Matt: Hey guys welcome to the Business and Bootstrapping podcast. Today I am pretty excited to have Damian Thompson, founder over at Linchpin Marketing Automation Solutions on the line today to share some of his experience, some of his guidance and really help you get your business off the ground. So thanks so much for coming today Damian.
Damian: Happy to be here Matt.
Matt: So thanks so much for coming on today Damian. I originally got introduced to you through a couple of other great podcasts…Tropical MBA and such. And then have really connected a little on Facebook. You have been giving me some good feedback on things I am working on. But first I think we should give people a little background on you. So what is Linchpin? What do you do?
Damian: Okay so Linchpin is a…I say we are a sales and marketing automation company. I am starting to change that to say we are a demand generation company. Essentially what we do is we help mainly software and service companies that are small business companies, we help them gain new customers fasters, retain existing clients longer and obtain market leadership through setting up proper sales and marketing funnels that are repeatable and scalable. So what that means in fancy terms is we come in and help you figure out how you sell and then automate a lot of it or help you reshape the way you market to drive more business interest in what you sell. So you can focus on creating great software or delivering awesome services and we will help you do the sales and marketing edge. So really we are for people that have maybe only one or two sales guys or one or two founders that are focused on doing sales. They don’t have a large sales team and want more of a big professional effort to get leads in the door but they don’t have the money or bandwidth to have ten sales guys out in the marketplace.
Matt: Yeah it is jumping right into that productized service type of business where companies have a focus. They doing something amazingly well but unless you outsource stuff, unless you get other people working on it you never will be able to focus on your core competencies. How did you go about starting that? What is the story?
Damian: A bunch of mistakes. A bunch of failure. So I will jump back a little bit. I am a bit older probably than most of your listeners. I am in my early 40s, 42. I spent a good decade and a half, 15 years as a corporate warrior working for companies like MacAfee and Symantec. Big enterprise software companies. Essentially what I did was go around the work and help them turn around failing software sales teams or setup new sales and marketing teams. So places like New Zealand and Australia and other places like Asia. I went and was basically like the first guy on the ground helping them establish a beach head and then built a big team around me or came into a team that wasn’t performing well and turned it around. So I have got a lot of sales and marketing experiences in my background selling big million dollar software projects. So I was doing that from 1997 to whatever, I guess the mid-90s to the late 2000s. And then I did my first startup back in 2001. That was funded, went out and raised a bunch of money. Back then it was called a manual service provider, what we call productized services now. But it was around security. For lawyers that didn’t want to learn how to setup their antivirus and intrusion detection. We will do this for you and charge you a monthly fee. And I loved the model at the time. There were a lot of problems back them. There was no Amazon Web Service. There was no cloud per say. If you wanted to build a web server you had to go and out and build your own data center. So we raised 1.5 million to build our own data center. So that was my first foray into this idea of taking software or a service and delivering it over time and turning it into a product. And after kind of ended after the 2001 dotcom crash. And then 9/11 attacks it was a pretty tough year for tech. So went back crawling into the corporate software world and did that for another decade or so. And then I moved…at the time I was living in Australia. I moved back to the US with an Australian company and was working for them. They were great guys but it just wasn’t a space that interested me at all. It was cost reduction services which I thought would be hot because this was after the financial crash and big corporations want to save money. But again it was probably the third time….I would love to say I don’t make the same mistake twice but it is just not true. It was the second or third time in my career that I chased the money thinking this will be a hot market so I will go after it and I hated it. I was bored out of mind talking to people about saving money. But I did that for a couple years. At the time really was miserable. Just wasn’t happy. This was like 2009, 2010. And I started listening to a bunch of podcasts. Stuff like the Internet Business Mastery guys and Tropical MBA, Dan and Ian. A couple others… And really started to think about this whole internet marketing thing and I guess was kind of boom time for internet marketing too. With all the Jeff Walker product launch formula stuff. So I said hey if these monkeys can do it I can do it. So I decided I was going to start trying to figure out how to make some money online and read the Four Hour Work Week which I know a lot of people have done. Really it wasn’t the four hours a week which isn’t what he talks about that hit me. The thing that hit me…and at the time I was in my late 30s. And I was like well I am doing this working 40 years for this magical retirement date that just isn’t really likely to happen. Really what I should be doing is designing the life I really want and creating the job the I really want and creating the company that I really want. And the only way I can really do that is if I build it myself. So I decided to get off the corporate hamster wheel and decide to go out and build something. But this time I didn’t want to take money. I didn’t want outside loans or investors telling me what I could do or making decisions best for them and not best for the company or our customers. So I took a gig with Dan and Ian of the Tropical MBA. They had a weird opportunity in the Philippines. A friend they knew owned a resort and said hey if you come her and spend a couple hours a day helping us do some marketing you can stay…room and board free. I thought that would be perfect. Come out the to the Philippines and have some runway and figure out what I wanted to do next. So I came out to the Philippines about 3 years ago and started doing that. And then I spent the first year just trying everything. A little bit of affiliate marketing a little of this and that. But really got back to what I love to do which is I love to sell. I am a sales and marketing kind of guy. I love B2B. IO like talking to other business owners. And through that I kind of started focusing on copywriting and content marketing. And that was the first kind of iteration of Linchpin. At first it was just me selling, hanging out my consulting shingle and selling consulting services and grinding it out on oDesk and figuring out how to charge people money for copywriting and content. And then from there I started building a content marketing agency. Started hiring some people. I talk about kind of the three year plan. The first year you learn or hone a skill you can sell. The second year you learn to sell it and third year you learn to scale it by hiring others to do it. So then what I did was I hired some really smart guys to do some writing. So we did that and were having some success but we were focused on early stage funded startups because I like that space. Like the startup scene. But they weren’t great clients. I thought they would be great clients because they have a lot of