A Brief Review – Lead Magnets: The Fundamental Element Today’s Greatest Tech Companies Have Been Built On
As I mentioned in my previous article, lead generation and lead magnets could change your business forever.
The greatest tech companies that are around today have actually been built using lead magnets.
But they haven’t used lead magnets in the usual way. They’ve used them in an unusual way.
In my last article, I also shared with you my definition of a lead magnet.
My Definition of a Lead Magnet: A lead magnet is something valuable that you offer to your ideal prospects in exchange for something of theirs that you consider valuable (usually information of some kind).
From Lead Magnets: The Fundamental Element Today’s Greatest Tech Companies Have Been Built On
- I told you that when you see this definition, you need to realize that a lead magnet can be much more than a PDF file.
- You need to realize that prospects possess something much more valuable than just an email address they can exchange with you.
Then I showed you how Facebook built one of the most successful businesses around by using a very unusual way to think of and implement lead magnets.
Canva: Another Company That Used Lead Magnets in an Unusual Way
Today, I want to show you another company that has used lead magnets in an unusual way.
They used the same basic understanding of a lead magnet that I just shared with you.
But they built a different business model off of it.
The company I want to talk to you about today is Canva.
In case you’ve never heard of it, Canva is a website or an app that enables you to create graphic designs. You might be creating social media assets, website assets, or even posters or pdfs.
And you can do all of this for free.
So what is the unusual lead magnet that they offer?
Canva’s 4-Stage Lead Generation Strategy That Lead to Their Incredible Success
(IMPORTANT: Everything I’m about to share with you about their strategy is just from observations I’ve made as an outsider. I have no insider information.)
Stage 1: They offered the ability for non-designers to design professional-looking graphics very easily.
This is how the first stage of their lead magnet strategy worked. In other words, this was the “lead magnet” that they chose to offer people.
Their Lead Magnet’s Promise: Give us your email address and we will make it easy for you to create graphics at no cost.
And what an amazing promise it is!
In exchange for your email address, you get:
- Access to over 250,000 free templates
- Over 100 design types such as social media posts, presentations, letters, and more
- Hundreds of thousands of free photos and graphics
- You can invite up to 4 members to your Canva team for free.
- You can collaborate and comment in real-time.
- And you get five GB of cloud storage.
How Canva’s Lead Generation Model is Different Than Facebook’s Model
Now let me point out some important things.
Facebook’s purpose was to gather a bunch of leads so that one day they could make money by letting businesses and companies advertise to these people.
Canva had a different plan.
Canva’s plan was to offer you as many features as possible for free. But that’s not all. They wanted to make it as easy as possible to use these features to achieve success.
Once the user achieved success, that’s when their revenue plan kicked in.
Stage 2: Offer better or additional images, graphics, and more for a small price.
Let’s say you’re creating a graphic with Canva and you’re not satisfied with the pictures they offer for free. For just $1, you could purchase one of their better quality images.
Did you catch that?
- They aren’t trying to make a large sale off of a small amount of people.
- They want to make a small sale off of a large amount of people.
In fact, they don’t just want to make one small sale from a large amount of people. They want to make a bunch of small sales from a bunch of people.
How I Accidentally Became a Paying Customer
Originally, I didn’t sign up to use Canva with a plan to spend any money. I was just going to use the free tools, images, etc.
How did I end up becoming a paying customer? It was just too easy to spend $1.
After I purchased the first time, it made purchasing the second time easier… and the third time even easier. You get the point.
As an example, let’s use my “accidental purchase” history with Canva from 2020.
Over the year 2020, I spent $10 with Canva. That’s not a lot. I’ve spent more with them in previous years.
But let’s use it as an example because it’s from someone that didn’t plan on spending any money. Imagine how much was spent by someone who planned to spend a little extra on the graphics and pictures they wanted.
Now think about it.
Canva has 30 million users. If each of those users just unintentionally spent $10, like I did, that means Canva probably made AT LEAST $300 million last year.
Let me point something out, in case you missed it.
Canva Didn’t Do What Other Companies Selling Images Would’ve Done
Instead of just trying to sell me images, templates, or designs that I might want to use, they offered me a lead magnet.
They offered me this lead magnet in the form of a free tool, a tool to enable me to do something I desired to do: create better-looking designs.
Then, once I began using their tool and had the need for free images and graphics, they offered me some better images to purchase.
Stage 3: Offer users a chance to purchase access to a Pro Level.
Now, pay close attention. Because things are about to get good.
The third stage of their strategy was to offer what they call the “Pro Level.”
For $12.95 a month, you get:
- Everything that I already mentioned in the free version
- Plus, you can create one brand kit and upload your own fonts and logos.
- You can use a special feature that’s not available for the free members. It’s called the “One-click design magic resize tool.” If you’ve ever created a design in Canva and wanted to resize it, because you realized you needed it in a different format, then you realize how valuable that tool is.
