There can be few people in the marketing world who haven’t heard of Neil Patel.
At the age of 35, he has already achieved many accolades, including recognition by President Obama as one of the top 100 entrepreneurs under the age of 30.
He’s also known in the marketing world for shady, aggressive tactics like invasive website popups, sexist ads, etc. But, something changed recently which made him realize the value of focusing on people first...
It's the antidote to marketing bullshit.
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Louis: Bonjour, bonjour and welcome to another episode of everyone hates marketers.com, the no fluff, actionable marketing podcast for marketers, marketing consultants, founders, and tech people who are just sick of shady, aggressive marketing. I'm your host Louis Grenier. My guest today was recognized as a top 100 entrepreneur under the age of 30 by President Obama and the top 100 entrepreneurs under the age of 35 by the Unity Nation. So he's already ... He's only three years older than me, but he's much more of a big deal than me already. He's the founder of Crazy Egg and KISSmetrics that he co-founded with Hiten Shah. Everyone in digital marketing has heard of him, use his product or check his blog. Super happy to have you, Neil Patel on board. Welcome.
Neil: Thanks for having me.
Louis: So you've done this challenge before, I think three years ago, right? You've done this $100,000 challenge in 12 months where you would generate $100,000 with a blog in one year. So I have a slightly different one for you right now. Let's say I give you $1,000, right? You can't use your name, you can't use your reputation, and you can't really use tactics that are unlikely to work in two to five years. Right? So you can only focus on marketing tactics that you know will kind of always work, because they are rooted in people's behavior. And you need to 10 X your return, right? So $1,000, you can't use your name, and only use kind of timeless tactics. How would you do it?
Neil: So the one thing I would do is, and I would have to create a business that makes money, correct? Or I create a site or something that makes money?
Neil: The one thing I would start off with is a funnel, okay? You're familiar with McDonald's, you're familiar with when you go to checkout, I don't know the last time you had a McDonald's, but do you remember them asking you, would you like fries with that? Would you like a drink with that? Would you like to supersize?
Louis: Mm-hmm (affirmative).
Neil: That's an upsell, which you know of, and your audience knows of. But McDonald's has been doing this since the very beginning. Now on the internet, very few people are doing upsells and downsells. But with upsells and downsells, you can get more money out of each and every single customer. Now there's tools like click funnels that allow you to create upsells and downsells. You don't have to be a developer, you can do it for less than a thousand bucks because they have a trial and they have a monthly plan. And then from there, what I would do is once you create a funnel, a product or service that works that you like.
Go to Facebook, look at all the ads in your space, because Facebook has the library. It shows you people's ads, and also shows you their funnels. If someone's consistently running ads for a very long time, that'll give you a good idea of what's working, what's not working and you would want to adapt your funnel to be somewhat similar to theirs, and you'd want to make your ads similar as well. And that's how I'd get my start. When you run the ads, assuming you're generating sales right away, which you should in your product or service, you have to keep in mind, you don't have to pay your credit card until 30 days later. So that also buys you some time on the thousand bucks.
Louis: Right. And that's something that you keep repeating in your content, right? You like this idea of following what are those people are doing, what competitors are doing, other companies are doing. And reverse engineer their success so you can make it work for you, right? So the first part, let me go back to it a bit, about the funnel. So from your perspective, what is a typical journey, a typical funnel, that seems to kind of always work because it's rooted in user psychology, what people like, what seems to be the kind of the best shape funnel or the best funnel out there?
Neil: It varies, but the best funnel that I've seen is anything that's drastically unique or different than what people are experiencing. For example, Frank can release a free book funnel. Free book you pay for shipping and handling, or you pay for handling. And then from there, he upsells and downsells you into many different core offers. That for example, to me is an amazing funnel.
