How to Engineer Marketing Success – Patrick McKenzie (Patio11) – MicroConf 2012

0:00[Music] how do you everybody my name is Patrick McKenzie perhaps better known as petty 11 on the Internet so I sometimes get asked what I do and I'm kind of confused at it myself I was going to Town Hall recently to fire a file my taxes and I was across the street from Town Hall the light was preventing me from getting across the street and by the way I live in Japan and the guy comes up to me on a cycle stops right next to me and says total disco and my brain started to you know flip through like all the possible things that could be and like high

0:36probability for those characters total day labor are you a day laborer and I was like wow there's only one way I can answer that yeah but my rates are probably a little high for you so if you were here last year you heard the like grand Arc of my transition from really overworked Japanese salary man to totally not working all that much bingo card Empire guy it's really not all that great shakes compared to some of the things that people have done up here but it's a little website that could it had like it has over two hundred thousand users six thousand fifty-six paying customers I'm pretty happy with where it

1:15got me too and just for a little like update on the story for last year if you weren't here for last year it's on my blog somewhere I'm sure people will tweet out the link to that video if they're very very nice and kind to me but just an update so the blue bars here are the 12 months before attending microcon and the red bars are the 12 like the last twelve months so after attending micro-cap so since my business is crazy crazily seasonal if the red bar is above the blue bar I'm doing something right and as you can see in the last six months the red bar is

1:43routinely exceeding the blue bar so I was doing something very right and the thing that I was doing was stopping working on bingo card creator so my first actionable tip is if you have me in charge of your marketing like say Jason Cohen does you need to fire me and your sales would go up by 50% but we're not going to talk too much about being a card creator today we're instead going to talk about systems like we you heard earlier about building the fly at wheel being a growth hacker this is probably one of the most important things I've ever come across but a job is a system that turns time

2:16into money and the business is a system that CERN's systems into money I was once talking to a Japanese guy a large automobile manufacturer in central Japan that you might have known know of and I said T Corp is known in America as a company that makes cars and you know Ford or whatever is a company that sells cars and he said just kind of like patted me on the head like oh nice silly American Ford might well be a company that sells cars but T Corp is a company that builds organizations that builds cars I thought that was a very profound distinction and all of us are in the

2:52business of building things that help us sell things that we build and I think we are ideally situated this because as engineers we build systems you heard earlier about the term growth hack which is just on the cusp of becoming a meme by the way you're going to hear a lot about that over the coming over the next coming days because there are huge platforms these days everything from Pinterest to Twitter to Google to the App Store that give you ready access to hundreds of millions of users billions of users many of whom have credit cards and will actually pay money for things and as engineers we have the capability

3:30of exploiting those platforms in a scalable manner some of the ways to do it I talked about last year and I don't want to give all old content so if you want to hear about SEO which is the main reason my sales went up for this year just watch the thing from last year we're going to talk about new stuff Oh totally stealing a slide from last year so in addition to bingo card creators there were three really big things going on and I just want to give you updates on them so the most important one down in the bottom there last year I said something kind of out of school it

4:01wasn't like planned for the talk or anything she just slipped out of my mouth I said the most important thing in my life now as I've recently met a beautiful young lady in Miss Reiko Shimada over there and she is going to be the future mrs. Mackenzie and that was the first time that thought like ever got verbalized even in the deepest recesses of my mind so luckily it was not simulcast or anything that's official now it's happening at June 20 26 for obvious reasons but can I just like make a note about this everyone has shown a picture of their children or significant other and at a less charitable

4:43conference people might be oh that's the boring stuff skip that get to the good stuff that all those other pictures that is the good stuff there's a word in Japanese called moon'll no owari it means an awareness of the impermanence of things this all this conversion rates and equity grants and profits and all this yes oh this this will all be dust and memories what the important part of our lives is our families our friends that is what we will be known for so if you have a successful business and your family isn't feeling it something is going terribly terribly wrong but I can't just stay and stand up here

5:26and say my fiancee is the nicest smartest most wonderful beautiful woman in the world for the entire hour so just like include platitudes that h-naught platitudes complements Ted age I don't speak Engrish anyhow updates on other things that are going on so I got a slide up from fog Creek which it was one of my favorite clients that I can publicly talk about but I don't really have much content in this presentation about I don't know how I did that I don't have much content in this presentation about running a high-priced consulting business is that something you guys are interested in just like a show of hands I'm a marketing guy so I'm

6:04gonna give you the quick elevator pitch and if you want to hear about this we can talk about it like at the question and answer session is it interesting to you how I turn down $700,000 a year to do conversion optimization for big software companies just raise the show of hands would that be like fun or oh okay so we might talk about that for questions we're going to talk a little about appointment reminders stuff that I learned the second time I tried to make a software business from ground up and how you can apply to your businesses so this is my new thing which is by the way in almost direct

