By I’m fascinated by the mechanics of startup marketing, customer acquisition, and revenue generation. So when I received this email for my WPEngine WordPress Hosting account (on which Dharmesh and I host inbound.org), I couldn’t help but get curious:
It’s hard to list all the ways this email is a work of marketing art, but I’ll start with a few of the most obvious:
- The title – “Two months of free service…” could have easily been “16% off your annual bill…” – but the former is far, far better. Trigger words like “free,” clarity and simplicity (the title basically tells me the value proposition in a minimal number of words), and makes it sound easy.
- The email itself answers what I’d guess are 99% of potential customer questions (including the p.s. about what happens if you take no action). This means customer replies are going to be very few, so WPEngine can continue having high margins and won’t require a big customer service team.
- They clearly state how the switch will work and exactly how much I’ll pay
- Yes, there is a typo, but I’ll let it slide (“If switch” vs. “If you switch”)
- The nice, short, clean TinyURL link vs. those dynamic behemoths that so often get twisted by line breaks forcing the email to say “if you have trouble, copy and paste the URL below into your browser,” ugh.
That’s right. Literally one click and no data entry to make the switch. It might be the best user experience in an upgrade funnel I’ve ever had.
So naturally, I emailed Jason (Cohen, founder of WP Engine) with my impressed astonishment and he graciously offered to share some data about how they’d built it, the goals, and early results. I’ll let him tell it:
Rand: Fucking genius sir. Can’t believe you managed to make this work with only one click. Color me impressed.
Jason: Dude, I’m just an idiot for not doing this a year ago. However, our billing system before was home-grown and sucky and couldn’t handle it. Now we’re using Recurly so that end of it is easy (e.g. prorating and all that). Then we just wrote up an API call (of our own) to change a customer over with a unique API token thing, and that’s just hitting the Recurly API to change the subscription. Then just wrap in tinyurl so it’s not frightening and we’re done. 🙂
Rand: Anything you feel comfortable divulging about open/click-through rates would be cool, and anything related to the overall financial impact would be ideal, too.
Jason: It’s funny, I actually don’t have a lot on click-through rates, but about 3% of the customer base has elected to upgrade (by revenue). I expect more in the coming weeks, and if you count by number of customers it’s higher. Of course the more expensive the account the less likely a pre-pay is even an option.
The financial impact is pretty interesting, and of course will vary based on the other numbers in the SaaS company in question. As I know you know very well, the faster a SaaS company grows the more cash has to be deployed “in process” just like inventory in a hardware company, and therefore getting the prepay offsets those costs and eliminates the ensuing cash-flow issue (for those customers who opt-into that).
While I’d have expected slightly higher (and it will probably go higher over the next week, since this was just launched), the cash on the balance sheet could be a huge win for a startup seeking to postpone fundraising, beef up a bank account to prevent debt issues, or make a quick investment.
The takeaway for me is to work on upgrade and billing paths until they feel just as seamless and elegant as WPEngine’s. I know Joanna and her team are already thinking about this.
p.s. All of my experiences so far with WPEngine have been close to this good. The service is just incredibly solid and well-architected. If you’re seeking WordPress hosting and are willing to pay a bit more so your site doesn’t crash/get hacked/have scaling problems/etc, I highly recommend them.