# How to Find Customers Who Are 100x More Valuable Without 100x the Effort – Erica Douglass

Channel: Rob Walling
Video: https://www.youtube.com/watch?v=p5Yoyh90nTM
Duration: 49 min
Language: English
Words: 10799
Transcript page: https://viewrankai.com/tools/youtube-transcript/p5Yoyh90nTM

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[0:00] [Music]

[0:07] [Music] so when I first talked to rob about doing this presentation I said well let's make it a working title of finding customers who a hundred times more valuable without a hundred times the effort I think that's kind of long and tongue twisty so I decided to change it to how to measurably move the needle with your software company I talked to several of you yesterday at lunch and I found out that most of you are running software companies and you started out consulting and some of you are still doing consulting and trying to make the break between doing consulting which is you know trading hours for dollars and

[0:40] building a business where you don't necessarily have to trade hours for dollars so this is great so quick show of hands how many of you are still doing consulting to pay the bills and you want to run your business yeah that's almost the entire room thank you and so that's great because this is actually what we're going to talk about and this is what I've done as well so I've been a consultant and I've run a software company and I've run a web hosting company so I'm gonna show you three case studies today two of them are not mine and one of them is mine and I'm

[1:08] gonna talk about how to really grow your business so that you can be full-time with your business and I'm hoping that by next year a micro comp you can take some of these lessons along with some of the things the other speakers have told you and actually be full time with your business now some of my advice is gonna be contrarian and I guarantee that there are some of you who are not gonna like what I have to say but I'm really excited to share with you anyway but first who the heck is this woman who's standing up here on stage telling you all this stuff so I wanted to talk a

[1:35] little bit about my background and I'm gonna run through this really briefly because I want to make this mostly about you but I'll talk about Who I am first in 1997 when I was 16 years old I went on the internet and on a dial-up modem and I tried to find a job where I could work from home I ended up working for an SEO company that sold a software a boxed software remember those remember those back in the day when you went to the store and you bought software in a box they called it site promoter and that company was WGI and when you bought site promoter and

[2:04] you put the CD in the CD drive remember those we don't have those anymore and you put it in and it said well you can do this yourself and it'll take you you know 25 hours to do all of this yourself submitting sites and search engines or you can just hire our awesome team to do it for you for 250 or 500 bucks depending on which package you want when they hired WGI to do it for them I was the girl who copied and pasted all of their information into 500 different search engines and I got paid about 1250 an hour which was specially a pretty good

[2:32] rate for a 16 year old back in the day of course I didn't have to lie and tell them I was 18 in order to get the job but fortunately I was working from home so they didn't know so this was 2002 so in 1997 I started working for the SEO company in 99 I graduated high school and I decided to make my way to Silicon Valley and I ended up at in San Jose at the lovely San Jose State and I had a teacher there who told me that I needed to drop out of college he said it's 1999 you're stuck in school you're really good at this stuff you

[3:02] need to go make your fortune on the internet and I took his advice and I dropped out of school and I started a hosting company in 2001 so I started my little web hosting company I was at the time working at a company called cobalt networks probably don't remember them they made little blue servers and I was doing internal tech support so I was the person that people came to with their windows questions and that's where I learned about Linux and system administration and became a huge geek so in 2001 I dumpster dough for some servers you can actually see them here they're the ones with the white things

[3:31] right here those are those are ones that have been pulled out of production on Cobalt and I grabbed them out of the dumpster and put them in a data center in San Francisco and I was like I'm in business I'm running a hosting company I forgot that I actually needed customers to do that but that's how I got started in 2002 my grandmother died and my dad received a small inheritance of $15,000 so he's got to of course buy more servers and then I forgot that I needed to actually do marketing in order to sell those servers so I had no money to do marketing with so I ended up on a

[4:02] forum called web hosting talk and I pitched my little blue servers for sale and sure enough people did end up buying them and leasing them out as dedicated servers I remember one guy paid me over $1,800 in cash from poker winnings for one of his servers it was the largest amount of cash I'd ever held in my hand at that time so this was 2002 and that's when I got started by 2003 I had moved to a larger datacenter and we had more servers you can see here that I'm starting to build servers below those servers we still only had just one rack of servers by 2005 we had our own office

[4:30] and I had hired my first employee this is me standing here at the office those are eight dual Xeon processors or the processors in my hand that we're using to build servers that's eight gigabytes of RAM which in 2005 was incredibly expensive and behind me is $50,000 worth of Cisco gear that we were using to build out our new infrastructure so this was my company and I ran it just like many of you guys are running the company now and by then we were doing several hundred thousand dollars a year in sales by 2006 we'd grown a little bit more and this is our diet cage full of servers I

[5:00] bartered these pictures in exchange for free hosting for a month for one of our customers who went on to become very famous and now works at Facebook and so I grew from one one tiny slab of servers to a full rack of servers to eight racks of servers and then I sold the company in 2007 to one of our competitors for over a million dollars at that point by 2007 we were doing eight and nine hundred thousand dollars a year in annual revenue so and we had six people at the company so that's the story of my bootstrapped and selling this crazy business so in 2007 after I sold the

