This interview features hardcore SaaS conversion rate optimization (CRO) tips, tricks and strategies from a 25 year direct response advertising veteran. Anne Holland is a direct response marketing genius, and her ideas about optimizing your pages and campaigns for conversion are backed by tons of data, and might surprise you.
First, some background information about Anne Holland.
Anne is the publisher of WhichTestWon.com, a site that features A/B and multivariate testing case studies from over 170 real life A/B and multivariate tests conducted in a variety of niches and industries. Anne has over 25 years of experience in the paid content industry, and is a seasoned direct marketer with a keen sense of what works and what doesn’t with selling subscription content. Anne is also the publisher of SubscriptionSiteInsider.com, an online publication that aims to help executives grow subscription content profits.
Although Anne’s primary experience lies in marketing subscription content, the insights she shares in this in-depth and revealing 60 minute interview are directly applicable to SaaS executives and marketers who wish to increase traffic, conversion rates, retention and lifetime value while decreasing churn and payment processing issues.
So strap on your seatbelts and grab your pens - you’re about to walk away with a treasure vault of insights, strategies and tactics to increase conversion rates for your SaaS products.
Dan:
Hello Anne, it’s nice to meet you today.
Anne:
Hey Dan, great to meet you too.
Dan:
Let’s dive right in today. I’d like to talk to you about a bunch of things related to Subscription Site Insider, and also things like search engine optimization (SEO) and pay-per-click marketing (PPC) for people who might be interested in starting their own membership site.
So why don’t we get started by you discussing your background and bio, and how you started Subscription Site Insider.
Anne:
I’m lucky, I actually started out as a marketer for paid content back in the 80s, so I have actually been in the paid content industry for 25 years now. Back then we were all doing direct mail trying to get subscribers that way. I worked on business to consumer (B2C) and business to business (B2B) titles – everything you can imagine from literally the Economist magazine to the Oil Daily – all sorts of titles. Then in 1995, for the company I was working for at the time, I launched one of the world’s first PAID subscription sites – this was back when everyone was saying do we sell advertisements, do we sell content, what do we do? We were testing all these things pretty early. At that time we went to the National Press Club of the site, and we had to explain everything to them, such as: “What is a web site”?
In the year 2000 I decided to get out of corporate America and launch my own company. I was very inspired by all of the entrepreneurs back then. I started something called MarketingSherpa which was a research firm. We researched what worked in marketing. So, we did all sorts of benchmark reports and events, in person summits, and we ultimately launched a membership site as well. I sold that in 2007, took a little time off, and then I went nuts and started my next company. My next company also is a media company because that’s my industry, and it’s called Anne Holland Ventures – ‘deep creativity’ on that name (laughter). We also publish paid content. It’s always been my career and my love.
Dan:
Anne, I’m really curious to know something. You mentioned that you had started out doing direct mail marketing to sell different types of content. We have all gotten things like the Columbia House Record Club, America Online (AOL), and all these different mailers. What did the paid content industry look like in the very earliest days?
6:10
Anne:
There has been paid content since people sold newspapers 150 years ago. When I started in the 80′s it was a REALLY exciting time because the personal computer had just taken off, and there was suddenly something called “do-it-yourself” publishing where you could be a “self publisher”. That was brand new then. And what happened was the traditional media – Life magazine, Business Week magazine, and the newspapers were pretty much the only people publishing subscription content out there.
And suddenly, in the early 80′s, all these guys started publishing what they called subscription newsletters – literally out of their garages and second bedrooms. They were trying to sell subscriptions using direct mail pieces, trying to see if they could make money with it. And I worked for one of the guys who was one of the first people in that industry, his name is Tom Phillips. He started out with one little print subscription newsletter that he wrote himself, and he would send out direct mail pieces (mailers) hoping to sell subscriptions, and he built it up into a more than $250,000,000 empire. It was incredible! In the late 90′s when I was leaving he was divesting, and it was this huge giant thing. He had 60 different titles in every industry you could name. He owned everything from PR News to all these advisory and investment advisory newsletters, health advisory newsletters, Dr. Sinatra’s health letter, airport newsletters, and it was such a cool thing. So whe you talk about all these niche membership sites and niche subscription content that’s happening online on the web now there is a huge history from the self-publishing revolution, with the exact same thing happening in print, it just happened to be in print back then.