Another good example of this is Russell Brunson with ClickFunnels. He teaches you how you can make a business out of a box. And he teaches you how you can ... How normally to create a business it's hard, but with ClickFunnels, you can do it in less than 10 seconds, or 10 minutes or whatever the number is. He shows you click funnels, he shows you how to do it. And then from there within the ClickFunnels interface, when you buy it, there's a checkout bump, there's a little tick box where you get another offer for something that's really high value for a low price, which helps improve the cart value. Also pays for some of the paid advertising, and then he adds in upsells and downsells.
But the big thing is this is what I would do if I have a short period of time and a thousand dollars. If my budget wasn't restricted and I have more time, I would do something totally different. For example, what I'm doing with Uber Suggest is something that I believe is super disruptive in the marketing industry, and I would do more things like that assuming I have more time and more money, because I believe that produces a much higher ROI, as long as you're willing to be patient. It's totally backwards and the opposite of what most marketers think. But based on all the financials and the numbers that we're crunching, it looks like it pans out very nicely.
Louis: So here you're talking about using technology, giving it away for free to acquire people on the top of your funnel, right?
Neil: Yeah. So think of it this way. There's Google algorithm updates, there's Facebook algorithm updates, your traffic goes up or down. There was an update in June, some people lost traffic, some people gained traffic. And it'll keep going on for life. But I have this tool, Uber Suggest. And Uber Suggest, to give you an idea, over the last 30 days I had 500 ... And I'm actually loading up the stats right now on my computer. And the last 30 days I had ... Let's see. It's almost loaded. All right. In the last 30 days I had 516,000 unique users who visited the site, who used the tool 1.6 million times. The average person used the tool 3.26 times per month. And those users generated 9.7 million page views. Average time on site is 7 minutes and 38 seconds. Bounce rate is 29.47%
All right, so here's what's interesting. In the last five days, my team released a feature on Uber Suggest which would allow you to do local keyword research. So Uber Suggested just another SEO tool. It's a copycat of [Eight Drafts 00:00:07:02], [Moz 00:07:03], SEMrush. You guys get the point. But instead of charging, I just gave it away for free. In the last five days, my team released a local keyword feature so that when you do a search, you can do a search for a keyword and get volume data, et cetera, based off the local results.
But it broke the tool we found out yesterday night, even though it broke the tool, and a lot of it was broken, I still had my best Monday yesterday. I still had my best Sunday the day before, right? It just shows the power of free. Now imagine I can keep releasing more and more stuff for free. More Facebook tools for free, social media tools for free, email marketing tools for free, unlimited email send, unlimited marketing automation, no cost. When you start doing things like that, what do you think happens? You disrupt the market and then you just come up with a better way to monetize.
Louis: And in sense, this is a funnel that is much more obviously expensive to make, but it's very efficient for you, so I suppose this technology you're building for free is at the very top of your funnel, you attract people who search for SEO tools, don't want to pay. They use it, you build trust this way. And then what is the next step? So do you ... What do you wish for those people to do? To Buy your consulting services? What you wish people to do after they use the tool?
Neil: Well, there's two things actually. The first is during Google algorithm updates, some people are losing traffic and I'm showing you, I'm not relying on any algorithm update even when my tools have broken, my traffic still goes up, right? Let that sink in for a minute. No marketing, free tool, even when it doesn't work all the time. And I fixed it, it should work all the time now. My traffic still goes up. Think about how powerful that is. No paid ads, nothing. Just word of mouth, right? That's powerful. [inaudible 00:09:00] I don't have to do popups, I don't have to do register, I don't have to do give me your email. Just naturally it's growing.
The second thing is there's better ways to monetize than people monetize right now. I'll give you a good example of this. If I have 500,000 users, okay, and I can get a half a percent to pay, that would be 2,500 new paid signups per month. Let's say they pay 50 bucks on average and they last nine months, $1.1 million per month, roughly $13.5 million per year. These software companies with high churn, even if they have good growth, they're worth maybe 6 X revenue. So 81 million bucks, okay?
