Building Things to Help Sell the Things You Make

Written
  • 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.
  • Three L's for a successful business journey:
    • To love
    • To live
    • To learn
  • Fundamental SaaS Equation
    • trafficconversionrateARPU/(1churn)\sum {traffic} * {conversion rate} * {ARPU} / (1 - {churn})
    • 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
      • 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.
  • 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)

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