About six months ago I began collecting the email addresses of folks who downloaded my app, VirtualHostX. This was entirely opt-in. I simply placed a MailChimp signup form on my download page. I promised users who join a three email course introducing them to a few of the major VirtualHostX features and a 10% off coupon for when they purchased. My goal wasn’t to collect their email addresses and, later, market to them. I simply wanted a way to automatically communicate with users new to the software and make sure they got off on the right foot.
Setting this up in MailChimp was surprisingly simple. They’ve got a whole section on email automation. Kudos to them.
A couple weeks ago, however, I ran across a new marketing product called Drip. It’s founded by the author of a book I really enjoyed about solo entrepreneurship. Drip promises to handle email automation similar to MailChimp but with better goal tracking and higher conversion rates.
I was intrigued.
After going back and forth for a week, I ripped out my old MailChimp form and installed Drip’s pop-up box last night. MailChimp has served me great, but I’m ready to go beyond simply sending emails and towards measuring the actual effectiveness of them. I’m hoping Drip’s goals and conversion tracking will give me those insights.
All of this is influenced by a realization I had earlier this year. VirtualHostX has reached a mature, stable state. There are plenty of more features I can add – my todo list is overflowing – but I’m wondering if I’m starting to see diminishing returns with regards to how many more sales I make compared to how many new features I build. I’m wondering if I could see a bigger difference in sales simply by upping my marketing game. I hope to find out that answer, to a small degree, with Drip.
Anyway, I plan on writing a full review of Drip and what success it does or doesn’t bring me in a few months once I’ve had time to see its effects on my mailing list. But for now, I just wanted to offer my sincere amazement at what a well-executed service it is. As far as I know, Drip is one of the small players in the industry. And I honestly wasn’t expecting much fit and finish. But I’m seriously impressed so far. Their entire onboarding process was stellar. And the workflow that led me through setting up a campaign, building my email course, and getting their JavaScript and tracking installed on my website was phenomenal. They’ve done a really, really great job.
You would think it wouldn’t matter what sort of coffee cup you use, but after picking one up on a lark from a kitchen store and then ordering four more on Amazon, I can tell you that it absolutely does matter what you’re drinking from.
But, first, what’s wrong with a regular old coffee mug?
As it turns out, a lot of things. For starters, have you ever actually held a coffee cup after filling it with coffee? It’s almost guaranteed to burn your hand. That’s why they all have handles. But the handles are never ergonomic. At best, you can wrap two or three fingers around the handle and then you have to do that awkward balancing act where you counterbalance the weight of the coffee mug by placing your thumb on top of the handle. Making matters worse, after making coffee with my AeroPress, my hands are always wet from rinsing it out. That makes holding onto the mug a slippery proposition. And, if you lose your grip and drop the mug, it’s going to shatter.
Do any of those problems really matter on their own? No, probably not. But together they add up to me always being frustrated with my usual coffee cup.
After complaining about the problem one morning, my wife finally said “Why don’t you just get an insulated mug?” It seems like an obvious solution, but every insulated cup I’ve found was always too large – sixteen or twenty ounces. I wanted something the size of a standard coffee cup.
I finally found what I was looking for with a 12oz tumbler from Tervis. And why is it the best coffee cup I’ve ever owned?
It’s insulated. I heat the water for my coffee to boiling using a BonaVita electric kettle (another fantastic product). By the time the coffee is in my cup, it’s not quite boiling any longer, but it’s still scalding. The outside of the Tervis cup stays completely cool. I never worry about burning my hand. Also, even with wet hands, the mug is very easy to grip. There’s no silly handle. It’s just a nice, round shape that fits naturally in your hand. It’s also an appropriate size for coffee – twelve ounces. That means I can fill up with my usual ten and not worry about the coffee level being close to the lip and spilling over.
The material of the mug is extremely sturdy plastic. I’ve dropped it a couple times (once on purpose!) and it’s never shattered or chipped. Other insulated mugs I’ve tried came apart after going through the dishwasher a few times. The Tervis mug has seen four months of cleaning and has held up like a champ.
