MicroConf On Air Day 5 | Video Discussion: Staying on Top of Your SaaS Metrics with Craig Hewitt

0:00[Music] welcome to day 5 of microcon thank you so much for joining me again today yes thank you it intro in just a moment all the way from Annecy France if you are watching this on Microsoft on air comm you can always head over find us in YouTube we let strip it on YouTube as well you can search for Microsoft we have a channel and this will show up if you are and subscribe to the channel to be notified if you are on youtube feel free to that over to microphone on air if you want to see the schedule for the coming week if you want to be more

0:42involved and ask questions you're gonna hear me reading listener audience questions today that all takes place in micro comm Connect which is micro comps year-round perpetual slack Channel it's a community of hundreds and hundreds of founders and aspiring founders like yourself so Microsoft Connect comm if you want to apply to get an invite thanks as always to Basecamp and strike wow this is so as I've said in the intro this is real life like we're all in our house I'm here with my wife and three kids and I have an Amazon Alexa just over my left shoulder and someone did announcement right during my intro so

1:22it's real life it's it's live and I would not put it past my kids to run in this house behind me or frankly Craig's kids to do so with that we're gonna talk for about 25 or 30 minutes we're gonna dive deep into what Craig's been up to as well as his Microsoft talk from Europe and just a few months ago so Craig Hewitt is the founder of the podcast hosting platform cast Oakes that's I Castro's comm if you want to check it out he was the subject of the tiny seed tails season 1 which was you know what 8 or 9 episodes a podcast where he and I really dug and I followed

2:00him over about six or seven months one of his journey as a founder of costos he's a two-time Microsoft speaker he is co-host of the rogue starters podcast and the other bunch of other stuff that I won't go into now less than 11 points thank you so much yeah my pleasure it's awesome to be here so Craig so we're gonna we're gonna cover different topics and you know it really is and ask him anything but we kind of wanted to shape the discussion around this microphone talk that Craig did in microcopy Europe in October and it feels I tell you what feeling world doesn't know it feels like years ago

2:41we watch the lego masters which is a reality TV show and obviously last year or whatever and everybody's high-fiving and hugging and handshaking when they come up and I'm like no you can't do that you know but it's so Craig's talk was titled staying on top of your sass metrics knowing what to measure and what not to to help maintain sustainable growth and that's just went live on YouTube in the past day or two so certainly even if you haven't watched it now it's definitely worth you know worth watching the next couple days it was it was well-regarded America of Europe so with that let's dig into a couple

3:19questions in the micro conf on-air Channel Michael connect all right so Jonny Platt had a question and he said I'd love to know how you set up your analytics between your WordPress plug-in or any other integration and your marketing / SAS application site I'm planning a few integrations Google Docs Chrome extensions and WordPress and it's making my head hurt deciding how to best track freemium and paid users across the tool and so for context Craig such pathos owns seriously simple podcasting which is a wordpress plugin it's what started to the precipice uses and that helps you know your wordpress site do all the things you need and then

4:02pass dos is a SAS application that obviously is really tightly integrated with seriously some podcasting and that's the hosting service that actually hosts all the files and such so with that context sir you want to dig in a little bit to his question yeah and my response to Johnny was it's difficult and it's kind of complicated but we do a few things to to try to attribute least trial new trial customers and website visits and things like that that we know are coming from WordPress to the site and so like the the first and most obvious is like a unique landing page so the only reason people

4:40should be coming to this page on your site is they're clicking on the link from wherever you have your integration again like a Chrome extension a wordpress plug-in they're clicking on this to learn more or sign up or start their trial or whatever and that's the landing page however you want to define landing page but a dedicated page on your site that is just for people coming from this integration to kind of learn more about your stuff and hopefully sign up and so that's like the easy one we also put UTM parameters in that link just in case there are other people coming from wherever I mean the page

5:14that we send people to from WordPress to Cass dose does rank well in in Google for certain terms so we have a UTM parameter kind of configuration on that link from WordPress to to or to to the Castros marketing site just so we can filter out okay out of all the traffic we know you know 100% these are the links from our integration to the marketing site to this landing page that's that's kind of as far as we've gotten we also we also get those UTM printers parameters into amplitude which is like the product metrics tool that we use and we're able to kind of slice and

