Sebastian Engelbrecht, SimpleSite
Presentation at SlideShare: How 2 inbound marketing guys generate 4 million trials per year
January 28, 2016
I have been with Simple Site for around 10 years. I have 25 years’ experience in sale. Before SimpleSite, I was in a newspaper.
A little bit about SimpleSite, it’s a website builder where it’s very easy. Our main ambition is to make it as easy as your mother could make a website. If you could use a computer, you can use a phone or a tablet, you can make a website, it’s simple as that. We actually date back quite long. The service was launched in 2003 in Denmark. We ran the model which was pretty common at that point. So you tried it for free for 30 days and after 30 days, you either converted to Premium or you buggered off. And that model worked for quite many years. We actually just shifted in 2015 where we went to the Freemium setup and there’s a lot of good reasons for that. The largest one obviously is not to get rid of all those trials. We make between 400 and 500 thousand trials every month. So instead of just saying Asta La Vista to those guys, we keep them and we try to do CRM and urge them to upgrade to premium.
This graphic illustrates the philosophy we are trying to do at Simple Site. We don’t really mind buying customers at a high price. We don’t really mind selling low volumes of sales. We just don’t like the combination of those two. We run a self-fueled marketing budget. We don’t have IPO behind us or any seed investment. The money I can spend is the money we make from premium subscriptions. And that needs to be extremely test driven. We have to focus to the extreme on return on investment. So basically we don’t really do anything we cannot measure.
When we launched our product the Dutch name suited for Denmark. So the strategy was—partner model with a strong focus on labeling. We approached a lot of medias and large Danish medias and urged them to sell our product but labelled as our own. And that’s a lot of good benefits from that in terms of the affiliates point of view, because we can get them to do much more. They promote it editorially. They build in links. If we just approach them with affiliate setup, they would just put maybe some banners and after a week or two it won’t work. But the best way to sell stuff like a website builder is to do an editorial, content promotion and so forth.
We did a lot of email advertising and we started out with some search engine marketing—AdWords. And when we launched in an English version, we also launched a Swedish and a Norwegian version. It became apparent that AdWords were the way of the future for us, because it’s hard to maintain relationship with maybe 40—50—100 partners in one country and add 4 more countries. That would require a pretty large staff, and we were I think five people at that point.
I think when we launched in those countries, we realized that AdWords was the way we had to move forward. So that’s what we are doing today. We are using search engines, the ones that are available for advertising AdWords with Google and Bing who serve ads on MSN and Yahoo. Yampex, which is a Russian search engine, Baidu, which is a Chinese one, and whatever search engines we can find to push our ads. We also do a lot of Facebook. We are strong with affiliate now and we want to do SEO better than what we are doing now. It’s a thing we are going to do in the future.
An important thing to do online advertising on the scale we are doing is we have to know the Math very well. So the first thing we have to determine is the lifetime value of our customers and of course the delivery cost, but those are usually pretty easy to come by. Another thing about the LTVs is that they usually are quite, from channel to channel, from market to market. SO it’s also important to identify the differentiations from the lifetime values from the different sources you have of advertising.
Customer acquisition price is pretty easy to come by. You just have to know the number of your ad-spend and divide it with the number of customers. But you can also determine a CAC by saying I want to have a customer acquisition price of say 200 Cronos and try to reach there by optimization or to be more adjustful to the profit margin in the way you are calculating. For instance, in some markets you have a very large market like the US for instance. There you could be more kind of liberal with your market, because just if you squeeze a bit, you get a lot of more customers, where as in say Luxemburg, it doesn’t really matter if we bid twice as high or anything. You’ll probably get the same two customers. So that’s a pretty important equation for this setup.
This is the way we are actually working. The way we regard markets is if they speak our language or the language we support, if we can take the money, we can sell to them. The question is the level of sales we can do. We are running in every country in the world except Cuba and Sudan and North Korea and Syria. They are not our largest markets. But if we can get two or five sales there each month, it’s two or five sales. And if the customer acquisition price and the lifetime value matches up, it’s good money. So if you can just copy the Google campaign and then specialize to a particular country, it’s good business. You don’t use too much time on it. elit.
As I said, we only do stuff we can measure and that leaves out for us TV, advertising, radio, print and all those other old fashioned way of marketing. I am not saying TV is not a good media for us. It probably would be, but we don’t really have the capital to do global TV campaigns. At the other hand, we are kind of born into a data driven mind and you have to be a little bit a believer to accept all the data TV are giving you in return of evaluating a campaign.
Optimize—we do that all the time. That’s the core thing we are doing in my department. Optimize the campaigns, adjusting bids, better ads and so forth.
This is just to illustrate the road we have moved from. If you go back to 2012, we actually just got our sales and trials from Google and Bing. But the later years, we’ve actually managed, partially due to a larger team, to spread out the risk. Right now, we see pretty nice business from Facebook and Yandex and even Baidu is starting to move. And affiliates are also growing to be a huge market.
This other, represents the partnerships. That were the key thing when we started. Others not what it’s used to be?
Some Lessons, advertising and search engines are excellent for us. It also comes down to the fact that when people want a website, they are pretty hard to determine in terms of demographic profile. It’s not like men or women or young or old. Everybody can be interested in a website. Unfortunately a lot more are not interested in a website. So search is very good, because when people make a search for free website or how to do a blog, then the market for the product we have. So that is why it works for us.
Facebook was kind of a struggle. It used to work couple of years ago. Then it didn’t really work. But we cracked the code again early last year and it’s a huge part of our acquisition today. As well as affiliate which were kind of a sleeping beauty for many years, but with more staff and with better focus, we actually have grown that and almost doubled it each quarter for the last couple of course. So if we can just continue that for 10 more quarters then it’s going to be pretty good.
Something that’s not working as well would be SEO. We really have invested a lot of time and resources and we really suck at SEO. We plan to do yet another go at one point, and we can see all our competitors from our research we can find they have something like 50 people working with SEO and we have an intern working for SEO. We are not really on level there.
Banners, we love to make banners work. It’s a huge resource of inventory online advertising has to offer on the internet. Unfortunately it doesn’t really work for us. We try every half year to make it work, but as I mentioned before, it’s very hard to catch people at the right point with a banner.
Partnerships, we had to shut those down, or at least suspend them until we find some way more efficient to run our partnerships globally.
I am the playing coach in the team. I have a robin Santi and we have four interns coming from CBS. And we pay the interns so we get better interns.
I have some key take away from this. In our experience, you can sell on all markets on all channels to a certain degree. The question is how much you can do it. As long as you reach your target price you can usually almost in our case, you can always find a level that actually is good business for you. So don’t neglect that. Why not have good customers even though if it’s in small amounts. If you are in 200 countries, that sums up.
Knowing your customer acquisition price and try to box your lifetime values. Try to identify whether it’s men, women, old, young, what kind of product gives you the best lifetime value. There’s always differentiations in all companies. And optimize. That’s what we do all the time. When we are done with that we’ll start all over again.
One thing that we have learnt which is helping us do all that global advertising is that we currently only support 19 languages in our platform, but we do advertising in 48 countries. The trick is just to translate the ads and the onboarding situation. And after they finalize, we just throw them into the English one. And of course in some markets like the French market, they react badly. You cannot do that everywhere, but most of the places have invested just enough of their resources to the trial. So that makes pretty good business for us. For instance we did Arab. Before we had the Arab version we had around 100 sales per month just advertising Arab and throw them into the English version.
So you don’t necessarily have to do a full language translation of your product in order to advertise in a market, but it’s strongly recommended in our experience to do the onboarding and do the advertising in the local tongue.