money so they would argue. I was tired of arguing over prices with cheapskates. And they were. They didn’t care. They just raised 3-4 million dollars. They wouldn’t argue over another 1k per month. But I learned they were very transient. They wouldn’t stay long. Either they would run out of money quickly or they would decide to spend money somewhere else quickly or they start having success and start hiring people fast. So they weren’t looking for long term. They were looking for someone to come and work with them for 4-6 months only. And that is not what I wanted to do. So I went back to the drawing board and started focusing on…you know through talking to friends…I really wanted to build a scalable productized business. So I said what would you pay me $500 a month to do? What would you pay $1000 a month to do? What problems do you have in your business? That good lean startup, customer development stuff. What are you doing by spreadsheet that you should be using software for. What software are you purchasing that you are not using correctly. And through those questions kind of found that at the time Office Autopilot and then Infusion Soft were two awesome pieces or software that a lot of small business owners were buying with the promise of all this automation but they just weren’t learning how to use it correctly because they had other things to do. And I thought here is an opportunity. That was about a year ago. So we pivoted and focused exclusively on marketing automation software and helping people to use that. And we have been doing it for a year and it has been awesome. And then you look back in hindsight…..sometimes I consider myself a semi-smart guy. But I look back it just makes so much sense. I mean I was a salesforce administrator a decade ago. Ten years ago. I mean I have been in CRM for a long time. So CRM and I am a copywriter and an email marketer. So CRM plus email marketing and delivering services and products around that just makes so much sense in that I should have saw it three years ago. But it is what it is. You make some mistakes. You figured it out and now I couldn’t be happier.
Matt: You just have to get there. I hear the actual idea or kind of the inspiration of this for Linchpin came for you in a bar. You were hanging out with some entrepreneurs and just shooting the shit and tossing some ideas around. Take us back there.
Damian: So you know. I am guilty of this too. In the online community we kind of grab onto these ideas or these clichés and we beat them up. We throw them out there a lot but we don’t actually give practical advice about it a lot of times. So one of them is this whole idea or niching down. So I am a big fan of niching down. I think to get traction, product market fit they call it in the startup term. But I think niching down is a great way. Ether you niche down by your market or what you deliver. We were talking about James Schramko a little before the call. I had Uncle Shrammy come on and beat me up a little on my podcast. It was great and he was right. I was thinking a little small. I still think you start with a niche. And that is great advice but it is kind of hard to figure that out. So yeah I was hanging out in a bar with Dan Andrews from the Lifestyle Business Podcast and Justin Cooke form Empire Flippers. And they were beating me up, we are all good friends but they were beating me up. Like okay okay. You tried the content marketing agency and you didn’t really like that. And no you are back to being a solo consulting thing. You have got to find a niche, you have got to find a niche. Finally I was fed up and said I agree. But let’s figure it out….instead of telling me I have to find one how about we actually find one for me. So we kind of sat there with some beers and did the customer development process and figured out that Dan had owned Infusion Soft a couple years earlier and they canceled it cause they never used ti correctly. And Justin had just bought Office Autopilot and he knew he wasn’t getting the value out of it. We kind of talked it through a little bit and it made a lot of sense. It ticked a lot of boxes for niche selection. Like someone is already spending money. They are already spending several hundred a month on software so you don’t need to convince them to buy a piece of software. My business has evolved a lot over the year. I actually talk to a lot of customers and convince them to buy it because we talk about it. The result more than the thing. But it definitely started off out of a pain point. They are spending $300-$400 per month that is just sitting there.
Matt: Would you say that that is the most valuable thing you can do as an entrepreneur when you are looking to grow a business? Should you just focus primarily on your network? Build something for them. Is that the best way to do it?
Damian: Yeah that is the advice I give out a lot now. I am a big fan of this whole productized service movement. We are about to re-launch our podcast internally at Linchpin and focus on two different podcasts actually. One of the podcasts will just be me rambling about email marketing and CRM and software. And the other is going to be about how you scale a service business. And a lot of that is going to be about productizing your services and operations and processes. I say I think the best way to do that is absolutely do that. Go to your community and find ten people that say they have got a problem. And then find three that let you fix it for free. And then go in there and fix it for free. That is what I did. I worked for free for the Empire Flippers for a couple months. I worked for free for another company for a couple months as I figured this all out. You want to build something that is scalable but don’t worry about scaling right away. It will generally be just you at firs.t you have got to go figure this stuff out. And to me I didn’t know Office Autopilot at the time. I knew CRM software and could figure it out but I had to figure it out. They gave me a login. It is hard to do that. But I think that finding two or three people who will let you do it for free for a testimonial is very powerful. And then once you get going then I say then don’t be afraid to start charging for it really quickly. We started charging for…so I did that for about six weeks. And in my second month I started charging people. Like not them but I started actually selling it to other people by going out and finding people with the same pain point wiling to pay me money. And I charged way too little. I charged $500 a month. That same service is $1500 a month right now. You are going to make a bunch of mistakes. And I think people get…especially us entrepreneurs. We love the spreadsheet right? We love the planning. We love the spreadsheet millionaires. We love looking at that, the growth we are going to have in this imaginary land of the spreadsheet world. And sometimes you just need to get out there and make mistakes. If you don’t know how to price it just price it something. If you are selling too much of it it is probably too cheap. If you aren’t selling enough of it it is probably too expensive. You have to take action. It isn’t rocket science. I think the difference who I will give them my time to and help them and talk to them and give them my ideas and ones that I won’t are whether they take action or not. And I think that is the single greatest thing that determines success in entrepreneurship. Are you a talker or are you’re a walker? Are you actually going to do the work? And if you are going to do the work I think that…it isn’t guaranteed success. It isn’t rainbows and puppy dogs and lollypops but if you are going to do the work and you continue to do the work there are people out there and resources that will help you reframe and reshape what you are doing to make sure you put effort in right place.
