I speak with Mike Morris who is Head of U.S. at Get Response. Mike has had an interesting past as he was at Grasshopper for 7 years. He helped grow the company to a $165 million acquisition by Citrix. We discuss partnerships, events, content marketing paid promotion. In fact, there isn’t much we don’t talk about in this episode. It’s super interesting to hear how Mike directed the marketing team at Grasshopper to a big buy out and now how he directs the U.S team at Get Response. There are a ton of takeaways in here so take a listen and let me know what you think.
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Last 5 questions:
What’s your best piece of marketing advice?
The best piece of marketing advice I can offer is always believe the numbers. Everybody has their own opinion, but the numbers don’t lie, and they will generally point you in the right direction.
Can you recommend a book to our listeners?
One of the best books that I’ve read ever really is a book called Thinking Fast and Slow by Daniel Kahneman. What that does is it explores sort of the way that people think and make decisions and act. And what it reveals is that most of the things we do is not terribly rational. It’s a fascinating book to understand buyer behavior, and what makes people tick.
What software tool couldn’t you live without?
For this question it actually has nothing to do with marketing. The software tool I couldn’t live without is a software tool called “Training Peaks“. I do … and Training Peaks is where I keep all of my workouts, both ones I have to do and ones that I’ve done, as well as past progress, and it’s just sort of a very geeky, analytical piece of software for fitness, and it’s definitely something I could not live without.
What’s your favourite example of a marketing campaign?
I think the Dollar Shave Club viral video, kind of how they launched the business is one of the best examples. It’s also one of the most copied, which doesn’t really work anymore, because once something like that happens, it becomes less effective when it’s repeated. But I just feel that candidness and use of humor in a video that was solving a real business problem, a personal problem in that case, but the fact that razor blades are ridiculously expensive just was brilliant on many levels.
Which other podcasts do you listen to?
I love the 538 podcast because I’m a geek and I like the statistical and numbers aspect of everything. But from a marketing perspective, what I’m really looking forward to, use a shameless plug here, is GetResponse’s new podcast, that’s going to be hosted by Jamie Turner (of the 60-Second Marketer) and that’s going to be launching in the next month or so.
Transcription:
Matt Byrom:
Hello, and welcome to this episode of Marketing Strategies podcost. Today, I’m joined Mike Morris, Head of US at GetResponse. Mike has been with GetResponse for nine months, and was previously at Grasshopper for 7 years where he was Vice President of Customer Acquisition and Retention. Grasshopper was sold to Citrix in 2015 for over $170 Million. I’m excited to talk about Mike’s journey and the strategies he’s used to acquire and nurture customers.
So, let’s dive right in. How are you doing today, Mike?
Mike Morris:
I’m very well. Thank you very much. Thanks for having me.
Matt Byrom:
Yeah, you’re very welcome. It’s great to have you on today. So, to start off, being part of a fast growing company for 7+ years in the position of Vice President of Customer Acquisition, must have been incredibly exciting.
Mike Morris:
It was. It was a fantastic journey. Grasshopper was a very interesting experience. We were all self-funded; we had no outside funding at all. Everything that we use for growth we had to generate from our earnings, and had to run things very tight for that reason.
Matt Byrom:
But it’s a good position to be in, I guess isn’t it, where you’re self-funded, you’ve got total control of what you’re doing yourself.
Mike Morris:
You do. Actually I feel people sort of look at me funny when I say this, but I kind of like the position of not having all the money you could have or you could want to spend. I think it makes you really think things through, and it makes you focus of what’s most important.
Matt Byrom:
Yeah, that’s totally true. Actually, if you’re spending money that’s your money it could be in your pocket effectively, whereas invested money is not quite the same.
Mike Morris:
Yeah, that’s true.
Matt Byrom:
Obviously you’ve had a fantastic experience at Grasshopper which we’ll discuss a bit further as we go along. Obviously you’re now at GetResponse, what was it about the opportunity that interested you?
Mike Morris:
GetResponse, as you know, has been a company that’s been around for about 20 years. It also is privately funded, so it had similarities to an environment that I was used to. It has a great product in a market that I know and understand really well. It felt like it was a fantastic opportunity to take a lot of what I had learned and use it to help another company grow in similar ways.
Matt Byrom:
Yeah. Does your role have similarities at GetResponse that it had at Grasshopper?
