Growth Report: How We Made $4,580 in Recurring Revenue For a Brand New Service in 11 Days
By mid-December, I realized that it wasn't working.
Both of our experiments to productize our business were a failure.
Something had to change. What was I missing?...
Before I decided to write this as a follow-up to my 1st growth report published over a month ago, I thought:
- What if writing this is a distraction?
- What if people think I'm bragging now?
- What if I completely fail after writing it?
- What if it attracts competition?
Many of the entrepreneurs I admire and respect the most like Andrew Warner (of Mixergy.com), don't share how much their businesses are making and instead let the brand, mission, and content of the business take center stage.
Other entrepreneurs who I also admire and respect are the opposite: they openly share their business metrics, writing Income reports and post-launch reports on their blogs.
So...
Why am I writing this growth report?
http://www.youtube.com/watch?v=-DAb7wB-VqQ
I'm writing this report for a few simple reasons.
- I like the idea of documenting Growbo's growth for your and my own benefit.
One of our company's core values is relentless self-improvement. Sharing that once per month with you and the rest of our audience is like a mini "celebration" of our progress.
I believe Growbo will be a very large and very successful business in the future. So, call me sentimental, but it will be nice to be able to look back at the story of our growth at that time.
- Sharing the journey and teaching what my team and I are learning is a good thing because I believe it will attract more interest in Growbo and in general create more goodwill with you and other members of our audience.
I love teaching through content. I've published over 200 articles in the last several years of writing on this blog, my team has published an additional 200. It has gotten us to where we are today -- with a growing audience of entrepreneurs, small business owners, and marketers.
So why not do more of it through these reports for your benefit?
On the question of competition, I don't think there's much risk of it, especially because (knowing from experience) the barriers to success are much higher than most people would realize. This is not an easy business to start, get traction with, and scale, as you'll see.
- Finally, I believe the value of this report is very intrinsic, both for me and for our audience. I believe it can help keep us grounded in reality, while reminding us of our goals for the future, and also the progress we've already made.
Now that the "why" is tied down, here's what I'm going to consistently be giving you in these monthly growth reports.
What you'll learn from following along
Each month, I'm committed to giving you my best:
- I'll show you all the "juicy stats" on how we're growing month-to-month
- Then I'll give you the story behind it -- what we did to cause growth, what specific marketing tactics and tools we used, what did not work, and what important lessons we learned
- And finally, goal setting for the following month or a progress update as we get closer to our "big picture" goals in general
For example, keep reading and you'll learn:
- How we "ghetto-hacked" our way into finding a hidden need in the market and quickly launched our new productized service
- A big "limiting factor" I didn't fully account for until this month
- The two biggest short term goals the team and I are reaching for right now
So let's jump into the numbers...
All the juicy growth metrics
Everyone cares about revenue, so I'll start with that.
- Revenue: $4,580 in monthly recurring revenue is what we generated in mid-to-late December for our new Wordpress sales funnel service, which is 18 customer sign-ups in 11 days. Total monthly run rate (MRR) is $5,305 today.
- Misc: $497 / month was our "starting point" last month for customers on our maintenance service. We'll transition these accounts into the Sales Funnel Service in the future. This amount is already added into the total above.
Here's what that looks like from last month to this month (the growth is over 10X from December):
- Annual Run Rate: $63,660
- Email subscribers: 7,537 active subscribers
- Traffic: 13,101 visits to the site in the last 30 days. This is 10% higher compared to last month.
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Now numbers are nice, but they are hardly the whole story.
How we found a hidden market need and completely re-invented our business
Almost exactly 90 days ago, I set a very simple goal: "retirement."
I put the word in quotes because I don't believe in retirement. It was more about discovering what was holding the business back from being able to scale and grow without me, so I can take my first vacation since I started Growbo over 5 years ago.
Put another way, my goal was (and is) to be able to take a 2 weeks vacation from my business while knowing that customers are still being taken care of, and that the business can still run and grow without me.
To do this, I decided I'd have to focus on fixing a few of the perceived problems with the business...
- Recurring revenue was somewhere between modest and non-existent.
- The business needed my constant attention. After all, I was the market expert and we were selling inbound marketing and custom, done-for-you sales funnels.
- The sales cycle was long (3-6 weeks)
- Proposals were no fun to write after I'd done it hundreds of times.
