We Discuss The Future of Hosting & WordPress With One of Its Leading Community Members
Chris has 20 years of consistent senior-level software management success, he been a key member of corporate management, software development, and product teams.
He has been driven by challenge and motivated by the opportunity to add value. He managed development teams filled with people smarter than me, and yet motivated and managed them to deliver consistent and high quality work, in corporate and startup contexts.
I’m a seasoned executive with proven expertise in eCommerce, SaaS, and membership/subscription systems, having developed strategies and frameworks for remote & virtual teams, and New Product Development.
I’ve had the wonderful opportunity, over the last decade, to also be a coach and advisor to many of the commercial endeavors in the WordPress ecosystem.
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Announcer: Welcome to the WP-Tonic podcast, where each week Jonathon and his cohost interview the leading experts in WordPress, e-learning and online marketing. Jonathan, take it away.
Jonathon: Welcome back folks to the WP-Tonic show. It is episode 494 yes, we’re getting close to the big 500, I didn’t think we could have lasted that long. I’m really proud of my tribe. Listen to me for 500 it was you’re a masochists at heart, I can tell. We’ve got a great guest actually. I’ve been looking forward to this conversation. We got Chris Lema on the show and he’s been a member of the WordPress community for a long time and a great member of that community as well. So first of all, we’re going to let my cohost introduce his self. Adrian, would you like to introduce yourself to the listeners and viewers?
Adrian: Hi everyone. My name is Adrian. I am the CEO and founder of Groundhogg. We help small businesses launch their marketing automation strategies.
Jonathon: It was a great product. And Chris, would you like to introduce yourself to the listeners and viewers?
Chris: Hi there, my name’s Chris Lema. You can find me at chrislema.com. I’m also the VP of products at Liquid Web and Nexus, our liquid brand that focuses on managed WordPress, management commerce and management Genta.
Jonathon: Oh, that’s great. And I just want to mention a couple of great sponsors that really help the show. First of all is Kinster, Kinster the hosting. I’ve been hosting the WP-Tonic site with them for the past couple of years. They’re a great hosting company. They use Google as their platform. What you get is a great interface, great technology all the bells and whistles, not only for yourself but for your clients. Plus you get some really great support. They’re really dedicated in their support to their clients. When I’ve ever approached them, I’ve always talked to somebody straight away that really knew their stuff and really tried to help me. And that makes a big difference to some hosting providers where you get the opposite experience.
Jonathon: So if that sounds great, go over to Kinster and tell them that you heard about them on the WP-Tonic Show. So let’s go straight into it. So Chris how in general do you think the WordPress community is doing in 2020? Obviously we’ve had the virus that’s really affected the community considerably. But in general, do you think people are busier the same as last year or a lot of people struggling?
Chris: I think if you look at product owners, I think depending on what segment of the market they were attacking, some of them are thriving more than ever because people are trying to get online, they’re trying to spin up things and they need tools to do it.
Adrian: In particular the LMS community.
Chris: For sure. I think you have other product companies that are struggling if they were not considered essential to what you were doing. And so people are tightening their budgets and turning off, you know, auto renews and just saying, I just can’t afford to spend money there. And then agencies, I think we’ve seen again, a mix. All of this is just, you know, different parts of the market. Micro agencies, freelancers, have taken big hits and seen a lot of customers just say, hey, sorry, depending on what industry they’re in.
But if you were building websites for travel related stuff, its game over, right? I’ve seen a bunch of agencies and micro agencies, small shops, three, five people freelancers who are really struggling. At the same time we’ve seen other slightly larger agencies that maybe two thirds of their customers have closed down. Well, one third of their customers have gone bananas, right? If, if you’re, if you’re a customer with say I live in California, if the California state government is your customer, everything is online.
You want to put every possible group and all the forms and everything else you want to get it online so people aren’t coming into the building. They’re pushing budget at that like crazy. Or if you are a company that had done some marketing and now you want to double down because let’s say you did all your, all your stuff in events, your budget for events just zeroed out.
