I think I would much rather roll out my own solution using Mailgun/Amazon's API with a basic RoR/Golang prototype than use these shady monkeys.
It's their business and they have every right to price it the way they see it fit, but when there's something deceptive going on, as an end user I think I have every reason to point it out.
For example, when you start with a free plan and you decide to upgrade to a paid plan, you actually need to go about 5 levels to actually get over 2000 users! And it's not pretty cheap either. I mean $100k to send just emails? (Keep scrolling down)
I once used them when Feedburner bailed out on us, only to never look back at these monkeys (that's their trademarked mascot) and I rolled out my own basic solution on my VPS in just good old PHP (with Wordpress) and it worked well. And I definitely didn't spend $5 for 50 emails, just $20 for my basic Linode.
If you're capable of banging out basic RoR/Golang prototypes which can be used by non-technical email marketers, this skill alone can get you $20k+ engagements to build them with a bit of company-specific secret sauce in them. The sauce doesn't have to be that complicated at all -- for example, "I wish there was a way to send people an email on day N of their trial if their account had less than X objects in it... and I want N, X, and the object type to be editable without having to talk to Engineering" justifies $X0k at a lot of places.
(That's sort of software-firm specific because that's who I typically sold that to. Let's see, what's a more prosaic option. Oh, OK: consider a small insurance company in Kansas which collects a meagre $20 million in premium income per year. There exists a non-technical marketing manager within that company who wishes that there was a way to email business customers a solicitation in December to pre-pay their premiums for the following year to book a current-year expense for tax purposes. She calculates that getting an extra 6 months of float on 20% of their $12 million in business policies is worth approximately $100,000. Can you imagine what you could sell her for $40,000?)
In related news: businesses pay serious money for things which make them money. Consider adapting one's behavior to optimize for this. You can use the resulting money to buy lots of fun things, including stupefyingly large amounts of MailChimp credits if that floats your boat.
I've been following your advice and newsletters, and I get great value from them.
However, one thing that I still haven't figured out is this: how would I find say, that small insurance company in Kansas who has $100k to spend on a solution I could offer to their problem? Where would I begin to look? Cold-contacting seems unscalable.
I know networking goes a long way toward such contacts, but it can't be just that. Is there a way to search for clients that's between cold-calling and a personal network contact?
Go to the local Chamber of Commerce, or other watering holes for businesses, and say you're going to teach a free lecture on business use of email at the VFW hall, with reception to follow. The hall rents out for ~$20. Buy donuts and Starbucks coffee for the reception.
Talk for an hour on how to solve business problems with email. After the hour is over, you're going to be mobbed with people who want to pick your brains about email. At that point you just continue teaching them things until you win the engagement.
This built Brennan Dunn's business (to a ~7 figures consultancy with 10ish FTEs if I recall correctly), in a very not-generally-associated-with-great -Rails-sales-environment part of the country. It was also, broadly speaking, a major portion of my lead generation when I was consulting. (I sold consulting services primarily to B2B software companies, so speaking at events likely to be attended by them was generally a win.)
n.b. "I follow your newsletters and get great value from them" a) Thanks, that really makes me happy and b) this points the way towards another option for you, since if the small insurance company in Kansas was saying that about your newsletter then you're pretty much made for pipeline.
Also, with regards to cold-calling: I've never done it, partly because it would give me stress hives and partly because I've never needed to do it, but I disagree that it is necessarily unscalable. After all, if you're selling $40k engagements, then adding ~10 qualified leads to the pipeline every month would easily sustain a small consultancy. That's not all that much calling. As your consultancy grows you tend to collect recurring engagements / referrals organically, but if you absolutely positively have to make e.g. $2 million this year to cover all employee salaries, that's still only one engagement a week, and if you're counting in the millions you have throw-money-at-this-problem options to being tired of all the talking on the phone.
* As Patrick mentioned, tap into your CoC's network of local businesses and offer to host a presentation. This will help you seed an audience - you'll later want to host your own events.
