Speaking with Patrick Mackenzie (Part 1)

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Rui:                 Hi there, I’m Rui, and I have here Patrick McKenzie with me at MicroConf Prague and we are going to be talking a little bit about Email Marketing.

Patrick:           Thanks very much for having me.

Rui:                 Thank you for being here.

What do you think is the most important thing about email marketing for businesses? What  sort of difference do you think it can make?

Patrick:           Honestly, I think the most important thing about email marketing for businesses is that they actually do it. I know a lot of businesses which say, “Oh yeah, we know, we’ve heard the stats, we know that email sells more than any marketing channel per contact basis, but we don’t actually have someone who does that in that in our company,” or, “we’re doing it,” but only in a superficial manner, which is maybe doing a newsletter to an entire mailing list every month.

I think that it’s something that people can really see in immediate, highly positive returns if they tried to do things which are bit more sophisticated. For example, for an income startup, go to the people who have  bought stuff from you before and find other things they might want to find out. Send them stuff and say, “Hey, you might want to buy this.” It’s sort of like one of the canonical examples.

Or for a software company, offering people the opportunity, “you’re paying monthly for the software, but since you plan on using it for a while, why don’t you try upgrading to the Annual Plan and we’ll give you a few months off?” Or even just sending people, not commercial messages, but things that they will  love and enjoy.

One of my favorite companies to me is called Wistia. They do online video hosting. They will never tie in with their customers to learn how to do video better. Wistia will just send you an email every month saying, “We hear from a lot of people that they’re worried that they need to buy a $10,000 camera to do a video. You can actually record the video on the iPhone very effectively. There’s an example of us doing an entire video on an iPhone, and here’s how you can do the lighting well to make it look very good. It’s something the company invests positively.” That’s obviously successful for Wistia for people to continue using their service for actually [inaudible 00:02:03] creating video content and they need a place to host it.

Rui:                 Can you speak about a specific case that you worked on where you implemented email marketing, what the situation was before or after you implemented email marketing for them, or improved it?

Patrick:           I [inaudible 00:02:20] the serial numbers for some of these anecdotes, but I was once working with a software company; something unrelated. It’s 4:45 in the afternoon. We thought, “Oh we only have 15 minutes left in the day, so might as well leave early.” I said, “Wait, we can do something worthwhile in 15 minutes. Why don’t you show me a list of all customers you have who they have a quota of say 100 units of whatever it is that we sell monthly. Why don’t you show me everyone who’s using more than 80 units [inaudible 00:02:48] monthly, and list their email.

We’re going to send all these folks an email and say, Thanks for using our service every month. We know that you’ve been using over 80% of your quota. You might be a little worried about that. You might think if you got shut off or have an overage charge. That’s not actually how we do business, but since you don’t want to worry about this, how about we just get you a little more overhead by stepping you up to the next higher plan? To make this a very easy decision, we’ll give you a 15% off the next higher plan, for the good of …” your lifetime, let’s say. “If you click here and upgrade now.” We sent the email out at 4:40, or 5:05. The next day, they were looking at a plural percent of their annual revenue cost directly related to that email.

Rui:                 Wow.

Patrick:           Other examples, I worked with … I generally work with software companies, but actually, software companies which increase the percentage of free trials, which you convert into paying customers of the company by in some cases close to double just by having a good email retention strategy in the first month to get people comfortable using the software. Starter guides, letting them know that the team is here for them. If they have any questions, get them to tell you issues with using the software, basically improve that for their success.

Rui:                 You said before about how when you look through the dashboards and you look at the usage of end user, you can generally predict how many of those are going to convert based on your usage data. How do you suggest people should use that and incorporate the information into the email marketing [inaudible 00:04:35]?

Patrick:           I think the [inaudible 00:04:38] people don’t do that. They don’t plug data on individual customer’s actions and then start using that to form emails. I think it involves statistical engineering processes to [inaudible 00:04:48] hiring a statistician or doing anything pretty complicated. Actually, that’s not true. You can start by just doing things in a very kind of ‘finger to the wind’ fashion.

If you take a look at your last 20 customers who bought something from your store and just look to see if you can generalize anything from their experience. For the first 20 emails, something you might have to say, “Hey, you bought two from us a month ago. Maybe your two have run out, would you like  to buy more?” That’s something that their information [inaudible 00:05:25], obviously. Or say, “Hey, you bought this thing. Did you know that you can use it [inaudible 00:05:31] way?” See if there’s a positive reaction interpreted from customer replies and business results when you send out  to 10 or 20 or 100 emails in this way.

If that does work, then you can figure out, “Okay, we used a bit of human interaction the first time with our internal tools to find out what was a good [inaudible 00:05:51] before, how do you tie that together and make sure it works?” Sure, [inaudible 00:05:57] for customers that play very well with. You can have your own database and things and then push them to some sort of events to trigger emails in a very straightforward fashion. I suggest looking into one of them, but it doesn’t have to be [rocket surgery 00:06:12]. Just bootstrap things yourself by doing it by hand, find out what works, what doesn’t work. You can then implement things which do work and [inaudible 00:06:22] a more scaleable fashion.