Now on the flip side I have 500,000 users. 10% of my audience is in the United States, all right? So, 50,000. So I'm only taking a portion because right now we're focusing on the US market. 50,000 of those I can get roughly 15% to be leads. Name, email, address, consulting leads, et cetera. So 7,500 leads. My sales team can close roughly 4%. That's 300 deals.
Now let's give a low end number. I'm just doing pencil math, I'm not saying these are the reality, but let me just give you sort of low and conservative numbers. Let's say average customer pays $2,000 a month and they stay for 10 months. That would be 6 million a month. Over a year, that'd be 72 million. You see how 72 million is much greater than 13.5 million in revenue? And that's just monetizing 10% of the traffic. Now the other 90% may not convert the same, but you can easily see how that could be a nine figure business.
Louis: So I'm sure our listeners listening to you right now say, "Okay, that's all well and good, but you're Neil Patel. You have money to put behind those free tools. How do I do it myself?" Then if I want to build a funnel like this, should I start with the first funnel you mentioned? This type of funnel, the way you sell a service, a product, you scale, and then you start investing in free technology, give away stuff for free so people trust you. And then later on convert?
Neil: Well, let me first clarify something. So when I broke down the numbers, my intention with the tool isn't to necessarily monetize or make money from people. The reason I created the tools, I just believe tools are too expensive and shit should just be for free. Excuse my language.
Louis: That's okay.
Neil: But I have no monetization plan. The point I was trying to make is if you're trying to monetize, do you see how my number in that funnel was way better than the original concept that most in the industry are using, right? It's just basic math. And again, my intention isn't to necessarily try to make money or anything like that. This was done as a fun project for me. I have no intentions, no goals. So if someone is trying to do something similar, yes, they may not have the capital, they may not have the resources.
But one, you can start off smaller. There's a lot of people out there who build small, simple tools for 5, 10 grand and get a lot of traction and go from there. The guy who built Uber Suggest was a developer, probably didn't spend more than a few thousand dollars. I bought it from him. You can partner with the developer and get a lot of this done for free. A lot of neat tools get traction without much investment at all.
The second thing to keep in mind is if you don't want to do that and you want to go hard and go fast, there's a lot of people who invest money into startups and companies. If you have something that's disruptive, go for it. Do whatever it takes to succeed and do whatever it takes to win. And if that means you have to raise money, do that.
Peter Thiel, who was one of the first investors in Facebook, [inaudible 00:12:59] was early on, or I believe one of the founders of PayPal as well. He has this concept in his book in which if you're not a monopoly, you're not winning. So think of disruptive models when you're trying to build a funnel, that's so disruptive you can really shake things upside down and just drastically change the way things convert.
Louis: One way for you to do this is most SEO tools are paid, are you need to pay 200 bucks, 300 bucks a month. The way you want to destroy ... The way you are disrupting it is basically giving away the same features for free, right? What are the other-
Neil: And a far simpler user interface. How many of these SEO tools are easy to use for a newbie? Honestly? Not many, right?
Louis: [inaudible 00:13:48]
Neil: If you're advanced marketer, no problem. What's funny is when I use AHREFS, it's really easy for me to use because I've been using it for years, same with SEMrush. But for beginners, they don't necessarily feel that way. Now granted, these tools aren't necessarily targeting beginners, and they've created amazing tools and they've done a good job. But being disruptive and being, "SEO tools should no longer cost." When everyone does SEO, that's hugely disruptive. Especially if I keep releasing more stuff. For example, in the next 30 days, I'll release a dashboard where you can track your progress, you can track your rankings and everything completely free.
Louis: So, this is another way for you to disrupt it. Not only you give it for free, but you also know your audience. I mean, this is clear for you in your blog, YouTube videos and all of that. You really target the newbies, people who are starting out in digital marketing, and you know that what they are looking for is easy tool against the more advanced, more sophisticated, more complex tools out there. What other-
Neil: Here's an interesting stat for you? Did you know that the majority of the tools that Fortune 1000 companies use are free? Employees at these companies, do you know why?
