Patrick (patio11) here. You signed up for periodic emails from me about making and selling software. Today is going to be a rather short one, because Ruriko and I are in Hawaii. (People who say solo founders can never take vacations are incorrect. Then again, I'm on Waikiki Beach with email open -- dang it -- but I'm excused until she wakes up. My favorite Peldi quote ever, on balancing a business with a young family: "If you work while they sleep, then they never know that you're ignoring them.")
[Edit: Actually, it's possible that you've never gotten an email from me. Somebody might have just given you the link to this page, which is an online archive of an email that I sent to folks who had asked for it. If you'd like to get articles like this in your inbox, totally free, about once a week or two, give me your email address.]
Anyhow, remember how the last two emails were about how product companies could take sales advice from consultants and how consultants could productize their services? I've seen some great examples of people putting these into practice, and wanted to dissect what they're doing right.
A/B Testing As A Productized Offering
Given that I ground out A/B tests for years for consulting clients, A/B testing as a recurring engagement (on the retainer model) sounded like an obvious win to me, and I used it as an example in the earlier emails. Nick Disabato just delivered an incredibly compelling example of this. Here's his sales site. Go read it, right now. Seriously.
In addition to this being a great consulting offering, so much about the execution here is wonderful. A partial list:
Positioning: Notice that Nick avoids the temptation to focus on what A/B testing is (split traffic across alternatives! optimize your website's conversion rate! statistically significant! calculate confidence intervals with a g-test or student's t-test unless you're lazy in which case you use a z-test but wait there's some theoretical issues with that!), because the typical business owner could care less. Instead, he leads with the business benefit: A/B testing predictably makes your business better at making money, over time. And then he successfully uses the nature of A/B testing, that it requires multiple experiments and course corrections and lots and lots of waiting-for-results time, to sell business owners on the engagement.
Check this copy out:
That's impressive. He manages to simultaneously position it favorably against an expensive service the customer already pays money for (website redesigns), hits an emotional point for business owners ("I'm too busy running the business to deal with this" -- this works for nearly every sales pitch ever in B2B, by the way), and positions the limited nature of this engagement versus a full-monty consulting engagement as a strength. It's probably not 100% the direction I'd go for selling the same thing, but that's mostly personal preference. This is one of the better sales letters I've ever seen.
Establishing credibility: A lot of consultants struggle with how to get people to believe they're capable of producing things which, by the nature of consulting, don't exist yet. Nick does a great job by using an impressive selection of past clients ("These trustworthy folks trust me, ergo you should, too"), a testimonial (about which more later), sample work output (he'll show you a report suggesting exactly the type of report you'll get), and feedback from a separate product of his (he wrote a book in a related space that people describe as definitive, so clearly he's probably competent in this space).
I'm going to reproduce Nick's testimonial because I have a quibble with it:
Here's my quibble: while this testimonial beats the heck out of having no testimonial, out of the universe of all possible testimonials it is fairly weak. When you're looking to get a testimonial for your own work, try to get one which is:
How does this testimonial not quite hit these points? "I hold Nick in the highest regard"" is not specific. I hold my brother in the highest possible regard. He's the best man I know. You'd be a fool to hire him to run your A/B testing, because he knows absolutely nothing about sales or persuasive copy on the Internet.
The likely objection to Nick at this point in the conversation is not "Nick, I do not get the sense that you're a great guy", it is "Nick, I do not think you're going to make my business several thousand dollars a month." A better testimonial would be "Nick implemented A/B testing for us, and within 6 weeks it had increased our sales by 10%." That hypothetical testimonial stomps all over that objection.
Also, I don't know who Brian Leli is and do not know why I should care about his opinion. Some people have sufficient credibility that their name alone is enough on the testimonial: for example, if you're selling to software people, and you have a testimonial like this one from e.g. Jason Fried or Joel Spolsky, leading with it is fine. If the person isn't personally known to the reader, then you should generally include some sort of identification which suggests that they're quite similar to the reader. For example, if the target customer is somebody in the software business, this could be as simple as "Brian Leli (Founder, FooCorp Software)."
But, again, these are only quibbles. It's still the strongest sales letter I've read recently.