You’re not sending people traveling anywhere. They’re not going to those events. You’re not getting your name recognition at those events. So they’re pushing into other forms of marketing spend. And so people who are doing Facebook ads or creating landing pages or building funnels, we’re seeing some of them really take off. So all in all I think I would say it’s kind of a 60/40 split. I think 60 are hurting, 40% are doing better. I think that or maybe it’s 70/30, but it’s kind of like who targets what industries and what segments and that’s kind of how it’s playing out.
Jonathon: Yeah, I totally agree with you. I think that’s a great insight and thanks for that summary and I totally agree with it. Over to you Adrian.
Adrian: You mentioned some product people, I’m a product person, and I sell WordPress plugins. And you started off the conversation with some are doing really, really well and some are not doing so well, especially if their business is considered nonessential to the bottom line. And before the show we were talking, you had just started to introduce a free plan into your liquid club managed through commerce process and your hosting company.
Now I went to Cabo press last year and it was an amazing experience. One of the things I learned that I was basically just wiped free from our commercial website. And I went home and I did that and immediately saw an increase in sales and it was one of the greatest decisions I ever made. Now it’s almost like we have to revert back and like, hey, listen well if we’re no longer considered essential, how big of a role do you think that free is now playing for the product market space?
Should businesses who were traditionally, not free be really starting to consider, do we revert back into, offer a free plan? Do we offer a free trial? How important is that long-term now?
Chris: So I think the issue is the conversation that we had in in Cabo was there were two studies that were done now about two, three years ago where it was membership sites. People were paying recurring monthly fee and two of these membership sites were, or two of these studies looked at membership sites that were zero. They were free memberships and they told their customers, they notified the customers that they were going to move from zero to $1 a year, right? $1 a year is not a lot of money. I mean like just about anyone can pull together if the quality of content is there, $1 a year you could do.
What they discovered was between 25 and 35% of the customers across all these different sites said no. Quit canceled. And that is the interesting dynamic, is that there’s some group of people that when they sign up to your forever free plan, they have no intention of ever spending with you. And that is what we call a tax. That’s a tax on your system because they’re still calling in for support. They still want help, they still have issues and they’re making product requests. They get angry when something doesn’t happen.
So my recommendation to most companies is started a dollar a year. I don’t care. Like whatever you want to do, just don’t do free because free and especially free forever means you’re just going to get a higher cost of service to deliver to customers who have no intention of ever spending a dollar.
Now, that’s very different than a time-based window of free. So a free trial for 14 days is a tool for onboarding. It’s a tool for saying, come check it out. A nexus it’s a liquid web company, but it’s where we’ve moved our liquid web managed WordPress and management commerce. At nexus where we do this and we just launched this middle of last month. We launched this free trial, 14 days and I made one big mistake. I didn’t think it was a mistake. If you had asked me, I would-
Adrian: All big mistakes started out as great ideas.
Chris: If you’d have asked me up until the day that I learned it was a mistake, I would have died on the opposite Hill. What we did was we turned off access to SSH access. So first of all SSH access, it’s somewhat of a technical dynamic. Like it’s not-
Adrian: Very developer. Even me, I’ve been a developer for several years and even I tried to avoid it as much as possible.
Chris: You just not going to have a lot of end users who are like, I need SSH access so we turned it off. Also, and you’re doing a free trial you can have bad actors that literally spin it up and then accessing the box and then drop in malware or whatever and use it as a vector into other attacks. And just use, use a bunch of these free trials. So we said, okay, no we’re just going to close this down. I never thought that’d be a problem. In fact, I thought it was a really good idea and I landed on the side of saying, yeah, we should do that.
So we did it and turn it on, and I think the first report of an issue came in about six days into it. Now six days into a launch you know-
Adrian: That’s a long time.
Chris: You’re just like I don’t know it’s random. Like whatever. But it was a customer that has only been with us three days. And after three days, the customer had test enough stuff, and said how do I migrate my site to here? And our migration tools use SSH and our migration tools require that you give it the login, the password or whatever we show you in the display to bring it over. In my wildest dreams, I didn’t expect that people after three days of a free trial were going to say, I want to move my side over here.
Because, first of all, if you know anything about the hosting space, people don’t move their sites just randomly. Second of all people-
Adrian: It’s a very like, educated decision that they make.