6:35competition to somebody who was in the first session of tear downs so you might like compare and contrast to the way I do it in the way he doesn't actually went up to him afterwards and tried to teach him what I know about this because people helping people is what this event is all about and we all get better even if we're competitors sharing knowledge anyhow it makes appointment reminder phone calls text messages and email messages to the clients of professional services businesses so this is a wee bit more sophisticated than my bingo thingy why did I pick this problem this is a slide in which I give bad advice the way

7:11you should actually pick a problem like skip back to your notes from Amy Howie's presentation that's the way you should pick a problem this is not the way you should pick a problem but it's true so I'll tell you at anyhow so you see this jacket that I wear in all of my presentations because they're color red looks good on me and I love this company - Leo - Leo came out with this product that led web developers basically script up phone calls and SMS messages and I thought ooh that's kind of Awesome and I like to view the market the market in like the sense of the broad capital C

7:41capitalism sense of the market as a placid lake which incorporates everything that we know about the world right now and when new information gets added to that it's like dropping a rack in the lake ripples in the lake our change and the larger the ripple is the more change there is the more possibility of there is to get outsized profits over the course of the world right now because like we learned from micro economics 101 the natural state of profits and the system is zero in the steady state and truly truly o was like dropping a big effing rock into the software world because you can finally

8:17interface with the plain old telephone system without having to understand what an asterisk server is and if anyone here has ever tried to hack asterisks I'm sorry for you so what could I do with with a telephone that I couldn't do before I made a list of like 400 ideas and just because I was still today job at the time and since I spend like 16 hours a day in front of a computer screen my shoulders ache like crazy so I sometimes go to massage therapists and this one day I went into a massage therapist and asked hey can I get a shoulder massage because I'm an engineer my shoulder

8:49aches like crazy and she said it's gonna be about two hours like well I'm gainfully unemployed so that's no problem I'll just take my iPad browse hacker news in the corner here for a little while and then we'll get the massage but you can do it 15 minutes later she comes back to me and says hey I know I told you it would take two hours but it would be really really helpful for me if I could massage her shoulders right now I said oh sure no problem can I ask why and she said well I had this slot booked up with somebody else but he didn't come in and now he's 15

9:17minutes late and if I don't start massaging your shoulders now that's gonna throw off the schedule for the rest of the day and I'll never get the revenue from these next 45 minutes back like whew that's interesting why didn't you like call him and notable and quotable line from her she says I'm a massage therapist if my hands are on a telephone they're not on someone's back and if my hands are not on someone's back I'm not making money and I thought that's interesting so I asked if I had a system that could call someone automatically before their before their thing their appointment with you and would

9:49that be motivational to you and she said yeah so I went through my list of 400 things and thought oh this is the the first one I've had an actual customer need for how did I know it would sell though that's one person so what I did two things one thing I did was just whipped up the MVP Minimum Viable Product read Eric Cruz's book the Lean Startup everyone should read that book it's amazing I whipped up the MVP which is a website you can get to it I'll show you the link later and it just you given your phone number and it calls you just

10:21like you had an appointment and says hey you've got an appointment click one to confirm and then if you confirm it shows right on the schedule here this person confirmed and if you cancel it says this person cancelled we would email you right now so you can rebook this lat and save the money and I just threw this up on the internet and waited and people signed up for my pre-launch list said that is exactly what my problem is the other way I did was I went home to Chicago which is where my family is from took out $400 from an ATM and walked around downtown Chicago and looked for

10:51like salons and other massage therapists that sort of thing I walked in I said hey do you take walk-ins yeah are you free right now yeah are you the business owner yeah okay I've got a weird proposition for you and no not that kind of weird what's the rate on a 30-minute shoulder massage she would tell me it's almost always she and I would say okay I'm gonna pay you the rate for a 30-minute shoulder massage but what I'm really interested in I'm a small businessman I live in Japan I'm interested in the business of Massage Therapy so how about we just skip to that like post massage

11:24cup of tea that you're gonna offer me I have learned this over the years it's gift to the post massage cup of tea I'm gonna pick your brains about how you run your business and then I'll go no massage needed and you get your money and almost everybody took me up on that and nobody call it the police yeah and so I would ask questions like what do you use for your appointment scheduling right now pen and paper version 1.0 how many people cancel last do not like them people cancel yes do you phone call people every day well yeah I kind of do but I sometimes forget yeah yeah and

11:57then the money question if I had something that I could show you right now that would that would call would you pay for it yes would you pay $30 a month for it because $30 a month is close to your rate for just saving one appointment yes can I get your email address right now as soon as this is as soon as this is ready I'm going to come back to you and say it's ready let's it get that $30 a month and I just collected those and I actually didn't end up selling any one of those people but the need was clearly demonstrated to me there I've got a better way for doing