[5:33] business I started a blog because I thought well this would be great to be able to relate some of my experiences of success and failure as we did have some rough times with my hosting company as well and so I started a blog called Erica dot biz it became very popular it's now one of the top 10 entrepreneurship blogs I was featured in ink magazine last year in 2012 that was a real highlight for me they came out and took pictures it was very exciting and so in 2012 I grew the blog to 1.2 million unique visitors per year in 2010 I started my current company which is

[6:05] called boost traffic and we're changing our name which I'm going to talk about in the presentation and we talked about why we're changing our name too so this is me and so now let's get into what you guys want which is the case studies this is the real meat of everything so I'm going to talk about changing your pricing this has been a pretty popular theme here at micro comp I had no idea when I put these slides together that this was going to become one of the most popular themes of the conference I was really happy when Jason got up there and talked about changing pricing yesterday

[6:31] because I'm gonna actually show you how we changed WP engines pricing so this story got started when I moved to Austin Texas recently and in January of last year Jason hired me as a consultant we we both needed something he needed a boost to WP engine and I needed a fake salary so I by a house so that I wouldn't have to go through the mortgage company as a self-employed person I know every one of you that's laughing has had to deal with this problem before so I totally get that so so we traded Jason hired me on as a consultant for three months part-time in exchange and for a w-2

[7:05] salary in exchange for me working with him to change their pricing this uh this was their website and I have some of the fonts are off a little bit on this so please please don't blame Jason for the bad font choices so this was their website when I first started working as a consultant with them and they had three basic packages and I've labeled the prices down at the bottom so they had a $49 a month package which Jason had in his notes that he wanted to change to a $29 a month package and that was to host a single website with WP engine then they had what they called

[7:33] the Touring package which was $200 a month and it was it was for WordPress multi-site now the problem with WordPress multi-site is that absolutely zero people understand the difference between hosting multiple websites and WordPress multi-site and the issue was that their customers were getting confused is this multi-site mean I can host multiple websites well kind of but it's also a different version of WordPress with its own issues and it got really convoluted and then of course they had the call package right a lot of us have that on our website over on the right side where we say if you're a gigantic enterprise then you can call us

[8:07] and we'll personally handle everything of course they didn't have a phone number yet so we talked about that too and we got them to get a toll-free number so those were the three packages that they had so when Jason brought me in as a consultant I immediately saw one huge flaw and their funnel and this was a combination of having been in the hosting industry for many years and having been a blogger for several years and I said Jason there here's the problem here's here's the leaky part of your funnel no blogger has one website we all have multiple websites we may have one website that's doing really

[8:39] well and that's our primary website but we never have just one and so we created after several hours of intense discussion in a conference room we created different pricing plans and these were the pricing plans that I helped Jason come up with and I did all the copy I changed the copy on the pricing page and on their home page as well so we changed the copy and we changed the pricing plans first of all Jason said I want to bring the four $9 month plan down to $29 a month great let's do that I said let's put in a 10 website plan for $99 a month and Jason

[9:10] said I don't know that's a little risky let me see if I can actually make these numbers work and make sure that we're actually gonna make money with hosting 10 websites for $99 a month and turns out the numbers did work pretty well and I asked people at lunch yesterday about this and several of you said that you're on this plan can I get a quick show of hands like who's on this plan with wpengine there's several of you in this room that are on this plan and I know a couple of you yesterday said you probably wouldn't have signed up if every website that you needed a host was

[9:39] an additional $29 a month and so that's why we did that and then I we opted to do the 249 a month plan and notice here I've got again right down here at the top I've got domains one domain 10 domains 25 domains we had a big discussion about whether we wanted to say domains or websites it turns out most hosting companies use the word domains so that's what we went with and then of course the call plan down here with unlimited domains and contact us so notice here too I also changed the copy on the pricing page so I want to go back and you can see here it says enterprise

[10:10] class hosting for serious bloggers I changed it because I felt strongly that not everyone who owns a WordPress website is a blogger so some people have WordPress hosting needs but they're not necessarily blogs they're running content web sites that aren't blogs so I changed it so it now says the fastest WordPress hosting try it risk creep for 60 days and notice here - I changed the copy we we discussed changing the pricing plans as well he used to say any package free for 15 days now it says try it risk-free for 60 days but they click the credit card upfront and then I highlighted the biggest pain point with

[10:43] their customers I asked for a support person alias on their support system and I read through hundreds of support tickets from their customers and I also listen to the testimonials and feedback that wpengine received and one thing was really clear everybody at WP engine was there because their site had pretty much crashed and taken down and been taken down when they got tons of traffic from another hosting company that was a huge problem in fact that was the reason Jason started WP engine so I said get started now and never worry about your site crashing again so we changed the copy and we changed the plans

[11:15] and that was how I wish I had the graph that Jason had yesterday where they went flat and then there went straight up that was about when we hit that change in February of last year so that 10 for a 99 dollar a month plan really made things skyrocket I use this as an example not only of the type of consulting that I like to do but also because a lot of people get stuck in a particular type of mindset and it's because you know your servers will only support this or you know you think that because you're this way that everybody is the same way it made sense for Jason

