Do you really know the numbers behind your SaaS business? No, I’m not talking about monthly P&L statements. I’m talking about business metrics like customer lifetime value, churn and monthly recurring revenue. You don’t have to hire an analyst to crunch the numbers. Just use Baremetrics. Hat tip to Ryan Robinson (see his interview about growing Close.io with content marketing) for introducing me to Baremetrics.
Josh Pigford, founder of BareMetrics, shared his insights about growing the company, content marketing and more.
What is Baremetrics and how does it help customers?
Baremetrics is a revenue analytics product. We help businesses get insights on the money that’s coming in. For subscription-based companies, we would track metrics like monthly recurring revenue, lifetime value of a customer, churn rates, and other data points. The metrics themselves are not necessarily new to the industry, but they are traditionally really hard to calculate on your own. Without a tool like this, you would need to do lots of spreadsheet calculations or build internal tools. Baremetrics completely replaces all that. You can get up and running a few minutes.
What do you find most challenging in marketing Baremetrics?
There are two challenges. One, finding a channel that’s scalable from a cost standpoint, especially for paid acquisition. Two, finding a channel that is easy to track or attribute performance. It is difficult for us to say, “This is the channel. This is how much it costs to acquire through that channel, and here’s how we scale it up.”
When it comes to content, you can make some guesses about things, or even have some high-level data points. Knowing for sure is a different story. Connecting the dots between a prospect reading article A and becoming a customer is difficult to track.
What is your thought process around content marketing for Baremetrics? In a recent blog post, you mentioned that past efforts at content marketing at other companies did not generate results. It sounds like you are taking a different approach today.
In the early days of content marketing days, say five years ago, SEO considerations were at the top of the agenda. The approach was let’s produce much content to rank for a specific keyword. Recently, my approach to content marketing has shifted to focus on how we create the content, in and of itself, really valuable. Search engine optimization can be a part of that, but first and foremost, you need to be writing for humans.
When I started Baremetrics, I tried the SEO focused content marketing. That approach did not work well for us. Going forward, I wanted to produce content that was genuinely helpful for other businesses. If there was an SEO impact, fantastic. If not, I am sort of indifferent about that. Ultimately, I wanted something that people could read and get much use out of.
What makes a piece of content “genuinely helpful” in your view?
I want something that’s actionable – you can do something with the thing that you just read. That may be a resource or downloads such as a spreadsheet you can use or a marketing how-to. Alternatively, I want you to be sitting and thinking about it for a while. So, I want it to be something that a week later, you are still chewing on it in your head. Like, “Oh, I had not thought of something that way.”
The article about our Medium experience (Why we transitioned from Medium back to our blog) was more on the how-to or actionable side. It had some practical points on how you can use medium based on our experience using the website.
In other posts, it is more a case of sharing the struggles of running a business such as burnout (e.g., The Impossibility of Separating Work & Life). If you are thinking about one of these articles later that day or a few days later, that is a sign of a successful article.
How do you organize and publish your content assets?
We have two different silos of our content. First, we have got the main blog with articles aimed aim founders, business owners, and people who are work at startups can get much use out of. Second, there’s the academy which has more a SEO focus. There’s content related to keywords like monthly recurring revenue such as glossary article on monthly recurring revenue. The Academy is about answering questions people are searching for on Google.
For the Founders blog, I produce nine out of ten articles. For the academy, most of our production is outsourced to freelancers. In many cases, academy content references and repurposes articles I have written.
Are you using paid customer acquisition methods?
We have tested these methods, but nothing has made sense from a scaling perspective.
What would you say has been your most successful marketing channel so far?
The content we produce is by far the most successful channel.
Your content includes publishing revenue figures (e.g., open benchmarks). How did that come about?
After we had made our metrics public, other companies contacted us and asked to be listed.
What does your free trial to paid customer process look like?
You start by signing up for a 14-day trial. During the trial, it is a self-serve process with automated emails that guide you through onboarding and getting value from the product quickly. At the end of the 14 days, you either upgrade to a paid account or stop using the product.
What kind of touch points do you have with prospects and customers during this process?
I try to hop on a call with most new trials, or someone on our customer success team will try to hop on a call. At the very least, we reach out via email. So, it is not high touch, but it is not any touch, either. Sometimes this will involve doing a video chat, a screen share and walking them through their dashboard.
Why do have a 14-day free trial?
You can do 30 days instead, but our view is that we want you to start paying soon after you start getting some business value out of it.
Contrast our product to other software where you start with a blank slate – Google Apps, or Dropbox, or Slack for example. All of these tools require you to start using them, slowly getting data put in, and then you begin to see the value.
With Baremetrics, depending on how much data you have with your payment processor, you can start to see value in minutes or a few hours. That is how long it takes to see a whole dashboard full of data. So, the time between when you sign up and when you start getting value is extremely short compared to most SaaS products.
The 14 day period gives us a little bit more time to help you see the benefits, or to show you all that’s there. It is not just the single page that shows you some numbers that there’s a lot more depth to it.
What conversion rates do you see from free to paid?
Currently, we are around 14% from free to pay.
If you sign up, but it turns out you do not use a data source that we support, you will probably not convert to paid. Our conversion rate of people who have a data source that we support would be a lot higher, but it is difficult to track and report that separately. We support payment processors like Stripe, Braintree, and Recurly.
Is there a demand for people to use something like a QuickBooks or an accounting app as a data source?
There are certainly people who have asked for it. The problem is, we need a particular type of data, or format of data, to provide our metrics and subscription numbers. The problem with QuickBooks or Xero is the nature of the data. It is flat data. We could certainly see, “Oh, in this category you brought in $10,000,” but we would not be able to get any insight into that. It would require us to reformat your accounting books to process it. We are trying hard not to be accounting app. Our goal is not to give you accounting insights but rather higher level business metrics instead.
What business metrics have the greatest predictive value for your customers?
It depends on the stage of the business. One of the more consistent indicators would be churn (see “How Churn Prediction Can Improve Your Business” on Baremetrics.com). Put it another way: at what pace are people canceling? That is a good indicator of the health of the business. It is one of the more actionable metrics. If it is in the double digits or over 20%, you have a big problem on your hands. In that case, you should focus on nothing else except fixing that and figuring out why customers are canceled in such large numbers.
What is a marketing experiment from the past year that you are proud of?
Our sort transparency journey has been the gift that keeps on giving. It has been almost four years, but at the same time, it consistently keeps working for us, and new opportunities come from that. We continue to see other people reference Baremetrics regarding transparency for our numbers and how that helps other businesses.
What kind of new opportunities has that brought to Baremetrics recently?
A new company will want to make their data public on our website. When that happens, we tend to see a new influx of customers or at least visitors to the site.
At Baremetrics, who is responsible for marketing activities?
I am responsible for marketing. To do that, I have support from freelancers in content creation, administrative support, and engineers helping with data to inform the content.
For readers that would like to connect with you and find out more about Baremetrics, where should they go?