- But wait there’s more… 🙂
- You get over 420,000 free templates with new designs daily.
- You also get over $75 million premium stock photos, videos, audio, and graphics that are free to use.
- You can save designs as templates for your team to use.
- Instead of 5 GB of storage, you get 100 GB.
- You can schedule social media content for 7 platforms.
- And all of this can be used by up to 5 members of your Canva team.
Think about the power of this additional offer.
A certain number of people, like me, signed up to try their free tools. They eventually decided to purchase a $1 image, and another, and another.
These users began spending so much on $1 images – and were getting so much value from Canva – this $12.95 offer was a no-brainer.
By implementing that simple offer, they moved people up the value ladder and locked in a guaranteed monthly revenue from a certain percentage of people.
(Listen to this “Marketing Secrets” episode from Russell Brunson and learn more about what a value ladder is: The Primary Question That Fuels Your Value Ladder.)
Do you see how adding that “Pro Level” boosted their sales and stabilized their monthly revenue?
Well, they didn’t stop there…
Stage 4: Offer more levels for larger companies to purchase.
Canva realized that there were probably users out there who required many more users – large companies.
That’s why they added higher-priced levels.
- If you have 10 members on your team, it’s $77.70 a month.
- If you have 15 people on your team, it’s $142.45 a month (and $9.50 more per person a month).
- Or if you have up to 50 people, you can pay $595.70 (and $11.91 per person more than 50).
I didn’t even realize this until I started researching, but they actually have a Canva Enterprise level.
I won’t go into all the details that come with purchasing that level, but it provides a bunch of tools that an Enterprise level company would want to have for their team.
The cost? $30 a month per member.
How Effective Their Lead Magnet Model Has Been
Do you want to know how successful this lead generation model has been?
An article on TechCrunch.com, “Canva raises $60 million on a $6 billion valuation,” revealed this surprising fact about the company…
“Sydney-based Canva, the design platform for non-designers, has today announced the close of a $60 million funding round, bringing its valuation to $6 billion, according to the company.
“The startup has raised a total of more than $300 million, including this latest round of financing, from investors like Bond, General Catalyst, Sequoia Capital China, Felicis Ventures and Blackbird Ventures.”
From Canva raises $60 million on a $6 billion valuation by Jordan Crook
In my last article, I said something that some of you probably thought was an exaggeration.
I said, “That means that when you understand lead magnets in this deeper way, you’ll realize that the right lead magnet is worth millions, if not billions of dollars.“
I think after revealing Facebook and Canva’s examples, you now see that I wasn’t exaggerating at all.
Canva’s Example Applied to My Lead Magnet Definition
Let’s take my definition and plug in Canva’s example. That way I can help you see their whole strategy more clearly and simply:
- Something valuable that you offer your ideal prospects: Canva offered the ability for non-designers to easily design professional-looking graphics. (Facebook offered “connection” as their lead magnet. Canva offers the ability to create great designs as their lead magnet.)
- In exchange for something of theirs that you consider valuable: Canva got the user’s email address, but they got much more than that. They were able to build databases of people who had voluntarily shown their need for professional-looking designs and images. This gave Canva a massive amount of leads it could sell images to and eventually offer a monthly service to. This ultimately gave them access and opportunity to sell to larger and larger companies.
Many More Successful Tech Companies Have Used an “Unusual” Lead Magnet
So far, I’ve shared the examples of Facebook and Canva. I did that to prove to you that successful companies really have built their business models off of a fundamental marketing strategy.
And it’s this basic – but unusual – lead magnet strategy that has brought them such incredible success.
This second marketing fundamental (aka attraction) could also help your company achieve success in 2021 if you implement it correctly.
The thing I want you to realize is that these are just TWO business models I’ve discovered after thinking of lead generation and lead magnets in an “unusual” way.
There are 10 other very successful tech companies I’ve documented that have used lead generation and lead magnets in an “unusual” way to build their company.
As I said before, many of them have built completely different business models off of this fundamental marketing strategy.
Others have simply added their own variations to the different models.
I don’t have the time to walk you through all of these companies and show you each business model or variation.
But, I do want to show you one final example. Because I want you to see one other way you can use lead magnets in an “unusual” way.
Here’s a hint of what I’ll reveal to you in my upcoming article.
How One Underdog Company’s “Unusual” Lead Magnet Enabled Them to Enter the Streaming Wars Under the Radar
In my next article, I’m going to share the incredible story of a company that created an “unusual” lead magnet.
This lead magnet enabled them to enter the stream wars in such an amazing way that in 2020 they were purchased by a well-known company for $440 million.
You’re going to like this next story because it will show you a very different way to use “unusual” lead magnets.
This article will go live in a couple of days. Stay tuned.