Dan:
That’s really interesting to hear. I wanted to dive into the nitty-gritty about where all that stuff started, My father is a financial planner and has been for 30 years, and he was subscribing to various investment newsletters and stock tip newsletters.
The next question I’d like to ask is: in these large universal niches such as weight loss, dieting, relationships, or personal finance we keep seeing certain unique spins, twists, and angles on the same old themes. Going forward do you think there’s still room for unique spins, twists and angles in these niches for potential membership site owners?
Anne:
Huge.
We used to say in the publishing world – health and wealth. If you can launch a product for health or wealth you’re gonna make money. It’s insane all those old newsletters you mentioned your father used to subscribe to, there are more than 1,000 subscription titles out there just for stock tips, trading tips – for consumers, and there’s hundreds more out there for professionals. It is insane. I’ve got friends, for example, who used to work with me at Phillips, who now work for companies like Forbes Online, Motley Fool, and places like those. If you go there you’ll see they’re constantly launching new newsletter titles that are online. It’s either online, or it’s delivered via PDF. There’s just a constant flow of new ones. The other cool thing to realize, and maybe this is something that you hadn’t realized, is that consumers who tend to buy content around a particular topic tend to buy more of it.
Your best email list, the people who are going to be most likely to buy your subscription product are your competitor’s customers. That doesn’t mean they are going to leave your competitor, it means they are going to buy your product also.
Dan:
That is an insight that sounds like it’s been backed by data in terms of your own experience. I would have never thought that.
Anne:
And of course anyone from the classic subscription world knows this, and that’s why when you go to conferences where they all hang out, you’ll see them all doing deals. No one’s listening to the speaker. They are all in the hallway, and they all say: “Ok, I will swap you 5,00 names, I’ll swap you 10,000 names”. They are doing list deals. They are doing cost marketing deals such as cost per action or cost per acquisition deals. They are all affiliates of each other.
Now one other industry that knows this is frankly the adult content industry. They are all affiliates of each other, because somebody who buys on one site is going to buy on another site. Content buyers are content buyers.
Dan:
Ok, so everybody’s doing deals, everybody’s cross marketing.
Anne:
Your competitor is your friend.
Dan:
So that just makes me think that growth by acquisition is, you are just growing the lifetime value of the customer if you have multiple purchase points for that customer.
Anne:
Once you do get a customer in some of the ways that you can grow that lifetime value include selling that customer additional content products. For example, let’s say I buy one newsletter from Motley Fool. They will try to cross promote (cross-sell) me to their other newsletters. So they are going to try to turn me into a multi-buyer. Or, a lot of membership sites will try to upsell you to a higher level. Maybe I joined at silver, and they will try to convince me to upgrade to gold. You could also go to a competitor and propose list swap or exchange deal where you offer to market their product to your list, and they will market your product to their list. This tactic gives you more leverage.
Dan: (12:40)
Obviously niche selection is something that’s very important. In the books I have read the experts mention that people tend to get niche selection wrong. You had just mentioned health and wealth. How does one reconcile passion versus profits. Let’s say you are passionate about skiing. Are you better off just going into the health and diet related subscription content product that you don’t really care about, or are you better off to stick with skiing. Do people have enough of an extreme passion to create a viable subscription content business around skiing where they can create a set of products and revenue streams that would make forming a lifetime relationship with a customer to be profitable, viable and sustainable?
Anne:
You actually have 2 questions there.
One of them is a psychological question as an entrepreneur. When you are launching a site or a product or a company it is going to eat up every single hour of your day and night. You are sooner or later going to get a little burned out by it. So if you launch into something that is your deepest passion in life, that can help because you don’t mind. You know, you love skiing so much you’re thrilled to create content. But, it can also burn you out on the topic of skiing, or ruin skiing for you for the rest of your life.
I have a personal passion for real estate. That’s my hobby. I love it. I would never launch in that niche though because I don’t want to get burned out with my hobby. I want to have that enjoyment for the rest of my life. I’m going to launch in different niches that I also love, but it’s less of a personal passion.
You do have to really enjoy the niche you’re in, otherwise you’re just not going to be able to do it. If you’re just doing it for the money people aren’t going to respond.
