From 80-120 Increasing price and growing revenues
So what happened on the road from 80 to 120 recurring paying users?
Things went very well, soon after I finished publishing my previous post, I was already at 87 and $1,700/month revenues.
I tried adding a pre-registration page with a great testimonial from one user to track if people back-out after seeing all the rights I asked with the Google login after you press the button. It turned out that it DECREASED the conversion rate (from unique visitor to trial), so I just removed it and looked at my site in general.
I still had the competitors mentioned on the home page of QuickMail.io but somehow I didn’t feel like I needed them anymore. QuickMail was working on its own now with other users recommending the product to other people and I felt I had enough differences that those other tools were just different. Plus I never really cared about the competition, all I care about is helping my users to be successful.
So I reworked the copy to remove competitors and once this was done, I didn’t see much change in conversion (or a slight increase). I could do a better job at it but there was more pressing things to improve.
Funny story: On the new page, I mentioned 2 big names (Bryan Kreuzberger and Aaron Ross). At that point, I’ve been using Olark (live chat box with me on my website) for some months when one day I received this text: “funny to see myself on the website here, jeremy. thx – aaron ross”. After checking with the man himself on LinkedIn, it turned out to be him and not a prank
As I talked to a lot of other founders, it was obvious that I was charging too little for the benefits this brought to them.
So I decided to raise the price. I sent an email to everyone telling them I won’t change the price of their subscription and give them the opportunity to jump on the pro plan before I change the price.
I remember segmenting people for different emails communication (people still in trial, on basic account or pro account).
A few really interesting things happened then. I had 2 people converted from old Basic to old PRO overnight, meaning an additional $40/month in recurring revenues. But as time passed 4 more upgraded and 2 new accounts were created that I could directly track to locking in the price before the upgrade.
So about $200/month extra in recurring revenues, out of $1,700 (+11%), not bad. but what about the sales funnel?
Well, I got an influx of people willing to lock in the price too (I could see it as not much activity went in their account before they converted to paid customers).
My conversion rate from unique visitors to trial halved. This may be extreme but 2 weeks later, it was back to 2/3rd and I considered the loss as weeding out people not fully committed (which tend to require a lot of support) or with no real business (because $37/month when you pay a salesman $5,000/month is peanuts and it would cost you way more to have a VA doing what Quickmail do).
The number of new accounts didn’t really go down, I just attracted better users who turned out to be great users too. I’m still averaging 5 new trials each day.
100! It didn’t take long to finally reached the 10% mark on my 1,000 recurring paying users journey. Helping 100 users is a good feeling, can’t wait to help 1,000
But then I went over it pretty quickly, so I didn’t have time to enjoy the milestone properly and celebrate. Instead I kept working hard to help new users on-boarding so they can have a great start.
And… it happens. Touchless sales started to become a reality. I know this is needed for a business to be scalable, have predictable sales funnel, and build revenues whether I’m injured, sick or just away. But the other side of the coin is that this will lead to higher churn (people dropping out, less tolerant of potential problems), and I’m running the risk of becoming detached from the needs of my users (thus slowing my learning). So part of me don’t like this. Let’s see how I feel about it in a few months.
In October, I doubled my monthly recurring revenues from $2,000 to $4,000. Yeah. Thanks to the price increase and touchless sales.
My master mind group made me realise how important the 100 prospect limit was ingenious in converting people from trial to paid. Initially, this was made to prevent abuse (e.g. you sign up, upload 30k contacts and never use the platform), but it turned out to be the best conversion tool I could have built. People turned from trial to paid customers in about 4 days on average because they want to try it on more prospects. And that means I’m happy to give extension of time too if needed. I know it’s to try out properly and not to ramp up usage.
In September, people were getting crazy numbers with QuickMail.io, some people got close to 50% reply rate! Always makes me smile to see people happy about a 30% OPEN rate, when some of my users got 48% REPLY rate!
Anyway I felt small with my 25-30% response rate that I though was pretty good initially. The good thing is that I keep learning about copy and I feel lucky to have access to a large library of what my user produce with hard numbers (not opinions) so I can go and help other users to be more successful (this is why I do the user highlights on the blog by the way).
Developing my own software turned out to be a big competitive advantage, sure it slowed me down a lot but also allowed me to have an extremely fast turnaround between suggestion and implementation. Coding fast is one of my unique strength, so I’m playing this card. I would not recommend people without this unique strength to go that road, it takes a lot of time away from growing the business (as I’ll explain in the next post).
There are a lot of channels one can use to grow a business. One of them is paid ads, but I just don’t like it and not surprisingly, whenever I try it, I do poorly. Wasted $20 on Facebook for 4 clicks I think and my google campaign is not bringing anything. I will use those channels one day, but I prefer to develop other channels for now.
One channel that is showing a lot of potential at the moment is to help agencies. They basically use my software to provide leads to their own clients, so they tend to spend the effort to acquire new clients and then use my software to help them delivering results. Really like this as it’s also less support for me (I can help them setup things once and they kind of put a process in place to do the rest). This could be a big win in the future and something I should spend more attention to.
At the same time though, I had the feeling of spreading thin. Some users started to pull me in a direction while other tried to get me in another direction.
When you develop great products, people like it and want to start using it for things that are tangent, which is great because it gives you idea of potential interest (as long as this is not an entirely different product). For some suggestions, I realised this would be easy to build but the communication part (landing page and audience will be completely different and would require a lot of extra work with little guarantee of success).
To price anchor, I added an expensive plan ($490/month), a concierge service where people can just provide me with a list of prospects and I write their copy + manage their QuickMail account. I didn’t plan anyone to take this plan to be honest but someone did. Suddenly I’m not considered as helping anymore but working for a client. I didn’t quite expect that. The client is a really nice chap and I really like him as a person. The problem is that it feels like consultancy and my time suddenly is split between working on the product for everyone’s benefit or working for one person who pays *me*. So the first thing I did after realising that was to double the price to $890/mo (and will double again if someone do pay this amount). If you think of it, $490 for someone skilled working for you for a month on growing your business is peanuts!
One awesome chap in my mastermind group (founder of CartStack: http://cartstack.com/) mentioned the 80/20 rule, saying that most people will pay $50 to attend a sport event but some will pay $5,000 to get the first row/special treats/whatever. And in that $5,000 you can apply the 80/20 rule again. I think my concierge plan experiment validated the model can work and that could be a direction to find growth in the future (with other people doing it of course).
Growing your business while having fun is super important! Any engineer with a bit of courage can look at my product and say: I can do that. Sure, copying a product is easy, well, would take you some time because I’m pretty fast moving person and don’t settle for mediocrity or second class product, but you can do it. Then what?
Well, I’m being playful, having tremendous fun, do a lot of unscalable things and suddently, *that* is way harder to replicate. Good luck with it. I’m personal, love interacting with my users AND prospects, and personality is WAY harder to replicate.
I was watching a ted talk from the creator of LOST a long time ago (http://www.ted.com/talks/j_j_abrams_mystery_box?language=en). He mentioned that everyone sees the shark in Jaws (the movie) and try to replicate this in their own movie, but it ends up being a B movie or a flop. For him Jaws is the story of a father struggling with his family and one of the best moment is the time when the father and kids built a connection while mimicking each other’s at dinner. It’s the same with business, people try to replicate the wrong things (the product).
So find what makes you unique and GO 100% at it. People will have a REALLY hard time to replicate you as human being.
If a competitor comes up with a new feature I don’t have that would make their life easier I believe they won’t switch product. Instead they will let me know and ask me to do this feature. Why? Because they value the relation as well as the product.
Go kick some ass!