Chris: Yeah. And if they go try something, I imagine they were going to try for 14 days and then we have emails that say it’s time to make a decision and then we’ll open up things and we’ll show you that. Three days in. And what’s crazy is we got the first report, I think it was six days in, we got five more reports on day seven, another five reports on day eight. Like all of a sudden you’re like, oh my goodness. Like we saw a market that said I’ve seen all I need to see. I’m feeling the performance immediately. I want to bring my site right away.
So of course we went back and said to the engineers, I got to expose this now. And I got it because people need to be able to migrate in and we released an emergency change and suddenly it’s there for you. So, I think what you learn is forever free plan is not something I ever recommend. I think you’re going to end up with a weighty tax. I think it’s not worth it. But a limited free trial to get someone on board and get them to experience it is a great on-boarding tool.
You just have to manage all the different dynamics related to it so that they can have a really smooth on-boarding. Now, beyond that, I will tell you there is also another benefit of doing something that may or may not be free, but is a heavy discount. In these times a heavy discount on a timeline.
So Groundhogg offers it to me for a dollar a month for the next four months. After that, it kicks back into normal price. But it gives me enough time to check it out, experience it, put it into use, and then I go, okay. I mean what we’ve seen with companies that have very, very low or even free plans, is that if you start using these things you are able to turn something that may not be mission critical into something mission critical.
Groundhogg of course, is a great example of this, right? Where you’d be like, listen, you haven’t been sending out these emails, you haven’t been doing this ongoing, you haven’t been making these changes, but that’s because you haven’t ever done it. You don’t have tools and you don’t know how to do it. But if I get you to do it and I show you to do it, and you start seeing the benefit of doing it, suddenly it does become mission critical. You can’t live without it.
Chris: So if you give yourself enough time, a dollar a month for four months. At the end of four months, you send him a note saying, hey, if this hasn’t gone well and you’re not happy, if you haven’t seen any return on all this stuff, we’re fine to say, let’s just wrap this up and click this button and we’ll cancel your account. If you’ve discovered that this is life giving, and you’re amazed at the leads that are coming in, and how you’re following up with people you’re closing and converting more. We want you to click this button and we’re going to, or we just want to let you know that next week we’re going to push it into the normal plan and here’s what you’ll be paying.
Adrian: And by the way, I just want to mention this is not only applicable to product companies, this is applicable to service and course businesses and membership companies like across the board, right?
Chris: Absolutely. In fact, it’s even for services, right? You could, let’s say you have a maintenance care plan and you do product updates for people’s WordPress websites, for example. And let’s say its $99. Do you want to go get some new customers? Make it $12. But $12 for four months Or $9 for four months. And you’re saying, yeah, but Chris, that costs me. And you’re like, well, hold on a second. You can even limit it to a certain number of customers. Because you know you have staff, your staff has workloads, they also have capacity. That extra capacity is sunk costs. You’re already paying for their salaries. You’re already paying for that. So you have this window of sunk cost where you can say, I could probably bring on another 50 customers. Okay, well then go do it.
And just give them a discount for four months and then pop it back up. Some people will leave, other people will stay, but you have gotten the volume, right? Most of the time the biggest issue is getting people to crosses from not paying to paying. Not, okay hat happens later when they’ve gotten enough value? Now, if you’re not giving them a lot of value bounce, when you push the prices up. But if you’re giving them great value, you’ve just lowered the bar of entry to make it easier for people to experience how awesome you are. And then they’re like, oh my God, yeah, fine, charge me. I love this. I can’t live without it.
Adrian: Just before I throw it back over to Jonathan, by the way, thank you for that. What do you think about premium products or premium services going or offering some sort of freemium model? This is my own business model.
Jonathon: Well, it’s a sucker question because you know how I feel about freemium but-
Adrian: I do.
Chris: Don’t do it people. It’s fine you could do freemium. What I tell people is if you’re going to do freemium, you need to know two things. Number one, you need to know all your numbers. So if I walk up to a guy who’s doing freemium and I say walk me through the unit economics and he looks at me funny like what’s unit economics? I’m like, you’re dead. You might be dead in a week, a month, a year. I don’t care.