(14:05)
To answer the second half of your question, how do you know what angle? let’s say you decide to go for skiing, how do you know people are going to buy something, and that you can create products that will sell? To do this you actually have to turn your passion off and say: “I am me, I am not my prospect”.
It’s the biggest mistake that most people make. They think: “I’m crazy for skiing and I know what I would want in a subscription site, and they go out and build what they want to build. The problem is this – who knows if the marketplace wants that.
Research, research, research.
You can take a niche, or even take a couple of niches and do a hard hitting market research project before you launch anything. Talk to the actual prospects. Find out what their pain points are, find out what gets them excited, find out what doesn’t get them excited, find out how many of them there are. Don’t ask them how much they would pay – they don’t know. But do ask them what kind of content they are buying already. Are they spending money already on content, information, classes, courses or programs? They are not going to be able to tell you how much they would pay for your product – they cannot. You learn that later from price testing. But you are going to be able to learn if they routinely buy content or buy association memberships or subscribe to journals or magazines or go to conferences.
EVIDENCE FOR SPENDING
Do you get any magazines, newspapers or journals? Do you subscribe to any paid content sites? Do you belong to any clubs? Find out what you need to find out. We just literally came out of a 3 week market research process because we wanted to launch a new publication this year. We’re thinking about June. We now have an in-house staffer whose job it is to do this research on niches. He researched 3 completely different markets. One of them was veterenarians, one of them was doctors who own private practices in the US, one of them was internet entrepreneurs with companies that are worth $250,000 to $5,000,000. Those are really different markets. But we had an idea for a publication, we thought the markets were pretty good. He did in person interviews and sometimes phone interviews with the actual prospects themselves. He talked to consultants who serve those people who have a good overview of those people whether it’s a lawyer or an accountant or a business broker and he also did just a lot of general research into the finance and existing publications as well as internet usage and all of that. It was amazing because the market we though we were going to launch in ended up being a total loser. Now I can’t tell you which one we’re going to launch in, but the results of the research shocked me. I thought I knew what I was doing, and it’s always critical to do this research before you launch anything. Anything! It only took this employee a week per market to do the research. He made his calls, he talked to people. You also get your SEO work done then because through the conversations you learn about the words they use when they talk about themselves and their passion, and these words are often really different from what you would use.
Dan:
That’s very interesting to hear all that. I would be very curious to know, you have obviously been in business for a couple of years with Subscription Site Insider. I would be curious to know what you’re willing to reveal in terms of your overall sales funnel in terms of your front end, mid-level and backend – whatever you’re comfortable revealing. If nothing, then that’s fine.
Anne:
We have a classic sales funnel in that we’re always trying to generate that email name, but we want a name from that person who is the perfect qualified prospect for us. We tested out a bunch of different ways to get the word out to different demographics when we first launched. We tried everyone from folks like Stompernet to folks like the specialized information publishing association, so we really ran the gamut. Magazine publishers, we work with the Newspaper Association of America. We work with all different groups who are interested in paid content online. And we learned out of that not only the types of people that were going to convert, but then what types of people would stick. As a subscription publisher what you’re really interested in is lifetime value. We had to figure out who were the best ones, and that took about a year to figure out who was really, really, really the best out of real life. We also adjusted out pricing. And then we went out there and built a blog to attract them using keywords, and we began to build the marketing alliances with the people who are just in that niche. You’ll see a new homepage on our site in a week in a half. Adjusting the site to use verbiage and important branding messages that we would want. For example, right now it says on the web site: ‘Get information to help with your launch”. We learned that people who are planning on launching something make terrible subscribers because it’s just too much information for them, and they aren’t ready for that much information. They aren’t ready for the high level, amazing, detailed information about how to run their paid content business. They always get overwhelmed, and they’re not ready. They’re not in it yet. We learned that you really have to be in business for about a year to take advantage of what we offer, and to stick in our member forum. I mean, this is a community of peers (NETWORK EFFECT), and not a newbie community. We are really adjusting and tweaking, and we’re about to come up with some major marketing campaigns coming out. We have done direct mail campaigns by post, we have done telemarketing campaigns, very careful telemarketing, we’ve done a lot of speeches at in person conferences such as association conferences, top level publisher events, often in New York or Washington BC, we’ve done some webinars with some key vendors in the field. For example, I’m doing a webinar tomorrow with Vendicia. Vendicia is the payment backend of choice for most subscription sites that I know that are making at least $10,000,000 a year – the big guys. If we do something for them such as giving a speech for free they will tell all their clients about it, and there is an implied referral. All their clients are people we know have money because they are paying for Vendicia, and there’s Vendicia saying: “Wow, we’ve got Anne Holland. You’ve got to subscribe to her site”. Well, they’re going to take that seriously. So I really work with vendors helping them with their content marketing, maybe showing up at their user conferences, giving a keynote, things like that to get the word out to just the right people, the people that have money. We also do play nicely with competitors whenever possible, if they’re the type of people that play nicely back, all that sort of thing.