[11:46] in his case to hope tow sites at $29 a month per site but in my case I knew that I would never move to WP engine if I couldn't host all of my sites there because why would I want WP engine plus another hosting company the whole point was to move the site's over so by doing the 10 for $99 a month plan we actually changed the type of demographic of customers that WP engine was attracting now no more would they just have one website they could have 10 or 25 or more so we changed the home page to the home page used to have a picture of an engine

[12:18] on it it's now on the pricing page it's over here on the left side so that used to be in the home page and I said Jason we need a picture of your team so we took a picture of the team in the office and we put the team picture up on the website he also had on the home page superb WordPress hosting which I felt strongly was a word that didn't really mean very much it's like it's great so I we diagrammed out on the whiteboard and it took me several hours to come up with the word that I finally wanted which was hassle-free and that's what I feel embodies the WP

[12:49] engine experience it's it's hassle-free WordPress hosting you're not gonna have to mess with configuration settings or upgrade your plugins or any of that stuff because they take care of everything for you and you don't have to worry about your site crashing so and that's what we changed on the site and of course we added a toll-free phone number as well which I think Jason would attest would measurably move the needle with their companies well there's one other thing that I changed and I'll go back to the back here they had a metaphor of like a car company where it said part sales and service up at the

[13:18] top and I felt like this was kind of like a cheesy used car dealership and and I said yeah I get that it's called WP engine but I don't want the metaphor of like a used car service so instead of part sales and service we changed it to our customers they love us pricing plans and service so we changed it a lot and actually those pages we tracked those pages got a lot higher click throughs and we redesigned the testimonials page as well for that so that was WP engine and that's a great case study of how just changing your pricing and rethinking what you're doing

[13:52] can make a huge impact on your business so I wanted to share the nitty-gritty of what we did with WP engine site so ok now here's the part that you guys may not like it's called doing things that don't scale and I love this case study and I love this example and I'm doing a lot of this stuff too there's there's a tendency right we're all software developers here or we're developers were techies and we have this tendency we're like well can we can we like can we use software to do this instead of a person right I don't want to sit there and call customers I don't want to do tech

[14:26] support I don't want to do any of this stuff just let me code and peace in my basement and I don't want to deal with people I don't want to deal with any of this crap that I have to deal with to run a business and I totally understand where you're coming from as a techie myself but I'm gonna show you this case study and I want you to kind of rethink maybe doing this at least at the beginning you don't have to do this forever but try this at the beginning okay so the question every but every developer has when I talk about these sorts of

[14:53] things with them is does it scale does it scale and we all freaked out about that especially I mean even if you have investors or advisors in your company you decide to you know do a friends-and-family round or get advisors they're like well but you're emailing everybody and you're doing this personal thing it's almost like you're dragging yourself back into that consulting role that you hate so the question is does it scale okay so here's some stuff that doesn't scale that you should do it anyway and I this is a really extreme example but I think it's a pertinent one I've noticed that Leo from buffer has gotten a lot of

[15:26] attention during this conference and and this is great because I have a really stellar case study from leo he he found new customers by emailing them individually for buffer and if you remember yesterday when Ben did the analysis for buffer and they said only 2% of their customers turn into paid customers wait till you see the number of hours that Leo spent emailing these people individually are you ready for this so I got one from Leo this I know this print is probably a little bit hard to read but I'm gonna run through it because it's an important example of how emailing your customers individually may or potential customers

[16:03] individually may not only get you more customers but get you more loyal fans so this email was dated December 7th 2011 so this was before anybody had heard a buffer nobody knew who this guy was and he emailed me directly he said hi Erica I hope all is well with you just read your latest post and he talks about my blog post how many obstacles you had to overcome to reach selling your company for 1 point 1 million dollars especially the story when you got fired because you were only an 18 year old college kid was very inspiring to me one has to overcome a lot of crazy setbacks to succeed so I

[16:34] love Joanna's talk yesterday because she talked a lot about using you in the copy instead of me right so he's not talking about himself at all there right I still no idea who this guy is I have no idea who his company is but the first paragraph is all about me and it makes me feel really good because it's like okay this guy's actually paid attention to me he's actually read my blog as a blogger I probably get 8 to 10 pitches a day and it's ridiculous what people will do they're like blah blah blah just came out with a new product attached is our press release thank you for writing

[17:02] about us I'm like I don't write about people's press releases so I get these emails and I just delete them but Leo's really attracting my attention right away because he was talking about me and it was clear that he had read my blog he he probably read my blog for 30 seconds to come up with that that's okay though cuz he's talking about me and he said just quickly I love this too because it indicates that my time is valuable just quickly we're launching the buffer button for blogs and we're getting 10 top blogs on board for a big press launch okay so now we're introducing a