Mike Morris:
I think so. My focus at GetResponse so far has been really on the small business segment, which is for lack of a better term, those customers who come to GetResponse and sign up online as opposed to people who go through sales folks and more mid-marketer enterprise deals. So, yeah, I think there’s a lot of similarities. I think the acquisition methods are very similar, the customer behaviors are very similar, and, you know, there’s lot that similar.
Matt Byrom:
That’s great. OK, let’s dive into that. You say that the acquisition methods are similar. How did you generate customers at Grasshopper and how do you generate customers at GetResponse? What are the most successful marketing channels for you?
Mike Morris:
In that case, there’s a couple if differences. The channels are all the same, I’d say the relative weights are a little bit different between the two situations. So, being online businesses, of course, there’s are a lot of SCMs of both paid search as well as organic search that comes into play, so those are two pretty significant channels.
Both companies use affiliates and partners to generate sales. When I say “partners” in that case I really mean referral type partnerships, so other companies in similar markets who sell to similar customers who then you can deal with to kind of jointly refer customers back and forth.
Both companies generate a good amount of customers from word of mouth referrals, so in GetResponse’s case, through a bottom of an email that’s sent you can refer customers. And of course there’s a referral type of a program there so that also is an important channel. In Grasshopper we use some offline media to generate awareness. It’s not something we do with GetResponse. (We can talk about that a little but later in terms of specific strategies.) It’s something we tried, but it’s not something that’s worked out so far.
Those are pretty much the major ones.
Then, of course, you have the mysterious direct traffic that every web marketer knows and loves and hates because it usually makes a pretty bit and you have no idea where it comes form.
From those perspectives, there’s a lot of similarities.
Matt Byrom:
It’s interesting that you say affiliates or partners, it struck me that might be a strong channel for Grasshopper particularly. It’s interesting that it’s a good, strong channel for GetResponse as well.
Mike Morris:
Yeah, for both companies, it generates companies. I think one of the keys for an affiliate channel, is it has to, the people that I’ve seen be most successful and the ones that I’ve seen that work the best with, are ones who, simple as it sounds, generate their own unique traffic, have their own audiences, have their own kind of positioning that is sensibile and kind of in line with our particular customer segment. Not so much the coupon sites, and things like that, it’s much more genuine content developers and people who are writing to members of the market about problems that they care about.
Matt Byrom:
Yeah, so they’ve got an audience rather than just having people come into to check off like coupons and deals and things.
Mike Morris:
Exactly, We actually had that situation at Grasshopper when I first took over marketing, where the vast majority of our affiliate orders were coming through people who typed Grasshopper coupons into Google, and they find coupon sites. We actually went through and rebuilt the whole program to refocus it on people who had their own audience, who had their own content development, who were talking to small businesses, who talked about issues that small businesses care about, as opposed to just people who were looking for the coupons or deals.
Matt Byrom:
Yeah, that makes total sense. Based on that, I’m understanding that a lot of the partners that you’re working with were bloggers, or writers, or publications in some sort of way.
Mike Morris:
Yes, and they could also be other companies marketing small businesses. So one thing that’s interesting when you think about the small business market, is it makes a lot of sense to partner with people who might be a little bit earlier on in the small business life cycle than you are.
So for example, Grasshopper wasn’t the first thing that somebody who starts a business thought of, but it was pretty close to one of the first things. The first thing if you think about starting a business, you might say, “Oh, well. I need a domain for this. What domain can I get that’s available that makes sense?” So they go to GoDaddy or to any one of those sites that sells domains and purchases one of those. Then depending on the kind of company, they might try to set up some sort of LLC or some kind of structure at a LegalZoom, or some company like that. So we used to look to companies that were a little bit ahead of where we are in the life cycle, because we felt that they could generate prospects who would be interested in our particular service.
In GetResponse’s case, I think we’re a little bit further on than kind of the domain, phone number and company structure because it’s a company that has formed and has started to think about acquiring customers. So again, it’s just at a different sort of a stage in the business and it’s important to pick partners that are around that same stage or slightly ahead of you.
Matt Byrom:
Yeah, I guess then you might even for GetResponse find people in sort of the CRM because I guess the CRM would come even before the marketing sort of thoughts in the journey really, as well.