- The business hit a growth ceiling and kept hitting it because -- again -- it was dependent on me and the time I input. And if I ever took a break, growth stalled.
So one day 3 months ago, I realized nothing was going to happen unless I decided to make it happen.
I set a goal and declared it on Facebook.
I began by brainstorming ideas. I wrote in my journal each night to reflect and "think on paper," and I took immediate action.
I rewrote our homepage, removed all the links to our sub-service landing pages and launched a packaged offer for a done-for-you sales funnel service.
It included a setup fee and a three-month minimum recurring fee.
We generate a handful of leads from it, many very interested, and one closed within the first two weeks representing a minimum of $6500 in revenue.
But there as a problem with that. Yes, it was packaged, and yes it was easier to sell especially because it was at a lower price point and the offer was more clear to prospective clients.
The problem though was it wasn't scalable. We would still need a whole team of developers, designers, writers, quality assurance people, and multiple project managers in order to grow--and we were still doing a lot of custom work for each and every order, which took time and hurt our profit margins.
I regrouped and began asking the question: what is a better example of a productized service that has been proven to be scalable?
I looked at services like LeadFuze among others.
I saw how focused they were are doing one thing well. I decided our service had to be more focused in it's offering.
I decided to pivot again in November and try another experiment: launch a productized Wordpress maintenance service.
I rewrote the copy on the homepage again, and created 3 new packages at lower price points: $99, $199, and $299.
We launched -- and I expected we would generate a modest 1-2 sales right away -- but after a full MONTH... crickets.
Not a single person bought. This despite implementing a new email autoresponder to follow-up with prospect, launch announcements, and something like 50 leads (we require people to opt-in to see the pricing page).
I couldn't understand: why was the conversion rate so awful?
After a month of no sales, I decided to do the smart thing... I asked.
I sent a brief email to the people who had opted-in to learn more about the service asking them why they hadn't bought and what was holding them back.
The response?
"I thought your business was about sales funnels, where'd that go?"
It was around then that I made a connection:
Part of the reason our conversion rate on our done-for-you services was so low was because many businesses can't afford or are afraid to invest $5,000 - $20,000 to set one up from scratch.
So I sent a follow-up email to the same list of people and I asked the following:
"Hey, I'm thinking of launching a new service that is part-strategy + part-implementation to help you build and optimize your sales funnel using your Wordpress site and related tools right away. We won't be able to create it from scratch, but instead of hiring an expensive freelancer, consultant, or agency, you can get 95% of the benefit without waiting months to launch."
The response was immediate. People said that this was exactly what they wanted.
I quickly rewrote the copy on our homepage and re-created our pricing packages AGAIN for the third time.
Hit the publish button, and sent the announcement to our list of ~80 leads who had previously opted-in in the month prior.
The next day, just 12 hours later, we had our first sale.
Lesson learned: create a offer that matches with your audience and the relationship you have with that audience. Not a new offer in search of a new audience.
And the sales didn't stop.
People who I had spoken with in the past began reaching back out saying they were interested. Four people signed-up in the first 5 days.
For most, I offered to get on the phone. I wanted to understand how they saw the offer.
I decided to host a webinar and make this our flagship offer the next week.
It was getting close to Christmas and people were getting ready to mentally "check out" as the holiday season got underway.
I had to push forward fast.
The webinar launched. It was my first one in over 6 months.
It was well attended (67 simultaneous attendees, over 400 views on the video). A few more orders rolled in.
All this time, with each new order I spoke to each new customer over the phone.
Why?
I was like a scientist, discovering what it is was they wanted and how I could start building more structure to the offer while also improving the sales copy on the website.
I was quite literally building the bike while riding it.
Demand after the webinar remained surprisingly high. I announced we would be raising the price and the last few orders rolled in just before Christmas.
The end result? 18 customers. $4,580 in recurring revenue in just 11 days.
I had found the focused offer we were searching for, one that I knew Growbo could scale off of and provide expert service around.
A big "limiting factor" I didn't fully account for until this month
The big takeaway from launching last month was the importance of aligning our offering with what our audience actually wanted.
It sounds obvious but it's not. You kind of have to "follow your nose" to figure it out and it can be a back-and-forth iterative process as I explained above.
The big lesson I learned this month was how much our growth is restricted by something that also seems obvious: time and the need for a system to service customers.