Neil: Because even if you work for Microsoft, doesn't mean you can spend $99 on AHREFS or SEMrush or any tool. You have to go through approval processes, et cetera. Right?
Louis: Right, exactly.
Neil: So they tend to start with the free tools first. So whether someone's a newbie, or advanced user, or works at a company, the chances are they're going to use a tool that is free first. Why? Because you don't have to get approval. Then later on, they may get approval to use a paid tool, or they may just keep using your free tool.
Louis: And this is very true of ... Let's say free tools where you use it, you start using it on the side with your Gmail account, you play with it for a while on your side project. And then when you're ready, you ask your boss or your manager for approval for it because you already use it and you know all about it, right?
Louis: So there's one thing I want to come back to that you mentioned briefly you said, "Now I offer free tools. And I don't need to use popups, I don't need to use any of that on my website." Right? And to be honest, Neil, I have actually noticed a difference in your website in the last kind of few days, compared to maybe last year or two years ago, right?
So two years ago, I actually used the Wayback machine to triple check if my memory was correct. Two years ago, you had this kind of webinar offer at the very top that tells you if you don't sign up before the end of the day, you're going to miss out. You had this little icon notification at the bottom right. That says, "Here's a notification, check it out." You had this popup on exit. If I'm looking at your website today, I don't see any of those anymore.
Neil: When I have the webinars, I still have popups though. I have a quiz at the end, I have a spin the wheel sometimes on the left side. So I do still have some popups, but not on every page. So my new marketing philosophy is disrupt the market, just provide more value for free. And not just in SEO, but in anything inbound marketing. And then eventually figure out a way to make it all work in the long run, but just disrupt the market and put the user first and do what's best for them.
And I found that when you do that, as cliché as it may sound, you naturally grow. See, as marketers I've been skewed. I've always been, "SEO is the best, pay-per-click is the best, social media marketing." The real solution is none of this. The real solution is you create a good product or service, so you don't have to do much to market it.
Now it is expensive to do that, but marketing has become so expensive. See, when I started getting into SEO and content marketing, I did it years ago because I couldn't afford paid advertising. But now even SEO, paid advertising, everything is so expensive. It's cheaper for me to invest those marketing dollars to disrupt and create a free tool than it is to pay for the ads.
Louis: And is that what made you change your mind? Because I can see in the way you're explaining it that there was clearly a trigger, something that made you realize the value of focusing on giving value for free, focusing on the user instead of focusing, maybe on the channel or squeezing every conversion possible or every signup possible out of your website. What was the trigger? What made you realize that this was better?
Neil: So I have a guy on my BizDev team, and he goes and he reaches and he tries to buy companies for me. And one of those companies was Uber Suggest and he was digging around, we were looking at the data. Did you know where Uber Suggest got most of their traffic from before I acquired them? If you had to take a guess, where would you think?
Louis: Maybe an obscure forum used by a few people, something like that. I don't know man.
Neil: So thousands and thousands of websites blogged about Uber Suggest and linked to them.
Louis: Ah, right, okay.
Neil: That wasn't the main traffic source. The main traffic source was people just going direct to the site, or Googling, "Uber Suggest." That's what made it very clear to me that if you build something people love, you don't really have to market it. They market it for you. You don't have to build links, people just write about it for you. So then that's when I came up with the notion of, I should buy this, I should just do this 10 times more and 10 times better.
Louis: And so that was a trigger. When did you buy the tool, two years ago? A year ago? When was it?
Neil: Roughly two years.
Louis: And so do you think two years ago, that was really the change in your philosophy towards marketing? Do you think that was really the trigger that made you change things?
Neil: It was a start. It didn't happen over night. What ended up happening is when I did experiments and I try to make Uber Suggest more and more free and more and more better and I saw the trend continue. I'm, "Wait, this experiment is actually working." Because the way my brain operates is even though I think something is a right thing, or this is where the future's going, I then have to test it to validate my ideas. And then after I did it with Uber Suggest I started doing it in other sectors and spaces. And then I noticed the same thing over and over again. And I'm, "Wait, this model works."