Qualifying customers: Nick knows that this engagement isn't going to work for everybody, so he says right off the bat that he only wants to work for clients who need the service, have the budget for it, and are actually willing to put his advice into practice. This hopefully scopes him out from having to deal with prospects who don't have websites but would love to have a successful online business, do have websites but don't have enough scale to benefit from A/B testing, or have scale but have internal political reasons why work just never gets done. Trust me, from someone who has delivered this before: all of these are really pains in the butt to work around, so better to get them out of your funnel as early as possible.
Making the service concrete: Nick offers people a monthly report -- not just a quick email with a summary of the results obtained, but something which has a certain amount of tangibility to his customers. This is an important part of managing customer expectations, because without that a lot of stakeholders can't quite grasp that the service you are providing them is actually a Real Thing. (Some people just don't connect with "There's a graph on the wall, the spike is partially due to me. I can prove that with Science (TM).") Particularly for remote consultants who might be working out-of-phase with the decisionmaker, this sort of objection is one you sort of have to stomp and stomp hard for many clients.
Limited availability: Creating urgency is a classic sales technique for a reason. Obviously, as a solo consultant, there is a physical limit to how many clients Nick can service in a month. Nick exposes his guesstimate at that limit (15 clients), which means that it's first-come, first-served. If you don't give a business owner any reason to buy your service today, there's always the compelling option to think "Hmm, this sounds interesting, I should probably take a look at it next week, after we get the kinks out of the new release." Next week there will be a new hire to onboard. The week after that the servers will crash. Every business owner ever overestimates their ability to finish their todo list, so you want your sales pitch to be sufficiently compelling that buying your stuff never goes on the todo list. "If I wait until next week, this won't be available" is a time-tested way of making that happen.
Pricing: $650 a month with a 3 month minimum, or $6,500 a year. When you work it back to the two to three hours of work a month this will likely require, that's a pretty good rate. I think it feels a little arbitrary, to be honest: anybody who would greenlight $650 a month for A/B testing would also greenlight $1,000, so you might as well just step it up to $1,000. (Or $950, if you're worried about hitting the "Can't put it on a purchasing card" wall at $1,000.)
The three month minimum is pretty smart, too. It does make the barrier to entry to the service quite a bit higher, but that is likely in Nick and the customers' mutual interest. A/B testing tends to only produce meaningful results roughly one test in four, so if Nick allowed people to buy this just month-to-month, I'd expect the majority of customers to be pretty disappointed after the first month and cancel.
One of the nice parts about this pricing structure, combined with Nick's limited availability, is that he can effectively tranche his clients in this fashion. The first 15 clients might be brought onboard at $650 a month. Some will stay and some will leave. When Nick re-opens himself to new clients, he'll likely have a better sense of what this is worth to clients, better testimonials (including directly on-point quotes from credible people saying they got 20X ROI on hiring Nick), and more focus on what niche of businesses he does the best work in. He can then open to a new tranche of clients in that niche at a more premium price. (I did A/B testing for years professionally. There exist people who would happily pay $5,000 a month for this, assuming the execution quality is there. For many clients that would be ludicrously profitable.)
Brief Disclaimer: I don't know Nick personally and haven't talked to him about this. I'll probably end up buying this service though, for Bingo Card Creator. Why do that, when I know I'm capable of doing A/B testing quite profitably myself? Because actually doing it for BCC is no longer the highest priority for my business, and hasn't been for several years. I test a couple times a year. Buying Nick's services could walk that up to monthly. I know that if Nick is at least as good as young-and-stupid me then BCC will grow by the 10% or so it takes to get positive ROI on him doing it for a year. This service is exactly what I want as a business owner: a way to predictably cut a check and semi-magically have more money arrive every month.
Selling A Product Via Teaching
Alright, enough on smart consulting for a moment. Bryan Helmkamp, the founder of Code Climate (an automated code quality diagnostic SaaS for Ruby on Rails applications which I rather like) attended a bootcamp about email that I put on with Colin and Joanna a few months ago.
He just released a new project which makes very savvy use of email, with the ultimate goal of selling Code Climate subscriptions. Take a look at Rails Security, a free course delivered over email which teaches generalist Rails developers how to not get their applications owned.