[17:32] little bit of scarcity here right there's only ten of these there's Mari Smith KISSmetrics pan marketing nut berto peon comm and other so far okay so now your name dropping but this is cool because this is social proof right here so he's talking about okay yeah you can be right up there with Mari Smith and KISSmetrics who wouldn't want to be right one top blog that I obviously thought about was or blog Emily Wow this makes me feel really good so then he gets into what he what he's doing right so we said we've all talked to now he's kind of leaning toward ok this is what we're doing but

[18:04] this is why it's important for you so I love that second paragraph too in the third paragraph he talks about the buffer button and he gives an example of Mari Smith now I will tell you that this paragraph didn't work as well with me because I I wasn't quite clear on what the buffer button would do for me so that that part I would say I would switch it out I mean obviously you know 2011 he's probably still trying to figure out what he's doing with his company so I would say you know probably switch that out for a little bit more concrete of what's in it for me type of

[18:30] situation what's in it for the blogger but it said will allow people to share posted a better time I would have used the word you here but and create more traffic for the site I would have said your site so a couple of examples he says do you think you could try the buffer button and see if you get more shares you can easily grab all you need here and I love this last paragraph too because it sounds like now I'm not gonna have to do a ten step process to get the buffer button I'm just gonna have to like go to this website and make a

[18:54] couple of clicks and I can do the button so I didn't respond to this email but I kept it and I thought it was really interesting and when I started seeing buffer all over the place because they did about 1 million guest post to launch their product then that was when I tried buffer and now I am a customer of theirs so this is how it got started though this really stuck in my mind as an email and he did follow up later I'll talk about that in a minute so I asked Leo yesterday to give me some stats on how well this worked for him

[19:24] like how how many bloggers did you email with his message right was I the only one were there 10,000 I don't know and how many of them responded or how many of them you know decided to try out the buffer button so Leo said overall my success rate from getting a response from bloggers was thirty to forty percent so thirty three to four out of every ten people he emailed responded back but then it gets worse guys alright alright so I would send ten emails and three to four people would put up the button or let me guest post on their site so now you're starting to see how

[19:55] Leo built buffer by guest posting on everybody's site right that's how buffer became everywhere and in 2012 and early 2012 this is the this is the crazy part I would email 10 people per day for three to five months ten per day times five per week has four weeks in a one times three to five months it's not about thousand emails a thousand emails a thousand emails is what he sent and and they were similar to the one that I did that I received and he was looking for 10 blogs in that case I know he got his 10 blogs but he also got hundreds of guest posting

[20:35] opportunities back now the real thing is that that he didn't even send out a thousand emails no because if you didn't respond he followed up and he and he had a simple trick and he said hey just wanted to check to see did you receive my last email and that was all that was basically to follow up and that's really effective by the way I use this all the time especially with people that you want money from hey did you get my last email about that just checking and then they respond back like right away and it says yes sent from my iphone so I see

[21:06] that a lot from people but that works really well too so not only did he send out a thousand initial emails we're talking about multiple follow-ups for each person so this is almost a full-time job for Leo building buffer but look how large buffer is now so can I get a quick show of hands how many of you have heard of buffer everyone okay yes that's exactly how that works and so if you want your product to be known within your target market that's the kind of thing that you're gonna have to do does it scale no it doesn't scale but it gets you known by everyone and your

[21:42] target market doesn't have to be bloggers right and Leo's case it was but it can be any sort of professionals that are in your market most of you are be to be any sort of consumers that are in your market if you're b2c so what you have to do is think about who's my target market how do I most effectively reach them how do i bombard them with blog posts and Facebook Ads and emails and maybe the best strategy is to email them one-to-one individually there's a great example in Leo's and in Leo's email and all you have to do is so simple social proof ask them some

[22:13] questions ask them one thing have them do one thing and and they will be emailing you back or offering to help you in some way I've used this trick successfully as well so thousand emails can okay so I'm gonna ask you guys is anybody up for this as a challenge anybody want to do a thousand emails hands anybody all right yeah I know exactly right you willing to try okay hands again real quick everybody look around those are the most successful people in the audience there you go so these are the kind of things that are gonna drive you to success in your industry it's tough right because we

[22:52] want to just go back in our hole and build software and not deal with people and not deal with customers and we try all these loopholes like let's try Adwords or retargeting all it stuff I'm not saying any of that stuff doesn't work that's great stuff to do but to do retargeting you have to get them to your site to begin with and to do Facebook Ads it's gonna be more successful if they already know who you are so this is a way to individually reach out to people and say okay this is who I am and this is my product and I here I'd like

[23:20] you to do one thing with it try it maybe it's free so case say number three here's here's my version of leo's of Leo's emails I did this it doesn't scale but I think you should do it anyway this is really pertinent for you how many of you you have a business but it's not quite making you enough money to survive quite yet quite yet yeah okay great thank you that's like half the room so you're on that cusp right so you've got a business you've got a product it's making you a little bit of money and you need it to make you more money this is where you want to be with

[23:54] this case study and this is what I'm gonna show you how to get your business from a thousand dollars a month or two thousand dollars a month to ten thousand dollars a month to twenty thousand dollars a month so this is how you do it it doesn't scale would do it anyway I by the way this was a lot of my twenty twelve I spent doing this this I did I offered free one-on-one support to every customer who signed up at over $100 a month so I didn't do it for the $9 a month people but I did it anybody who signed up at over $100 a month and this