-- Note: in case you're curious, I purposefully changed the word I'm using to describe the people who invest in our service from "clients" to "customers." I did this because I want to emphasize that this an affordable service and we're using a proven, standardized system with battle-hardened best practices, that can fit any type of business using the web to generate leads and sales. --
I realized this when I found myself working 14-16 hours a day servicing our existing customers with no time to focus on improving our marketing (duh, who would have guessed I couldn't do it all myself).
So this month I put together a detailed hiring process. I had to hire and train people as Funnel Assistants and as Funnel Strategists (with expert copywriters and developers to help them do the implementation for our customer's accounts).
I've started off have very mixed luck with recruiting and retaining key team members in the past, but I have gotten better at it and learned how to weed people out who are not an ideal fit for our company over time.
For example, I learned that your ability to find your ideal candidate for a position depends directly on how many "likely" quality candidates you interview. (If you want me to go into more detail on this along with our hiring process, leave a comment below).
Fast forward a few weeks and we have a streamlined recruiting system and 4 new hires (3 Funnel Assistants and 1 virtual assistant).
The system for service customers is still a work in progress, but it's becoming more and more clear every day.
For example, we recently signed-up for HelpScout which allows us to track our email conversations with customers in one centralized location while also making it easy for customers to tell us if we're doing a good job.
So far, we're 10 out of 10: all customer's who've rated us have rated our responses as "Great" instead of "Okay" or "Not Good."
According to Help Scout this is 31% of our customers, but, knowing that we don't have 30 active customers, it's a little confusing. I'm not sure what the other 69% are doing but regardless, I plan on using this as a key metric going forward to understand what kind of experience customers are having as we work with them to optimize their sales funnel.
Ultimately, I believe the solution to this "limiting factor" is going to be our Customer Success System where I will document all my knowledge in a training guide for our team. More on this below...
Looking ahead: Our two biggest goals
- The first big goal we're shooting for is $10,000 in recurring revenue.
- The second big goal is for the company to be able to run, keep customers happy, and grow (even if only modestly) on its own without me being present
I'm aiming for at least 20% month-over-month growth going forward. So by next month, if I can achieve that we'll be over a $6.3K monthly run rate (MRR).
To get there, I'm constantly looking to improve the quality of our Triple Your Leads webinar and relaunch the design of our homepage and pricing page.
I believe people will see our service as "more legit" and trustworthy with a higher quality design in place.
Our email autoresponder also needs to be updated as it is still advertising our "old" services. I've held off on this until not because it is quite complex (it's a survey email funnel with something like 40 or 50 different emails across 5 different sequences -- tailored to whatever our email subscribers tell us they are interested in or need help with).
I also plan to officially have our Customer Success System documented and in-place to empower our Funnel Assistants and Funnel Strategists to help customers
- (1) have a smooth, consistent and "WOW this is valuable!" experience right when they first sign-up, and
- (2) use the system like a tool to guide customers on a path towards growth through a variety of strategy discussions, recommending tactics, and helping with implementing each recommendation.
If I can accomplish all that, I'm confident we'll have a great month and an even better year ahead.
But just so you don't think it's all "rainbows and unicorns" --
-- the thought of doing all of that is... scary.
Of course I'm going to do it anyway, but I'd be lying to you if I didn't admit that the idea of handing-off responsibility for helping our customers achieve their sales funnel and marketing goals didn't feel daunting.
To use Andrew Warner's True Mind / Counter Mind concept:
- My Counter Mind is telling me it's scary because what if they mess up or don't guide the customers as effectively as I could? What if a customer is unhappy because he / she doesn't get to have me manage his or her account anymore? Afterall, I'm "the face" of the business and "no one" would be as good as me... That's the fear however...
- When I think it through, my True Mind tells me: "Listen, I'm putting a well-trained and vetted team in place is going to give customers an even better experience than if it was only you handling the 1-on-1 strategy phone calls and emails. They'll get a faster response time and more diversity of talent applied to their sales funnel while also using the Customer Success System you are developing. Plus, you can still step in to help or tweak the system behind the scenes as the company grows."
And with that, we push forward into February!
Conclusion
Want to build or fix your sales funnel? Join me on our next Triple Your Leads webinar and I'll teach you our exact process.
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