Dan:
Let’s say that there is an entrepreneur out there who wants to start their own membership site. Looking at the bigger picture, the membership site is one revenue stream in their business model where perhaps they’re thinking about also publishing some other information products such as an ebook or two, perhaps a book, and maybe selling some other products. Let’s say that this individual has 5 products in mind. When you take all the different possibilities in terms of purchase combinations on the backend of that, somebody might purchase only product one or only product two, and someone else might purchase product 1, 2 and 5 during the lifetime of their relationship with the company. When you multiply those all together, that ends up being quite a few different purchase possibilities within that person’s model. Is that how you tend to look at things in terms of the lifetime value of a customer? So you know that you have an email subscriber, and you know that 1% of your subscribers are going to buy product 1, 2, and 5. Is that how you set up your metrics on the backend?
Anne:
(22:31)
Gee, I’m not that complex. You’re making it harder than it needs to be. After a while you tend to get a gut feeling about how well each product will sell. For example, I do an annual benchmark report for Subscription Site Insider, and it’s a separate product, and it’s literally a book that you buy and we mail it to you. We have a fulfillment department. So every year we put together this amazing benchmark report. I know that I’m going to make $X,000 from that report. And I know that some of the people who buy the report are going to be my current customers, and we’re also going to get some new people buying the report. The great thing about having an additional product is it gives you the chance to go out and publicize and rent people’s lists or go out to your affiliates with a new message and try to convert some customers which is great. I also know in general out of my total opt-in email list, people who maybe come to my site and sign up for a free offer – we’ve got free offers, a free blog you can sign up for. We’ve got a free 7 step e-course, and all of these are ways that we are legitimately trying to capture your email address. I know that out of those different lists, I know that X% will ultimately convert to subscribers. I have a pretty good feeling of what to expect per product, how much to expect out of the total email list in particular – that’s generally my measurement. Worst case scenario – if I can’t get 7% – 10% of an email list to convert then I’m really in trouble – that would mean I had a dead site.
Dan:
On that note let’s dive right in to conversion rates. In your experience, what are the ranges of conversion rates that people can expect from pay-per-click traffic coming to a squeeze page. What is the ultra low end of what they can expect?
Anne:
(24:36)
Let’s say you’re a dating site – it’s going to be completely different than if you’re an investment site. Let’s say you’re a crappy pay per click marketer which a lot of people are. It all depends on how good you are, how good your landing page is, what your offer is, and how deep your conversion funnel is. A lot of people, especially for pay per click, you’re probably not doing a hard offer – a hard offer meaning pay up front, right away. Maybe you’re trying to get a free trial with a credit card number, or maybe you’re just trying to get an email address and hounding them on the backend. And then there’s conversion rates through each step of that. I can’t give a generalization – that’s too large of a generalization.
On the other hand, if you have an email list that is a true opt-in email list, and these are names that have joined within the last year, and you are routinely publishing good content to them, so they have a good brand relationship with you, they like the stuff, they tend to have a good email open rate – and by pretty good it had better be over 20%, possibly over 30% if it’s B2B, you’re gonna get – hopefully – between 5% – 10% conversion rates with a true opt in email list. Now, there are people who get much better conversion rates, but you also don’t know about their lifetime value. So just because they are getting a higher conversion rate doesn’t mean they have a more profitable business this year, or a higher business valuation in the long term. Some of them have high conversion rates but low lifetime value.
Dan:
so is that 5% – 10% over the lifetime of the relationship, or per email sent?
Anne:
The 5% – 10% conversion rate is over the lifetime of the customer relationship, however long that might be. If I have 1,000 opt-in email subscribers to my beloved newsletter, I would expect 5% – 10% of those people to buy. If my price point is right, if my offer wording is right, if I’ve got a pretty good paywall, if they like me – I mean, there’s a lot of “if’s”, but if I’m doing a half decent job that’s what I would expect.