5:57dice things a little more from there into kind of like how successful people are and how much they activate within the product so Google Analytics I think is a really good top of funnel tool and then it kind of for us it gets passed over into and - amplitude to say like okay we know where they came from they landed on the site here and they started a trial this time and then for us you know things like they publish their first podcast episode and they created their feed and they visited the upgrade page to become a paying customer and things like that so that's kind of where

6:30the handoff happens there but but I think Johnny if you're if you're able to you know create a dedicated page on the site use UTM parameters and then pass that information into something like amplitude you're probably doing about as good as you can I think under robbed you ever need anything stick out there no that's always what it is it's always this is probably I don't know this is not 100 percent attribution this maybe is 54 60 percent you know and and we were just talking before we went live that you're you're actually doing surveys once people sign up and stick around or maybe to your marketing

7:08audience and saying hey how did you hear about us and well you know human memory is imperfect I was found that extremely enlightening and kind of surprising we could compare Google Analytics and Mixpanel and all the student even drip and all the sources we had for where people were coming from and yet when they actually told us in a survey the numbers never it was always different quite a bit different so I think these are just multiple sources of data it's incomplete information right like I always say and you just have to do your best with it yeah and I kind of think the the qualitative data like a survey

7:41response for me carries more weight because they're they're kind of the I don't know if they're the vocal minority but but they're kind of your superfans but the people that take the time to complete the survey especially if you if you show them the survey after they become a paying customer something you know those are the people that can't kind of rather to an extent the data you really want to get so all right next question oh by the way if you have questions for Craig please do feel free to post them in on our channel there's only one more question and then I start telling jokes

8:20and doing magic tricks for the remaining time so you didn't trust me you don't want that all right Sean Davis says hi Craig I'd be interested in thoughts on a customer acquisition cost versus lifetime value I've been running a consulting business for a while each sale can bring in a lot of money but I choked on the acquisition cost which can be quite high wondering if there's an acceptable rule of thumb percentage or ratio what he said percentage I think it's more Mary Jo but what are your thoughts on that how do you think about LTV to cost acquire yes I I think you know for Shawn if he had

8:52like a one-time consulting engagement that he's selling it's a little different than thinking about Inc like paid acquisition for a SAS or like a recurring productized service because then like for a one-time thing you have like the return on adspend like row as is the term that they use in e-commerce a lot and you want that to be whatever some multiple for anything that subscription-based it's all about like how how long it takes you to get paid back and so oh yeah I'll answer it for both forecast us and for podcast motor at castis were comfortable spending up to about 50% of lifetime value directly attributed to Adwords or Facebook to

9:38acquire a customer and I say directly attributable because there's like this halo effect of just running ads like you run ads and people see your name and go to your website organically and type in you know castis comm or podcast motor comm and so I think there's there's something kind of to be said there and the and the converse is true to that we're only comfortable spending like 50% of lifetime value because attribution stinks and we know that we're we're spending money that isn't really kind of getting us customers down the road so so that's that's kind of the the two sides of that I think for Shawn if he's

10:21selling one-time consulting engagements maybe it's a little easier I think paid acquisition for any kind of subscription tool is harder than things like e-commerce or one-time engagements because you can just say like okay I'm gonna sell this $5,000 thing if you have enough runway you can spend $4,000 to where that customer in the math is really like straightforward for us it's like how long do we back for us as bootstrappers I think that the goal is something like three months on a subscription basis if you can get paid back and the veer your ARPU then that that's pretty good Casa dough's are we're not doing that good yet which is

11:07why we're not spending it's on unpaid acquisition and then kind of the other side of the coin is that podcast motor we have lifetime value and the thousands probably Shawn like you do and so we're fine spending you know five hundred dollars to acquire a customer because lifetime value is like five thousand and we can recoup that cost you know just so much quicker so it's just multiples of the same idea yeah that would be that would be Mike my guess is I would say for a one-time sale I would I would want to as a bootstrapper especially be able to spend like less than half of what

