Building Things to Help Sell the Things You Make
Written
— Updated
- Source: https://www.youtube.com/watch?v=acVvumkWVLU&t=1s
- Author: Patrick McKenzie
- Past Businesses
- Bingo Card Creator
- This was a B2C which was very hard to do as a small entrepreneur.
- Appointment Reminder
- This was the next venture, after Patrick had quit his job.
- It was the "great business idea but I have no passion for it" type of idea, and this was a mistake as well because there wasn't much to keep up the motivation in the hard times.
- Patrick did consulting at the same time too.
- Bingo Card Creator
- Three L's for a successful business journey:
- To love
- To live
- To learn
- Fundamental SaaS Equation
- Traffic is hardest to optimize for,
- Conversion rate is easier but takes a while to see results.
- ARPU (average revenue per user) is easy, and can be changed with a few minutes of work
- Churn requires working on retention of existing users
- See 2011 presentations from Rob Walling and Patrick
- Charge more
- Appointment Reminder started at $9, $29, $79, and enterprise "call me for price" plan
- Dropped the $9 plan and added a $199 "office" plan, and revenue went up 60% in 2 months.
- Lifecycle Emails
- This is different from a drip campaign because you the recipient is already a customer or in a trial. This is basically an email designed to trigger an upsell or conversion.
- It requires some thinking about what your funnel looks like and the right time to send these emails.
- Annual Billing
- To add it after your business exists:
- Offer a discount (1 month free) if they switch to annual
- Offer to "loyal customers" over email
- Make it easy to switch, 1-button click
- When you have happy customers, this gives the impression of free money to the customer.
- Upsell Tiers
- When you have usage tiers and your customers are close to their quota:
- Send an empathetic email about it
- Upgrade with a discount for "peace of mind".
- Example
- 1. Query for everyone within 20% of their quota on some features
- 2. Add in extra special offer plans at a slight discount (say 20%) to "make it an easy decision for you".
- 3. Write a two paragraph email referencing the upgrades from one plan to the next.
- Internal Dashboards
- Just run some queries to look for interesting patterns
- heavy usage, light usage
- Upcoming plan renewal
- Trials
- Look at the differences between those who convert and those who don't. e.g. for Appointment Reminder the converted customers used the product a lot and the cancelled trials used it lightly or not at all.
- So what goes into those "lightly or not at all" trials?
- Was the product not useful?
- Did they have trouble figuring it out?
- Managing Trial Users
- An email sequence can help with these things.
- Auto generated welcome
- Establish expectations.
- Recommend checking out the tutorial and also using it actively on their own needs.
- Personal touch "If you email me, I will personally read it and can do my best to help you"
- Personal Welcome
- Announce availability
- Ask then to email you
- Trial Check-in
- For a good trial, sell them on conversion.
- Simple ROI calculation with money saved.
- Offer to close now with personal consultation or something.
- For a bad trial, try to rescue it.
- If they didn't use it, try to find out why.
- Sympathize with them being busy
- Ask if they had trouble with anything
- Offer to extend trial
- Not great conversion rate on this but it is very valuable
- Great opportunity for customer development, finding out where your product might be falling short
- If they didn't use it, try to find out why.
- End of Trial
- Send an email a few days before the trial ends, letting them know and that the credit card charge is coming up
- Weekly Checkup
- Put in some ROI calculation from the week if you can.
- You did this much stuff and saved this much money!
- This makes it easy to continue justifying the price they're paying for your product.
- Put in some ROI calculation from the week if you can.
- Account Investigation
- Have a per-customer dashboard with some recent usage (anonymized as necessary) and with month-over-month and lifetime usage stats.
- This way you can see when a good customer cancels or just their credit card fails to approve.
- Call them if you can. "Just want to get the new card info to make sure your account doesn't get cut off."
- And if that doesn't work, send a friendly email letting them know that the credit card didn't go through and give a 3-day grace period.
- Follow up each day.
- After that, send an email letting them know you "took the liberty of pausing your account."
- Thoughts on Consulting
- Scaling Consulting
- Increase your rates
- Hire people
- Improve how often you get contracts and get paid
- Reasons to Not Consult
- Constantly looking for new clients. (Ideally you repeat business with existing clients)
- Lots of unpaid administrative work (billing, talking to lawyers, etc.)
- You have a boss and have to go to work and do planning meetings and stuff
- Replacing Consulting with a Software Business
- It can take years to become profitable, if ever.
- Revenue can be very spiky.
- How to Get Out of Consulting?
- Productize your consulting service
- Basically take the thing you do for people and take "you" out of it.
- This can be a book, a course, or even training events.
- Patrick's "Non-software Product"
- In consulting, customers would need help with email and Patrick would set them up with drip and lifecycle emails.
- This generally took a lot of sales, a little bit of coding, and some copywriting (by a self-proclaimed "not great" copywriter).
- So why would a customer buy a book about this when they could just hire the consultant?
- $500 instead of $20K-ish
- Don't have to find a consultant
- Don't know if you have the time to really act on it yet.
- A lot of companies aren't really. able to get everyone in the same room for a few days just to focus on email marketing.
- Cheap easy way to get into email marketing without going all-in
- Why not just get it for free from blogs?
- Real businesses spend money on their problems
- "Free" takes longer to research than just buying a package, and "free" isn't free when you're paying employees
- In larger orgs, putting money into something indicates seriousness and quality of the initiative to those that might otherwise object.
- How to do it
- Started building an email list a few months in advance
- Focused 75% on teaching, 25% on the upcoming product
- Sent just 2 sales emails which linked to a long landing page with more details
- Landing Page
- Establish value proposition early
- Unusual phrases in copywriting attract attention
- "unreasonable amounts of money"
- Case Study on how the techniques work
- Assuming you're coming from a consulting career, use one of those
- Personal testimonial
- Acknowledge and answer objections
- List the benefits of the course.
- What it will do for you is more important than the table of contents and all that.
- Jobs to be Done style
- Multiple Pricing Tiers
- He did a single user and team license for 4x as much.
- Nathan Barry (ConvertKit) had three tiers.
- Focus was on what you get, not on the prices
- Started with the expensive one so you see all the stuff first and go "less" from there.
- Most sales were for the highest tier.
- The product
- Speaking into a webcam and decent microphone. Would add slides next time.
- Partnered with people with related interests
- Made $65K as of the time of the video. Two thirds of that was in the first month.
- This is actually pretty good ROI since it took about the same amount of time as a consulting gig but paid about 2-3x the amount and didn't require a bunch of contract negotiation, etc.
- Keys to success
- An active email list is very important
- Target a pain point you know there is a demand for
- Work on your copy. (See Copyhackers)
- In consulting, customers would need help with email and Patrick would set them up with drip and lifecycle emails.
- Scaling Consulting