Matt: I totally agree. And I want to thank you. You and Dan actually gave me a little bit of a feedback on a direction to walk on an old productized service podcast. And I am currently working on getting some about page and branding services in line. I am totally guessing on everything I am doing and trying to get feedback and it is a pain in the ass.
Damian: Yeah that is awesome though dude. So I am still guessing. So there is now six full time Linchpin employees. We are doing…we are killing it. We are growing really fast. The customers…we are figuring out exactly how to deliver customers. But I am still guessing at stuff. I am still launching new products that are good and some that are horrible. I am still focusing on some things that are wrong. It is business. You will always make mistakes. But I have a good friend in Australia who is a rugby player and one of his favorite saying is it is easier to change direction when you are moving. And it is just absolutely true. So start moving forward and if you need to make a subtle shift while you are moving can make big changes. When you are standing still and pondering and thinking about things everything is effort. You need to start moving towards a direction and get it wrong. And Linchpin…this is…I joke that this is version three of Linchpin. There were a bunch of businesses before Linchpin that I tried. Two or three month’s business I launched. Hey Email Marketing Doctor and Small Business Samurai. I was thinking more about marketing and thinking more about what I was going to do rather than thinking about what problems do I actually solve and are people willing to pay for it?
Matt: How do you find that as quickly as possible? Cause that is really what matters. How do you test that idea? That is something I have trouble with. That is something pretty much every entrepreneur is going to struggle with is not just getting the product or the service but getting it out there. How do you get people to try it or sell it to people to try it?
Damian: So I think you are right. That is the important thing. This is again. I think you have to go out there and market test it. And the way to market test it…and this is why I think niching down is so important. So if you don’t have a big community. If you don’t have people that you can go to and say hey I am thinking about this idea. I want to charge y. and would you do it for free for a month or two while I figure it out. So if you don’t have that opportunity for whatever reason you aren’t trying hard enough. There are LinkedIn and Facebook. I am literally on the other side of the planet. I am in a different country and I figured out a way to do it. So there is a community out there you can find of people. But let’s just say for some reason that doesn’t work for you. What you need then is to really pick a target market. And there is some great stuff, Jason Cohen, the founder of WPEngine who writes a blog called Smart Bear. He talks about this quite a bit. We were talking before the show why I don’t actually love the word bootstrapped. Because I think it connotes that you are not building a real business. I want to build Linchpin into a business that supports 1000 customers at the same time. That is a huge business. That is going to be a hundred employees and $50mil in revenue. I have these big plans for Linchpin in the next 8-10 years. So to me am self-funded. So right now it is my money but I hate the term bootstrapping because it sounds like hey we are cheap or we have small goals and dreams. I just think that is not true. I think one of the things you can do is…don’t get catch up in the TechCrunch…everyone thinks raising money is a win. Raising money is not a win. But there is some great stuff in that community. The lean startup method is a great way to build a business. Even if you don’t run a software company. And some of the stuff that I really love ….and the biggest one is this idea around customer development. And the idea around customer development is simply going out there and validating your idea against your hypothesis in the marketplace. You do it. You put in the work. You cold call. You pick up the phone and you call people and you find 20 likely people in your target market that you think might have the pain point you are solving and you pick up the phone and ask them. And you don’t say can I sell you this product. You actually approach it as a research assignment, almost like a journalist. Hey I write a blog, I deliver content, I create solutions in this area. Whatever your area is. I am not calling to sell you anything. I would love ten minutes to talk to you about these five questions I have for people that are just like you. Do you have 5-10 minutes for me to ask these questions for you? I promise I won’t sell you anything at the end. And people say yes, they want to talk about themselves and their business sand marketplace. And you ask them the five or six questions. I have been talking to other people in your same industry and they tell me problem A is the biggest problem. Do you agree that is the biggest problem? Well I think that is a problem but it isn’t the biggest problem. And you go through this process of really figuring out what their pain points are. And the guys at the Foundation do a question that I love as well which is kind of what are you currently using or doing with spreadsheets in your business? Cause if someone is using a spreadsheet for something that is probably an inefficient process. That is probably something they should be doing somewhere else. In a CRM or HR tool or whatever. And so you just start asking those questions. What are you doing, how are you doing it, what are your pain points? And you approach it as a research rather than hey I am here to sell you. And then once you start getting an idea of what you might be able to do then you go back out to the world and say hey here is what people are telling me the problem is. Here is my proposed solution to it. I am looking for 2 people that want me to do this for free. And treat your service business like a software business. So you have a Beta service. You have a general service and do customer development. So think of it as you are crafting a solution for them. Not hey I am selling hourly services.