Dan:
OK. So let’s move from pay per click to SEO. It sounds like you advocate some type of ‘soft offer’ up front, on the front end, for pay per click campaigns. In terms of SEO, let’s say someone wants to start a membership site around the business of wedding photography. How does the sales funnel differ for a prospect who came through SEO versus a prospect who came through a pay per click campaign? Do they differ at all?
Anne:
Hopefully an SEO prospect should convert a little bit better. I have seen that happen. That does mean that you better be looking at your backend and be very aware of the pages that SEO traffic is hitting. Because it probably is not hitting your home page. You know that, right? It’s probably not hitting your perfect landing page that you worked so hard on for pay per click. You need to be aware of the landing page that it IS hitting, and you need to optimize that page. I have seen people A/B testing their top SEO page templates and REALLY getting a better result. If it’s just a random page on your site and you haven’t really worked to make it into a conversion vehicle then it’s not going to do that well.
Dan:
Let’s move to design. We’ve all seen sites like Craigslist – just totally ugly – but it’s consistent, fast, and it gets the job done. Have you noticed any correllation between sites that are slightly ugly but consistent in terms of conversion rates? Do they convert better? Or perhaps the answer is ‘it just depends’ on the niche.
Anne:
Absolutely it depends on the niche, and it always blows me away. Because there are some butt ugly sites out there that I can’t believe are making money. And we’ve done case studies on them. Have you ever been to GanttHead.com? Hideous. It’s a hideous site but it converts highly. The guy who founded it is a friend of mine, I love those people, they’re amazing, they’re doing incredibly well – it is one of the scariest sites you’ll ever see if you’re a designer. But that community, he’s marketing to people who are usually loner tech people, IT people – it’s a particular type of IT person in corporate America who’s kind of lonely in their cube. And apparently, that kind of person LIKES a really ugly page. And I understand that because I’ve actually seen other A/B tests going out to the technology and IT community, and anything that smells like marketing they run from.
Dan:
So it’s the classic answer of ‘it depends’ – you know, let the data do the talking. Some balance between your gut feel and the data.
I read your SMS executive summary from 2009, a PDF that’s available online for folks that are interested in getting some hard data about subscription site statistics.
Anne:
Yes, our first benchmark report.
Dan:
In that report, you obviously don’t give everything away, but you do give away some very helpful and useful information. One of the top things you mentioned in terms of missed opportunities is A/B and multivariate testing. Going back to our ‘business of wedding photography’ membership site example, what are some accessible ways that new site owners can introduce some tests without having to a be a PHD in statistics?
Anne:
That’s a great question. After the first benchmark report we actually did a dating industry report for all the dating sites. Did you know that the average online dating site had DOUBLE the conversion rate of other types of paid content sites? It’s not like it’s not competitive in the online dating space. The paid dating sites are competing with free sites. There’s INSANE competition, and still they’re getting double the conversion rates. The reason is that they A/B test more. They A/B test their brains out. They A/B test every single page you can possibly imagine. Most subscription marketers don’t test at all, let alone nearly enough! It’s clear that it pays off, and yet only something like 30% of American marketers do any type of testing including A/B testing.
If you’re launching a new site you do need a certain amount of traffic to be able to A/B test. In fact, it’s not really about the traffic, it’s about the conversion action. All A/B testing is based on statistically conclusive results. You need a statistically conclusive result to be able to say “which test won”. To deem version A or B as a winner you generally need at least 100 conversions for the testing software to be able to figure out the statistics and data. That’s very rough math, and anyone with any background in statistics would cringe at that, but between you and me it’s at least 100 conversions you would need. However much traffic you would need to get 100 conversions.
(31:35)
Your conversion action might be someone filling in their email address in an opt-in form, or a full lead generation form, it might be a trial conversion, they converted to taking a free trial with credit card. It could just be they are clicking on a button, although I hope you’re tracking a little further down the conversion funnel. Whatever that conversion action is you’re going to need at least 100 people to convert to be able to tell which version of the conversion action works best. That’s only if you have 2 versions that you’re testing head to head. If you have more versions, you’ll need more conversion actions to get accurate data.