Mike Morris:
Yes, exactly. That’d be an example where we could be a good partnership for GetResponse, for Grasshopper probably not, because by the time you get to that stage, you’ve already got some way that customers are likely contacting you. So you’re probably a little bit too late.
Matt Byrom:
What did you find throughout all your experience of partnerships, what did you find made the most successful partnerships. For the listeners listening, it’s useful to have these take aways where people can think, “How can I implement this tactic, but how could I actually do it in the best way?” So, for people listening, how would you suggest that they go ahead and set up partnerships that are likely to be successful?
Mike Morris:
So, as simple as it sounds, it just has to make sense for both sides. So, you don’t actually want the best deal you can get, if you know what I’m saying, you want to make sure that it makes sense for the partner as much as it makes sense for you. So I think that’s lesson #1. I wouldn’t say I learned that at Grasshopper, I learned that long ago from a guy that I worked for who used to run partnerships for Hewlett-Packard back in the day. He was the CEO of the company I was working for at the time. That was something that always stuck with me, and I think that’s something people lose sight of when they start to negotiate partnerships because it becomes an “I win-You lose” type situation and how can I get the best possible deal, whereas what they should be focused on is: how can I build a structure that makes sense and is profitable for both sides.
That said, and I’m a huge believer in gearing pretty much everything acquisition oriented around this is, it’s got to make sense with your life time value. As a SAAS company, you need to of course understand what that life time value is. As you start to put partnerships together, you need to make sure that you’re not giving all the money you’re going to expect to get from a customer out as a bounty or as any kind of payments for those types of partnerships. So it has to be rationale.
Matt Byrom:
Yeah, absolutely. You don’t want to be giving away all the profit, but at the same time, you don’t want to be giving away too little because then it’s not as appealing for the partner.
Mike Morris:
It’s a balance, just like almost everything, right?. You have to make sure you strike that appropriately. And, you know, we learned some hard lessons at Grasshopper in particular partnerships where we would work with one particular company who I shouldn’t name specifically, but we struck a deal with them and things were going really well, and it turned out that the reason they were doing the deal was because they were interested in seeing if this segment was something they could acquire a product in. It turned out it was, so they acquired a product and we no longer had a partnership.
So, you know, you have to be mindful of those types of things, too, so you want to be partnering with someone that’s kind of in it for the long haul.
Matt Byrom:
Yeah, you don’t want someone who’s just going to be there for a short time and disappear really.
Mike Morris:
Yeah, and just use you to test.
Matt Byrom:
It takes a lot of time to set up partnerships. More than you think really, more than you think on the face of it as well.
Mike Morris:
It does. It’s a lot of work. It’s a lot of work to maintain them. I think that’s one lesson that I’ve learned over time as well is that: it’s one thing to strike a deal, but it’s another thing to ensure that that deal continues to drive benefit to both parties. That’s simple things, Sales 101 stuff, like calling and checking in and understanding what’s working for them and what’s not working for them, and sharing that same information about what you’re seeing from it. So, you know, it’s a lot of work.
Matt Byrom:
Yeah, I mean, we do a lot of partnerships ourselves at my business Wise Owl, we create, animate and explain the videos, and we partner with a lot of web agencies. So, of course, it’s like you say, it’s earlier in the… but they refer business to us where partnership they create web sites for want an explainer video as well. That’s a perfect partnership. But some partnerships really work nice and smooth, they work really well, and communication is great, and others, you have to really work at. So I’ve been in that boat, too.
Mike Morris:
Yeah, absolutely.
Matt Byrom:
Just the last thing that we’ll discuss on partnerships, I guess: would you pay somebody out if it’s a recurring payment, would you pay not just the first bounty as you call it, but actually recurring monthly from then on or annually?
Mike Morris:
We’ve done both. Both at GetResponse and Grasshopper, we have both structures. A lot of times it depends on what the partners were interested in. At Grasshopper, it also depended on our cash position at the time. So RAB shares were easier to pay out cash-wise than bounties sometimes. But I’m relatively indifferent to those, as long as it comes down to about the same percentage of the life time value. I’d pay a bounty, but I’m not going to pay him more than 15%-20% of the life time value, and that’s about what I pay out on a RAB share anyway.
Matt Byrom:
So, that would be your suggestion 15%-20% would be around where it fits for you?