Neil: And I didn't come up with this model. One of the companies who created this and was doing this back in the day was HubSpot. HubSpot grew by just releasing things like their HubSpot greater tool, free email signature generator. I just did one better instead of saying, "Hey, let me give a mediocre tool." And I'm not saying HubSpot's a mediocre tool, but their free stuff, they don't care to put too much emphasis on their greater ... But the free version of HubSpot is amazing. But I just decided to go better. And I'm, "Let me not do freemium, let me just do a free tool straight up with no strings attached."
Louis: Makes sense. So on the back of that then, I can see the difference in philosophy today compared to a few years ago. And I've researched a lot about you, obviously for this interview, looked at a few people who know you personally. And a lot of them are saying that you're one of the hardest working, most generous guy out there, right?
From an outside perspective, I know also a lot of marketers who would say that they don't necessarily like the aggressive nature of certain popups you have. You've also tried a few ads that some people find offensive. I think you know which one I'm talking about. this Playmate, when you've put on an ad saying that you taught her to make money without taking off her clothes.
And another aspect that some people mentioned was the fact that you use to have some articles that were kind of using the same, copy as old articles on the internet and they didn't really like that. But am I right to say that ... Do you have regrets about using those tactics, or do you feel like no, that's part of business?
Neil: See, I look at marketing as experimentation. You try a lot of things, you find what works, and then you go from there. Some things you learn that you shouldn't do, or aren't good. Some things you find that, hey, people may not like. For example, popups, if people don't like them, they can close them or they don't have to come back to the site. Keep in mind the marketers who are complaining aren't my target audience, right? So you also have to look at feedback and not just look at, hey, what are people in the industry saying? You have to look at what your ideal customers are saying.
If 10 marketers say Neil Patel sucks, and most marketers don't like me, which is fine. Does it bother me? Not really. Do I still ... do I hate those marketers? Not at all. I have no regret to them, if they post something that I like I'll share it. Even if they say something bad about me, I'll still say something nice about them. I've had marketers who have trashed me online and I've had people who have hit me up being, "Do you know so, and so? I'm interested in buying their company." I'd be, "Sure, let me do an introduction."
I don't ask for anything. I just believe you treat people fairly. If people hate me, that's fine as well. But I keep in mind that these people aren't my ideal customers. I optimize for my customers. If you're running a business and 100 people told you, "You suck and we don't like your tactics." But they were ... Whether they liked you or they hated you, they would never give you a dollar. Would you really care what they think versus your ideal customers?
Louis: Yeah, I get you. You said something quickly that I want to go back to, why do you say that marketers don't like you?
Neil: You already know the answer. They think I'm aggressive. They don't like my marketing tactics. Some will get mad at me that I released Uber Suggest for free. I released Uber Suggest for free. You mentioned that, "Oh, this is great. A lot of people say I'm generous for it." On the flip side, I can show you not one or two, I can show you dozens and dozens of articles from other marketers who say I suck. I released a shitty free tool. I shouldn't be doing this. I have a different motive.
I can show you the opposite of people telling me I'm shady and I created a terrible tool. And then I can also show you responses to people being, "Stop complaining. You may not like the tool, but it's free. What other tool does all of this for free?" There's always going to be both sides of the table. You're never going to please everyone.
Louis: Especially in marketing, right? And do you ... Does it bring you down sometimes or are you just in the momentum, you just do your stuff, do your podcast, your YouTube video, your LinkedIn videos, your articles. Do you just mute everything that is just not really relevant to you, or does it still kind of affect you?
Neil: It used to bring me a lot more down when I was younger. But over time I've learned to mute it out and focus on the end consumer, try to do what's best for them. Whether marketers or other people hate me or love me, if I do what's best for the user, hopefully I'll make their lives better. Whether they hate me or love me still that's up to them, but hopefully I'm making their lives a bit better. And if I can get them more traffic, make people more successful without having to pay money, it makes me happy even if people don't like me.