To be able to do the math about conversions used to be hell. We used to do this in direct postal mail. We A/B tested our brains out – all the time. Now it’s so much easier. All you do is get yourself a cute little piece of software. All the good A/B testing software is very cheap and/or free will do the math for you.
Dan:
Which resources can you recommend for people, Anne?
Anne:
WhichTestWon.com. You knew I was going to say that, right?
Dan:
I thought you were going to say Google Website Optimizer or something.
Anne:
No. Go to WhichTestWon.com. It actually is one of our publications. It is the #1 weekly on A/B and multivariate testing. Every single week we publish a new real life test. And we’ve got lots of them – subscription sites, ecommerce sites, lead generation sites, all sorts. We’ve done more than 170 of them now. We don’t do the tests. We’re reporters. We’re journalists, and we make paid content. We go out there, we talk to the people who are doing the tests in real companies.
Dan:
So that’s to understand conversion data and which test won, but I was referring to which specific tools people can use to do their A/B and/or multivariate testing.
Anne:
We’ve got a free directory on WhichTestWon that shows the 39 best testing tools. We have a profile of each and there’s even a list by client name. So you can look up who uses who.
Dan:
That sounds like an excellent resource.
Anne:
It’s really fun, and we show the pricing and everything. We also have a list of 80 consultancies and agencies who will do the work for you if that’s what you want. Again, you can see who uses whom, so you can see who their clients are.
Dan:
What are some the biggest mistakes you see with sales funnels and the backends of membership sites right now, and are there any opportunities we haven’t discussed yet that you consistently see being missed.
Anne:
Price testing.
Almost nobody except for the most sophisticated sites is doing price testing. A lot of marketers just think that if everyone is charging $19.95 that’s what they should charge as well. Such a waste. You could do some serious price testing. You may find that you need to lower your prices, and you may find you need to raise your price. I’ve seen a lot of tests where you actually had to raise your price, and you actually made more sales and made more money! So you should absolutely be price testing. You can use A/B testing for that.
Dan:
Absolutely. So would you say that’s one of the first ‘low hanging fruit’ places that people could start?
Anne:
Absolutely. Once you have optimized your site and emails just for conversions in general then you want to start testing prices. You also want to make sure you’re doing the best possible job you can with email. Email is far more important than social media in terms of trying to convert someone who has already been to your site once maybe, and trying to get them to come back and to buy.
A lot of sites make the mistake of putting these big social media icons all over their home page, and all over their landing page, like – “Please god, Facebook us, Twitter us”. That’s not going to get you the conversion. There’s lots of ways to convert people through email. Get the email address. Focus on getting the email address. Don’t focus on social media until later in the relationship. Once they have converted, then yes, ask them to join your Facebook page or whatever. But not until later in the relationship after they have converted. You can do Facebook and all those things on the backend, but don’t put it up front, because there’s not a reliable conversion funnel from there.
Dan:
I was thinking exactly that Anne. I have read a couple of great Internet Marketing books recently, and I went to the web site of a guy named Ramit Sethi who runs Iwillteachyoutoberich.com.
Anne:
I have heard of him, yeah.
Dan:
He founded and then sold PBWiki which was a venture backed startup, and I guess he wanted to get more into the list marketing end of things. He’s got a great system going on there. One thing I noticed about his is that he’s very conversion focused in that the goal of every page on his site is to get the email address. There were not 20 different things cluttering up the page, 20 different calls to action including social media icons. I see a lot of sites that have all these social media icons everywhere, and it makes me thing – that is NOT a single call to action! That’s 20 calls to action.
Anne:
When we first started WhichTestWon.com we had an option where you could join the email list, or the Twitter list. Most people joined Twitter. I literally removed the Twitter option off of that page because I realized that I was just losing email names to Twitter, and I didn’t have the knowledge or ability to really make Twitter the best possible conversion vehicle. After you have added me to Twitter, how often are you realistically going to look at my tweets? Will my tweets get lots among 1,000 other people who you follow? Are you somebody who is going to get a Twitter account, and only check it once a month?
That doesn’t mean I’m not on Twitter or that we don’t do well with Twitter. But it’s further down in the conversion funnel, further down in the site. Once your deep into the site, then we have all sorts of “tweet about us” type of options, and we get more than 100 tweets a week. We’ve got a lot of people tweeting about us, and it does drive traffic, and that’s fabulous. So we do have all sorts of Twitter activity. I’m just not making it my main conversion activity on the home page and web site template.