Matt: And another way you can really get in there well. I have used similar strategies that you have explained. As the student. If you play a student card, even if you aren’t a student you can pretty easily get by a lot of the filters people will put up in terms of wasting time.
Damian: I agree. Student card, press card, and anything that is not salesy sales.
Matt: So speaking of sales we have talked a little bit about Linchpin. Who are your ideal customers? How do you really brand your business and brand your company towards what you are focused on? And what is your marketing strategies?
Damian: Poor. Bad. So yeah. So I am a salty old sales dog. This is one of those things that…so I can generally test a product a pretty quickly and see if it is going to be successful pretty quickly because I am not afraid to go out there and sell. Which is great and I can ramp up fast and get customers on board quickly. But it hides a lot of problems. So historically what I have done for this business is…so I built this business on cold email and referrals. So I go out there and find people that I think would be a good match for our service through LinkedIn or through my sales assistant that crawls the web and looks for companies that fit our criteria. Which is small software and service companies less than 25 employees but doing more than $100k in revenue…. And then I do a little research on them and I send them an email or I pick up the phone and call them and say hey. I have three questions for you….do you have this problem? Do you have this problem? Do you have this problem? If so would you like to talk more? I make it all about them. I don’t talk about me or what we do at all. And I have had success with that and signed clients. But the reality is that has masked problems. Our marketing funnels aren’t as good as they should be and our messaging isn’t as tight as it should be. It is kind of….so we’re are redoing right now. So I actually have my internal, my content team..the creative team usually working on client projects. I have decided that Linchpin is becoming a client of Linchpin over the next three months. So we can do a better job ourselves. But there is opportunity out there. And again depending on what your goals are and your early goals shouldn’t be huge. I mean if you are going out there and you are totally alone and it is a skillset. You realize that you are going to have to sell it and deliver it. So I like the kind of $1000 a month mark. I think that is a good monthly productized service. I think less than that you are in trouble because less than that it will be hard to find people to deliver the work for you later on. And more importantly if you are doing it yourself it is kind of hard to deliver it and sell at the same time. So say you are charging a $1000 a month and up. I mean how many customers do you need. Do you need 10 customers? Can you support 10 customers? And if that…and I think ten customers is a great first goal. And realistically if you can’t find 10 customers willing to say eyes and give you $1000 a month you are doing something wrong. You are creating a product that no one really wants or you are selling that product into the wrong marketplace. The world is immense. And I think that one of the biggest things you have to realize is that in the old days you had to be…you actually had to be better at a lot of the stuff because your market was so finite. Your market was basically your local town. So you would have to move to a really big town and everyone else had the same idea so the competition was crazy. But now the market is literally the entire world. I mean there are a lot of people online, like 2 billion or 1.8 billion online. If you can’t find ten of them willing to give you $1000 a month then there is something wrong with your product.
Matt: So I like the idea. $1000 a month seems a bit high for a service. So what would you say….let’s do a live breakdown of basically what I am thinking. So I am working on….
Damian: So I want to jump in for a second. I am going to tell you what I tell my sales guys okay. You are wrong about pricing. So like you have to…that is your head trash. So pricing is…you saying a $1000 is a lot is that is crazy sauce Matt. So I am telling you we charge from $1500 to $5000 a month for our services. I am looking to actively add a $10k a month service. And I know it sounds crazy. Three years ago when I heard guys like Schramko talking about things like this as like yeah that is nice for you. But the reality is you have to find a service you can charge $1000 a month because the math won’t work otherwise. And I am telling you it is out there. And you have to remember that you want to find a starving audience. You don’t want to have a nice to have product. You want people that have real problems and real pain and look to you to help them solve that pain. If you focus and this has changed but I think the way to do productized services is to focus on B2B. Someone will pay you $100k a month if you can deliver them $500k a month in business. It really just is math. It really is just ROI calculations. So what you have to do is not focus on the price itself. You have to focus on what you can do to help them get a higher ROI. What can you do to get them the money they want? Cause that is what they want. One of my big mantras now is that nobody wants business automation software .Nobody wants software. My customers want more customers. That is what they want. So how do I help them get more customers? That is what matters. And if my focus is to help them get more customers, if my job is to create our services to help them with customers and to be constantly monitoring and making sure we are doing that and getting them more customers. Then they will literally pay me anything as long as I keep delivering them more customers. So the idea of your price is high or your price is low. That is in your head and you have got to get rid of it because you are wrong. It is just wrong. There are a hundred people out there that would give you $1000 a month to do what you want to do for them if what you do for them helps them get more customers. Yes?
Matt: Yeah of course. So I have a question for you then. I have been running with this idea of About pages. Would you still recommend that? Would you still say that is something that could be productized as a service? With the thousand dollars a month threshold it seems a bit high. I am not sure how….