If you make your coffee with an AeroPress, you’ll be happy to know the press fits nicely on the top of the mug. Not too small, not too big. And as a bonus, the mug is clear so you can see your coffee being filtered as you press down. It’s a neat effect the first time you see it. You also always know how much coffee you’ve got left in your cup, which would have saved me a few times when I quickly picked up other coffee cups not realizing there was still liquid inside.
The only real downside is the price. I’ve never found them cheaper than $10 a mug. I think they’re completely worth it, but your mileage may vary.
So, there. Nearly six-hundred words about something as ridiculous as a coffee cup. But it really has made my morning coffee routine much better.
After publishing my Mac app financials last month, I received mostly positive comments. But a few people did share with me, over Twitter and email, their displeasure for what I wrote. They seemed to think that I was only writing to jump on Jared’s bandwagon, to grab some cheap, easy traffic, or to show off. One person even gave me the old Gruber fist-eggplant.
I completely understand why some people might think that. My post did generate a lot of traffic thanks to Hacker News – 30,000 unique visitors to be exact. And for folks who aren’t as profitable with their own apps, it may seem like showing off. (Although compared to some other indie developers I’ve spoken with, my revenue is far, far below theirs.)
So, I’d like to take this opportunity to explain why I wrote the post and what I was hoping to accomplish.
My first goal was to offer a realistic financial data point for what other developers might expect when selling their own software. Every minuscule financial detail of publicly traded companies is available online for inspection, but there’s very little data available for independent software vendors. For folks just beginning or considering starting a software business, it can be maddening not knowing what sort of success (if any) one could expect to achieve after six months, a year, or longer.
I realize my own situation may be unique. I’m primarily a Mac developer while most new businesses focus on iOS. I also have a head start as I’ve been doing this since 2007 – even before the App Store. But, as I wrote about in this post, for developers who are targeting a niche audience, I wanted to offer my situation up as a possible example of how things can play out. I wanted my story to serve as encouragement just as much as it is a warning.
Taking that rationale a step further, I’ve always felt that it would be beneficial to the indie developer community as a whole if we were more transparent about our business dealings. But first, a story.
Back in 2007, when I was first learning how to sell my software online, I created an open-source dashboard called Shine that essentially runs my business. It handles everything from orders, to Sparkle updates, to user demographics, to coupon codes, license activations, and everything in between. I made it open-source because I thought other developers could benefit from my work. The project gained a little traction. I heard from less than a hundred developers who were using it.
In 2010, as my time at Yahoo! was winding down, I came up with the great idea of building a more robust version of Shine and offering it as a software as a service – a product other developers could pay a monthly fee for and I would handle all of the hosting details. I successfully built the new-and-improved version, switched myself and a few other developers over to the new version, and even secured nine months of runway from two angel investors. I’m sad to say that they subsequently pulled out in fear when Apple launched the Mac App Store. My fledgling business venture died.
I don’t tell that story to get pity. It was a great idea. And I was said to see it fail. But I bring it up to say that one of my other end goals – after successfully signing up lots of independent software developers – was to produce and begin blogging aggregated, anonymous financial stats that only someone with access to everyone’s sales figures could know. There was no evil plan to sell this data. I truly wanted to use the data to infer what business strategies were working and then publish my findings so that the community as a whole could benefit from them.
There’s a misattributed quote to JFK that says “a rising tide lifts all boats.” I’ve always really felt that if we as a developer community pulled together and shared more openly our business strategies, the entire developer ecosystem could rise up, earn more money, and produce even more, high quality software.
We’ve already begun to do that to a limited extent. More and more developers are opening up and sharing their experiences on the App Store and their luck with up-front pricing, in-app purchases, freemium models, etc. Other developers are talking about how they’re encouraging users to write reviews – the lifeblood of any app.