Louis: To go back to the question I asked you about regrets. So if I summarize what you said, you have no regrets running those experiments, right? You have no regrets running those ads or trying the stuff out?
Neil: You live and learn. Some things I wish I didn't do. But instead of living in regret, I can't change that. I don't dwell on the past. You take your licks, you take your wounds, you adapt, you say your sorrys, you learn from them, and you just keep pushing forward. Keep in mind, no matter what though, you'll never please everyone. And that's an important lesson for people to understand.
Louis: So most of us, I mean, I know you through your LinkedIn videos, through your YouTube videos, through your blog posts, right? And there's a theme that I keep seeing is your in front of a white background, even during your promo video, it's not from your desk, your real desk or anything like this from buildings and all of that.
So it made me think it's difficult, I think to get to know the real you, the authentic Neil Patel behind the screens. Because you have a very, very good marketing strategy where you have this strong public persona. So I was thinking, can you tell us, and tell me something about you personally speaking that you haven't shared anywhere before?
Neil: I've actually shared quite a bit on my personal life. A lot of things don't know I have a child, so that's one thing. So a lot of ... Some people do know I have a kid. What else? I'm OCD. When I go to the airport and you know how they make you take off your shoes?
Louis: Mm-hmm (affirmative).
Neil: I try to put booties over my socks, because I don't want them to get dirty. I'm a bit quirky but yeah, just, I'm an average Joe, there's nothing special about me. I've got to where I am by just cranking and working hard. I make mistakes, I need to continually improve, I need to do better by my customers. I need to always be the best that I can. It's just going to take a while and I can always improve and get better.
Louis: I appreciate your honesty. You said you're quirky, give me an example of that.
Neil: So sometimes when ... I was at the grocery store the other day and I was with my wife and one of my friends in there grocery shopping. And they were laughing at me because I was just walking in circles, staring in the middle of the grocery aisle, staring at the ceiling and just thinking. This is ... I don't know why I was doing that. I just do that a lot of times, but it's things like that. I don't know. It's just ... I'm a bit off here and there.
Louis: You're thinking of Uber Suggest again, and what new feature you want to offer for free. So what's next for you then? If you talked about your vision and focusing on the user, giving stuff away for free. What can we expect next from you?
Neil: Yeah for me, I'm just trying to create more marketing tools and try to disrupt more and more people. I'm not really looking for anything, just trying to disrupt more industries in marketing, more companies and provide the best experience for users and ideally not charge a dime. That's my goal.
Louis: So what do you think marketers should learn today that will help them in the next 10 years, 20 years, 50 years?
Neil: The easiest way to get a ton traffic is to disrupt. Don't think about a channel, think about disruption. Most marketers think of, "Can I leverage this tactic? Can I leverage this channel?" Think of disruption. How can you disrupt the whole category? It's the easiest way to market a business.
Louis: What are the top three resources you'd recommend listeners today? So it could be anything right? Books, podcasts, anything?
Neil: Sure. Backlinko.com. I love Brian Dean, his content's amazing. Larry Kim, he puts out a lot of good information, smart entrepreneur and marketer. And of course you can check out all my stuff at neilpatel.com.
Louis: Yeah. that was the question I want you to ask you last, but I guess you said it. So neilpatel.com, you have Uber Suggest, any other tools you want to share to our audience?
Neil: That's it. You can also try out a lot of the competing tools like AHREFS, SEMrush, they're all good tools, Moz. They're not bad. I'm not trying to say I'm better than anyone else, so you can try them all out.
Louis: Cool. Well Neil, I appreciate you sharing some stuff honestly with me, sharing your vision, the mistakes you've made in the past. I think people really enjoyed the interview. So once again, thank you very much.
Neil: Thanks for having me.