Damian: Well so yes. So let’s talk about it. Two things. First of all productized services doesn’t necessarily have to be recurring. They don’t have to be recurring processes or services. Yes recurring revenue is awesome but…that About page I don’t see that as $1000 a month. I mean are you going to rewrite my About page every month. It will be a one off thing right. I absolutely see that as a viable thing. Now here is the thing. It all comes down to how you sell it. If you go out and sell About pages I think you will have troubles. But if you go out and sell lead generation by telling your story more efficiently…. And it is the same thing. But it is how you position it. Positioning really does matter. Like positioning is of all the four P’s and all the old school marketing stuff which doesn’t work anymore. Positioning still absolutely matters. Positioning is how you charge a premium for your product and how you get people to say yes. So it is the same with us. If I positioned us as hey we are InfusionSoft administrators I would be competing from every guy from Bangladesh for $10 an hour to run Infusion Soft. That is not how I position us. That is not what we do. We actually run marketing automation done for you. So we run your entire e=system for you. We are the brains and the brawn running this system so you can focus on what you do better. Now a lot of the services I would deliver would be similar. But that positioning is the difference between $10 an hour and $1500 a month. Make sense? So you have to do that in everything you do. So we are rewriting our About page right now as a matter of fact. I have got copywriters. I have a luxury most people don’t have. And it is still painful. So again I am working with my copywriter and am talking about it and what do we want. That is a great questions. What do were really want here. Do we want an About page that chuckles and they say that is funny and they pass it along. Or do we want one where they sign up and get on our list so we can sell them later on. Do we want an About page that actually qualifies people out. So I am….everyone talks about the death of vanity metrics but the reality is people still get caught up in them. My email list is very small and I am happy for it to be very small. I really don’t want you on my list if you aren’t ever going to buy from me. So I am okay you aren’t ready to buy from me now or a year or two. But people that say hey I just want to check out what you are doing. Cool that is great but I don’t really want you. I am a bit mercenary about this. I don’t need the ego stroke of audience. I don’t need to know, hey I have got 10k visitors on my blog this month. I don’t care. I would rather have 100 visitors of likely buyers. That is what matters to me and the business is am building. But what I just talked about. Most business owners don’t even think that way. So if you came in and helped them figure that out. If you said look Bob there are three reasons you have an About page. And this is how you demonstrate your authority and this is the Matt Ward philosophy about About pages. The three reasons are to demonstrate authority, to create rapport with customers and to generate leads for your business. Or whatever those three things or five things are. And then that is your mantra. You just do it over and over and over again. Every conversation you bring back to that. Here is the Matt Ward philosophy about About pages. And here is the reason why you have an About page. So that is the reason. And let me tell you how you can get there. There are 112 different ways to get there. What really matters is you want to show some personality but also understand what is your goal? Is your goal to…if you are an ecommerce customer your goal for an About page is not to increase email signups. It is to make them feel comfortable enough to buy then on that visit on the site. If you are a B2B like mine then the goal is…what I would love to happen on my About page is to schedule a call with me. Just do a consultation, a free consultation to see if automation software is right for you. So it is you helping them and guiding them through what is important and why they have to have it and how they do it and then actually doing it. And I think if you did that then that is a really sexy productized service. I think you launch that at $1000 and over six to twelve months you will end up raising your rates on that. You will say hey I now have real word case studies and I have helped XYZ company gain 50 new leads a month and two of those leads closed at an additional $10k a month in business to them. So this is now $2500 a pop or $5000 a pop or $10k. It is like copywriting. There are copywriters out there that will do it for $5 an hours and there are guys out there that will charge you $100k a page and 10% of your business and get people to pay that. So I mean it is all about where are you in the hierarchy and where are you in value proposition and where are you in case studies. What have you done? So first I would charge $1000. But charge $500 if you want, I don’t care. But start doing them, start figuring out what works and what doesn’t work. Start figuring out what your message is. And then absolutely if it was a non-recurring productized service I would want to charge more than $1000 for it. Especially something like that which would take some brain glucose. Well I think one off is fine. There is no problem with one off. But it will take a lot of effort. I mean it is not…that product, a lot of that value you are going to add. A lot of the way you will go from $1000 to $10k is a lot of you right. It will be alto of you talking to them, coaching them, making them feel good. Which is fine. That was my business the first six month. But realize you time is time you can’t be writing other people’s about pages or having other people writing other about pages. So it is kind of a hard thing to productize the entire delivery cycle. So because of that I would want to charge even more. But I would start $1000 and go out and find two people who will let you do it for free. Then find five people who will give you $1000 and start working on them and then figure…and again I started my product at $500 a month. I still have my first customer paying $500 a month but we are currently charging $1500 for that product. It is not a problem. The people that won’t pay $1500 are not good customers for me. They are not a good customer. If they going to hem and haw over a couple hundred dollars a month. That is not someone who is talking the long term view. And for what I do I need them to take the long term view. It is a marathon, not a sprint. And all common clichés I can throw out there. But it is absolutely true. It is why I have learned the customers that are good. I need customers that, the lifetime value of their customers is high. Like ecommerce are not awesome customers for me for the most part unless they are doing pretty big scale because a) they have a bunch of interesting tech on the backend and more importantly a new customer isn’t worth enough money to them. If their average shopping cart is $100 I need to get an awful lot of those guys into the shopping cart every month to justify our rates. Whereas if you are a web development firm and a new project is worth $30k to you then I have to help to get you far fewer of those for you to be happy with our service. And that is something I figured out. And it makes sense when you talk it out loud but it is something you find the hard way by actually doing it and realizing okay this is not a great fit.
