Patrick McKenzie's talk at Microconf 2012, covering building systems to achieve marketing objectives.

1. MARKETING FOR
PEOPLE WHO WOULD
RATHER BE BUILDING
STUFF
Patrick McKenzie

2. Bingo Cards… Who
Knew, Right?

4. A job is a system which turns time
into money. A business is a
system which turns other systems
into money.

5. A job is a system which turns time
into money. A business is a
system which turns other systems
into money.
We build systems. Heck yeah.

6. Updates On The Other Stuff

7. My Newest Business

8. Why Did You Pick That
Problem?
+

9. How Did You Know It Would
Sell?

11. A Brief Interlude On Pricing

12. How To Read A Pricing Grid
Most revenue: 33% to 50% of total revenue comes from most expensive
plan.
Most users: Either the plan called out or the second cheapest plan.
Highest support costs: free customers or, alternatively, the ones on the
cheapest plan.
Biggest surprise: There is probably a “call us” option which is arbitrarily
expensive even if none is actually listed.

13. SaaS Mathematics 101
 Per-customer margins: very high (80~95%)
 Low fixed costs (~$500)
 Many founders would like $8,000 ~ $12,000 a
month:
 $9 plan: 1,000 to 1,500 customers
 $29 plan: 300 to 450 customers
 $79 plan: 115 to 175 customers
 $249 plan: 35 to 50 customers
 Enterprise pricing: 1 to 2 customers

14. How To Price Stuff?
 Align plans with customer success.
 Names matter.
 Feature segmentation can work, particularly
where $$$$ customers have particular must
haves (HIPAA, etc).
 Charge. More.
 You are ridiculously underpriced.
 Your software costs less than 10% of the fully-
loaded cost of their cheapest full-time employee.
 Avoid pathological customers – they’re
cheapskates.

15. Charge. More.

16. Drip Email Marketing

17. “My biggest business mistake was
waiting so long to start building an
email list.” – Ramit Sethi (and me)

18. Email Is Like RSS That Actually
Works
 Email actually gets read.
 Email actually gets read by normal people,
too.
 Email is “necessary time” rather than “luxury
time.”
 The psychological framing for your email will
be “surrounded by important work” not
“surrounded by 56,000 items of unimportant,
meaningless Internet chaff.”

19. Email For Fun & Profit
 Collect: offer an incentive for email +
permission to content
 Educate: send pre-scripted content series to
your users, with goal of establishing trust and
educating about problem domain
 Sell: give them option to buy something which
solves their problem

20. Tips For Successful Email Capture
 Ask for as little information as possible: name
& email
 Have an attractive, boldly colored button which
promises value not pain
 Minimize distractions – works best on landing
pages
 Include a compelling offer.

21. Quid Pro Quo: Ask At Trial
• Add an email opt-in to
trials.
• More opt-in than you
would expect: 25%+
• Modestly depresses
conversion rate to trial.
(e.g. 45% to 42% on my
AdWords pages)
• Mostly a good option
because it is stupidly
easy to do.
P.S. Consider using the “one
free email” you get on
signup to do some light
marketing.

22. Quid Pro Quo: One-Off
Resource
• Gate a download on
opt-in.
• Incredibly high
conversion rates –
much higher than
to trial.
• Fairly low cost:
creating one
beautiful PDF not
really that hard.

23. Quid Pro Quo: One-Off Tool
• Break out your
programming chops and
do a mini-project, gated
by email.
• Opt-in rates around that
of trial through much
higher (for high touch).
• Can provide very
qualified, valuable leads.
• High cost: do one of the
others as a placeholder
first, then extend to this if
results warrant it.

24. Educate, Then Sell
AggressivenessofSales
Time

25. Three Simple Ways To Put Out
That Fire In Your Hair
Hiya $NAME,
Your hair is on fire, which is why you signed up for this handy emailed course on
Firefighting: Hair Edition at doesyourscalpburn.com. This is your second out of six
emails. You can unsubscribe at any time.
Water: Why The Obvious Choice Is All Wet
Many people have tried extinguishing the fires in their hair with water. You may have
yourself. If so, you know that it doesn’t work, because oil-based hair care products
like shampoos and waxes don’t mix with water. Thus, the fire just spreads even
more. When we surveyed our customers over 72% reported failure with water.
Repeat two more times.
Continued on next slide…

26. Three Simple Ways To Put Out
That Fire In Your Hair (cont…)
Have a question about your hair’s fire?
We love hearing from folks. Do you have a question about your particular fire?
We’ve probably put one similar out. Feel free to ask us a question. All emails are
read by our Chief Firefighter, who has personally squashed 6,312 fires in the last 18
months. We try to respond to everyone within 24 hours.
Regards,
Bob
Chief Firefighter
P.S. Got this far? Great, I’ve got a gift for you. Go here to download a free 15 page
guide on extinguishing fire on necks.

27. More Salesy Stuff To Do
 Pick the right plan for them. Make it decently
expensive. (e.g. Suggest column 3 out of 4.)
 Offer a time-limited bonus if they pull the
trigger in the near future. (Free consulting
services for onboarding = Total. Win.)
 Pre-answer all their objections.
 “Pointy” customer testimonials directly focused on
these issues.

28. Learn from the Masters
 Ramit Sethi (iwillteachyoutoberich.com)
 Motley Fool
 Whoever is outbidding everyone else in any
high-money vertical with a liquid affiliate
market, like e.g. mortgages or online nursing
degrees, since they’re probably not stupid.

29. First Run Experience

30. Does This Remind You Of
Anything?

31. Three Steps To Improving FRE
 Script their first 5 minutes like invasion of
Normandy.
 Measure all user activity in first 5 minutes.
 Implement and test engineering / marketing
efforts to change behavior in those 5 minutes.

32. Instrument A Funnel for Your
FRE

33. Fix Weak Spots In The Funnel
 Bingo Card Creator
 Add more activities for users to use.
 Surface relevant activities on dashboard
immediately. (+10% activation)
 Restructure complicated preferences. (+10%
activation)
 Dan Martell’s app
 Add suggested tweets (7% -> 65% activation)
 Appointment Reminder
 Tour mode… oh, goodness, tour mode

34. In-app, Functional Tours

35. A Deep Topic But In General
 Try to get people all the way to “activation”
 Tell them they got there! Just like Vegas, you’re
not having fun unless people tell you so
constantly!
 If there is a social / viral component, put it in
here and obsess over it
 This builds companies. c.f. Zynga
(boo), Dropbox (yay!)
 If the software requires lots of data entry /
analytics / etc to work right fake it for now

36. For more details
 http://training.kalzumeus.com – I’ll swap you
your email address for a 45 minute video
teardown of the FREs for both of my apps plus
a few others I rather like.
 Special bonus for Microconf folks: I don’t
presently sell anything, but when I do, it’s
yours. Send me an email.

37. Thanks for Listening
 Blog at http://www.kalzumeus.com
 Slides will be posted. See @patio11
 Send me email. I love chatting about this.
patrick@kalzumeus.com