[24:21] is the email the exact email that I sent I sent these manually you can do it with an autoresponder that works too I sent them manually because I felt like it would be a little bit more legit if it was sent manually not right away after they signed up so it was simple thank you for signing up as part of your service with us you're entitled to a free 30-minute consultation one-on-one then give a little bit of examples of what you're gonna get out of the consultation we'll go over what keywords you might want to aim for what your competitors are doing and how you can

[24:47] see the best results from our service highly recommend setting up your consult right away click here to pick a date and time for your consult now that link redirects into one of those calendar services that you can use the people who click on a time and it will give them the the time and schedule the meeting in both their calendar in yours so that's all it does it's just a redirect link and then I look forward to speaking with you I have literally done hundreds of these consultations I have spent upwards of 10 hours a week doing these and what I did developed into a process by which I

[25:19] built my whole website and my business so I wanted to get a feel for who my customers are who are they what kind of business are they running what words are they using what emotional angst do they have right what problems do they have how are they solving those problems right now and most importantly where doesn't buy software fit into this where what part of the chain are we in this you know if they're what is their goal and how are we helping them get to it or not helping them get to it so I got a feel for the step by step process my customers used to get results

[25:56] and you can do this too if you know approximately who your customers are get on the phone with them do one on one so you don't have to do it for everyone do it for the ones that pay you the most if even let's say somebody signed up six months ago and they're your largest customer and they're paying you 3 or $500 a month or they've paid you $3,000 up front something like that you can go back to them now and do that and say hey I just want to check in with you and see how everything's going I'd love to offer you a free 30-minute

[26:22] one-on-one just so I can help you grow your business or help you you know whatever their problems are that you you're taking a guess right now what their problems are you you think probably I know this you're making an educated guess and how do i how can I help get on the phone with them I do these through GoToWebinar of course there are many webinar solutions out there I happen to use go to go to meeting actually is what I for the one-on-ones and it's great in there you know many other ones so don't get too hung up on the technology part of it but just get on the get on the

[26:51] webinar with them get on the one-on-one consultation pull up their website or pull up their business and talk about how you can help them and I often by the way recorded these as well I have like recordings all over my computer and I had somebody transcribed them so I could actually read through and get the language that people were using and use that language to build our website so we designed our landing pages we designed our email campaigns everything that was customer facing we designed around the language that they were using and this is what we ended up with now I will say this your software has to measure up to

[27:23] their expectations so we had to redo our software to provide a more step-by-step process as well and in fact we talked about this but we ended up revamping a whole lot about the business so this is what I ended up with for our homepage and this is actually based on the exact language that our customers used and if you hit move traffic comm you can see I've got down here a step-by-step process of how people can get more traffic to their websites which was what we were able to focus on most and of course I threw in a testimonial from a customer as well by the way these

[27:52] one-on-one consult especially if they've been a customer of yours for a while are great to get testimonials from I got stuck on that sometimes it felt really awkward emailing people in saying whoa can you give us a testimonial you know so that we can put it on our website that felt really cheesy to me but when I could do it as part of the one-on-one consult and I said well you know you've been using our service for three months or six months or however long you've been using it can I can I get a quick testimonial from you and they're like sure and they get all excited and then

[28:18] they say it and you repeat it back to them and say okay so what I heard from you was this this and this and yes yes that's exactly it well you have them on audio now and you hopefully are recording this so that you know exactly what they said and then you can throw that up on your site so we found out in our case that a lot of people just needed hand-holding to get traffic to their websites so that's what exactly what we built our software to do so now it's time for a quick heart-to-heart conversation we're going to stuff down here for a minute I'm gonna talk to you

[28:47] guys so this is really difficult sometimes sometimes here's what happens you get your customers and you get in the consult with them and you get them one-on-one and they start saying stuff like your stuff doesn't work for me this is where it gets tough because you're gonna have to be able to listen to what they're saying and take that in stride and say what's not working and how can I change that for you we did this in by late 2012 early 2013 it was clear that the user interface that we had for our software was not working for our customers and they were not happy about it

[29:24] some of our customers were happy we were still growing the business but they weren't happy enough so you're gonna have to get real with your customers and say alright sometimes this isn't gonna work for you sometimes we're gonna have to redo a lot of this stuff and so that's what I did with with this I had a hard time with my co-founder and we said look we've raised a little bit of funding we've done a seed round it was very small seed round mostly friends and family and we we've growing we have the graph going up into the right in terms of revenue and in terms of customers but

[29:55] we have this undercurrent of customers who are not happy and so now what now what do we do and so we realized that we needed to redesign what we were doing in order to help our customers grow bigger businesses so I started out by being pretty frugal how many of you would consider yourselves frugal I know as a bootstrapper it's hard right there's like okay so that's most of the room probably two-thirds of you so you know I don't know about you but I do my monthly expenses every month I track everything right I know where my credit card spending is going I know exactly how

