Microconf Europe 2013 -- Patrick McKenzie
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Microconf Europe 2013 -- Patrick McKenzie



Patrick McKenzie on quitting day job/consulting, building things to optimize the things you build, etc.

Patrick McKenzie on quitting day job/consulting, building things to optimize the things you build, etc.



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Microconf Europe 2013 -- Patrick McKenzie Microconf Europe 2013 -- Patrick McKenzie Presentation Transcript

  • Want To Follow?  Hashtag #MicroConf or tweet at @patio11  Slides are available at http://bitly.com/microconfEuropeRocks
  • Bingo Cards… Who Knew, Right?
  • We Were All Newbies Once 0 10000 20000 30000 40000 50000 60000 70000 80000 2005 2006 Profits (Early Days) BCC Day Job
  • See My First Microconf Talk 0 20000 40000 60000 80000 2005 2006 2007 2008 2009 Profits (While Employed) BCC Day Job
  • Once More, With(out) Feeling
  • Products With A Side Of Consulting 0 20000 40000 60000 80000 Profits (Excluding AR) Consulting BCC Day Job
  • 2012 Was A Very Good Year
  • Not Important Relative To Last Slide 0 40000 80000 120000 160000 200000 Profits (Through 2012, Excluding AR) Training Consulting BCC Day Job
  • And how will I know that people buy it? What Should I Make?
  • Quick Wins To Pay For Microconf 2014 Look for the star! $X,000 in return for under 2 hours of work.
  • The Fundamental SaaS Equation  Traffic is hardest to optimize for – see Rob Walling‟s presentation or mine from 2011.  Conversion rate throughout funnel is easier to optimize (A/B testing, funnel analytics, etc), but takes weeks/months to see results.  ARPU you can manipulate with a few minutes of work  Churn: run your own Operation Retention
  • Charge. More. • Killed the $9 plan • Added in $199 plan due to apparent demand
  • In Which I Take My Own Darn Advice $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00 12/2010 1/2011 2/2011 3/2011 4/2011 5/2011 6/2011 7/2011 8/2011 9/2011 10/2011 11/2011 12/2011 1/2012 2/2012 3/2012 4/2012 5/2012 6/2012 7/2012 8/2012 9/2012 10/2012 11/2012 12/2012 1/2013 2/2013 3/2013 4/2013 5/2013 6/2013 7/2013 8/2013 9/2013 Scaled Revenue for Appointment Reminder
  • Lifecycle Emails For SaaS
  • How Is This Different Than Last Year?  Drip email marketing is often/typically pre- signup, lifecycle emails are post-signup.  Lifecycle emails require more app-specific logic.  Very helpful: good understanding of funnel  Not required:  Lots of volume  Great copywriting
  • Get People To Upgrade To Annual Billing  Offer discount (“1 month free”) if they switch to annual billing.  Offer it to “loyal customers” over email  One click + confirmation to switch.  Conversion rate from 10% to 25%+  Immediate revenue of $200 per email sent
  • Raising Your ARPU, Trivially Consider Bob, who has 280 appointments a month and is on Small Business ($79). Is Bob happy? How can we make him happier? We should do Bob a solid and convince him to upgrade to Office ($199), perhaps at a discount.
  • Did This At A Consulting Client  “Run my a SQL query of everyone who is within 20% of quota on FEATURE_1, FEATURE_2, or FEATURE_3” (~3 minutes)  Add in 3 extra special-offer plans, which were equivalent to existing tiers but at a slight (~20%) discount (2 minutes)  Write a two paragraph email and interpolate their account data (25 minutes)  Made +N% of yearly recurring revenue
  • Investigating Low Conversion Rate  Takes ~20 minutes to do in Rails or whatever  Put it on a dashboard which you use for Customer Support tasks, review daily-ish  Get qualitative feedback no matter how poor/small data is
  • What‟s The Difference?
  • Walking People Through The Trial They start They succeed They get confused
  • My Trial Email Sequence  Day Zero: Auto-generated welcome  Day Three: Personal welcome from me  Day Twenty:  If trial is successful: sell them hard  If trial is unsuccessful: rescue the trial  Day Twenty Seven: “incoming charge”
  • Welcome Mail  Establish expectations for trial  Getting started guide  Introduce yourself and ask for them to email you
  • Personalized Welcome  Styled to look like sent one-on-one  Announce your availability  Ask for email  “Sent from my iPhone” – maybe not  Lots of folks send this automatically within an hour, almost certainly a good idea but I don‟t do it personally
  • Free Trial Going Well  Simple heuristic  Do ROI calculation  Close sale (or mention it is automatic)  Immediate incentive
  • Free Trial Not Going Well  Simple heuristic  Figure out why they aren‟t doing well  Offer a trial extension if they talk to you  Great opportunity for customer development
  • Weekly Checkup (“Get Them Promoted”)  High perceived value  Great engagement  Creates “ongoing earned media” via the option to embed announcements/link s/etc  Makes ROI discussions academic
  • Digging Into Individual Accounts If he cancels or has a CC billing failure he gets a phone call. Everybody gets a dunning email, sent three
  • [Action Required] Appointment Reminder Could Not Renew Your Subscription  Get to the point ASAP  Prominent link to capture updated CC data  Extend a 3 day grace period, try daily within grace  Don‟t forget a “You didn‟t update so we took the liberty of pausing your account” email
  • How To Quit Consulting
  • But Patrick, Why Would I Quit Consulting?  People say consulting doesn‟t scale. Horsepuckey.  Ways to scale consulting:  Move your rate up, dramatically  Hire people  Improve your utilization at the margin
  • So Why Really?  Constant rat race to get new clients  Lots of unpaid time doing prospecting / proposal / administrative work  You have a boss and you have to go to work every day