Dan:
That’s good to hear some validation for that theory. Let’s go through a scenario here. If you had your businesses stripped away, and you had to start a brand new membership site from scratch, something for consumers, and all you could use was pay per click and email marketing, and what niche do you think you would choose? Would it be viable if all you could use was pay per click and email?
Anne:
First of all I would never launch anything if all I could use was pay per click and email. You’re cutting off your feet with a strategy like that. To be able to market well you’ve got to surround the marketplace through EVERY medium. And I mean including things like postal mail, and SEO. Including things like Facebook and Twitter. Including affiliate marketing. Affiliate marketing should be at least 15% of your sales. Including “Tell a friend”. Referrals are a really good source of revenue.
(39:31)
Somebody like Audible.com – 15% of new Audible.com subscribers come through user referrals.
Why would I start a site if I was not going to be able to market it properly?
We just finished a big market research project looking into multiple B2B and B2C niches. The market that I picked as the winner ended up being the loser according to our market research. If I just picked one according to my gut I’m going to get it wrong.
Dan:
It sounds like the marketing approaches have to be pretty holistic, and like you said, SURROUND the marketplace. It also sounds like the B2B marketing strategies for a membership site are going to differ from a B2C membership site because in all cases the answer is ‘it depend on the niche – look at the data’.
Let’s move now toward someone who is actually thinking about starting a membership site in whichever niche they choose. Obviously, they are going to need some level of sophistication in terms of design skill, copywriting skill, doing some conversion testing, and setting up all these email marketing funnels and conversion funnels.
Let’s say someone is able to create the content, and put it up on the site. But maybe they don’t know HTML and CSS and Javascript and the whole technical side.
What amount of startup costs would someone expect to pay if they want to take a serious run at starting a membership site?
Anne:
Not including marketing? Because marketing is, you know, a completely different cost. You can get out-of-the-box software for very, very cheap. It’s pretty cheap.
You’re going to have to get your Authorize.net account for payment processing. Please GOD do not launch with Paypal.
Dan:
Why is that?
Anne:
Well, first of all, you can never sell your site if you launch with Paypal! You can’t sell a customer you acquired with Paypal. They will not let you hand that account over.
Dan:
That’s a pretty key insight – I didn’t know that.
Anne:
Ha ha ha.
Also, Paypal takes a big cut of everything. They are not a cheap payment processor at all. And, last but not least, they don’t hand over a lot of customer information to you. if you are planning on cross selling and upselling that customer, good luck if you plan to use Paypal. Not going to happen.
Dan:
So you’re recommending Authorize.net
Anne:
At the base level, use Authorize.net as your payment gateway. After you get more than a certain amount of money coming in, if it’s a major launch and you’ve got tens of thousands, hundreds of thousands of dollars coming in every month, you aren’t going to use Authorize.net. You’re going to go direct through Chase PaymentTech or work with somebody like Vendisia. For example, the folks at RollingStones.com, when they launched their membership site they went direct.
If you’re somebody that’s just starting out, get an Authorize.net account. You need a merchat account with a bank or with Costco, or wherever. That allows you to receive the money. You need a gateway account, and most people tend to use Authorize.net. I’m not saying they are the best, but we use them, and many people use them. You also need some type of cart that actually accepts the information. That cart could be as simple as FormStack. I literally am selling subscriptions on FormStack which is, what, $20/month. You just create a little form and then add a secure socket layer (SSL) and bang! You’re taking money. You don’t have to be fancy. Or, you could go through one of the pre-built membership site software. A lot of it is crappy. We have tried different ones. We’ve got one site that sells memberships, and it’s got several thousand members. It’s called AMemberPro.com. Subscription Site Insider is also using pre-built software by Membergate, and they also give you a content management system (CMS) so it’s all in one. Membergate’s #1 competitor I believe is SubHub. They power everything. If you’re really into WordPress you might end up going with WishList. but WishList just gives you the paywall and I think you also have to get a cart after that.