[30:26] much money I have in the bank I know exactly where I'm spending what I call too much money you know I've cut back on cable TV like many of you have I'm sure in order to help fund and grow my business because my business is more important to me than that kind of stuff and I know many of you are in that same boat and so is apparently this guy so I I started out being frugal as well the problem with being frugal is that it doesn't really help you grow your business because you get stuck in this mindset of well I I would be hard-pressed to pay $20 a month for

[30:57] anything except if it's ridiculously important to my business if it's going to measurably grow my customers or my revenue I'm gonna pay you $20 a month for I'm not gonna pay any more than that so we get stuck in that mindset and we get stuck in like well I don't know if it's worth that much to people so here's the problem with that when somebody comes up here on stage and says to you raise your prices a lot of us have a hard time doing that because we're stuck in that mindset of well it doesn't feel like it's worth $99 a month it doesn't feel like it's worth more than that it seems

[31:29] ridiculous to have an enterprise plan where I charge a thousand dollars a month for this thing that I would never pay a thousand dollars a month for but you're not your customer you see and so what you are struggling to pay $20 a month for there might be an enterprise out there or a huge business where $1,000 a month for the same thing if it gives them you know $100,000 a year in new revenue and that's what your tool can do or if it saves them time or hey it saves them from hiring an employee which is what you hear a lot of enterprise saying at $1,000 a month or

[32:01] more then it's worth it to them and so you have to get in the mindset of this maybe not designed for me you know our minimum plan probably shouldn't be 9 or $19 a month it should be $100 a month and then how do you make it worth that much them so that's the real question it not worth that much to you right because you're the bootstrapper you're the guy of trying to feed his family I get that but worth it to them how do you make it so that it saves them enough time or makes them enough money right those are the two points that you can sell on

[32:31] making them more money is the stronger point but how does it save them enough time or make them enough money that $99 a month or $500 a month or $1,000 a month is worth it to them you have to step out of that mindset in order to get to that so that's what we did with boost traffic we decided that what we were selling we were not happy with so we first of all we changed the pricing so we did this all right our lowest plan used to be $9 a month and we changed it to $49 a month and we distributed some coupons and whatnot to

[33:01] bring it down for people we have 50% off for three months floating around out there and we changed our agency plan to 499 dollars per month and we got screams from agencies so we added an agency light plan what I called agency light at $99 a month and honestly that should be up there instead of the personal but we're gonna change their whole thing anyway and then we added an enterprise for 999 dollars per month you know what happened people signed up for it they did they signed up at 999 dollars a month can you believe that but they did because it was worth it to their

[33:32] business to have that and so now almost 5% of our customers are paying 499 dollars a month or more we've doubled our average revenue per customer in the past six months we've gone from thirty to forty dollars a month per customer it's almost $80 a month per customer and average customer revenue and you know what I'm gonna do next I'm gonna scrap the personal plan entirely I don't want to go below $99 a month and I'm gonna say what would make it valuable for those people valuable enough that even an individual would pay $99 a month you know we're gonna start doing stuff that doesn't scale like webinars they scale a

[34:03] little bit right but yourself to get on there and talk to people for an hour not not most of our ideas idea of like a fun time you know I getting on the webinar like you know telling people how to use your software telling people how to grow their business with your stuff but the things that people will pay for that's the stuff that people will pay for maybe it's adding a community to your site depending on what your website is and what you're selling maybe it's connecting customers to other customers of yours or other vendors of yours that they may find valuable it's that personal touch that's gonna say WOW $99

[34:32] a month was totally worth it because the CEO actually reached out to me and said hey I heard you're looking for a web designer I've got one and he's awesome so that's what we did and that's how we doubled our average revenue per customer very quickly so this this may force you to reevaluate your entire business it did me it did I am standing up here and six months ago the business was radically different from where it is now we didn't have an enterprise plan and we found out pretty quickly when we tried to sell enterprises that some of the stuff we had wasn't up to par with

[35:01] enterprises so we had to go through and rebuild massive pieces of our software to cater to enterprise level customers so we reevaluate it everything we we went down to the bare bones of the business if we if our business was a house we took it all the way down to the studs and decided to rebuild it and do it at a higher price point so we went from selling SEO software which is where we are today selling marketing software because we found out that most companies have a more holistic marketing strategy I mean duh right they're doing SEO and social media and AdWords and all this other stuff right but they're not

[35:38] necessarily just doing SEO they're not willing to necessarily pay a lot of money for just SEO software so we became a white label HubSpot which is marketing software has somebody asked me yesterday what is UPS but we became a white label HubSpot white level marketing software for agencies and hosting companies so here's how this works now here's how what we're building what we're moving into is being able to have agencies look like the expert to their clients by giving their clients recommendations labeled with that agency's name we went back to the agencies and we're like okay we're rebuilding this from the ground up what do you actually need and they're