11:42that consulting engagement costs and as on a subscription basis if you can get payback in three months that's really good yeah the venture capital rule of thumb that I've heard for funded companies is up to one third if you can require for less than a third of your lifetime value you're doing quite well so it's like a 3:1 ratio no more than one year of payback period again this is funded this is people who raise millions hundreds of thousands if not millions of dollars so they have a lot of cash in the bank because it's not just ratios it's how much cash do you have in the

12:16bank because if let's say you have a lifetime of five years which these a lot of these bigger enterprises have lifetime value you know lifetimes of that customer lifetimes of that or longer but you can't just spend a year and a half trying to recoup that cost because you'll you'll suck up all the cash in the bank to do it so more than a year ratio that's funded I've always thought about you know us more capital efficient self-funded any funded folks two to four months is my range with hip tail and I'm trying to think with drip I went out a little further but with head

12:47tail at one point I was getting really good at the Facebook ad side of things and it was so wildly profitable because it was just me and a couple contractors so I mean a perfectly the net profit was like a 90 percent or something on that app and I went out to six months on the buys and it allowed me to just why Matt funnel and I knew that you know the the revenue and LTV that would come in would pay that back and I had enough cash in the bank because at certain point I was doing 20 30 grand a month and just putting that in the bank and then you

13:15know reinvesting it so two to four months is typically and you do have to do the math on if I'm spending $5,000 a month do I have and I'm getting paid back in 4 months do I have a 20 grand of cash in the bank to fund those ads during that time you know and that's that's what comes down to them that's this whole exercise right yeah I think that's where that last part is really important of like the total amount you're spending makes the math a little different it's like if you're going to spend $500 a month and then just cut your ads off once you've

13:47acquired that customer whatever then it's not that hard but yeah I mean you know we've spent ten or fifteen thousand dollars a month in ads and you got to make sure that your math is right to feel comfortable doing that yeah for sure and as you were saying you know you were referring to to Shawn that he's a consultant and essentially has you know one-time cost and that I haven't really yeah I haven't really thought about that I mean I used to run a you know micro agency with me or me plus a couple other contractors and I didn't even think about cost to acquire because I guess I didn't run but hey

14:23dad's at the time but I was doing contracts of let's say twenty to a hundred grand each contract was and I I would easily have spent five or ten grand to acquire if I really needed somebody all right we're running out of clients and you need to keep people busy I mean you can obviously you know a couple more question so forest has a question he says how do you decide which attribute attribution model is best to use currently working on revamping our attribution tract so for context for folks there is first touch there's last touch there's a weight of attribution across all the touch points that you've

15:07had with them so first touch would be hey I had a Facebook ad they clicked it and they came to the website they came back a week later then they signed up for my email and went through at nurture sequence and then they came back a week later and signed up first touch would say Facebook dad gets gets this sale in essence right gets the trial signup last last touch would be well it was their last email that got right before they came in and then there's waited you know like try to split it if there's five touch points 1% am I missing any yeah and only I think that the other one

15:43I hear about and I think is just kind of nebulous is multi-touch and that just I think to a lot of people it doesn't make any sense and is super hard to track so I think people we're gonna say that's great but it's kind of hard to do anything with yeah for us we are we are big on first touch attribution and the way we think about it is we have like this whole like kind of funnel instead of nurture sequences and everything and those are static right like we get people land and they're on our list and we nurture them and hopefully they start a trial and all these kind of things so

16:23if somebody starts a trial from email but they came from a Facebook ad then then really like the thing that we're changing and affecting is that Facebook ad and so that's really what we want to measure I think if you if you go to change your nurture sequence later then you might want to look at like last touch attribution at a later time but for us like if we consider that a lot of our more bottom of the funnel like nurture and things that are getting closer to when people are purchasing or starting a trial or whatever are relatively stable then first touch gets a lot more important because then it's