12:28it these days because as I mentioned in time in kind of the talking to people about wedding things and I'm learning stuff stuff about like selling wedding dresses because I am the unwitting victim of that and so there's this thing called the iPad and every sales man at like a wedding venue or a wedding dress shop or whatever in Japan is using the iPad and I predict within five years that every salesman in the entire world will consider that their key sales tool and the reason is when you have a sales discussion with someone with the eye had you were sitting next to them standing next to them kind of hunched

13:04over the shoulder and a very kind of intimate psychologically reassuring way while they drive the iPad and flip through oh that's a lovely dress oh that's lovely I really like that one you like that one I'll show you more like that mm-hm and when they get confused you can just like take over for them do the little like slightly slightly thing and it is a very very persuasive technique so if you don't know whether a software will sell they're not knock up like go to loo themes or go to theme for us to pay 15 or $70 or whatever it is mock up three screens from it or even mock up two

13:37screens plus the final output put them in a just photo gallery on your iPad and take it directly to people in real life stand out and then listen over the shoulder it's like do you really have a wedding dress problem we got these and if you are solving in actual people they will sit and people a problem people actually have they will say at this point shut up and take my money if you are not solving him so if someone says oh that's kind of interesting yeah yeah tell me when that when that exists you have not successfully identified a problem that people actually have failed

14:17to identify problems prior to spending six months of your life building the solution to those problems that no actual human being aside from you actually experiences in their life you will have much better success that way brief interlude on pricing this was brought up in a few things and we kind of treated at a high level so I thought I would dig into the nuts and bolts considering many of you are in they saw software as a service business here's how to read a price in great this one's from woohoo you you have seen similar things all over the Internet's I can't tell you about exact results I've gotten

14:50firm customers but I talk to a lot of people about the sort of things so for just kind of anonymizing here's how you read it find the most important find the largest dollar amount plan that plan generates 33% to 50% of gross revenue why because it's sold to people who are not spending their own money they're spending a corporate budget and spending your own money hurts but spending a corporate budget is kind of happy thing for a lot of people because check this out if you don't spend your budget it gets taken away from you so if you're trying to protect your home position at a company you want to spend

15:23as close to the top of that budget as possible so help people out and they're you know trying to protect their status and job security by helping them spend their budgets because $200 a month is nothing to a company that has actual employees the cheapest possible fully loaded cost for a college graduate is about $4,000 a month $200 a month is like 5% of that so if you're only saving one or two hours of employee employee time a month $200 is a total no-brainer so is 250 anyhow the one that has the most users nobody likes to be a cheapskate boom it's this one the one that has the

16:01highest support costs so Wow who has a free plan I'll guarantee you they get more annoying emails from people on the free plan than anything else put together probably squared the worst customers I call them pathological customers are attracted to things that don't have a lot of money and it's amazing how many people have told me this you raise prices and you deal with less crazy people 99 cents people have very unreasonable expectations what this flashlight app didn't do my Texas one stars but when you're charging people tens of thousands of dollars a month or a month for an enterprise-level service they say hey you know our business

16:41really needs this feature oh thanks for the email I would really love to implement that feature but we're kind of constrained on time right now can I get back to you in the indefinite future if we get time to do that you'll get a one-line email back sure that sounds great would you rather like deal with the no stress and get the tens of thousands of dollars or one stars for 99 cents it's almost self-explanatory by the way I've sold them a semi b2c product for most of my life I really do love teachers even when they're kind of exasperated and can't tell the difference between the blue googles and

17:15the green googles and don't understand why they can't get a CD of the Internet actually happened to me today but in terms of like if I could go knowing now if I had known then what I know now I would never go into b2c charged businesses charged them value appropriate to what you were charge them a price appropriate to the value you're providing by the way a big surprise about software is the service companies almost everyone has Enterprise pricing available some of them don't put it on your things but I guarantee you there is a way to go up to woohoo go up to almost any like plan that taps it any software

17:54is a service company and pay arbitrary arbitrary amounts of money for their product for example if you have a $500,000 budget and you talk to somebody at whoa foo I will guarantee you that they will find an option to spend $500,000 maybe it's we send a trainer and teach everyone how to use their drag-and-drop forum building interface and then the cost of the trainers time is 500 dollars an hour at the business you say oh sure yeah whatever and then by the way that you need to purchase a service level agreement with that and the service level agreement runs $20,000 a month and there are businesses that will happen to pay that

18:31doot-doot-doot so software is a service economics 101 why do you want to charge closer to the top of this these pricing points instead of the bottom of the pricing points because you have to get a lot less customers to generate the revenues that you want as to like either replace the day job or to make whatever your own personal goal is by the way we're going to do oh yeah so how do you segment plans first align it with customer success getting based on features can work but if there's a numeric thing that allows you to discriminate between customer classes such that the more value they get out