[36:12] like oh man I hate doing proposals for my clients it is the worst I have to like manually copy and paste everything and we said okay well there's like there's proposal software out there right there's bid sketch and other companies that do proposal software but how can we specifically help you with with not just the design of the proposal but the content and they said well it would be really great if we could have something like you know them plus their competitors and some like lines and graphs that shows like they're not competing well against their competitors they're not ranking as well and then some charts that show what we can do for

[36:42] them and like all the things that are wrong with their website and how we can fix it at the end we're just gonna slap a big price tag on it and we're gonna make it into a PDF and we're gonna just send that to them okay so it took me a while to weasel that out of the agencies but I found out what they really wanted was the ability to look like an expert to their customers and of course who doesn't want to look like an expert so we said well what if we built this thing where you could do proposals where you could do a customer center and you could

[37:07] white label all of this with your name so that they can see what you're doing and they can see where you are and they can you can do proposals out of it and then you can show them what you're doing as you're doing it oh man that would be great when can we sign up for that please shut up and take my money so we said okay we're gonna we're gonna redo this so we're gonna we're gonna take it down to the studs and redo it we're gonna we're gonna become marketing software for agencies and hosting companies so I took this a hosting companies too and I said

[37:33] well what if we could decrease your churn or increase your average revenue per customer and they're like yeah great I said what if we could do that by actually educating your customers and helping them become better helping their websites be better yeah okay awesome all right so we're going to you as a pilot program and I ran this past a couple hosting companies I said can we put you in a pilot program where you offer this to your customers and then we track if it decreases your churn or increases your average revenue or lifetime value per customer yes sign me up great so we're gonna do that until we

[38:03] get to the point where it does have a measurable noticeable effect and then we blow the barn doors open and we and we sell it to every hosting company and every agency out there and we say this helps make your customers feel better about choosing you as a company so that's what we decided to do we ripped our business down on the ground and we rebuilt it so we were called woosh traffic and still are to this day but today I'm pleased to announce our new name market vibe and I'm really excited about this so we just finished the domain name acquisitions actually this morning last night I sent off the

[38:32] payment and today we acquired the domain name and we're changing for most traffic in the market we got a ton of questions about that by the way why are we changing most traffic is a cool name whoosh traffic is startup II and it's fun and it's you know is goofy and and all that stuff and our customers do like the name the problem is we're selling to enterprises now we're selling to larger companies we're going into meetings with big dudes and suits at long conference table and we're sitting there like what was traffic and they're like what so we actually talked to the marketing the VP

[39:01] of Marketing at coca-cola and the guy was like your company is called what and he looked at our business card and he's like guys dump that was like alright so we're gonna change the name to so we you know we have this kind of feedback and we just take it and try to go okay well if we're gonna build a huge business you know we've got the guy at Coca Cola's email address but he's gonna hate the name whoosh traffic and he's never gonna sign up for that product so what can we do we took a white board and we diagrammed out names and we bounced it

[39:32] around for a week and we talked to advisors we talked to investors we talked to consultants and we finally came up with market by which we really liked so I'm pleased to announce that as of today we are changing our name and everybody's on board with it so that was a huge part of the learning process for us is that not only do we have to break the software down to the studs we actually have to change our whole name and our company brand and the feel of our company so we took what was going to be a million dollar business in the SEO tools niche and we're turned into a

[40:00] billion-dollar business I'm seriously committed to building this to a large company and I know this won't resonate with everyone out there but way too what will resonate is building a business to the point where you don't necessarily have to work on it full-time anymore it's putting in the 60 or 80 hours a week now and contacting customers individually and emailing them and following up and doing webinars and doing one-on-one consultations now so that those customers will stay with you for a long time and it's about adding value to the point where you don't have to kill yourself with customers going back to $99 a month in terms of that

[40:32] being your lowest price Jason's point of having 150 customers at $100 a month is more than enough to pay for most of your bills and for your full time salary and once you have 150 customers as I can attest it's easier to grow it from there because you have some idea of what customers want to pay and who they are so here's here's my conclusion I would say be brave remember how many of you held up your hand saying that you wanted to do the thousand email challenge those were the brave ones you guys were the brave ones so be brave go out there and do what other people won't do or can't

[41:07] do charge more deliver the experience to match how many of you have Apple computers yeah charge more deliver the experience to match yeah so you bought the Mac right it was expensive and I have one too I know and you may not like it all the time right how many of you are ipads ipads that's everybody charge more you know Android tout you know you can buy an Android tablet for $89 these days I like Android but $89 versus 500 what do you guys all have your the iPads charge more deliver the experience to match and then do what doesn't scale at least at the beginning at least for

[41:46] the customers that pay you more than your average customers at least for that 5 percent or 2 percent that pay you a lot of money go out there and do what doesn't scale with them I know it's a little bit scary to go to somebody who's paying you a lot of money and go well um would you like some of my time involved but usually they're like yes please I have questions about your software or something's not working or this is confusing for me the best user testing you can possibly do is on your existing customers because though they once they know that they can be open with you