Matt: It is almost the inverse of where I am at. I have done some free consulting and written some free pages for people. One guy actually got an 89% bump in conversions with that and another adjustment. But like when you are dealing with the ecommerce side of things the whole boosting conversions is a lot bigger than getting an additional customer.
Damian: Yeah. And there other thing I would do is that…and this is where we are simplifying a lot of our language too. We spent the first year of our business focused on people that had this software and had the pain of not using the software fully. And that is still a big target for us. We are evolving more into a hey let’s stop talking about software, let’s stop talking about what you are using and what the end result you actually want. And the end result you actually want is you want more customers. You want more leads, you want more appointments. That is what you really want. So what we are doing will help you do that by doing this, this and this. And I think it goes more top of the funnel so you get a broader audience. But you need to start somewhere else. So with you and the about pages I love the idea but I think you have to be careful that you are not being too clever like hey I am the About page guy. What matters to business people? And even 89% conversion, even me and I am an internet marketer, my eyes glaze over when I hear stuff like that. That is such a stat. What you want is you want a case study. So to me it is not…I don’t care you raised it 89%. What I care is you got him four new leads and one of those turned into a new customer worth $50k. That is a story. People want stories, not stats. And especially if you want to go broader. Cause conversion rate…remember people will never admit that they are an idiot, or never admit they don’t know what you are talking about. So you will say conversion rate and they will say yeah while thinking what is a conversation rate. What you want is to say hey I will help you get more leads. I will help you get more customers and more people to talk to. And I also think there are a lot of other natural products you can sell after the About page. Great the about page, you know we actually rewrite service pages too. And I have to tell you I took a look at your service page and it isn’t clear what you do and why you do it. There are a crop of other products you can sell later on. But I would niche down to one thing and do that. You don’t want to call yourself a copywriter. The market is full of people calling themselves copywriters. I do think in your market niching down and being specific is awesome. But yeah I think it is a winner. I think if you deliver it right and go out and do it. But I could be wrong. I am wrong a lot. So… the one thing I would say is is it a big enough pain point. And I am not sure that is true. I think there are probably better pain points to solve. Go back to the starving customer. I don’t think people are starving for their About page to be written. I think it is an educational process of here is what your About page really is. Your About page is the second most trafficked page blah blah. And I think there is value there and you can train them and get them to work with you and build a business. But are there other problems you can solve that are more important? Probably. Probably. And I would say around pain points. A big part about the mundane. Rewriting your About page is fun and exciting and people love getting stuff that changes that they can see. But if you started hey I will run your online accounting software for you. Boy that is something that people know they are not doing right. They are sure their local bookkeeper is fucking it up. Sorry I swore there. And so if you became the Zero guy or the QuickBooks online guy or whatever I think that is a pain that you could solve better and again….I found a good kind of juxtaposition to get is you want people that understand they need the service you have but don’t want to do it themselves. Like I don’t want a DIY guy, a do-it-yourselfer. I want a done for you person. They say hey my time is more valuable to me than learning a new piece of software or actually doing my books or my time is better spent somewhere else or I don’t have the skills where I feel comfortable and want a pro to do it. And that is a pain that people are willing to pay for than you talking about hey I am going to rewrite your About page.
Matt: I think that is some pretty good feedback. And I am definitely going to have to think about it. So speaking of the podcast, speaking of putting out content. I know I was talking to Schramko earlier and we were talking about this. What if you did a case study study of your podcast? You could do case studies of your customers. That could be your both coaching and lead generation tool.
Damian: Yeah I think it is a great idea. I will say this. So I run a content marketing agency. I ran one before, I am running one again now. We create content for our customers. I want to caution people to be really careful about advice. So a lot of times what is working is for someone else is not going to work for you. The people who are talking about it…the Kissmetrics, the Buffers, you know the content marketing kings….they are so many steps ahead of you that what they are doing definitely won’t work for you. So you have to be really careful. So for me I always want to come back to lets be pragmatic about this. What are you actually trying to accomplish? So one of my first things I talked about in content for Linchpin. We are not putting out enough so we are ramping up our production. I have writers on staff this month. I keep going back to I don’t want to create how-to posts. Now how-to posts are very popular. If we wrote a how-to post on how to do something in Infusion Soft or how to set something up like that, how to do the step by step process of how to do this would be a popular post. But popularity on the post is not what I want. What I want is people to enter my funnel that are possible buyers. And people that want to know how to work every angle of their software, that is not someone going to pay thousands to do it for them. So you need to be careful what content you create based on what audience you want and what result you want. And most of the advice out there is for building large audience that is not very engaged. What you want is your want an engages audience for het most part. But yes I do think case studies are something. We are just coming up on month eleven right now. We are just getting to point where we have customers enough that we can look at results. I think our longest customer has been eight of nine months and most of them are around the 4-6 month mark. So we are starting to see some of the results and starting to be able to track that. So I agree that is definitely something we will do. We will highlight them a bit, what we did, mistakes we made and moving forward. And I think that is stuff that resonates very well with other business owners. And that is the kind of stuff we will be creating. What we won’t be creating is here is how you do this or here is how you create tags in Infusion Soft. I will let other people focus on that kind of coaching and consulting market. We want to be in the business service market.
Matt: Fair point. Pretty contradictory to what I have heard but I think it is good feedback for people to hear.