Mike Morris:
That’s usually where it worked well for us. Because the other piece of partnerships marketing like that is that in one extent you can’t really control it, because if the partner all of a sudden generates a ton of orders, which of course is a good thing, well, you now need to make that payment. And so you don’t want the CPA to be so high that you start to question, “Do I really want to keep writing this check?” So I think that 15%-20% keeps you in a good place.
Matt Byrom:
Absolutely. OK, so you also mentioned search, paid and organic, as well. Tell me a bit more about how that worked at GetResponse in the past, and also for GetResponse, too.
Mike Morris:
I think we’ll start out with paid. I paid, you’ve got two sides of search: you’ve got the brand side, which you really can’t do much about from a search perspective (that’s really a reflection of what you do non-search wise); and then you have the non-brand side, which is really more of an awareness creation. I’ve always, in both places, managed those separately. So a lot of times, and this was the case very commonly when you come into an organization that’s just looking at paid search they’ll quote kind of an overall CPA.
So I’ll make up the number, let’s say it’s $250, and that’s the total amount that they’ve spent on search in the last month divided by the total number of new customers they got in the last month from search. That number in and of itself is almost useless to me because when you break that down into the brand and non-brand, in the case if it’s $250 overall, my guess is you’re probably paying 50 bucks for brand customer, and you’re probably paying $600 of $650 for non-brand, which is the only you’ve got to really worry about.
Matt Byrom:
Majorly skews the number.
Mike Morris:
Totally skews the number, right? If you look at the spend, everything is so, paid search, from the volumes, to the spends, to the CPAs, that we would, the way that I always look at that, and this goes for both, is on a campaign level, I will up to a certain threshold on a CPA that I’m comfortable with, and I won’t pay more than that, even at that campaign level, because again, everything is on the margin to me, right? What’s the marginal cost? What’s the marginal benefit? If I get 1 more customer, how much does it cost me and what’s the CLV of that customer? I’m much less interested in the overall averages.
So, I think that that’s the one thing that I would suggest from a search perspective is that it’s all about the margin, and it’s all about what that last customer cost you across the different types of campaigns. So I think that’s the key thing to look at there. You know, paid search can be tricky. We have in both places gone to look at experimenting in spending more, or spending less, to see what happens to the overall spends, mostly on the non-brand side, to see where that saturation point is. You obviously want to get as much as you can, but you don’t want to be paying an irrational CPA.
And like I said, on the brand side, brand to me has always been to me about, I will spend whatever it is I need to spend in order to ensure that I am first on a brand search because I feel like I’ve already paid for that customer in some other way because they already know the name. So somehow, I’ve already paid for that through another channel, and I certainly don’t want to lose it. I almost see brand, the brand of PPC, as almost like a retargeting type of thing.
Matt Byrom:
Absolutely, yeah.
Mike Morris:
Because it’s just about capturing the demand at that point.
Matt Byrom:
You’re trying different campaigns, then, you’re testing and trying different campaigns but you’ve always got the CPA or your target CPA in mind?
Mike Morris:
Yes, and I will pay more than that from a test perspective just to understand or to kind of buy data or buy information. But I’ll always have, that CPA is not something I would change. Now, it can change depending on the state of the company, the growth aspirations of the company, or even the company’s funding states, so as an example: we spent more on a marginal basis after we were acquired at Grasshopper than before. We didn’t go beyond the CLV, but we would go further out.
The other thing we would always look at is, not just the CLV, but how many month does it take me to earn back the amount that I paid for that customer. On paid search, we might go out a year. That was fairly conservative for us. You probably could have gone out 2 years or even a little bit more than that from a collection perspective. But we’d also kind of gauge it that way, if that makes sense.
Matt Byrom:
Yep, it certainly does. That’s very interesting actually.
Mike Morris:
Yeah, because it’s both pieces, right? It’s not just about, especially if you have a low average revenue and a very long life time of a customer, you amy not want to set your CPA thresholds at a 4 year payback, right? That might not make sense. I mean, 4 years from now, who knows what’s going to happen. Even tough it might make economic sense. So I think that’s the other attribute to look at.
Matt Byrom:
Are you typically seeing CPAs decrease as you’re doing new experiments and actually learning further, or are you seeing CPAs increase as the market becomes more competitive?