Jonathon: You better give a quick outline to some of the listeners what freemium means.
Chris: So if someone’s doing a freemium plan, what they’re doing is they’re saying, I’m giving you a product that starts at free, and then I give you a way, when you want additional features or additional access or additional users, some metric is going to tweak and you’re going to move up to a paid plan. And then that will tweak again and you’ll move up to another paid plan. And that’s fine, and I don’t like it. I don’t think enough people do the math homework so-
Adrian: That’s probably true.
Chris: Unit economics is an understanding of both your fixed and non-fixed costs to deliver that service, whether it’s your hosting and whether it’s the cost of licenses you pay. All of that may be a fixed if you’re uncertain kinds of infrastructure or it may be very dynamic. But also on a per customer basis, what else is involved? And it includes your marketing, includes your sales, it includes-
Chris: Yeah, your support, which is a big one. So the first thing you have to understand is what your profitability on a per unit basis is and where does that change and how does it change? The other is you have to know your conversion. You have to know what are the conversions rates go from zero to your first year. Your first year, and your second. You got to understand that conversion because that’s going to play into understanding your cost of sale. So, anything I spend to win that deal, right? I worked years ago with a customer that had a freemium and he’s like, I don’t pay anything. You don’t pay anything to get customers. No, I don’t pay anything.
They come, they sign up for free, and within a month, 20% of them shift over. Right. It’s just brilliant. I don’t know why you hate this. I go, you don’t pay anything? Like you just get free customers? He said yeah. Okay, well let me ask you a couple of questions, right? Like, do you do any ads anywhere? Yeah, but that’s not related to this. Do you have a partnership that brings you leads? No, but we have these guys. Oh, do you pay them affiliate fees? Well yeah, but out of the profit. Stop, these are all costs of sale.
Anything that is sales and marketing is your cost of sale. And just because you don’t connect the dots doesn’t mean the dots aren’t there to be connected. So if you know your unit economics and you know your conversion and it all says, yeah, it’s good, like this is good for you, you should do this. I’m all for it. Go do it. If you don’t know those things, not a big fan.
Adrian: Thank you for that. I think that’s pretty insightful for anybody who’s trying to figure out how to satisfy the market need now the fact that everybody’s kind of tightening the purse strings a little bit. Thank you for that. John?
Jonathon: Yeah. We’re going to go for break folks and we’re coming back and we’ve got a great discussion with Chris Lema. We’ll be back in a few moments.
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Jonathon: Coming back. Chris has given us some economical lessons about how not to go broke.
Adrian: I feel educated.
Jonathon: Yes. Well, you know if you talk to Chris of Lifter LMS that’s how they base their business. But I agree again.
Adrian: Chris knows his numbers though.
Jonathon: He knows his numbers but I fundamentally agree with our guests.
Chris: And just to put a fine point on it, go ask Chris how many different pricing plans and how many different models he used until he got to the one that he’s at today. Because it’s not the one he started with. What he has-
Adrian: I was the same way, yeah.
Chris: What he has today works because he went through a whole bunch of different options and tweaked it a bunch of different ways. And I think even he will tell you he lost a lot of customers in that learning, right? Because he was, oh, now we’re going to charge it this way. And people are like, what? And they all left. And then even if he changed it and pivots again, it doesn’t mean they all come back. So it’s a very hard lesson and it’s never, Oh, I’ll just do this and it’ll work and I’ll just make money. Often it is painful.
And I will say if it hadn’t been for the product and how it was done and what they do I don’t think he would’ve survived two or three pivots. Right? So kudos to them for what they’ve done and how it’s worked. And that’s fantastic. But it doesn’t mean that if you’re starting today and you look at Chris and you say, Lifter LMS does it, I’m going to just copy them. You’re in for a world of hurt if you’re not in the exact same context, same industry, same business, and same dynamic. Because you’re going to go do it in a different realm and then discover, oh, I got to do my three pivots and then, oh, they never came back and now I’m dead. And that happen a lot more then pivoting two or three times getting the right price model and saying, okay, now we’re working.
Jonathon: Pricing is a nightmare isn’t it? So are there a couple WordPress companies, plugins, whatever, that come on your radar recently that’s got you excited? And the individuals or the company, you think they’re doing something that’s really original or, the way they’re just doing business, you think that’s the way to do it?