* Go to your local office supply store and get those folders with business card inserts. Print out your slides, and insert them and your business card into this folder.
* Hand folder out to each attendee, and include a strong call to action: "Want to learn more about how your business can best utilize email? Go to bit.ly/xyz and sign up for my FREE email course."
* Try to get everyone in attendance to opt-in to your course. Reinforce your email course during and after your presentation. (BTW, this is MUCH easier when you're running your own events and have some sort of registration system - you can then just auto opt-in everyone who attended.)
* Over the next month, teach them more about email via autoresponders.
* After your course completes, personally email each attendee and ask them point blank how they're planning on implementing the advice you taught them both at the live event and in the email course in their business. Tell them you want to buy them coffee and listen to their plan + give them some advice (note: this is a FOOLPROOF way of securing that first meeting.)
* The general takeaway from this meeting should be, "Wow! I now a LOT more about email marketing thanks to this guy. But hey, I'm busy running my business, and it's obvious this guy knows what he's doing, I trust him, and he's already delivered me an overwhelming amount of value."
As usual, a very useful and thought-out reply. Thanks for taking the time.
As soon as I get over the typical impostor syndrome and realize I have a lot to share in a newsletter, I'll follow your advice :) 'Tis true, "do stuff, tell people" is still the best advice.
One thing I'm still struggling with is how to explain and justify the (otherwise normal but perceived as) high cost of web development to a crowd that's anything but tech savvy. How do you justify your consulting fee? "Everybody charges that" doesn't sit well with me...
Although, I do see a point in making them do the math to figure out how much more they'd make by paying me, but I'm bearish on how many small business owners would actually do so.
I'm no patio11, but I did follow (I think) a similar trajectory. I used my consulting gig to build a nest-egg that I invested in my own startup, which will hit $1.2MM in revenue this year. I wanted to augment his comments with a couple of things that I know worked for me.
> I know networking goes a long way toward such contacts, but it can't be just that.
For me, it was literally "just that". However, understand that "networking" is a vague term. For me, networking was more than just showing up at social events and being nice to everyone, although that certainly counts. For example, I had a reputation for showing up at my clients' offices any time there was cake (birthdays, etc). It became a kind of running joke with everyone, and always got lots of laughs. But I digress.
Networking is the subtle combination of being present and expressing your value to those who are interested. This does not mean shouting your pitch at everyone you meet. Rather, it means listening to what people say, thinking about the challenges they're facing, then offering your advice on how technology could help them.
> One thing I'm still struggling with is how to explain and justify the (otherwise normal but perceived as) high cost of web development to a crowd that's anything but tech savvy. How do you justify your consulting fee? "Everybody charges that" doesn't sit well with me...
Maybe I'm just being narcissistic here, but my very favorite piece of advice for people in the technology field is "stop selling technology". The person you're selling to isn't interested in buying technology. The world is full of companies selling technology, and the buyer you're targeting doesn't understand any of it. The most successful sales pitches I've been a part of (and continue to be part of) are couched entirely in the language that the buyer uses, not the language I use.
Take a second and internalize that.
The small business owner doesn't have the time to become an expert in technology. They might even think that they do. For example, I would occasionally have a customer ask me what technology we used to build our websites. Some customers would ask about specific technologies: "Do you use 'pee-aych-pee'?" I would always deflect those questions tactfully by explaining that the technology that drives a website are nuts-and-bolts, which we can figure out once we really understand the problem the customer needs to solve. I would say something like:
"As a geek, I'd love to talk to you about PHP, Ruby, and ASP.NET, but I think that might be getting ahead of ourselves. I like to approach technology problems from the other direction. All of those technologies are great, but they're a means to an end, not an end in themselves. Let's talk about what problems you need to solve, then figure out what technology fits best."
If the client doesn't light up when you say that, then you're probably talking to the wrong client. It's very difficult to work with pseudo-experts. They end up meddling too much in the technology side of the work.