[42:13] they'll be able to say ok look this isn't working for me I need this this is just not working I need this to do this or I need this over here or this is broken and that's the kind of feedback that's so valuable in fact I keep one tab open when I'm doing these consults in fog bugs our supports are our ticket system so I can actually write tickets in for our development queue as customers are telling me this isn't working or this is what I need and go bigger go really big don't try to build a business with just enough to make you just enough to like make you enough

[42:46] money to kind of make it ok a little bit and then if you lose one big customer it's a disaster and you have to scramble to get more customers that's what I did wrong with my hosting company so go bigger 150 customers and $100 a month ok now 300 great it's okay to make $30,000 a month that's great invest it back all of you frugal folks make 30 grand a month put 20 of it away awesome even better but go bigger with your business think bigger think hundred dollars a month think a thousand dollars a month how many customers do you need at $1,000 a month giving them two hours a month of

[43:18] your time in exchange and have some great software that'll help them grow their business or become a better person or whatever they need to do at $1,000 a month you need 10 15 of them do it go bigger so that's what I have thank you very much you'd mentioned how to scale how to transition from consulting work to scaling your product how do you do that when you're doing consulting work how do you do those things that don't scale especially the the emails I get that's not a well but the webinars yeah how do you do that or maybe you don't do that depends on your client great question so

[43:58] how do you do webinars and all that other you know one-on-ones and all that stuff when you're trying to do consulting as well I'll tell you a story last year my largest consulting months I made almost thirty thousand dollars in consulting and that was not from the larger gigs like wpengine that was all from individual you know medium to large businesses signing up for our software and consulting as well and I almost almost killed myself with it I at one point I just collapsed into tears and I was like I cannot do this anymore I don't care that I'm making $27,000 a month this is not worth it to me so what I did was I

[44:31] built a business where I could do the one-on-ones initially and then have email follow-ups so that I didn't have to kill myself with you know going on and doing this stuff with each individual customer so I had like a hybrid consulting software business I wouldn't recommend that what I would recommend is getting them on board initially with the 30 minute consult and then going into the software and having the software take care of it for them so that's what I would say does that answer your question yes awesome other questions hi so you are converting from I guess from SEO software to marketing enterprise software yes how do you

[45:16] manage the I guess culture change that may impact on your business yeah that's a great question too I like that so my business is basically for people right now so it's me my co-founder parnell our lead developer Paul and our support person Fay and so there's four of us and what I basically did was say look either we're gonna drop this business in the ground and we're all gonna go back to consulting either as a team or individually because this is all killing us right now and we hate doing what we're doing or we're gonna transition into something more awesome and so what we did was we actually

[45:46] created a Google Doc and I wish I would have had some screenshots as I didn't think about that but we actually just it was a collaborative effort and we through all of the ideas that we had for better businesses in they're like alright we're not gonna do this anymore okay what can we do and we came up with some great ones there was like better affiliate software I know I'm getting basa derp is here they're doing that and you know there was like all kinds of like shopping cart software for e-commerce companies and stuff for web designers and there was like all his stuff in there and finally we came to

[46:14] the conclusion that the easiest route would simply to be make our software better and not so focused on SEO so that it's more focused on marketing and less on SEO and then stop killing ourselves by trying to keep up with the Google stuff and go into building more enterprise-e higher priced software and so then we just took that and we changed the pricing and then we just went to all the enterprises and agencies and we have meetings with everyone like huge names that you guys would all recognize know we're sitting in their boardroom we're like whoo Boosh traffic yeah look at our software it's so cool and they were just

[46:45] like well it needs to have this so we generated this huge list of features that it needed to have and we started building it out and we said we worked backwards right we took from what the customers wanted and then we just built that then we said okay great well now it has this feature and we mail them back okay great now you can sign up for a trial and then then we finally started getting agencies and companies bigger companies to stick with the software so it's definitely a process it took us about eight months to get to that point of transitioning from you know nine

[47:11] dollars a month where we had a 40% drop off rate in the first three months of people paying nine dollars to people paying $500 a month or more which has virtually no cancellations so that's how we did it and it was is definitely a process and it had to involve our entire team in my case but it was something that we're all on board with because we want fewer customers that pay more and then we can grow that into you know having gigantic customers fortune 500 companies and whatnot we have time for one more

[47:42] so you were saying that you would go to your customers and then they would say we'd like this feature but did you go to each customer and those I want this feature and you'd start adding that because you think so you didn't wait to get a group and then say here's a new release you just went one by one pretty much yeah so we wanted to know why right so so agencies all said that reporting was their largest feature that's what they needed they needed PDF reports to be really solid so we spent two months building a PDF report generator that became one of the most awesome ones out

[48:13] there and we and we built that and we you know we said look we have this really awesome report generator and they all came over and so but there are some customers you're right there are some that are just doing it for themselves right and they want this thing that nobody else cares about if they're paying more than $500 a month and it took less than two days of our time to add the feature became our rule we just added it for them and we said okay this is now a feature and it turns out that some other customers would want that feature too they just hadn't thought to

[48:40] say it because I thought it was minimal if it was a customer that wanted one thing it was going to take us like a month to build that thing they better be paying us a lot of money yeah did you then put that up as a new feature so yeah okay exactly

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