Mike Morris:
Sometimes you see both. Usually the decrease that we see are a function of improved quality and improved quality scores from the site, right? So if we were testing a new area, we might not have built out in that particular area, and so as we built content out, we would see CPAs go down. Usually though, CPAs go up over time as more people go into the market.
I have seen cases where certain players have shifted focus and decided that particular markets weren’t interesting to them anymore, to the extent you can actually start to see CPAs move. But I think kind of like inflation, CPAs just go up over time a little bit.
Matt Byrom:
That’s true, unfortunately. It’s very true, particularly in paid search.
Mike Morris:
Yeah, that’s for sure.
Matt Byrom:
It’s never ending increase. Are you promoting landing pages or pages on your website, or are you using some content as well (blog articles, ebooks, white papers)? What’s your mix there?
Mike Morris:
For paid search, when we’re talking about for example the small business segment at GetResponse, it’s purely targeting landing pages because our goal there is to get a trial sign up. If we shift to the lead generation side of GetResponse (where the point is to generate leads to feed to the sales team), then you’d look at it a little different. You might look at PPC to promote a white paper, or to promote a webinar, or other type of fulfillment where the goal isn’t just to capture a trial but it is to get information about a prospect for perhaps a larger type of an account.
So it’s definitely a mix, but I think on the small business direct response side, I would always go for a trial or a paid sign up as opposed to kind of content. If you’re targeting that kind of direct response market, the reason you’re targeting is because the sales cycle should be relatively straightforward and simple. If you’re dealing with a more complex sales cycle, you probably are going to have to have a person involved in it.
Matt Byrom:
With that in search, you can get that intent, really can’t you, where you’re actually targeting people that are searching for things closer to the decision-making process.
Mike Morris:
Absolutely. There are other services that we’ve used with various levels of success that claim they can build prospects of people that are into other things like that, that you can reach out in other ways. I’m a firm believer in the fact that the data has the answers, so I’m sure that that is possible and will get better over time. But you know, that’s another way to do it as well.
Matt Byrom:
So talk to me about your organic search functions.
Mike Morris:
Sure. So organic search, I’ve looked at in kind of two pieces, well, three I guess. One is the onsite stuff: making sure that your site is crawlable, that it’s optimized mabilly, that it’s fast (page response time is huge for Google, of course, so you want to make sure your load times are quick), and that you’ve done all of the things onsite that you can to not only optimize your response, but to show Google what you feel is most important. So, if your home page has the highest wait of any page on your site, the links from your home page then indicate you what think is the next most important area is on your site. And that’s what you’re telling to Google. So making sure that that whole internally linking is set up, and that everything is optimized. So I think that’s step 1. Not to belittle that, but that’s the easy part because that’s a technical operation, you hire some guys and some women, you go through, and you do it, and then you’re all set.
So then it becomes about content. What kind of content do you want to publish in order to attract your market. The way I’ve always looked at that is: trying to get in ahead of your customer to understand what problems does somebody have who’s going to buy your product? It doesn’t necessarily have to be product specific. So, I’ve always been a firm believer in content strategies that are a little bit broader than the product. So if you look at GetResponse for example, (GetResponse primarily makes an email and email automation tool), but a lot of our content is about how to grow a small business or build your list, how to solve the kind of problems that small businesses are looking to solve, that will need GetResponse, but they may not be at the point where they understand necessarily they’re looking for a marketing automation tool.
Figuring out what that strategy is, figuring out what you want your voice to be, and how you want to target those customers because again: non-branded organic search is all about awareness building, to me. So, it’s: how do I write content that shows up in search, where people will now discover that I exist, because they have a problem that I have written about? So that’s how I’ve always approached the content.
Then you have kind of the last piece which is the link building: how do you get links to that? We’ve always approached that in a very organic way, very much the way you would approach traditional PR, frankly: going and trying to build relationships with different bloggers, different sites that write about similar types of topics, showing them, “Hey, we wrote this article on what it takes to grow a pizza shop.” (Just making that up right now.) Wouldn’t that be an interesting article for your readers? Would you like to reference it?”
So we’ve always taken approaches like that because: (a) it’s the way you get the most qualified customers, and (b) it’s the right sustainable way to do things. There are all kinds of way you can build your rankings up in ways, let’s call it not so white hat ways. In my experience, that generally comes back to bite you. So we’ve always taken a very organic approach to organic search from the perspective.