Rui:                 Nice. From your own experience with some of these clients, do you find that usually are using an email list or [inaudible 00:06:32] at all?

Patrick:           I work with software companies. Software companies are often created by technical people and often, relative to other companies, they’re generally underrepresented in marketing. Maybe half of my clients will have no use of emails and scripts, or have conservative use of email, I should say. The other half would have monthly newsletters that went out to an entire checklist. Newsletters are wonderful tools. They’re well-understood in the industry.

I will never [inaudible 00:07:05] for being unsophisticated, because they’re worth billions and billions of dollars [inaudible 00:07:11] companies. The Amazon monthly newsletter is probably [inaudible 00:07:13] to a nation state in terms of impact on revenue. Being [inaudible 00:07:22] in the industry is the easiest thing to do. Of course, the monthly newsletter will be able to have much more complicated topics on top of that, in most cases. If you’re not already doing a monthly newsletter, that’s an excellent first step. [Inaudible 00:07:33] which is sending out emails. Having someone actually work that, that’s a [inaudible 00:07:43]. In general, it will send much more improved results get more sales and have your customers with email that you actually send versus email that you don’t send. Email that’s not sent, practically, does not result in sales.

Rui:                 Somebody who is just starting out with emails, what would you recommend for them to somebody who wants a sell a product, whether it’s software, an app?

Patrick:           The number thing to do with emails is to first start by teaching people. You can think of good contact which will make a tutorial post or whatever. You can repurpose that exact content or make similar contents and email, maybe come up with a few of them in similar themes, and say, “Hey, if you give us your email address, we’ll send you a five-part guide, free of course, delivered over emails. [Inaudible 00:08:38]. A free course, delivered over email. [Inaudible 00:08:39]

Give people a reason to trust you, [inaudible 00:08:42] delight when they see in their inbox. For example, you can have a all to action, which is they actually have to purchase something from you for a [particular 00:08:53] relationship with your company by speaking to the sales team or coming back to website or [inaudible 00:8:59]. In the beginning, just focus on building trust and building their perception of your expertise on top of your mutual interest.

Rui:                 If you can just talk very quickly just about how you launched Lifecycle Emails, your course?

Patrick:           Sure. I had a course, a paid course, doing by way of emails. Generally licensed to [inaudible 00:09:22] and what I did prior to you can start producing a product, whereas I had created a page on the website that said, “People in my industry, you have few reasons already that you should be trusting me, and here’s a free sample of a 15-minute video which explains something that is easy for you. I will give you the rest of my video, 45 minutes of awesome stuff, if you give me your email address in exchange. In addition to giving you this video instantly when you give me your email address, we’ll also send you something which you will like, every week to two weeks.”

For the next several months,  I just did exactly what I promised. Sometimes my email was my software, other entrepreneurs in the software space might wonder about how do I price the software I sell, so I send them my thoughts on pricing. That’s my voice editorial and [inaudible 00:10:19] a little on the long side. I’d write 2,000 words for pricing and come back two weeks later. Let’s talk about how you sell software to your prices. Two weeks later, let’s talk about how you can have very reliable software by improving your engineering practices. I would continue to talking about this for a few months while I was building my product.

Then I said, “Okay,” I thought I was about ready to… launch it.

Rui:                 [Inaudible 00:10:46] when you’re about to launch?

Patrick:           When I was about to launch, I think they had 3 or 4,000 members. That’s a high number that you can actually, even if you [inaudible 00:10:56] your audience at all, you can have other people sign up. Just do a landing page that you could just spread around them between the different groups, whatever, in your community. Even 3 or 400 is much better than zero.

When I was getting ready to launch, my thing is that, “Okay, in about a month I’m going to release the [inaudible 00:11:16] on this topic of the life cycle of email in companies. I’m just going to teach you a little bit about some case studies using lifecycle emails that you can [inaudible 00:11:26] in your own business. For the next month, we’re having sort of eclectic topics every week or two weeks.” I said, “we’re going to talk about email, email in the morning, [inaudible 00:11:34] selling products over email. That’s where I was.

The months had built up the anticipation of, “Wow, email seems really useful, something that we can use for our company.” Okay. All right. “I know folks, some of you are probably tired of email. That’s okay. Next week, we’re going back to the usual mix of topics. For those of you who are thinking, ’email is really awesome, but I don’t know how to get started with my company.’ You could go over to www.lifecycleemails.com. I have a 5-hour video course available to you which will tell you how to use lifecycle emails in your software company.” It was a sales page for my product and [inaudible 00:12:16].

Rui:                 How much did you get from the course?

Patrick:           I think I sold about 200 copies of the course, first revenue was probably about $60,000 within two weeks. It’s been a little less since then.

Rui:                 Wow. How much do you think email is accountable with your email …


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