19:09the product the more like X number that they need segment primarily based on that X number it doesn't have to be linear segmentation because the ability of you know fortune 500 companies to pay is not linear with respect to the size of the company like a thousand person company is not the same as collecting a thousand one-man companies and putting them all in a room together they have orders of magnitude more money so you should probably be charging them orders of magnitude more money names matter so back in my time as a Japanese Sailor man I was given a project to run by my boss and I was

19:47trying to buy I think crazy egg for it and I did the projection I wrote up for my boss and said by the way we need the nine dollar 99 cent hobbyist crazy eggplant and could you please approve the purchase for that boss takes my printed out proposal for the project looks down at hobbyist goes over to crazy ENCOM strikes it down and strikes it out in red rights enterprise the picks the top plan which was like $250 or $500 or something a month at the time something like a quarter of my salary and says that and says okay here's a new proposal sign off on it and then I'll assign it to my boss

20:27and I said boss boss we don't need the enterprise plan our projection traffic is clearly under the hobbyist plan he says well F if I'm going to show it tell my boss that I want to reimbursement requests for the hobbyist plan so we were under the enterprise plan I was like oh can I get the enterprise salary that did not work out so well I no longer work there anyhow future segmentation can work particularly if you have features where a hard like there's a hard requirement among some customers that they must have a particular feature and that segments people into has a little money it has a

21:03lot of money for example health care in the United States has more money than God and something that a lot of health care customers are going to be very particular at is is this hyper compliant talk to me later if you want the full story on that one but the magic words is this type of compliant means you can charge them as much money as you want and by the way you can have a system where all accounts are actually hyper compliant but you only tell people that the most expensive plan is hyper compliant and because they're not actually caring about hyper compliance they're carrying about being able to

21:33sign off on the fact of hyper compliance if you simply refuse to sign off on the effect for anything that cost less than two thousand dollars a month all of your health care clients are going to go for the thousand dollar a month plan which is by the way nothing in health care charge more charge more charge more charge more charge more anyone have a question about pricing you should charge more you're probably ridiculously under pricing $4,000 a month is the cost of the cheapest possible employee you are less than 1/10 of that you are probably creating a lot more value than many employees in the organization so charge

22:02for the valuer rating so I was doing tear downs earlier here's what I put up for my pricing great about a year ago and since I haven't had all that much time to work on appointment reminder I made a lot of mistakes and I haven't fixed them yet so I'm going to tear downs in my own pricing grid I have a $9 a month plan that was a mistake so I actually have a lot of customers on the $9 month plan they account for about 80% of my customer support requests and approximately 95% of my headaches and they pay me approximately nothing and don't stick with the service for very

22:35long I have an enterprise plan that's coming soon any day now a year later there's actually a plan that isn't even on here it's $200 a month it's just I call it small business - because I'm very creative like that and it's just small business and I bump this number up a little and small business - plus small business create over half of my revenues that are based on this and oh quick update on a point a reminder like quadrupled in a year without me doing much work on it at all makes n story just makes systems it really helps do to do yeah okay so a

23:14tactic you should all probably steal can you raise your hand raise your hands everybody just get a little stretching okay now put your hands down if you have not emailed a lot of customers all at once this month okay so if you look around the room and you're looking for speakers you will find almost all the speakers still having their hands up and this is one of the things that consistently consistently segregates like some really savvy people yet you can put your hands down consistently segregates really savvy people from folks who are not quite at that level of 70s yet so of course I didn't really

23:46seriously start collecting emails for like six years this guy we meet safety is one of the smartest people on the internet in Durham in terms of marketing he says the one like dull moment is that I was not building up an email list you heard earlier about an email list is creating your own your own reoccurring stream of earned media because there are people who want to hear what you have to say they trust you on a subject and they are begging you to sell them on your solution so you should be getting those emails let's talk about how oh why does email Rock now some people because we're

24:22all techies might say well if I want to get in touch with someone about a new blog post I wrote theirs RSS feeds for that right emails like RSS except better in every possible way email is actually read you know quick show of hands who here is over 10,000 unread items in their Google Reader yeah mm-hmm email is actually read by real people too and by real people I mean folks who don't come to conferences like this and who have authority to sign off on $500 a month purchases without breaking a single sweat email is a necessary time where it's like RSS reading is I don't have anything

24:58important to do today so I'll just like so if I don't have anything important to do today I might read some RSS stuff whereas emails if you're an information worker like all of us email is your job right you live in your inbox many many things in box get read particularly when they sound interesting and hmm the psychology of email is really important you know if I put a diamond in a trash store you're probably going to think that diamond is not worth so much think of the things that will be around your message in somebody's inbox it'll be a lot of important work if that's all