Matt Byrom:
Yeah, same with us really. We’ve always taken a very cautious, sensible approach because one of these algorithm changes can just come back to bite you, and you never know when that’s going to be.
Mike Morris:
It can be years down the road. I’ve seen, I do some consulting on the side, as well, and I’ve worked with clients that have gotten penalized for things that happened 7 years ago. You can put stuff out there and you can get yourself in trouble way past the time that you are actually are thinking about it.
Matt Byrom:
In terms of content, do you have a specification in terms of the length or depth or quality I guess, of the type of content you’re writing? So say for example a blog article or a post that you’re writing?
Mike Morris:
We stay away from specific rules, and really our focus is always on just writing it so that a real person would find it interesting, like you would write a real journalistic article, I would say. So we always take that kind of an approach: we think about the topic, we think about what kind of aspects of that topic we want to explore, and then we write something that fully does that. And again, you’re not going to write tomes and tomes, but you write enough so that you fully address that, or you break it up into pieces if it’s a very lengthy topic, but kind of write it with the reader in mind, as opposed to the search engine in mind.
Matt Byrom:
Yeah, and it’s interesting because this is a newish podcast (#11 here), and through speaking with people week after week, expert marketers have done a lot of this. I’m understanding more and more that, and we’re seeing it in our business as well, is that the content now needs to be longer, it needs to be deeper, it needs to be more thought provoking on a particular topic, and it really needs to be the best content that there is on a particular topic, or search term, or niche, or long tail keyword, for example, not necessarily that you just have to focus around the search engine, but more that you have to really be the very best piece of content for the whatever question somebody’s trying to answer.
Mike Morris:
Exactly. I’m sure you and the listeners can relate to this: when you do a search for something, if you have a particular question, or you’re trying to research something, and the piece is obviously written SCO piece of content, and it really doesn’t answer the question. “Well, yes I guess it was about the question, but it didn’t really answer it.” Very much in keeping with that, we would say: “What does it take to really address what the reader would want to know?”
Matt Byrom:
Yeah, it’s intent really, isn’t it? It’s giving the person that’s searching, the answer to what they’re looking for.
Mike Morris:
Yep. I agree.
Matt Byrom:
And how would you promote content, then? Do you create post on a blog, for example, or put up a landing page with a piece of downloadable content? How do you go about promoting your content, because you said you don’t promote too much content through paid search?
Mike Morris:
Yeah, so what we’ve done is promote the blog itself, and we would have a subscription to the blog so people can sign up for the blog, and they can get a digest of articles. But primarily, we would just promote it through that, and it’s on the site, so when people would come to the site, as with most SAAS companies, only a couple of the people actually sign up, but the other 98% saw the blog, as well. So you’re kind of getting it out in front of more people that way. That’s always how we’ve approached it. We’ve never promoted it as an entity per se, aside from just building links and building [inaudible 00:30:13] and search authority within a particular topics.
Matt Byrom:
So it’s really for people to find them through the channels you would promote through, really.
Mike Morris:
Right, because again, at the end of the day, the content is important from an CSO perspective and to help educate the customers, but unlike perhaps a professional blogger, we’re selling a product that we want somebody to sign up for, so it’s a little different.
Matt Byrom:
Yeah, and I’ve always wondered about this. As a business, you can help people answer questions, but there’s only so authoritative you can be when there’s an end goal of really what you’re trying to do is push people over to buy a product, I guess. And I’ve always given this a little bit of thought.
Mike Morris:
Yeah, there’s a little bit to that. I will say that in my experience, [inaudible 00:30:58] are not the highest converting segment of people that show up on your website, but I believe that they’re important because of the stage that they’re in from a customer journey perspective.
Matt Byrom:
How are you at adapting at the changing CSO landscape where it feels like things are changing again in CSO and search, really, how do you feel that’s affecting now GetResponse?
Mike Morris:
I think if you’re focused on solid content and you’re focused on speaking to your audience, I think you’re a little bit more resilient to things like algorithmic changes in other things. You take an extreme case where you have a keyword domain, for example. Back in the day, when people would have basically keyword oriented domains, and then Google decided through algorithms that wasn’t necessarily going to be weighted anymore, those people lost out. But again, if you’re focused on what your audience wants to know and writing quality content for that, I think you have a lot of resiliency.