17:02just people into the top of that funnel and the rest of it is is kind of the same so I think one of the dangers that Denise our head of marketing at Casa de is the thing we talk about a lot is like we can't change too much and we all want to or I want to change a hundred things as entrepreneurs and and just kind of see what happens but it really screws your data so we try very hard like on a monthly basis to say like okay we're gonna do this thing you know and try to just keep everything else the same because if we do that then we can really

17:31look at the data and say like okay this is Facebook ad resulted in twenty thousand more page views and that was thirty two more trials and and all this kind of stuff if everything else was the same if you start multivariate testing at the one time you you just need a ton of data dad most of us is like relatively small companies don't have yeah so that's how we look at it yeah and I I think that's should think about it is first touch and last touch are there different information the first touch is how are you driving people into the top of your fun the last touch is what is causing

18:05the most you know most people to convert and they're just completely different pieces of information I guess so I would think about it if you have a bottom of if no one's converting then I would start looking at last touch and I would try to optimize that with stuff with more emails with webinars with what you know there's a playbook for that and as you said once you have that relatively stable where you feel pretty confident in it then I would I wouldn't switch but I would because you can look at both right it's not like you have to pick one and never go back but look at your first

18:33time to just say how can I get more people into the funnel that will convert because the nice part about first touch is if you have ten different traffic sources you can see who converted you know you're looking at conversions to trial and you know that one two three of them it's kind of perform way better than the other so that's doing it another question they're rolling in here start how from Mason Hensley how often do you refer to your metrics / - boards as a founder daily weekly etc you mentioned amplitude Google Analytics etc do you roll those into a centralized location yeah so we have I know maybe

19:09it's not secret sauce but we so we have a scorecard that that we keep and this is Denise's roll one of our roles is is to keep the scorecard updated and the scorecard pulls data from several different sources it's a Google sheet and I talked about this at Emma my Kampf Europe talk so if you want to check out the talk on YouTube it talks a little bit about how to set this up but you can basically automate reports from Google Analytics into a Google sheet on whatever kind of frequency you want and then you can look at things like page views and unique visitors and any kind

19:44of custom events or goals that you have and so we have a goal in Google Analytics for when somebody visits the trial registration page when they start a trial and then when they view the upgrade to a paid plan and then we have custom events that are fired by JavaScript and becomes a so we have all that stuff in Google Analytics and all that feeds automatically on a daily basis into our scorecard that gives us a lot of the it's not top of funnel but it's like the the acquisition side of of having customers really you know it's like okay they they come to your website they

20:22check you out they view your pricing page they start to try all that kind of stuff that's getting people in the door and for us at this point that's where we're really focused you know our stuff after people start trials trial - paid conversion ratios churn lifetime value for us are all really solid so a lot of our focus is on the acquisition side and so we look at Denise and I review the scorecard every week during our weekly marketing goal and we're really just looking at we have goals on a monthly basis we want to increase pageviews this much and we want to increase trial to

21:01pay conversion ratio in total trials and new customers and so we've set like the conditional stuff in Google sheets do you know if it's above 15% growth and it's green if that's you know 15 to 5 then it's yellow if it's 5 or less than its red and and so we can pretty quickly look at a pretty complex spreadsheet and just say wow there's two red cells what the heck is going on here you know that's the that's the whack Amole that we got a that we got a hit you know here going forward or understand what the data is so we look at the data every

21:36week Boyd as a hyper compulsive founder I look at profit well every day so that's that's the other part of that yep and I used to look at stripe every day I used to I did same thing with you we had a weekly review meeting of Google Analytics all the trials of the week we try to tag them figure out where that came from and look at the numbers and Anna actually do a lot of manual tagging which was a trip maybe I'll talk about that another time and then let me think oh if I was starting up a new ad campaign or if we were gonna do some

22:14when testing or something where we were actively changing things I would review it every day sometimes multiple times a day but that feels a little compulsive yeah compulsive to check on it a lot of times it would be daily daily daily and then once the ad campaign or this but just whatever was kind of running and I feel more comfortable with it then it became a twice a week or once a week cadence just all about the level of uncertainty you know when you're starting something new all right we have another question we have time for this one maybe one more depending on how long how long these