25:33important your message probably important as well think of things that are probably going to be around your blog post or content in someone's RSS feed or in someone's like bookmark manager it's probably going to be a lot of commoditized internet trick that they're going to get to the first day after never I mean if you do like free association for say what's the what's like spirit animal of email its thunderbird it's fast its powerful it does important and if you do like free association with what's an animal that we can associate with like bookmark systems and what did it love would it be a cow it's like that's stupid

26:13so do email instead so when I say to email what do I mean really simple collect your email addresses educate them over the email and then sell them stuff let's go into detail on that so for a successful landing page you really only need a few things just ask for the minimum possible information from them probably their email address and their name because everyone likes hearing their name and you should probably put in subject lines because that'll increase click-through sorry open rates on your emails quite a bit so give them a nice attractive button that promises value not pain get something cool does anyone here run a website for like

26:56sadomasochists okay there are there are no stands up in the room which means that nobody should have submit as the text on their email button now minimize distractions on that page you generally don't want to be collecting an email from your home page why because your home page has to serve many masters you're probably trying to get people into the trial get them into the pricing grid should generally be collecting email and dedicated landing pages and what will you have on your dedicated landing pages a sweetener because people don't really care about you they care about themselves so tell them that giving you their email will

27:32accomplish something for them let's go into ways to do that the simplest possible way to get permission from someone to send them emails when they're signing up for the trial say hey in addition to that trial can I send you email just takes out in one box downside is going to like mine early decrease your conversion rate to a free trial upside you'll get crazy conversion rates on this by the way who here hates email and thinks man I hate getting email I would never click on yes I want to get email from you yeah hands up real people don't hate email some people like email

28:08a lot so I have a newsletter that goes out to the bingo card people and it's about monthly and I sent it out for October and said hey Halloween bingo cards you make them by going to bingo card creator and typing about Halloween stuff and then the November email is predictably Thanksgiving bingo cards do you make them by going to bingo card creator and typing about Thanksgiving stuff and I didn't hit the send button not in the November email because I just got busy that month and I got three messages from teachers in America all all of them saying hey I didn't get the get the email from you in November I

28:41must have like missed it or something or got eaten by the Google's can you please send me the email for November and I wrote back and I said well there just wasn't an email for November because I got busy but it was just going to be about Thanksgiving stuff they're like that's sad I want to read about the Thanksgiving stuff like whoa missed opportunity a better way to do things than collecting emails with your trials is to create some specific incentive for example Reuben from bid sketch uses beautifully designed templates of proposals and says okay I will give you a beautifully designed template for proposal you can

29:20turn around and make this into money and all you need to do for that is to give me your email address so I can email you a link to it works very very well you can see incredibly high conversion rates to this and people who convert to I care enough about beautifully designed templates to give an email address just to get a download link for him are not the kind of folks who hang out in hacker news like it's their job it's the people who really care about this they make really great prospects for selling to Third Way I think it actually does I just cut it off at the screen with the

29:58screen grab okay a different way and this has vastly higher development costs but you should consider doing it make a one-off tool gate access to what to the one-off tool based on giving your email address for example WP engine does this kind of well they have a tool that will tell you if your website is slow and in the it will only tell you it takes you know a few seconds to run and whatnot so rather than just doing Ajax refresh they'll say hey we'll send you a link to your port when it's ready and they give you a little option there in addition to hearing if my website is slow I'd also

30:32like to hear one month course about how to fix that and make it more scalable will make it more secure and one that get Jason drunk later and ask if this works or not that can provide this sort of thinking provide very focused valuable leads for you and it leads in to it's like a great transition moment in so their first couple of emails from you let's talk about that so there's kind of a cycle here of how sales that you get at the I think someone is coming off the internet they don't trust you they don't know you from Adam so for your first couple of emails over the

31:05course of a month and you might send six emails or eight emails over the course of a month depending on how much of a high-touch sales complex sales process your server for cars for the first couple of emails you focus on trust building and education and that's it like if you were just talking about you know someone's website is slow say hey thanks for signing up for the WP engine one-month course on improving your WordPress site here's three ways you can make your website faster and very focused on value for the customer minimal if any sales content for wpengine then over time as you have built up credibility with the

31:44customer over three emails they've seen your name and their inbox they're starting to associated with your problem domain and they're getting value out of it you start getting a little more sales eat and you push up that sales e to the maximum point and then if they don't buy by the maximum point they're probably not ready for your offering so like back down a little bit go more on the more on the education again and then try it again but sell a different product offering for example a different plan I just like kind of threw up a random thing here for a template for an email

32:18that educates someone about someone as something it's not really rocket science it's you know the the three paragraph hamburger essay that you all learn to to write in sixth grade I hesitate to say this but don't be afraid of dumbing it down too much you all live in your problem domain many many hours a day for months weeks at a time most of your customers are not super awesome ninja rock star experts at your problem domain so teach them the basic stuff because most people in your problem domain are beginners or intermediate not super experts feel free to share of your knowledge and answer basic questions