That said, not that this is a new change, but I think that mobile has required significant adjustments, because as mobile searches become more and more prevalent and more and more important, Google weights them more and more, and responsiveness, and load time, and some of the technical aspects of CSO have to be looked at to ensure that you’re keeping up with that.
So I think those are the kinds of changes that I’ve seen over the years become more important. But again, because our focus has been and the content side of things, we haven’t had as many types of algorithmic issue.
Matt Byrom:
I think Google can nowadays understand more about how a person is interacting with a piece of content, so are they spending more time on site. I’ve heard and I feel that they’re looking at this more. Obviously there’s click-through rate which has come out as being a very high indicator in the search engine results pages. These are actual actions that people are taking, dwell time and things like this, as well.
Mike Morris:
Yeah, that’s true.
Matt Byrom:
So obviously as a marketing automation platform, it would be criminal if it didn’t ask you about your funnel: how do you treat customers, or prospects, leads should I say, once they actually enter your marketing database all the way through their trial. How do you deal with that?
Mike Morris:
Sure. That’s a great question. What we do is, we focus on educating the customer about how they can get up to speed most quickly with the product and really get value out of it. So, in our case, we have a mix of different communications between educational oriented to the product’s use but also then answering questions in helping people with how do they build their lists, and different ways to acquire customers that could be interested in their particular products or services, or other things. Just sort of the basics of how to get up and running from a marketing automation perspective, and then share tips and tricks. We use all the different kinds of tactics that you would expect [inaudible 00:34:18] campaigns, we have different mobile notifications, and things with the mobile app. That’s really what we focus on.
Matt Byrom:
And do segment use is based on the changes they make or the progress they make in terms of setting up their campaigns?
Mike Morris:
So, the drip campaigns certainly targeted based on that. If people have done different things, then they would receive different types of notifications. But that’s how we would address that.
Matt Byrom:
OK, that was really interesting. Do you guys go for a long campaign, a long nurture campaign, or fairly short and sweet, where do you find the right fit?
Mike Morris:
Our primary focus is the nurture during the 30-day trial process. We do a little bit beyond that, but that’s mostly where our focus is. If somebody hasn’t converted over to become a customer in 30 days, you know what we’ve found is usually there just might not have been the need or they might not have been at the stage where they might have been interested. We don’t continue a hard press after that point.
Matt Byrom:
That’s interesting, as well. I guess you’re obviously looking for people to convert onto a paid plan from there. What is your actual conversion rate from free to paid?
Mike Morris:
I can’t get into specific numbers, but what I will say is I’ve had exposure to probably half a dozen different SAAS companies that sell through a trial process, and I’ve not seen a trial to paid rate as I’ve seen it get response. So it’s about the highest that I have seen. I think that a lot of that has to do with the products, how easy it is to use, and how important it becomes once somebody does start to use it. So we have a very good take up rate from the trial.
Matt Byrom:
That’s interesting. OK. That’s cool, as well. I guess we’ve talked about CPA quite a lot before. It’s very clear that CPA was really important for you. Would you say that’s when you’re looking to paid campaign, that’s like your North Star is out there, the metric that you’re really looking at. What other North Stars, or other particular focus do you have in terms of metrics? What do you look at on a daily, weekly basis?
Mike Morris:
I do think on an acquisition perspective, particularly on paid media, CPA is what it’s all about. I also think that there is a place for peer awareness branding. The way I’ve always approached that is I’ve always taken a budget, and broken it out, usually something like 90-10, or maybe 85-15, where I will spend the bulk of it on CPA driven marketing, and then the rest of it I would spend on more brand building type things that I don’t expect a hard payback from.
So I do think there’s a place for both, but being a math guy, I tend to the CPA side of things. That’s sort of where I fall down. From an overall metrics perspective, I think that when it comes down to it, for a SASS business, the most thing about it is how your MRR changes over whatever period of time you’re looking at it. So, in a simplest form that is: (new customers in * new recurring revenue per customer) – (customers out * their recurring revenue). In some businesses that I’ve seen that comes down to something as simple as just customers in – customers out, because everyone’s [inaudible 00:37:57] is the same. But in a more general case, I think that that change in MRR is the single biggest indicator of the health of a SASS business.