Adrian: Anything revolutionary?
Chris: Yeah. I think there’s several and when you don’t get the questions in advance, you’re just kind of like, oh, off the top of my head okay, let me get you an answer. So I’ll tell you right off the top of my head, the first one is a company called Stradic. Stradic made the news recently in that they just raised a pretty big round and they raise that round even though-
Adrian: That million dollars or something, right?
Chris: Even though they’re an Israeli company that raised money there, they also raise money out of Silicon Valley. Which is fantastic.
Jonathon: What’s their name?
Chris: Stradic. We actually featured it on the round table before.
Jonathon: Yeah, but I’ve interviewed the CEO, the lady.
Chris: Yeah, Miriam?
Jonathon: She’s been pushing that, it’s been a real struggle for her, but she hasn’t given up on it, has she’?
Chris: No, they worked on it for several years. They have a fantastic technical team an incredible support team, and what they do is they host your WordPress website. You go in and you use all the WordPress stuff like normal you write posts and pages and all that. You push a button. They run all their magic conversion sauce on it. And in the end you get a static, a website. Highly performance.
Chris: You remove a bunch of the security issues. Because it’s HTML and images and what have you. They’ve just finished integration with gravity forms. So people can use forms, although there are lots of other form tools you could use that are in common tools that are server-less that are interesting now. But I think what they’re doing over there is it’s something Miriam has been working on for several years. The team over there is sharp, the product is sharp.
Jonathon: And I’ve observed she’s a bright lady.
Chris: Yeah. So anyway, that’s one company that’s worth looking at. I think there are several others that are in that same vein of performance. So you likely know the, the company blog vault they have a SAS based backup solution.
Jonathon: We interviewed the CEO two weeks ago.
Chris: Yeah. Our shot is an awesome dude. And what I love about what they’re doing right is because they also have a security product. They’re focused on taking care of all the stuff that you never really wanted to think about anyway. And that is I think at the core of where some of this goes is the early stages of WordPress. Yes, it was a big focus on publishing, but there was also this inside the community focused on tools. Can we build this so we can build this so we can build this for getting the most customers don’t want it to? Like if I can live my entire life without going to a hardware store and buying a hammer and a drill, and then I’ve won in life. Like there’s nothing about owning a hammer and a drill that makes me excited.
Now I happen to own both because every now and then I got to do something in the house. But if I could live life without him, I would, right. I don’t wake up in the Saturday morning going, God I wish I had a hammer. I may wish that all my paintings are hung, but I don’t wish I have a hammer and WordPress community as a whole often because we can build tools easily because we like tools because the platform so open for tools, we get really caught up in building tools. An arc shot isn’t there. And blog vault and their products, they’re not there. They’re focused on the customer doesn’t really need to know all of this stuff. They don’t really want to know all this stuff. How do we help abstract a way, complexity?
It’s a lot of what we do at nexus and liquid web. We’re trying on the same hosting level to add layers of product to the hosting so that you can abstract away and not think about those things. I think the more you do that, the more we shift the focus from tools to ultimately where people are trying to go, what they’re trying to do. Solutions. Yep. And again, that’s why I think lifter LMS in the end and learn dash and several others have had success is because they are right on the edges of what a customer wants. Which is different than, Oh, what I really want is 16 more plugins that do 60 more features on my website.
Jonathon: Over to you Adrian.
Adrian: What, Oh, I mean I was, I’m sorry. I’m still reeling from just the impact of that last bit there. So let’s talk about.
Jonathon: Usually people just have problems. People just want solutions for their solutions.
Adrian: So if they could click a button and have one of those beautiful Elementor like demo sites just working with all of their content without having to think anything to transfer brain to computer, they would, that’s, that’s a product somebody should build. I could just think it, it should just build itself. That would be ideal. Let’s talk about I’d love to talk just a little about how the liquid web free trial is performing. So you’ve been doing it for a little bit. And I’d love to know just what kind of the effects of that are not only on the success and the conversion rate, but what did, what has the impact been on the resources required to run a successful launch of a free trial?