  • Why Not Replace With Software?
  • Why Not Replace With A SaaS? $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00 Scaled Revenue for Appointment Reminder
  • So What Do We Do Then?  Productized consulting  Your most common / most valuable consulting engagement, delivered without the full dance  An e-book / video course / etc  A training event / seminar / etc  Sell it through email  Offer it at a variety of price points  Make several gigs worth of money in a repeatable, scalable, tweakable fashion… with lead-in time of 2 weeks to 3 months, not 6 months to 5 years
  • My Non-software Product  Most common consulting engagement (2010): “We send no email. Can you, like, fix that?”  I would implement:  Drip marketing (see Microconf 2012 presentation)  Lifecycle emails (like two minutes ago)  It generally required:  Lots of sales / convincing  A bit of coding  Copywriting delivered by me, the non-expert
  • Goals For Productized Consulting  Convince people who already find me credible that they should be doing email, too  Teach them how to implement:  Drip marketing (see Microconf 2012 presentation)  Lifecycle emails (like two minutes ago)  This generally requires:  Lots of sales / convincing delivered at scale  SaaS products I could recommend and glue code I could describe in high-level detail rather than write  Copywriting that I could teach them to do themselves
  • Why Would You Buy That Over Consulting?  Because it‟s $500 versus $20,000  Because you couldn‟t find somebody to do this for you  Because you‟re not sure you can get to it right now  Because it‟s a cheap, easy way “to test the waters”
  • Why Not Get It Free On the Internet?  Because real businesses spend money on problems  “Free if you have two week to research it” is not free to someone who cuts paychecks bi-weekly  Because paid initiatives signal quality and help to reduce roadblocks to adoption within an organization
  • The Key To Marketing It  Started building an email list a few months in advance  Focused 75% on teaching people stuff (pricing, selling to enterprises, A/B testing, etc) and 25% on telling them about upcoming product  Sent two, count „em, two sales emails  Sent folks to a long copy page
  • My “Squeeze Page” For Emails http://training.kalzumeus.co m Promotion: • Put a HelloBar lookalike on blog, mentioned occasionally in blog posts • Tweeted once or twice • Ended up on HN once because the community knows me Not just for the “Internet famous”: I got 5,000 signups but total “unknowns” routinely hit X00 in a day
  • LifecycleEmails.com Long Copy #1 Establish value proposition very early Main heading and subhead only there to convince you “In or out, do you want to read more? Note “intriguing” copywriting like “unreasonable
  • LifecycleEmails.com Long Copy #2 Use a case study from your consulting career Copywriting wise, just because it‟s long copy doesn‟t mean it has to be a Giant Wall of
  • LifecycleEmails.com Long Copy #3 Personal testimonial from a consulting client with graphical call-out Customer is more like Jason than like you or me
  • LifecycleEmails.com Long Copy #4 Acknowledge prospects’ objections and answer them (Amy Hoy: “Can you smell the guilt here?”)
  • LifecycleEmails.com Long Copy #5 BENEFITS OF TAKING THIS are more important to the customer than what it contains But be explicit on that, too.
  • LifecycleEmails.com Packaging Pricing: Again, charge more, charge more, charge more. Multiple ways to buy means multiple ways for best customers to discover ways to pay you more money.
  • Nathan Barry Is An Effing Genius “Designing Web Applications” Three packages: $249 / $99 / $39 Sales focuses on what customer gets not on what the price is So how did that work out for Nathan?
  • Packaging Is A Huge Win 0 10,000 20,000 30,000 Book Alone $49Book & Videos $99Complete Package $249 Nathan's Sales By Package 0 10,000 20,000 30,000 40,000 50,000 Mo' Packages = Mo' Money Complete Package $249 Book & Videos $99 Book Alone $49
  • What About The Actual Product?  Me speaking into my webcam and a $60 microphone  Loosely scripted. If I do it again, will add slides.  Took ~2 weeks to record plus a video editor (ARGH) that cost about $3,000, but added fairly little value over $300 on oDesk.  Hosted the videos on Wistia and rolled my own delivery platform (you should probably use Gumroad or similar)  Partnered with folks with related interests: additional value to customers at vanishingly little work to me
  • Funny Story About The Revenue  Launch day (sent an email, it got on HN): $12,862  Next week or two: $16,576  “Reminder: the sale ends today” : $15,579  Total to date: $64,608
  • Keys To Product Success  Email, email, email. Get people on it, delight them with the things you can teach them, sell only very occasionally.  Target a pain point which you know there is a demand for. Consulting = validated market, right?  Work on your copy. You don‟t have to be a genius. I certainly am not. (Joanna has a book, buy it: copyhackers.com 100X ROI for me)  Deliver quality products, because you only have one reputation.
  • For more details  Get on my email list @ training.kalzumeus.com  Special bonus for Microconf folks: You can have the lifecycle emails product for free if you didn‟t already buy it, or the next one (probably on A/B testing) if you did. Send me an email. I trust you.
  • Thanks for Listening  Blog at http://www.kalzumeus.com  Slides will be posted. See @patio11  Send me email. I love chatting about this. patrick@kalzumeus.com