Damian: Yeah. Again I could be wrong. But I generally start from my ….if everyone is saying it it probably isn’t a good idea. So much of the advice out in the inter webs is everyone says to do it this way so you should do it this way. I disagree with most of it. The idea that hey you prove your authority by teaching people to do it and then they pay you to do it. That works in internet marketing circles. You have to understand if you are doing B2B, like my business…most people aren’t on the internet searching for people to run their Infusion Soft for them. That is not what they are looking to do. They have other pain points. So it is about really understanding what their pain points really are. They are not looking to… how to create tags in Infusion soft. And maybe they are but that is not an awesome customer for me. The customers I want…I need to figure out what their real pains and problems are. And their real pains are that they don’t have enough customers. They don’t have enough leads. They have been working on referrals only. They don’t have a repeatable, scalable process. So they are looking for help, I am building a sales process. Understanding how to build a sales team, understanding how to build marketing and understanding how to grow form $250k which they kind of did through hard work and effort to $2 million. How do they do that? That is my ideal customer. And that is the guy that I have to write to. And that guy doesn’t care how to create a tag in Infusion Soft.
Matt: So how do companies use Infusion Soft? How do they use Linchpin? What do you guys actually provide in terms of helping companies to grow? And when is it time to utilize a CRM or a done for you automation solution?
Damian: Okay so a couple questions there you asked together. I will go backwards. So I think and again when you are hammer everything looks like a nail. I am a sales guy. I think people should use CRM’s at the very beginning of business. If you are in B2B business you need a CRM. You need a way of tracking contacts, tracking your interactions with them, having a central place where you can make sure your tasks are going towards goal of selling. If you are a small business owner then the first couple years you are a salesman all the time. Revenue, top line revenue. Revenue solves all problems. So that is where your focus has to be. So I think a CRM is something you need right away. However I don’t think you need Infusion Soft or Salesforce right away. I am a big Salesforce fan form a pure CMR point of view. But there are bunch of good ones out there…Pipedrive, Nutshell. But you want a CRM that is actually a CRM. You don’t want a content management tool like Highrise or basically just card catalogs. But the idea of tracking opportunities and tracks against a contact record is something as a business owner you should be doing right away so find one for $20 a month. Email marketing…I think you should be email marketing pretty soon. Email marketing is the most effective way to market online. I still think it is the 800lb gorilla in almost every business out there. You look at AirBnB, you look at Groupon. You look at all these billion dollar overnight success stories of the last five to ten years, almost all were built on email marketing. Email marketing is the way you communicate with your customers, it is the way you communicate with your prospects. So having an email marketing tool right away is essential. Get Mailchimp, it is free for first 2000 contacts. You need to start using some of these tools pretty early. Now when are you ready to go form a standalone CMR and standalone email system to an Infusion Soft or Salesforce plus Hubspot or something? That is a good question. We are actually creating a software tool to help people decide that. Put in stuff and it helps. But I think it comes into scale and time. So it is about complexity. So how complex is what you are selling? Are you selling multiple solutions to the same market? Are you selling the same product to multiple markets? Do you have repeat customers? The analogy I use is if you have 5 of your customers sitting across the desk from you would you have a different conversation with each one of them based on some piece of information you had in the real world? If that was the case then you are probably ready to start looking at automation. Cause that is all it really does. It says instead of having big lists of data or lists of email address or contact records it starts treating them individually. It starts treating your prospects and suspects as individual. Okay bob is on my list but Bob has already bought something from me so he is a customer. So how I talk to him should be different from how I talk to some guy that came off the street to download my free calendar. And understanding who they are, where they are in the buying cycle. Where they are in their previous commerce relationship with you and things like that. When you start having complexity it is time to start using at a tool and that is what I would say Infusion Soft is good for. In my business I focus on B2B companies so I am not so interested in shopping carts and stuff like that. But tying the email and CRM together is value in that. So I think Infusion Soft is a great first step for getting into automation. Will be good for most people for a couple years. Then once you start getting more complexity like you have sales people and want to start doing budgeting or pipeline stuff then you might want to look at Salesforce plus a 3rd party tool. But InfusionSoft is a great…it is like a Swiss Army knife. It does everything you want it to do well. And then it is such a huge jump from a standalone tool, people get a lot of value. But the biggest thing it does is it allow you to have unique conversations with people in an automated fashion.
Matt: What is the most effective way for business owners….they are bootstrapped or self-funded as we like to say now and they are doing this on their own, they are using a Mailchimp or an AWeber and on the lower end of the spectrum. What are some good email campaign that they should setup or autoresponder sequences?