All of these stories are great! They all add to our collective knowledge. By sharing my own story, I simply hope to add to what I see as yet another missing piece in determining the overall health and status of our little ecosystem. It’s why I’ve been consciously trying to write about “Indie Business” so much these last few weeks. Not only to add to the conversation, but, more importantly, to encourage others to do so as well.
In this post I thought I’d share my history maintaining mailing lists for my products, how I make the most of them, and what sort of success they have and haven’t brought me. Near the bottom, I’m also going to share some real data about my open rates, etc.
To begin with, it took me a long time to become comfortable adding customers to a mailing list. I always worried I’d bother them when I sent an email. But over the past four years, as I’ve seen my open rates stabilize around 70%, I’ve gotten over my fear and come to understand that a healthy mailing list is the best way to communicate with my users and an amazing sales tool.
During the first three years running my company and selling my apps, I never bothered maintaining a mailing list. I wrongly assumed that 1) I had nothing to say and 2) that my users wouldn’t be interested. It wasn’t until I read a book on marketing for software developers that I finally got past my fears and setup my first email list.
Which Mailing List Company to Choose
The first step in setting up your own mailing list is choosing an email provider. After looking around at a few different companies, signing up for test accounts and exploring what they had to offer, I chose to go with MailChimp almost based on their reputation alone. I’m happy to report, four years later, I’m completely satisfied.
They offer all the features you’d expect: fair prices, pre-made templates or design your own, full control over your email HTML source, excellent tracking and reporting, integration with Google Analytics, and my favorite feature, Time Warp – it lets you send an email that hits your customers’ inbox at their local time. It’s an outstanding feature that I use to deliver emails at 9am local time no matter where my customer lives.
Because I was so timid about initially setting up an email list, I’ve gone through a number of different ways of capturing customer’s emails.
Before I talk about the different methods I’ve gone with, let me address one obvious way of going about it that I avoided. At the time I decided to setup a mailing list, I already had the email of every customer who ever purchased from me. Their email is not only tied to their software license, but it’s how I deliver their purchase information. There’s nothing stopping me from taking all those thousands of addresses and adding them to my list. The problem with that, is that those customers never opted-in to receive mailings from me. I’m sure some of them wouldn’t mind if I sent an occasional newsletter, but it’s not something they explicitly signed up for and a marketing newsletter is not worth violating their trust.
The one exception to that rule is if something earth shattering happened to me, my company, or my app. There could be a legitimate reason to contact everyone. In the seven years I’ve been running my company, that has only happened once. It was when my licensing scheme was cracked and I needed to email everyone a new license.
However, rather than sending out a mass email, I chose to issue an app update that would display a message about the situation when first launched. Sure, that took more work, but I felt better knowing I’d only be reaching customers who were still actively using the app.
All that said, let me reiterate how important it is not to violate your customers’ trust. It’s in your best interests to keep up a great relationship between you and them. Pissing them off with an unsolicited email could very well lead to fewer sales when it comes time to upgrade. It’s just not worth it.
With that out of the way, how do you add customers to your mailing list? Like I said above, I’ve tried a number of different techniques.
In 2010, I issued an app update that added a new menu item to my app which simply said “Subscribe to the VirtualHostX Mailing List”. Over the six months that feature was initially live, I had practically zero sign-ups. Less than fifty to be sure. Not only was the feature buried and out of the way, but there was no explanation of why joining the email list would be beneficial to the user. I’ve continued to leave that feature in the app, just in case, but I’ve moved on to better acquisition methods.
Next up, in 2011 when I was preparing for my third major app update, I pushed out an update to the current version that showed a window with a message saying “VirtualHostX 3.0 is coming soon! Be the first to know when by joining our email list.” Beneath the message was a sign up field. The user could subscribe right from within the app – no need to open a web page, etc.
That strategy worked quite well. Every user saw the message and they were given a clear (but, admittedly, not very compelling) reason to sign up. By the time I was ready to release my major app update, I had a list of a few thousand users within a few weeks.
