- What are the main distribution channels ConvertKit used to grow?
- ConvertKit Business Model Explained
ConvertKit is an email marketing tool that monetizes with three main subscription plans based on the list size. For instance, an email list with 0-1k subscribers goes for $29; 1k-3k subscribers cost $49, and 3k-5k cost $79. ConvertKit reached a milestone of over $1 million in monthly recurring revenues, in March 2018.
ConvertKit recently announced a significant milestone, $1m in MRR. Not bad for a startup which was bootstrapped by its solo-founder, Nathan Berry. In fact, Nathan Berry set out a challenge, which he called Web App Challenge, back in 2012. He didn’t know what to launch; he only had one objective: make $5k in MRR.
That is how ConvertKit started out, and here you can read the whole story:
What are the main distribution channels ConvertKit used to grow?
Along the way ConvertKit mastered three main channels:
- direct sales
- affiliate marketing
It all starts with direct sales. If you don’t have customers, there will be none referring you.
When Nathan Berry launched ConvertKit, after almost two years into the project, growth wasn’t picking up. Instead, it was slowing down at the point that he was advised to shut down the company. Yet he decided to double down, invest part of his savings from previous online businesses and started to dedicate to the project full-time (in fact, he was only devoting part of his time to ConvertKit).
Among the initial strategies he was using, there was content marketing, blogging, and social media. However, those strategies didn’t bring ConvertKit far in terms of growth
What direct sales tactics did Nathan Berry use?
It can be broken down into three main parts:
- cold email
- Skype demos
- super-organized follow-up
Cold email template Nathan Berry used for ConvertKit
Is anything frustrating you with MailChimp?
The reason I ask is I run ConvertKit, which is an email marketing platform for professional bloggers. We’ve got a lot of great bloggers using us like Katie and Seth from Wellness Mama, Pat Flynn from Smart Passive Income, and Chris Guillebeau.
I’d love to hear more about how we can build it to better serve bloggers like you.
This is how Nathan Berry reached out to potential ConvertKit users. The next step was the Skype demo.
Skype demo to remove the biggest objection
At the time jumping on a Skype call was a way to understand what was the main point of friction ConvertKit potential users had. In fact, as Nathan Berry describes:
Most early sales conversations ended with the lead saying, “ConvertKit sounds great and I love what you’re about, but… switching email providers is so much work. Sorry, it’s just not going to happen.”
Ouch. Just when I thought the conversation was going so well.
Then out of a moment of desperation I said, “It’s not that much work. I’ll prove it to you and do it all for you. For free.”
A little startled, they agreed. Then I realized that’s the silver bullet. The prospect placed all their possible objections on a single thing: the cost of switching. So with one offer I could remove that and make them so much more likely to switch.
This turned into a service that we now offer many times a day: concierge migrations.
Basically on any account over $79/month (5,000 subscribers) we will move them from their old email tool over to ConvertKit for free. That includes FTPing into their site and switching all their opt-in forms, signing into MailChimp (or another tool) and copying and pasting over all their automated emails, and finally exporting and importing all subscribers to keep any tags or segments.
It’s a decent amount of work, but we can do it pretty quickly. More importantly, the churn on accounts that go through a migration is around 1.5% rather than the more typical 5.5%. So it’s definitely worth the initial work up front.
In short, conversations are instrumental in understanding what is the main point of resistance and acting on it. When Nathan Berry realized there was one central point of friction (too much work in changing email provider) he set up a “concierge migration” that allowed his potential customers to switch to CovertKit for free!
Follow-up system used by Nathan Berry when growing ConvertKit
When you follow-up you will often say over and over again the same thing. Don’t do that. Instead, find something useful for the person you’re following up with. As Nathan Berry explains:
If your follow-up emails are just, “Hey, I haven’t heard from you, can we talk?” You’ll probably never get a response. Instead find some way to help them. It could be an intro, feedback on a recent project, a tip to fix something, or a tactic that’s recently worked for you. But don’t just keep sending them the same “Hi, hi, hi let’s be friends” emails.
Also, initially he didn’t use any complicated or expensive software. Instead, he used a Trello board to track all his conversations and make sure he wouldn’t lose a contact anymore:
Once you have is mainly about customer success. Once you managed to get into a small niche, most people will know each other. Therefore, you will have to make sure those people are happy enough to refer your service to more people in their community. This is the power of word of mouth, which of course starts from a consistent direct sales strategy.
Affiliate marketing to amplify growth
Once growth picked up for CovertKit, Nathan Berry started to experiment with affiliate programs. As most of his initial customers were professional bloggers making money with affiliate earning, he thought it made sense to amplify growth by offering them a 30% recurring commission. People like Pat Flynn contributed a lot to ConvertKit growth. Of course, affiliate programs don’t always make sense. In any case what makes sense is to understand whether your customers can also become your distributors.
ConvertKit Business Model Explained