Damian: Great question. Sorry cut you off there. So I say there are three campaigns every business should be running and you can run all these from Mailchimp or AWeber or whatever tool you want to use. They are autoresponders essentially. Just know if you use those tools you have to manually add people to lists which is fine. So the first is what I call lead nurture. So this is what would be your traditional autoresponders. So understand most people that come to your website aren’t going to interact with you right away. You want to capture a percentage of them. So you create your lead magnet or opt in bribe and get them onto your list. And in my world I call those suspects. So a suspect is someone who is on the list that potentially meets some criteria to be a customer of mine but really hasn’t done that much. So they go in my lead nurture list. And they get and email and usually it starts off with a kick start series on five ways to do this or ten ways to do that. And you start that and you kind of hit them every couple of day for the first month and it evens out to about 1 email a week and that is your lead nurture. And it is exactly what it sounds like. To keep your leads warm, to nurture leads. So people who aren’t ready to buy now which will be the vast majority of people because they are just doing research. So they aren’t ready to buy yet but you want to keep interactions with them. You want to show them some of your personality, you want to get that no-like and trust test. You want to pass those tests. And so that best way to do that is by email marketing. Email marketing is essentially it is salesmanship in print. So you get to send them…but you don’t pitch pitch pitch. Be about them about them about their problems and their struggles. People love personality. They love hearing the mistakes you made. I did this and these are the mistakes I have made. I have seen people have success having almost personal conversations. So that is your lead nurture list or campaign. And then the second campaign you should be running is shopping cart campaign if you are ecommerce or if you are business I call it a sales process campaign. So this is for people that have moved from a suspect to a prospect. In my world you become a prospect when I have talked to you on the phone. If I talk to you on the phone or we have a couple emails back and forth, but I prefer phone you become a prospect. You have shown some life. It is more than getting on my list, now you are interacting with me. And I am qualifying to see if you are we are a good fit. So that is the sales campaign. And generally that is emails around whatever your sales process is. So my process is to get them on the phone to do that consultation. If they are going to be a good customer for me. Meaning they are making some money and would see value then a proposal goes out. And some emails around hey you read the proposals. Make sure you check out page seven, it says this. But most of that is automated. And that is kind of the sales campaign. And then the third campaign every business should be running is a referral testimonial campaign. So this is for people who become customers of your. It is like an onboarding campaign in SaaS terms. So the first couple emails after they become a customer say hey thanks so much for coming on board. Make sure you check this out. Here is how we work and here are some of the things we have thought about and here is access to your project. And then over time it becomes hey we get to deliver such kick ass work because we focus 80% of our effort on our existing clients and only 20% of our effort on actually getting new ones. And the way we can do that is we ask our customers for referrals. So I would love for you to think of two or three people in similar markets to you that you know that you think would be a good fit for us. So you ask them for referrals. And then later in the campaign you ask them for testimonials. After a couple months of working together you are like hey it has been a pleasure working together. Remember a couple months ago I asked you for a couple referrals. Thanks and that is awesome. Now what I am going to ask you for is a testimonial again using the same 80-20 rule. The way we get customers is referrals and testimonials. People love to buy from people that are happy. So are you happy? And if you are not happy just reply to this email and let us know and we will fix it. But if you are happy we would love a quick…and I ask them some questions. Get their answer and then we turn that into a testimonial and send it back to them and say this is what we pulled from your answers. Are you comfortable with this being put on the website?
Matt: That is brilliant. That is absolute gold right there. Never would have thought of that. And I want to thank you for being on the show. I have taken up alto of your time Damian. I have one last question for you. And the question, it is actually a little unconventional. My question is what question didn’t I ask you that I probably should have? What would you have like to have covered?
Damian: You know I think we had a nice long conversation. The campaigns were important and Infusion Soft. You asked all the right questions. I will just give my piece of advice. And this is going to sound funny from a guy who sells software automation. But this is one of those things. I call myself a SaaShole. I love SaaS products, play with them all the time. Constantly trying new productivity apps and synchronizations and integrations between apps and all that stuff. I am a geek and love that stuff. But it is definitely a rabbit hole a lot of business owners go down. Like down worry about it. Go out and find your ten customers. That matters more than anything else you do. It matters more than ….like I say go out and find a CRM. Don’t spend 3 weeks trialing every CRM and finding what you like. Go out and find 10 customers first. Now I think a CRM will help you find 10 customers so pick one and go. And figure out later on why you don’t like it. And I guess go to back to what we said at the very beginning. The biggest when I talk to entrepreneurs and I talk to a lot…the biggest problem I see is inaction. And it is not inaction because they are sitting around lazy. It is because they are doing the wrong thing. They are spinning their wheels thinking about something or planning something or spinning their wheels researching something instead of going out and talking. I had a sales manager years and years ago. I kind of rolled my eyes when he said it but he is right. “If you are having a bad day pick up a phone and call a customer or a prospect. If you are having a good day pick up the phone and call a prospect.” So it is amazing what happens when you just kind of aim your business around talking to customers and potential customers. Just magical things happen when you are talking to real people that have real problems rather than you sitting in your ivory tower trying to figure out how to solve the world’s problems. You won’t figure it out alone. Go out and figure it out with help of your customers and prospects.
Matt: You guys heard it here first form Damian. And I want to thank you so much for being on the show. That is amazing feedback and I think you have given us, and myself especially some things to ponder following our interview. If people want to reach out to you and say hey. They want to thank you for being on the show, where is the best place for them to connect?
Damian: I am a Twitter addict so @DamianThompson. Or check me out on the site at Linchpin.net.
Matt: And of course guys we will have all those in the show notes. Business and Bootstrapping dotcom. Thanks so much for tuning in guys and thanks so much Damian for joining us all the way from…you are in Vietnam now right?
Damian: I am actually in Manila for another day. I fly out tomorrow morning at six thirty am to Vietnam.
Matt: Immigration troubles?
Damian: Yeah it is all behind me know thank god. So off to Vietnam for three to four months then Thailand for 3-4 months and then back to Singapore to make a home again.
Matt: Yeah living the dream. Thanks so much for joining.
Damian: Alright man.
http://businessandbootstrapping.com/bnb17-build-a-six-figure-productized-service-business-with-damian-thompson/