Chris: That’s a great question. So we one of the other lessons we learned in the midst of this was where do we want to send people when they’re getting towards the end of the free trial. So initially we had spent it up to be pointed to support. Support has a facility to help them upgrade. I mean, they, they have the tools and technology to do it. And then we started digging into how those were going. Again, I just want to be very clear. We’re like two and a half weeks into this, so we’re at the very, very beginning of it.
Adrian: Preliminary results. So everything with a pinch of salt. Got it.
Chris: Yeah. But what we discovered was that these customers weren’t, I’ll just after meeting into the lowest price plan. That’s what we activate for the pretrial. So just to be clear, we did not make a free trial of every tier of offering. We made free trials at the lowest price plan. We gave them the, resources associated with that small plan. And then we imagined that most of them would convert into that small plan if they convert, right. What we saw was support getting more and more questions about, well what about that plan? What about that plan? And so we pivoted so that now the emails connect you with someone in sales. And that was a dramatic adjustment again of saying, I have an idea. I think this should work, collect the feedback and then make an adjustment based on that feedback. Because if I thought, what I really did think was we’re going to get a lot of people who come in who test the free version and then convert to the $19 and sit there.
And the moment someone’s like, no, I want to buy the $500 version. You’re like, whoa. I don’t want the sales guy. I don’t want the support guy selling. I want the sales guy doing that because they know how to do that. No offense to our support team. But I want the sales guys to get involved in that conversation. We didn’t think we’d have that. The early numbers shows several things. Number one we are getting, and we did the first version of this launch the first two weeks, right? So right now things are getting ready to change. It was only direct meaning we just announced it online. We announced it on the webpage, we announced it on social, and that was it. We didn’t we didn’t contact you any of our affiliate network.
We didn’t want to do the indirect yet. We just wanted to test it out. Soft launch, if you will. After two weeks of soft launch, what we discovered was there’s good traction. People are, for the most part, they get to the page, they see the thing and they click the button. Conversions, it’s hard to call a conversion when you’re buying something for free. So just to be clear, I call conversion when they go from free to pay. But the people who are landing on a page, we’re being told about an offer in clicking the free trial has been good so far good enough. Then we said alright let’s give it to our affiliates. Now knowing that I’m going to be paying the affiliate. I’m paying the affiliate when they eventually convert which it cuts into my margin.
But the only reason you do that, and maybe that’s one of the big takeaways here if you’re trying to apply this strategy, the only reason you want to not only cause again, unit economics. If I’m giving you two weeks of a product for free, I have zero margins. I have no revenue.
Adrian: If they don’t convert, then you’re basically out. You know, it costs money to run servers. It does, it cost money to do support, costs money to pay that sales guy to have that conversation.
Chris: So my recommendation is you don’t load up your affiliate’s cause that’s costing money on top of them. So you already know that you’re costing yourself money with a free trial. If you do it for two weeks, your face shifting the revenue potential out too. It doesn’t mean you’re going to get a hundred percent conversion, but you’re phasing it over.
And that phase shift still costs you resources. It costs you hardware, it costs you licenses, it costs you support and it may even cost you to sales. So at that point in our soft launch, we didn’t immediately launch it with affiliates because I don’t want to double down on the risk.
Adrian: I’m sorry, that might not work.
Chris: It might not work. So let’s just try it ourselves and see if we get enough uptakes. That’s the first question. Are people even willing to do a free trial if we get enough uptakes? That’s the first bar you have to cross to let’s get a broader and get all the indirect and our channel to do it with us. That’s the first part. The second part is what level of conversion are we getting? You have to define your bar however you define it.
Like yeah. And that’s often a function of your capacity as well. If I had virtually no capacity in server infrastructure, I would want really high conversion to keep running this forward. Because I don’t want to give away free space when I have so little of it. If I have a lot of free space, my conversion requirement, my bar can come down. I can say, oh, if I get over 20% to convert, that’s a win for us. That’s just another channel for growing revenue. And I’ll reclaim the other hardware back. Now here’s a little tidbit that we caught our standard process when someone spins up a server with us and then use it and then cancels. Our standard is we wait another 30 days before we clear out the box. Cause what if you canceled?