Matt Byrom:
Do you feel that the marketing efforts that you and your team are doing there actually help reduced churn as well?
Mike Morris:
Yeah, actually in a high volume, low ticket item business, churn becomes critically important, especially when you’re are selling to small businesses. We actually recently had a pretty nice win with churn. We re-looked at our process that we used for getting new credit cards for customers whose credit cards didn’t work anymore. As as with many SAAS businesses, if you bill on a recurring basis, some percentage of those cards don’t work on any given time when you try to bill them. The question becomes: how do you notify those customers, get updated payment information and keep those customers active?
We just recently went through a process of revising how we approached that piece of the business, and we were able to reduce the churn from non-payment by about 25% through just more deliberate communications and some more direct communications, and keeping accounts on the books just a little bit longer to give people a chance to update their information.
Matt Byrom:
That’s huge.
Mike Morris:
Yeah, it was great. So again, I think particularly as a SASS marketer, you have two parts of your brain working. There’s the one: “how do I get more customers in?”, but then the other part is: “how do I keep customers?” because at the end of the day, that’s what’s going to determine how big you get.
Matt Byrom:
Absolutely. Yeah. That’s very interesting, as well. Another question would be around metrics in terms of how you’re actually tracking those. What software are you using? What pieces of software do you use on a regular basis to keep track of all your most important metrics?
Mike Morris:
We have an RJMetrics reporting system, and we have dashboard within that. Basically, I have a US-specific dashboard. There are other dashboards that deal with other areas within the business, and that’s primarily what we use to track those things.
Matt Byrom:
OK. So I’m going to bring to our last 5 questions. This is 5 quick fire questions, and the first question is: what’s your best piece of marketing advice?
Mike Morris:
The best piece of marketing advice I can offer is always believe the numbers. Everybody has their own opinion, but the numbers don’t lie, and they will generally point you in the right direction.
Matt Byrom:
That’s absolutely true, and it’s always good if they’re going up as well. OK. So #2 is: can you recommend a book to our listeners?
Mike Morris:
One of the best books that I’ve read ever really is a book called “Thinking Slow” by Daniel Kahneman. What that does is it explores sort of the way that people think and make decisions and act. And what it reveals is that most of the things we do is not terribly rational. It’s a fascinating book to understand buyer behavior, and what makes people tick.
Matt Byrom:
That’s really cool. I’ll definitely check that out. Sounds really interesting, actually. And I’ll put a link to that in the show notes as well, so if people go to MattByrram.com, you can click a link and view that book, as well. So that’s cool. I appreciate that very much.
So what software tool couldn’t you live without?
Mike Morris:
For this question it actually has nothing to do with marketing. The software tool I couldn’t live without is a software tool called “Training Peaks”. I do … and Training Peaks is where I keep all of my workouts, both ones I have to do and ones that I’ve done, as well as past progress, and it’s just sort of a very geeky, analytical piece of software for fitness, and it’s definitely something I could not live without.
Matt Byrom:
OK, so question #4 is: what’s your favorite example of a marketing campaign?
Mike Morris:
I think the Dollar Shave Club viral video, kind of how they launched the business is one of the best examples. It’s also one of the most copied, which doesn’t really work anymore, because once something like that happens, it becomes less effective when it’s repeated. But I just feel that candidness and use of humor in a video that was solving a real business problem, a personal problem in that case, but the fact that razor blades are ridiculously expensive just was brilliant on many levels.
Matt Byrom:
Yeah, in my business Wise Owl, we write about video an awful though, and actually that video is one that we feature. It’s probably one of our most featured videos actually in our blog articles. We feature it quite often as just as an example of an amazing viral video. So I’m totally with you on that one.
Last question in our last 5 is: which of the podcasts do you listen to?
Mike Morris:
I love the 538 podcast because I’m a geek and I like the statistical and numbers aspect of everything. But from a marketing perspective, what I’m really looking forward to, use a shameless plug here, is GetResponse’s new podcast, that’s going to be hosted by Jamie Turner (of the 60-Second Marketer) and that’s going to be launching in the next month or so.
Matt Byrom:
Amazing. I’ll definitely check that out, and I’ll also put a link to that in the show notes as well so that people can check that out as well.