A year or so later, I moved on to more tried and true ways of collecting email addresses. I added an extra field to my order form encouraging users to sign up for the mailing list at the time of purchase. It was just a simple checkbox with a message reading
Join our newsletter? You’ll receive 2-3 emails per year. And we never share your email with anyone else.
That checkbox lead to a 40% conversion rate. I was quite please but wanted to do better.
I knew the next logic step would be to have the checkbox already selected by default. I went back and forth for a long time over that decision, as it does bother me a little bit when other companies do the same thing to me. But in the end, I went with it – rationalizing that it’s just one click to opt-out and it’s clearly marked.
Over the next year I saw my subscribe rate jump to 85% and I’ve never received a complaint. I call that a success.
So that’s how I’ve been acquiring the emails of my customers. I guard that list like gold as it’s an amazing sales tool whenever I release a new, paid upgrade. But it still didn’t account for another type of user – prospects. I had no way of reaching out to potential customers who had downloaded the app but not yet purchased.
To reach these customers, I changed how my software’s download page worked. Previously, https://clickontyler.com/virtualhostx/download/ was a direct download of my app. Click the link, and the zip file would start downloading.
I decided I wanted to collect email addresses when users downloaded the app. I’ve seen some companies require an email address to unlock the download, but I wasn’t ready to go that far. As a user, I hate that. Instead, I changed my download page to be an in-your-face email signup form. Go there and see for yourself. Rather than being a blind download, it’s a signup form that initiates the download via JavaScript. This gives the user what they want, but still allows me to show the messaging of my choice.
I’ve seen sign-up rates of 40% this way. I attribute that success to the clear benefits I offer the potential customer.
After signing up, I tell them they’ll receive a series of three emails over the next two weeks. Each email will introduce them to a new feature of the app and how to use it. If the customer is already downloading my app, chances are they’re going to be responsive to a quick course on how to get the most out of the app.
I also tell them that each email will have a coupon code for $5 off if they decide to purchase. That’s a huge benefit to them – 10% off. Of the orders I receive, roughly 20% use the coupon.
MailChimp makes it super easy to setup an email course for your users. For my list, an hour after they sign-up, MailChimp sends them a welcome and getting started email that walks the user through the basic setup steps and offers various way to contact me and get help. Then, a week later for the next three weeks, MailChimp sends an email discussing one of the app’s major features and how to use it.
The timing of the emails correspond with the length of the user’s free trial period. However, I am looking into speeding up how often the emails are sent. I’m worried a week between emails may lead to too many users forgetting about the app. Maybe a day between emails instead? I’m not sure.
What to Send
I’m very respectful of my customers’ time. I try my best to only send emails I think they’ll genuinely enjoy or find useful. So far, that’s led to me sending at most three emails per year. I of course send out an email whenever I release a major new update, but I’ve also sent a few to solicit feedback about new features I’m working on.
This year, when I released version 5.0 of VirtualHostX, I tried something different and sent out a teaser email a few days in advance of the release to prime everyone’s interest in the release. That led to some buzz on Twitter and, what I believe, was a stronger sales explosion on release day.
Some Actual Numbers
Here are the most recent campaigns I’ve sent along with the open rates I saw, from the newest email to oldest.
Minion app announcement to my bundle customers – 72.1% open, 21.9% click through
Minion announcement to my actual customers – 73.7% / 21.2%
Feedback on building a sync feature – 71.7% / 31.2%
VHX5 announcement for bundle customers – 69.4% / 15.0%
VHX5 announcement to my actual customers – 69.2% / 19.8%
VHX5 teaser – 74.9% / 28.0%
New Features and a Coupon – 71.1% / 18.1%
VHX4 announcement – 79.3% / 36.7%
VHX3 new features – 75.1% / 26.2%
Cyber Monday sale – 77.2% / 21.0%
VHX3 announcement – 83.0% / 47.7%
As you can see, my open rates hover around 70% with a 20% click through. That’s way above the industry average of 18.3% and 2.5%. I think my success can be attributed to sending a few, highly important emails only to customers who have explicitly opted-in.