So it’s all different pieces that you’re going to stick together to create your subscription site. They are all pretty cheap, and you are going to want to customize. I tend to pick things where it’s a platform where I know there’s lots of good freelancers for. WordPress there’s a lot of good freelancers. Pick something that’s very popular, pick something that has lots of programmers who have lots of experience with the platform. If you’re planning on customizing I would not recommend MemberGate because it’s made with the Cold Fusion programming language, and it’s a nightmare to try to find qualified programmers with enough experience who have enough availability to do your work. Something like WishList, they’ve got 33,000 subscribers who use their software to run a membership site. They’ve got a whole bunch of authorized freelance programmers. Sub Hub has in-house freelance programmers. There’s something called AccessPass or WebAccess or something like that – MediaPass, actually. I heard through the GrapeVine that MediaPass is about to me named WordPress’s favored membership site plugin. There’s all sorts of good plugins out there. There’s digital access pass, there’s probably 100 different companies.
45:28
We have some reports on how to pick the right ones but you do need to be a member of our site to get at them.
Dan:
Through your Subscription Site Insider site are you targeting higher end B2B customers in terms of the paid content industry? What is your specific niche there so we can be clear about the types of people who might be interested?
Anne:
For Which Test Won which is of course about A/B and Multivariate Testing, we’re targeting anybody who is in ecommerce, or lead generation, or membership sites who is planning on doing some A/B testing and wants some inspiration or is trying to convince their boss to let them do it, and needs to show their boss evidence to get the budget to try it. It’s very cheap to subscribe to WhichTestWon, I think it’s like $40 a year or something. It’s nothing.
Subscription Site Insider, which is our site for people who membership sites, or paid content sites is targeting people who have been in the paid content industry, or publishing or media for at least a year. They have an ongoing company, or they’ve got enough experience that they’ve come from that background. For example, one of our subscribers has a launch right now that he has started, but he used to work for the Ladders, and before that he worked for Match.com, so he’s got a background – he’s perfect for us. We have newspapers, magazines, lots of little niche sites subscribe to us. You often have an existing business and they just want to learn how to deal with the credit card chargebacks, reduce the involuntary churn. If there’s a problem with the credit card you can lose up to 20% of your subscribers per month because you don’t know how to process their card properly. We help them figure out how to create their paywall so that it’s way more conversion oriented, how to optimize their email, how to optimize their financials. The people who are literally working in the field, in it, we make their lives easier.
Dan:
It sounds to me like the tests you have run throughout your career that there have been some pretty major surprises and some unexpected insights. Maybe we could just talk about a few of those.
Anne:
Make the button bigger.
No, really.
I always thought that as long as the button was visible, as long as it stuck out, it didn’t really matter how big it was. I have seen sites with gargantuan buttons that did better – that did A LOT better. So that always freaks me out.
Another thing to do is test the wording in your headline. In particular, if you’re under age 30. I have found that younger marketers tend to want to add elements like graphics, and images and videos and colors and things like that. And they don’t realize how important the copy is (the sales writing). Copy tests, especially headline tests, tend to have huge payback – way more than you would ever think. Often ones where you say: “I would have never picked that wording”. It’s shocking. And they are so easy to run, because you just have to type a different word on the page. It’s so simple – you don’t have to get the designer to do anything! So do a copy test, and especially for your offer copy.
So bigger buttons, do copy tests for your headline and offer, and either make the image bigger, or test removing the image entirely. If it’s a product image, you should make the product image bigger. If you just have a stock image of a pretty girl or a person sitting at a computer, that’s just a generic image, test removing it altogether. I have actually seen tests where it worked better without the image.
Dan:
Those are some excellent insights.
We are coming up on time here, so I would like to take a moment to thank you for speaking with me. It has been a very interesting chat.
Anne:
Sure! It has been great talking to you too.
Dan:
Is there anything you would like to add for people thinking about starting their own membership site?
Anne:
If you are someone who has some business experience and you’re not a raw newbie we have a private offer page. It’s at subscriptionsiteinsider.com/privateoffer, and you can go in there and get 10 days free. So enjoy! It’s not publicized anywhere else.
Dan:
Will send that out as an exclusive bonus, yeah.
One last thing. I find it so interesting speaking to mentors in business. I learn things from them that I wouldn’t learn anywhere else.
Incoming search terms:
- adult content website conversation rate optimization
- anne holland
- average conversion rate saas
- conversion rate for dating site
- saas conversion paywall
- subscription payment optimization