I'm a Rails developer, and am better-informed-than-the-average-bear about Rails security issues. Bryan taught me one useful thing in the first email of that free email course. (To whit, that if you accidentally leak the secret key for sessions in your application, for example by committing it to a public source code repository, that this gives attackers the ability to execute arbitrary code remotely via using a deserialization attack on you. If that doesn't mean anything to you, pretend I just said "Bryan successfully taught me, an expert, how to avoid the consequence 'My business dies'" because it is equally true.)
Now I haven't seen the entire email sequence yet, but I write these for a living, so let me make a prediction: after having continued to teach for a few more emails, Bryan is going to tell people that the higher plans of CodeClimate include access to their Security Monitor. Security Monitor proactively identifies common Rails vulnerabilities and emails you to tell you about them right when they're committed to your repository, so that they don't get into production and exploited.
Given that, by this time, Bryan will have spent weeks of demonstrating to people that he is very credible about Rails security, and that the consequences of having your application compromised are quite bad for your business, I predict that many of the people taking his course will say "Gadzooks! I can buy something which will give me an extra pair of eyes on this? For 1/100th the cost of hiring a security researcher to do a code review? Shut up, sir, and take my money."
Some things I think Bryan did really well:
Good, short copy: Bryan knows that getting an email address isn't the same level of commitment as e.g. asking someone to green light $650 a month, so his "sales" copy is short and to the point. It presents the benefit (you learn about Rails security and sleep sounder at night) and gets out of the way, rather than bludgeoning people over the head with extraneous detail to distract them from...
A great email capture form: Try typing in it, note the effect. I think this gives people a reason to show the page to their friends where they would not have if it was just an email capture page.
A good call to action: "Begin" has a beautiful simplicity to it. It will likely beat the stuffing out of "Submit" (blech!) or "Sign Up" (which suggests more of a commitment then he's asking for at this stage of the relationship). You can A/B test these, obviously, but I'm probably going to steal "Begin" for similar circumstances in the future.
Bryan mentioned on Twitter earlier that he got 2,000 people to take this course, just by the expedient of mentioning it on the Internet and having it make the rounds in the Rails community on the Twitters. That's likely to turn into a substantial amount of new business for Code Climate, and both the list and the course are now assets which they can build upon in the future.
Bryan's implementation choices are obviously his own, and he totally earned all of the success this course is going to generate for his business. He learned the idea (explained in quite a bit of curated detail) at a bootcamp -- a short, virtual conference -- that I held with Colin and Joanna some months ago, and has just deployed it to what will probably be dramatic effect.
Consultants: An Opportunity For Dramatic Effect
Like I mentioned a few weeks ago, Brennan Dunn (of Double Your Freelancing Rate fame) and I have a mutual interest in productizing consulting businesses, via tactics like Nick's retainer arrangement for A/B testing. This can help your consulting business get out of the feast-or-famine cycle, smooth out your worries about cash flow, and give you a bedrock of stability to allow you the freedom to grow your business the way you want to rather than having to run on a treadmill just to keep it running.
We're going to be teaching a one-day bootcamp about how to build recurring revenue for consultancies. It's actually a lot easier than building a SaaS app, believe me. (As a SaaS entrepreneur, "The Long SaaS Ramp of Death" is totally a real thing. Ask me about it some time.) It will be held August 8th, at your local Internet.
Do these sound like you?
If so, you should join Brennan and I, and a few dozen other successful consultants, on August 8th. Go read the details and sign up.
If that's not you, no problem! I'll be back next week, probably on Friday. My tentative topic for the email is going to be how to discover ideas for SaaS applications and validate that there exists a market for them. (People have been asking for that a lot.)
As always, I love hearing from you. Feel free to hit reply and drop me an email. I apologize in advance, it will take me to next week to get to it, because Ruriko just woke up and Waikiki Beach is a little more compelling than my inbox.
Until next time.
P.S. Any podcast listeners here? We have two episodes taped and edited for the podcast. They'll be posted next week and next next week in the usual places. Search for [Kalzumeus Podcast] on your local iTunes and subscribe if you want to hear about them.