22:44take from Ben Hill he says it's another question by attribution I do an annual investment in a certain seasonal marketing channel each year I respond on that channel and over the next 12 months new customers sign up but I don't know how many of those sonnets are due to my most recent send or if they were due to the reputation I have developed over the years any advice on how to determine if it is worth continuing to invest in that channel these channels are primarily trade shows so it sounds like he goes to a trade show once a year and he doesn't know if going each year you know

23:16continues that or if he could stop going for a year but you know let's say he'd stopped going permanently or let's say he's you know let's say he goes once every other year with that without maintain is there any way to track that yeah I would without knowing more about how people become customers or start trials or whatever been and if you want to drop that in the thread here back please do so we can get some more clarity on it but but I would I would say kind of like going back to the first question is like what kind of unique data can you get around people that are

23:48signing up whether it's like if you're at a trade show give out a like a business card with a coupon code on it and that's different every year and then you could go into stripe and say how many people are redeeming this coupon code that was from my trade show this year and anything that's like that yeah anything that's like that to attribute like what you did this year to people becoming paying customers because that's I say that's all that matters but like the most important thing yeah yeah the most recent is this so first touch our last touch thing I like the IDB coupon code I think that's pretty that's kind

24:25of a common you know common approach do it I think another way is to just ask people you know it depending on the volume of customers you can either do it automated have your onboarding sequence where it's like once they're two weeks into a trial or once they're one month into being a paid customer or if you know if you have lower volume if you're doing high-touch sales obviously you could just ask them on a call and it's not how did you hear about us you know this trade show it's this trade show this year you know or what caused you to sign up what made you sign up now rather

24:55than later or rather than you know it's almost getting into the interesting you don't necessarily want to know how they heard about you that you want to know why they decided to sign up I think that's something Ben says in here that customers start to travel on their own and he asks how they about him but they don't always say so yeah we think sure I think that's the that's thing is the data you do get there from those surveys it's really valuable I know yeah yeah keep asking in as many different ways as you can we ask in email after people become a paying customer about a week

25:27but we also pop up a hot jar survey in the app right after they start a try and those are that's different data right because one is paying customers there-there is trials and both are important for different reasons very cool sir I 25 minutes I don't see any additional questions it's interesting today you know you never have any idea what what road we're going to go down and we just we did a lot of attribution today so I'm glad you have a lot of thoughts on that on that topic for folks who haven't oh hold on the producers and/or just posted something someone new all right so there's a question someone

26:11new who is starting their own business where is the best place for them to learn about this kind of stuff lifetime value cost to acquire how to compute these things and potentially out of tribution what do you think sir you have any good resources yeah I think for my talk is a is a decent resource I think for a lot of the the subscription assymetric stuff Patrick Campbell is is the way to go so price intelligently come he puts out a ton of great content and is I think the authority on this for for analytics we really like using amplitude the the few tools out there

26:55they think do a really good job of this and they all have really good blogs you know amplitude heap and mix panel or the three kind of leaders they do a lot of content marketing so they will be good sources for this yep cool yeah I think that's gonna wrap us we're at 12:27 oh no he did not Nick just posted Nick from dentally just said I'd say a mandatory joke is required and it got to up floats already in like the first ten seconds what do you think Craig should we bail today without telling a joke or should we do one all right look let's hear it Rob I'm

27:32sure you got one all right so did you hear about you miss me did you hear about the guy who's fired factory he wasn't putting in enough we really need a sad trombone so thank thank you so much he's at Craig Hewitt Twitter it's also hosted up the road startups podcast and of a new podcast called the audience that if you're starting the place you have your own podcast I'm gonna listen to it it's legit so check those out tomorrow I'm gonna be speaking in very much the same fashion as today with Ben orange d co founder of tupl co-host of the Artic product podcast he did a micro comp talk

28:19last year called idea - validation to launch the first 365 days of people and if yes that head over to the microphone YouTube channel that is live right now how you can watch that azkaban any questions about things he - so thanks again Craig for joining me today awesome thanks Rob [Music] you