32:52that they have and then at the end you know just say hey do you have a question about this send me an email I read all of them almost none of you who have less than hundreds of thousands of customers would feel any burden from getting email back from this because most people think oh he doesn't really mean that in fact you will get emails saying do you actually read this and then you fire back yes signed CEO and I guarantee you if they have money you've just got a customer for life even if you have hundreds of thousands of customers that is for bingo card creator the envelope

33:22is kind of manageable and you can give them options for more things to do to convert okay so when you're getting to that salesy like hump on the graph what do you do first you eliminate all decision-making that they need to do aside from do I accept the offer or no which means if you have like four plans you don't say okay go to the pricing page and pick which of the four plans is worth it for you know give them recommendations save most of our customers find that this is the best value you should buy this here's the reasons why you should buy this it will

33:52solve your problems it will solve your problems it will solve your problems your life will get better your problems South you you you you you you you offer them a time-limited bonus and yeah you could have gotten to that pricing page at any time over the last 365 days but if you take me up on this offer in the next seven days I will give you something cool it's up to you what that something cool can be for many of you assistance directly from the CEO in integration is a really compelling offer because wow you can't get that anywhere else while their perceived value for that is very high and it immediately

34:29addresses one of the objections that they have for using your softwares like oh god I have to integrate that I have to like copy paste scripts into my webpage will do the copy pasting for you and thereby earn your loyalty for the next several years and several thousand dollars of customer lifetime value and it will actually be done by a freelancer that we've hired and told them how to FTP stuff I think I stole that one from Rob works pretty well and pre answer all their objections in the email and any page that you link them to this is what we were talking about earlier in the

34:59tear downs if you have a customer testimonial well when you're talking to customers you're hearing their objections like the price is too high find the customer testimonial that says oh yeah I winced but man it's so worth it and put that right on the page about answering the pricing objection with okay here's how you calculate the value for this it's a screamingly good deal for you yeah we will save you hundreds of hours of employee time for only tens of thousands of dollars okay how do you learn about writing email and copywriting better I suggest signing up for a lot of email and getting it from

35:32people because they will convince you to buy all sorts of stuff seriously or meet say--they I did a call out to him earlier he is in genius at this I found myself like he's a friend of mine I know he sells info curses for living I've never bought an info course on anything I was reading his email I sent him an email at the end of it because he says you know respond to all my emails I'm like hey roomie this is Patrick I want to I would crawl over broken glass right now to hand you my credit card Wow seriously get his emails they're good

36:06stuff and in addition to teaching you how to write email better they are genuinely worth your time if you're concerned with like increasing your career and/or freelancing business The Motley Fool does investment advice it's bad investment advice but they sell it really really well and then for any sort of like scummy market like I don't know online nursing degrees or anything people who are paying $100 plus just to get an email for that probably know what they're doing or they'd be bankrupt already so you can see what kind of works and then use your powers for good not evil okay so more specific to software people let's talk about the

36:41first run experience via software and up who here knows how many people come back to using their software after the first time like that is something we check okay there's a few hands going up here almost everyone should check that for those of you who aren't checking it I'm just going to tell you the numbers right now it is between 40 and 60 percent of people come back after using it the first time which subtract from one hundred sixty to forty percent of people never use the software a second time because they did not perceive much value in the first time use it your software they got bored of it after 10

37:11seconds or within five minutes so you should make that first five minutes as a software FAS thing because it is the most important five minutes in your lifetime because every subsequent use of the software is gated based on surviving that first five minutes that most of your users are not surviving right now so can I just show you software here who here thinks that this is a fun first five minutes suited for software so Microsoft can get away with this because your first five minutes with using Microsoft Word we're probably in like 1992 and you had to do it to pass a class and Microsoft is Microsoft and you

37:48absolutely have to use this if you want to work in the information economy but it's kind of sucky because there's just so many options here it starts you as a blank screen and you have no clue if this was like a free trial product and what do I do to get value out of Microsoft Word to make the decision on the go or no go for buying this Microsoft that isn't really a problem because you've already bought this if you see if you're seeing this screen but if your software if this reminds you of your software at all if you drop people into a blank screen that is a huge

38:15failure mode we're going to fix that how you script their first five minutes like it is the invasion of Normandy you were going to do this and then you are going to do this and then you are going to do this and then you were going to do this and then you were going to be effing happy can I give you a great example of that who here has played World of Warcraft yeah okay a few hands who here managed a raid killed in World of Warcraft for a few years okay so the first five minutes a World of Warcraft is literally all right you talk to this guy there's a big

