The 3 Tactics ConvertKit Used to Add $135,000+ in MRR in 1 Year – Nathan Barry – MicroConf 2016

0:00[Music] [Music] so two years ago at microcon I was out at dinner with a handful of founders and on the way back I'm walking back talking with a few people and there seem to be a lot of heat and Shaw stories I'm gonna give you another heat and Shaw story so I'm walking back with heatin and we're talking about random things and he kind of stops and looks over at me and says Nathan you should shut down convertkit now in general this is not a nice thing to tell a founder hey this thing that you spent a year and a half working on you should shut it down and so I was like I didn't

0:48know how to take it because I'm freely respect heating and this sucked to hear so I should give you a little bit of context convertkit san email marketing company for professional bloggers at the time I've been working on it for a year and a half and here's a little picture of the financial situation which is exactly what you're hoping for and start-up growth we had launched worked our way up to about twenty to twenty four hundred dollars a month in recurring revenue and as I'm doing this I also had another business selling books and courses on software design and marketing and that was going really well

1:27and so I was balancing both of them and the result of that was that convertkit had this slow steady decline over time and so this is where Heaton saying like look this is not working you need to shut it down luckily he didn't end there because that would have really sucked and he said or you can take it seriously and you can give it the time money and attention that it deserves and build it into a real business but what you're doing is not working so you need to change something so shut it down or double down so then I did what I think everyone does when they hear really

2:07really good advice and that's what I waited six months to take any kind of action at all and so six months later gets us to the end of that graph gets us to the low point actually that's elite amount of revenue I don't know if you guys notice it's a really the one 337 it's a really great number so we got to that point and it's no longer even covering like base server expenses and so I had to make a decision and I asked myself two questions and the first question was do you still want this as much as the day you started like I had a successful business with the

2:47training courses and so do I still want to run a software company and the answer was yes absolutely so they're thinking okay if I really want it as much today as the day that I started then why do we have this and so then the next question I asked myself was have I given convertkit every possible chance to succeed and the answer was no and so there was a disconnect there and so I thought that I owed it to I owed it to myself I owed it to our existing customers to really double down on convertkit and see what I could do to make it successful so the next steps

3:24were I invested $50,000 instead of working with contractors I brought in-house and hired a team hired the best developer that I've ever worked with to lead the development team I focused on a specific niche and so instead of being email marketing for whoever happens to want a product like this we became email marketing for bloggers and then we started on direct sales and direct sales was the decision that really started to accelerate the growth and that's most of what I want to talk about today so who here sells through content marketing we got good quite a few people that's how that's what I was trying to

4:05do for convertkit the problem with selling through content marketing is that you get rejected every day without knowing why so if someone comes to your blog post they've read through it it's good stuff they hear about your product they click through to your sales page to ring through it and at some point they decide that they're not going to buy now imagine that we're having a conversation and I'm saying hey you should buy convertkit and you're like oh that's interesting well think about it we talk to it a little bit um but let's say partway through that conversation you just without saying a thing get up

4:39and walk away that's not okay like you're breaking so many social rules that you would never do that but that happens all the time online where I'm saying hey you should buy this thing and you're like and so what happens by actually doing direct sales is you have to give me a reason that you're not going to buy the product and then chances are I've heard that reason before so I can overcome it we can have a conversation and I can learn why people are buying and so I think it's really really important to do direct sales so that you can find those objections so my sales process was

5:13really really simple I would list out prospects and that would come from just reading blog posts you know that someone shared on Twitter or I or I would generate lists of blogs and a specific sub niche and then I'd you know find their email address see that they're using MailChimp and I'd send them an email and then the goal of the email was always to get them on a call the email was really simple I would just say you know hey is anything frustrating you with MailChimp or Aweber you know fill in the blank I'd say I run convertkit it's an email marketing platform for professional bloggers it's used by and

5:49then I try to name-drop you know two or three customers that were as relevant to them as possible that definitely got easier over time and then I just say that I'd love to show it to you if you have a little bit time once this happened people would reply and they would usually say oh yeah I'm frustrated with MailChimp I'm frustrated that I can't tag my customers I'm frustrated that I get charged for duplicate subscribers and frustrated there aren't really automations and so that turned into a great conversation because then I could say that's exactly why I built convertkit I was frustrated by those exact things and so I get them on the