Back to the bigger picture, I don't think you're "thinking too small", although you might be thinking of this from the wrong direction. The best way to convince people to do business with you is to sound like them. Use their language. Put a lot of effort in to understanding them (their role, their challenges, etc). Resist the urge to jump right in to technology. A deep understanding of clients' problems will save you, even when/if you make a bad technology decision. If you do these things, you'll never have to justify your price. That doesn't mean that everyone will want to do business with you, but it acts as a natural selector for the types of clients you want to do business with.
The second point here is well-articulated. You don't have to "justify the high cost of web development." This is because you shouldn't be selling "web development."
You are selling a way for them to invoice their clients without Susie printing out 4 different Excel workbooks and walking them over to Accounting. You are selling a way for them to find customers that's more reliable than placing an ad in the yellow pages. You are selling a way for them to find which customers to upsell without Jeff the intern going into the basement and sorting through 5000 file folders.
And so on. Solve business problems, preferably ones that are pain points, and that have dollar signs attached. These are the key.
This kind of post reminds me why I'm still in this community. Thank you for sharing your experience.
True, feelings sell best, business goals second to that. I guess it all comes down to having the leeway to 'fire' the wrong clients.
Sidenote: I noticed your blog mentions Vero Beach, FL. I'll be in the Palm Beach area in February, it'd be great to meet someone else in the SoFL startup scene!
Adyus, yes there is such a method that is scalable. I've implemented it for my business and for clients of mine. It's called Automated Email, and I lay out the step-by-step process for a basic campaign @ http://42insights.com/automated-email/.
Essentially, you identify the types of clients you work best with, create a process for finding them online, finding the right contact people at the company, finding their contact information, then reach out to them via email. It's scalable because you can hire someone on oDesk to follow the process you create. All you have to do then is set up a call with the incoming leads. Happy to answer any questions you have.
I use Campaign Monitor much more than Mailchimp - and whenever I can, I always try to be on-hand when a client sends out at least one of their early/important mailouts, and I direct them to Campaign Monitors real-time map view of opens. You can see their eyes light up (and sometimes their heads explode) as they get a continuously updated view of people's names popping up in a map showing they've just opened the email - and even better when they're clicking on the links. If I possibly can, I try to be on-site so I csn open up one browser window with that Campaign Monitor view, and another with Google Analytics realtime report.
For me - that's usually one of the biggest "Oh, now I get it!" moments I can hand-feed to clients…
Until Amazon stop being US region-only for SES, it's a non-starter for mass emailing; we moved off it when ~ 4,000 sends was taking 2-3 hours nightly, and the flaky Joomla extension sending the mail would bail out halfway through, leaving me to pick up the pieces and resend. Still use SES for transactional stuff, though.
I don't understand why people refuse to pay marginal (<$100/mo) amounts for SaaS services. Look at the miserable, billable time going towards solving a problem that's already been solved by many.
Thanks for the info. We haven't hit near that number yet, we mainly use it for the autoresponder stuff and some simple mailings to a few hundered addresses.
Amazon SES is cheaper, but still pretty expensive at the volume where you'd be paying Mailchimp six figures. Sure, $100k to send emails is a lot, but that's the tier with 300 million emails per month! If you moved that to Amazon, it'd still cost you $30k (Amazon is $0.10 per thousand emails).
It's their business and they have every right to price it the way they see it fit, but when there's something deceptive going on, as an end user I think I have every reason to point it out.
For example, when you start with a free plan and you decide to upgrade to a paid plan, you actually need to go about 5 levels to actually get over 2000 users! And it's not pretty cheap either. I mean $100k to send just emails? (Keep scrolling down)
I once used them when Feedburner bailed out on us, only to never look back at these monkeys (that's their trademarked mascot) and I rolled out my own basic solution on my VPS in just good old PHP (with Wordpress) and it worked well. And I definitely didn't spend $5 for 50 emails, just $20 for my basic Linode.