38:44exclamation point in his head and it says right click the guy with the big exclamation point you right-click him and he says you need to save save the world from wolf there's wolf behind you you can kill it with Z zzzzzz so you kill the wolf and you go back to the the guys got another big exclamation point you're right click because you've learned that that works in the world he says great job save the world there's ten wolves kill them and you get Z n X this times e^x e^x DX so use the XE XE X and you have a feedback loop where it's both teaching you on how to use the

39:12software and you feel like yeah I'm the powerful you know level one gnome no mage that it's got to spend the next three thousand hours of my life playing this game but it's a great awesome experience for you and at the end of five minutes you've accomplished something and you've learned how to use the software all of your software should be that addicting sign up for the free trial of World of Warcraft play the first five minutes then stop so you measured they're active you measure their activity and then you use a be testing like we talked about last year to change their activity this is

39:44where the growth hacking comes in and making sure the kind of designing their first user experience that the software is actually motivational so here say the the you know you're gonna do this then you're going to do this then you're going to do this then you're going to do this funnel for bingo card creator instrumented out in KISSmetrics which is by the way the way I would go if I had any budget at all to spend on it I don't know what I spend and it's probably like $150 a month or you know nothing but you can you know write arbitrary code to do something like this and just throw it

40:15into a file if you need to anyhow so you can you know see here where people are falling out of the funnel if you're you know into bingo cards like that's your life and you can try things to get them to actually work I don't really have enough time to talk about what really worked here but the punchline here is that a particular intervention it increases the amount of people who successfully get through to printing a bingo card with bingo card creator by 10% from 60% to 70% which is really powerful for me and if you read my blog I've blogged about what exactly this was

40:53it actually didn't increase sales weirdly enough but similar things that I did with only two hours of work increased sales by like sixteen percent for two hours at work at durably you know tens of thousands of dollars for two hours of work very motion motivational you should probably do it okay so you fix the weak spots in the funnel that you've identified once you have the funnel analytics in there's just some examples of things that work for bingo card crater probably not too motivational for you but they've paid for my wedding so motivation with me dan gave a great example earlier in the growth hacking talk about people they've

41:29just signed up and they can tweet something but they weren't really planning on tweeting something and they don't know what to tweet so they don't tweet and then they go away and never use the app again you say hey you should tweet something right now let me give you ten suggestions pick which one you like and from six percent of the people who went through and actually tweeted something to seventy plus percent of the people tweeted something which is a huge epic when in activation activation means happy use of the software I guarantee you if you haven't optimized this at all you can achieve extraordinary gains in

41:58activation for not all that much work the thing that worked for appointment reminder was implementing a tour mode what is a tour mode so a point reminder has kind of suboptimal thing things about the way the market uses it in terms of getting people through their 30-day free trial I actually collect credit card at the start and then they get 30 days to decide whether they want to cancel or not problem is that people typically make their appointments for their customers well in advance so by the time the 30-day mark rolls around appointment reminder might not have actually reminded a single customer about appointments because they were

42:33scheduled that far in advance so that's sucky they get they get the last day they get to the email it's like hey we're charging your credit card in 24 hours if you don't want that cancel think oh this hasn't really done anything for me cancel so rather than making it take six weeks for them to perceive value from a point reminder and to have people come into their massage therapy practice or whatever their businesses I want to expose that value to them in the first five minutes so I just dragged him by on-the-nose through using the software instead of calling their customer I made a special little

43:03mode we would call them instead and say hey this is your fake appointment reminder if you actually had an appointment it would be five minutes from now click one to confirm it being they click one like great that's the experience your customer gets now let me show you how to do how to do that generally and you know walks them through this crazy obtuse interface because I'm at an interface designer so yeah put in five four five five five five two five five five five four one of the clients and we'll schedule a point for them and walks through every step of the workflow and tells them okay and

43:32this is where somebody's going to someone might actually cancel your appointment and normally that sucks but we're gonna send you an email and that's going to make you money isn't that great you're having fun now tell people that they're having fun now it's a big secret in Vegas I bet there's people running around and skimpy dresses with a lot of alcohol in their fan and alcohol in their hands we're trying to tell you all the time hey you're having fun hey you're having fun hey you're having fun because if you tell people they are having fun and getting value from the software they will tend to believe you create value

43:59but also tell them that you are creating that value if there is a social or viral component in your software if you tweet about using the software if you invite your friends if there is some sort of like friends list management first you should probably pre populate that friends list using anything that you can possibly do because people hate managing friends lists but make sure that that goes into the first five minutes because it will greatly increase your viral factor in that like literally makes or baked breaks businesses is in obsesses about this not a win for the world Dropbox obsesses about this that was a win for

44:33the world if on the other hand your software requires a lot of data entry like you're mocking up things or creating documents or making bingo cards for people figure out a way to eliminate the data entry as a prerequisite for actually getting the fun use of the software maybe gives them sample templates that they can use or just put in fake data and give them a blow away the pic data button okay this is a very deep topic I have a 45-minute deep dive available at training calumnious calm I'll tweet a link to that later if you give me your email address uh-huh you can download the video anytime I'm