6:28call and you know we go through the sales process and I would do this for any size account whether you had 500 subscribers or 50,000 subscribers but then we came across a really pretty major objection and that most people would say this sounds really great I'm excited about it I'd love to sign up for convertkit but let's be honest I am never going to switch email providers that is just way too much work and and I'd be like no no it's not that hard like you just switch over you copied the forms and you replace the listens a lot of copying pasting for the autoresponders but it's not a big deal

7:03like you know and people say sorry I didn't I'm not gonna do it and so that's where we came out with concierge migrations and so I said it's not that hard trust me I'll do it for you for free and so then whether you early on whether you had a $29 a month account or a $300 a month account we would get their login information for their site and for their MailChimp account and we would copy everything over create new forms and do all of that what this did is we got to the end of the sales process and they had this one giant objection left and we

7:40just immediately took that away and closed so many deals because of it the other thing that I ran into a lot with with the sales process and something that I wish I'd gotten good at a lot earlier was just the follow up process I was really terrible at following up and so finally when I realized that I needed to I just went and created a Trello board and I had columns for to contact contacted interested very interested in and signed up and I would just move people through this process and I didn't realize how bad I was at this before actually making a very simple process until I was at a

8:16conference with my friend Ryan Delk and we're talking with somebody someone else coming up joined our conversation he was interested in convertkit he's like yeah yeah I'll check it out it seemed like it might be a good fit and he walked away and I I pulled out my phone afterwards like launched Trello put his name in there to actually follow up put him in the interested column and I finished that put my phone away and like Ryan's standing back over there the arms crossed looking and he goes I've been trying to get you to do that for years like just follow up with people that's the most important thing in the sales

8:47process and it took me so long to do that but once I learned that once we started getting pretty aggressive with the direct sales this is how things started to look so I have the decision point marked there that was in basically October 1st 2014 and from then in roughly nine months from then to July where from 1300 a month in revenue all the way up to fourteen and a half thousand dollars a month in revenue and that was almost entirely direct sales now at this point we're trying to get some momentum were able to focus on some other things the next thing that we did is we focused on

9:25the messaging so we were able to listen to customers see how they were describing us and we came across this phrase from a customer they said the power of Infusionsoft but easier to use than MailChimp that really resonated with people and they knew where to put us in this whole landscape and that made a lot of sense the next thing that we did is we added two additional channels and these channels are only available as a result of the direct sales so you couldn't launch and like have word-of-mouth and I heard all these companies they're like oh we grew entirely through whatever out and that's fantastic but you need

10:02something to get that going so once the direct sales got that going got a bunch of happy customers they would tell their friends and that became a huge growth channel for us and then also we had affiliates so we offered a really competitive affiliate program paying a 30% monthly recurring Commission and then with the target market of bloggers that actually worked well you know blogging is a common revenue stream for affiliates and then we kept doing the you know non-scalable work of direct sales in order to contact people individually but now we're trying to get them to sign up for the affiliate program and do webinars and big

10:38promotions like that instead of just you know one-off sales though direct sales continues to be a huge part of our marketing plan since July we've grown from that $15,000 a month in revenue to now we're a little over a hundred and eighty thousand dollars a month thanks growing at a rate of about thirty thousand dollars of new monthly recurring revenue each month I remember the months where I was really happy to have five hundred dollars of new new MRI and all through this process especially early on we had a bunch of people saying like what are you doing with this sales process how are you you

11:21know spending like five hundred dollars worth of time to switch over a $29 a month account like that doesn't scale and that doesn't work and so if you're in these really early stages I would just encourage you to do the things that don't scale to put in that work because they enable the channels that do scale you can't just jump right in and go to the word of mouth and the affiliates that really accelerated our growth without doing the hard work of the direct sales so I'd encourage you to start there so thank you guys I'm running at the conference happy to talk it more about any of this and thanks for

11:56having me [Applause] [Music] you