things. We were also worried about how we would keep the community strong months and years into the project. So we studied other active forums and talked to people like Steve Kamb (who runs the massive Nerd Fitness forum) to find out how to make the Fizzle community as strong as we could.

We learned a lot from other forums, and from experiments along the way. Here 10 of the most important things we’ve learned you should do to make your online community or forum more active:

1. Create an onboarding process for your community

If you want people to participate in your community, you have to hold their hands and show them why it’s so important to you.

The best way to do this is with an “onboarding” process for new members. Your goal is to create a series of touch points (probably an email campaign) that tells people why the community is important and guides them through creating a profile and posting their first message. An “introduce yourself” forum is a great place for people to start.

If you can, give people hard numbers. For example, we know that people who participate in our forums are more likely to succeed at building a business, and more likely to earn higher incomes from their businesses than people who do not participate in the forums. Basically, tell your new members what’s in it for them.

2. Create a guided video course about how to use your forums best

Most forum software packages (we use IP.Board) have advanced features that are key to getting the most out of participating in a community. Notifications, search, private messaging, signatures and other features might seem self explanatory to you, but many people have never used forums before.

You’ll also likely have unique forum features and sections you build in over time. We have sections for progress logs and finding mastermind group partners, for example. You’ll want to explain these sections to people so they know why they matter and how to use them.

A guided video course is a great way to do this, and it doesn’t have to be difficult to create. All you need to do is record your screen and voice, explaining the different features of your forums.

Bonus lesson: here’s a full video lesson from inside Fizzle on how to record your screen to create a guided course like the one I’m talking about here.


Note: join Fizzle for $1 and get all 16 lessons of this course along with the 100s of other lessons inside. We think you’ll like it. And if you don’t, cancel anytime.

3. Encourage progress logs or other types of forums that require regular interaction

A real life progress log in Fizzle. This one belongs to John Corcoran.

A real life progress log in Fizzle. This one belongs to John Corcoran.

One of the hottest sub-forums inside the Fizzle community is the progress log section. That’s where people check in regularly to talk about what they’ve accomplished and what they’re working towards in their businesses. A progress log is a great way to hold yourself accountable and get feedback from other people about what you’re working on.

This type of forum is great for building activity and engagement in your community. Create some kind of section for ongoing threads, where people are reporting on something over time. For example, if your forum was about losing weight, a daily or weekly progress log would be a great way for members to record and share how they’re doing.

4. Spend time in the community yourself

This one might sound simple, but you might be surprised how many people expect to install forum software and poof! have an active community just spring up without any additional work.

In the beginning especially, it’s absolutely crucial that people feel like it’s worth their time to participate in your forums. When someone posts in the forums and doesn’t receive a reply, it’s like your community gets a little cut. One cut doesn’t matter too much, but if this continues, your forum will eventually suffer death from a thousand cuts.

Before you have top contributors in your community, it’s your job to be there to answer every post that goes unanswered. Obviously, this strategy won’t scale, but right now you’re concerned about bootstrapping your community, not scaling it.

Then, as you find people rising up and taking leadership roles within your community, you need to be there for them even more, nurturing your relationship with them and showing how appreciative you are for the participation.

5. Promote members of your community to special positions

Eventually, a handful of members will stand out as leaders and daily active contributors. A great way to reward and encourage this behavior is to recognize it in front of the whole community.

We have a special “Fizzle Wiz” title bestowed on our most active and respected members. It’s a title and an open line to us, and an expectation that our Wizzes will help us keep our finger on the pulse of the community by sharing ideas and alerting us to anything that we should be paying attention to.

Some people will take this special title pretty seriously (see the wizard hat in this photo? Our wizzes Darlene and Dee brought it to an in-person meetup and insisted I wear it during a talk I gave). That’s a good thing. You want members to take ownership of the community when possible. It ensures your long-term viability.

6. Send weekly “what’s new in the community” messages and give shout outs to people doing great stuff

We brought Barrett Brooks onboard earlier this year as our Director of Member Success. Barrett has become our eyes and ears in the community, making sure we’re aware of everything going on, and helping us echo back what we’re hearing.

Sending weekly summaries of the best posts and accomplishments from your community is a great way to keep people coming back, and to encourage them to make progress themselves. The weekly “What’s New in Fizzle” messages Barrett creates are simple lists of things we think people should be called out and pat on the back for. We also give shout-outs in our monthly live office hours calls.

The more kudos you can provide, the stronger the positive feedback connection between success and participating in the community.

This is a dead simple way for members to keep abreast of the conversations going on inside the community. In our community, at least, We’ve heard a ton of great responses from Fizzlers about this one “feature,” how it keeps them interested, informed and, normally, how they learn something they didn’t know in someone’s recent experiment or launch.

7. Make sure email notifications are enabled, and encourage people to subscribe to thread activity

Here’s another simple one that can easily get overlooked. Forum notifications are important to let people know when there is activity on one of their posts or comments. I’m always annoyed by forums that don’t notify me of new comments, because it’s easy to forget about something you posted and never come back to look for replies.

Email is an important piece of your forum strategy. When people first sign up, checking in with your forum won’t be in their daily routine. You’ll need to pull them back, and email is the best tool for that.

Make sure email notifications are enabled within your forum, and be sure to show people how to subscribe to individual threads or entire sub-forums if they want to.

8. Get your community together in other ways: especially in person and on live video calls

This has been huge for us. The people who show up to either live online video calls and especially in-person meetups are consistently our most active forum members.

There is something about being able to talk to people in-person or over video that adds an extra dimension to the community and makes people see the forums (and the people behind it) differently.

In Fizzle we have weekly informal webinars called “Fizzle Friday” where people simply show up if they can make it and myself or Chase or Barrett facilitates a conversation, usually starting with “what are you up to right now? Need any help with anything?” Something magic happens in a decentralized community like this when you hear each others’ voices and see each others’ faces over time.

9. Create case studies from your most successful members

This is a great way to take your kudos and pats on the back to a whole new level. Case studies of your most successful members are a great way to shine a spotlight on people who have accomplished great things.

These case studies will encourage your other members, and they can be a great way to draw in new members as well.

Better yet, let people create their own case studies. Give them a place in the forums to share their successes. From the success stories, you can create full case studies, or even repurpose the successes into public content, like this great post from Fizzle member Thomas Frank, which was originally published in the forums as a success story: How to Produce High Quality Videos for Under $1,000.

There’s all sorts of little lessons learned in these case studies. If your community is formed around a topic or skill people are looking to get better at, showcasing the stories of how some members were able to make progress can be an excellent way to not only encourage folks but also to help them with specific tactics to actually make progress of their own.

10. Other ideas

Here are a handful of other ideas for making your community more active. I’d love to hear from you in the comments below with other tips and tricks you’ve used or seen.

  • Require real names and photos (we’ve found this to be a factor in encouraging open, honest, helpful conversations).
  • Funnel discussions from courses, blog posts and other places into the forums (we use the forums as our discussion outpost for courses and founder stories interviews).
  • Track key forum metrics, including posts per member, percent of members with forum profiles, percent of members posting per week, etc. (we look at these weekly to see the health of the forums overall).
  • Study features of other popular forums. When you run out of ideas, go fishing. Sign up for other forums and see how things are done.

Have you been a part of a community like this? Are you running your own? What else have you done or seen done to make an online community more active? Please share in the comments.