45:11actually not trying to sell you stuff in fact when I actually have something to say sell you send me an email and say I was at micro comm plug it to you for free okay alright how much time do we have for questions

45:29we can take a few do do people want to proceed directly to the questions or was that consulting thing like motivational so if it consulting thing okay so what do I do we we talked about this earlier the way to extract money from any company is to promise them one of two things either you're going to increase their revenue or you're going to reduce their costs I'm kind of terrible at firing people and that's the best way to reduce cost for most companies but I'm kind of good at like scalable increasing revenues so that's what I do by trade I'm a programmer might if I was less

46:04savvy about this I might describe myself as I'm a Ruby on Rails developer who knows a few things about a few things but Ruby on Rails developers they're hard to hire right now but if you have like $200 an hour you can find Ruby on Rails developers but don't compete with all the Ruby on Rails developers in the world because github is lousy with them instead say that you are giving an offering that will increase their revenue by a lot and I can point to particular customers of mine that they will find very credible within their space and say we worked with Patrick and then our revenue durably like did a

46:36stair-step function and I said what is a stair-step you know 100 percent increase in sales of your software service product worth to your company if you have 10 million dollars of sales right now Oh 20 million oh great and I'm pretty cheap compared to you know the 10 million the marginal revenue you'll get and you get very little pushback on prices no matter how much you bump it up so scary little yeah

47:10No so I'm sufficiently credible about this thing I think most of my customers actually succeed because most of them invite me back but so like a let's say a week my a week in my consulting rate is similar to the fully loaded cost of hiring an engineer for a month if you have an engineer worked for you for a month and the product fails like most products do the engineer doesn't give a salary back right I mean now if you're plus the pricing structure would be very radically different if there was downside to me if it didn't work out there's downside to me if it doesn't

47:46work out there should be substantial upside to me if it works out so if I double the sales for the company I think as a close approximation I should own half the company afterwards I've actually used that line on people before and that they've been like oh that's cheeky and but we'll go with the cheap option we've the cheap option is where the cheap option is like twenty thousand a week or whatever there's just a representative number that is not a quote yeah as so so how turning down the seven hundred thousand dollars work out so I went to a company in a far-off land which is not the United States because

48:27the United States is a far-off land for me put a different far-off land and I did some stuff can I talk about what the stuff I did hmm I can't talk about specifically what the stuff I did but if you've listened to my conference presentations or read my blog you know that I really like a be testing and I really like search engine optimization and I really like say design in the first five minutes of software and it really like I don't know redesigning purchasing pages to extract more money from businesses that don't care about how much money that gets extracted from them so I did some combination of those

48:55things for a particular software company and made them a lot of money like a company that was making X so say eight figures of revenue went to a different eight figures of revenue but there's there's a lot of play in like the eight figures range and that was after like working for them for two weeks and so the CEO said hey you know the rate I would say is kind of embarrassing for me but the rate I quoted them was $20,000 a week so my members cuz I'm okay part of me doesn't part of me part of me has always thought that I'm really not worth that and I'm just good at

49:32bamboozling people but but this this engagement was the one that turned it around because we got one of the things i generally insist on is okay I'm going to I like this metric stuff I'm going to get metrics for the before and after we're going to a retest and we'll see if this actually worked and came back two weeks later and we looked at the metrics and I'm like oh I must have missed that and he says the bank account disagrees with you oh wow wow wow and he said so what was it 20,000 a week or whatever we're paying you he'd CEO doesn't even know I mean that's not a motivational

50:09amount of money to a CEO at a eight-figure your company you despite the fact it's kind of motivational number for me and said what was it twenty thousand a week so if you consult 50 weeks a year that's a cool million but you can't actually consult 50 weeks a year so there's like overhead and whatnot you have downtime and you have to like go to conferences to meet people like me so and it's call it a 30% haircut to that so that would be like what $700,000 is $700,000 a motivational amount of money to you and I'm like wow wow it's that on the table it's like I'm the CEO we're

50:42sitting at a table floor BAM so my life flashed before my eyes and and I'm like wow wow wow wow no wow I guess the follow-up question to that is why did I say no to that I like consulting is the right thing for me right now I have a wedding to plan for I have two weddings to plan for one Japan one of the u.s. people with iPads are successfully convincing me do I'm probably still in your position but for the consulting business so I would love to help you by coming here and spreading knowledge and talking to you and taking your emails anytime my email is up on

51:27the screen but I just like doing it as a day job again is not something that's motivational for me even for more more teeth than there is in China I guess the expression those seven seven hundred thousand dollars is a lot of teeth sorry not mean to brag there [Applause]