Then you’re like, no, no, I made a mistake. I want to sign up again. You don’t want me to say, well tough, it’s gone. Well, in a free trial, that’s exactly the opposite of what I want. In a free trial if you don’t say yes on the 14th day, I want that stuff zeroed out. No holding it for 30 days. I want it to be cleared off and ready to use for the next free trial again. Which means sometimes you have to change your product, you have to change your engineering, you have to change your operations, and you have to change your policy all to support this new thing. Because initially they’re like, Oh yeah, we can just do it. And you’re like, wait, wait, tell me about this other part. Nope. We’re going to have to change that too. So we were going to launch pre-trials I think at the end of February.
We ended up launching it middle of April probably because there were things that had to change in order to do that. Then, of course, the second dynamic, once you understand that entire same dynamic, what’s your conversion rate? People that are buying so far, we’re seeing a really good conversion rate. So my bar, I’m very comfortable not going to give you all the numbers. I’m very comfortable saying my bar was can I get one out of every four people to say yes. 25% and we crossed that bar. And we cross that bar enough that I was like, okay, time to double down, get the affiliates on board. So this week they’re talking to affiliates, they’ll, they’ll get it launched, we’ll get more people out there talking about it, et cetera. But then you have another dynamic, right?
Because your affiliates, they don’t want one in four. Like and again, we weren’t one of four. We had crossed the threshold, but still, let’s say you’re playing down at some level and affiliate prefers everything to close. So then you get this other component. How much am I willing to defer my revenue y giving the affiliate another coupon that says when your 14 days are over, if you like it, here’s a coupon that gives you 20% off of the list price so that you’re not paying 19 you’re paying 20% less than that. But that differs my margin even further.
Adrian: Because now you’re getting 20% off on the revenue and then you’re paying 20% on that price that the affiliate.
Chris: So then you have to know a different number, which is what’s your lifetime value. How long is this customer going to hang? Because if the customer only stays for three months and I pay all that money out to the affiliate and a discounted on the revenue and the margin, because of the first two weeks maybe I break even or maybe I lose money. But if the customer is going to stay for three years, no problem. I made all the money in the world. Like I’m good. So you have to know your unit economics more than anything else. You’ve got to know your spreadsheets. You’ve got to know your numbers so that you can make those decisions.
One of the meetings I had on Friday last week was saying, Hey I call this affiliate and this affiliate, give them a special deal to elongate a discounted price. And you can, for this one, you can go this far and for this one you can go this far. And the affiliate managers like, are you kidding? That’s awesome. Thank you. I know my numbers. It’s worth doing and their audience will come in and suck this up, so let’s go make it happen. So that’s part of strategy, but it’s a critical, you got to think about all of this if you’re going to do it right.
Adrian: I have so many more questions, but I think we’re going to save that for bonus content.
Jonathon: Yes. I think Chris is up for staying over another 15 minutes which should be able to watch the whole interview on the WP Tonic website or YouTube channel. Chris, how can people find out more about you and your faults and what you’re up to?
Chris: You can find my blog at chrislema.com you can find me on Twitter at Chris Lema. And you can find my products over at nexus.net. I think you will discover that not only is the free trial super awesome, you also discover a course that they performance is amazing. And maybe the best part about it is we spend all our day working with customers that are running LMS memberships and e-commerce stores that need, or sites that need high interactivity, people that are logging in. You want to be fast, even if your cash is turned off. Those are the folks that find our products to be really useful to them.
Jonathon: That’s great. And Adrian how can people find out more about you and what you’re up to?
Adrian: So if you’re looking for help creating the emails series that you’re going to use, and to encourage people to upgrade from their free trial to a paid plan, you can head on over to Groundhogg with two gs.io to download our marketing automation plugin. Which does despite Chris’s advice, start with a free core plugin. And we’re more than happy to help you set up your first marketing automation funnel.
Jonathon: Alright audience, we are going to wrap up the podcast about the show. We’ll be back next week with another great guest like Chris. Giving you insights about WordPress technology, marketing and learning management systems. We’ve got a broad set of interests on this podcast. But it all fits together. We will be back next week folks Bye.
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