So, clearly those open rates are great. But does maintaining a mailing list really contribute to higher sales? Absolutely! Take a look at the chart below.
That’s a graph showing my sales per day on a rolling seven day basis. The spikes you see are major new releases of my apps. Without a mailing list, I would have no way of communicating with my customers about the new release. The best I could do would be to write a new blog entry, post to Twitter, and hope and wait for customers to discover it on their own.
I can’t overstate how important my mailing list is to my business. I literally wouldn’t be able to make my yearly goals without the guaranteed spike in sales a targeted email blast brings in.
If there are any other questions I can answer, or any other data you’d like me to share on the topic, feel free to get in touch or post in the comments below.
Despite spending three years working in the Yahoo! Marketing department, I’m a terrible marketer when it comes to my own company. I’ll often be in the process of explaining to my wife some new marketing tactic I’m considering trying, when she’ll stop me and say “You sound like you’re apologizing for doing this. You don’t have to be embarrassed for spreading the word about your apps.”
And she’s right.
For some reason, I’ve got it in my head that my company should sink or swim solely based on the merit of my apps. There’s a gnawing voice in the back of my head that makes me feel ashamed or, worse, like I’m bothering people whenever I consider sending an email to my mailing list – hell, it took me four years before I even started asking users for their email in the first place!
I know many of my developer friends struggle with the same problems. We’re great at building apps, but when it comes to promoting them, we don’t know where to begin let alone feel comfortable even doing do.
But, thanks to my wife, I’ve learned over the last two years to put on a marketing hat in addition to all the other ones I already wear. Running your own business means doing everything yourself. Just because I’m not entirely comfortable shouting to the world about my products, doesn’t mean I can let that aspect of the business stagnate. In the same way I jump at the opportunity to learn a new programming language or API, I’ve had to force myself to get excited and motivated about learning new marketing techniques, strategies, and ways to spread the word about my apps.
More personally though, I’ve had to get over my feelings that marketing is nothing more than dirty tricks used by sleazy companies to fool consumers. I’ve had to realize that building software doesn’t end when you write the last line of code. Marketing is just another stage in the development process. It’s something you can practice and become better at just like any other technical skill. And for those of you running or thinking of starting your own indie business, it’s an essential one.
One of the challenges of running a small software business is how to turn customers into advocates for your company and products. It’s a challenge because unless there’s a support exchange, it’s entirely possible for your customer to go the entire lifetime of the app without ever having any direct interaction with you. Some customers may want that completely disconnected, self-service relationship. It’s one of the many customer benefits of selling downloadable software – everything’s automated and instant. But for a small business that’s trying to stay afloat and grow, lack of interaction with your customers can keep you out of touch with their needs and also make you miss out on opportunities to unexpectedly surprise and delight them.
As a business owner, you want to take advantage of every opportunity to thrill your customers and turn them into real fans of your app rather than just being regular users. This leads to more trust in your company and your product, which really shows up as increased sales whenever you come out with a paid upgrade. It also leads to customers spreading your app via word of mouth in person and on Twitter, Facebook, etc.
So, how do you do this?
For me, it all sort of clicked when someone told me I need to encourage serendipity. I need to make every effort to create a positive interaction with as many customers as possible. For my company, that means regularly doing three things.
The first, is to have a responsive presence on Twitter for my company and each of my apps. The key point there is responsive. Twitter is more like a flowing conversation than an inbox to be triaged. Responding to an @reply a day or two after you receive it won’t have the same effect as replying within minutes. I try and respond to every support email I get within twenty-four hours. But I keep Twitter notifications enabled on my iPhone so I can reply to those as fast as possible. Customers have come to both expect and love that level of access to the developer of their (hopefully) favorite apps. Further, in the early days of VirtualHostX, I even made a habit of gifting free or heavily discounted licenses to Twitter users who spoke favorably of the app. Those tweets may have cost me an immediate sale, but they turned into retweets and additional sales down the road via upgrades.
Another point of contact I make a point of initiating is right after someone makes a purchase. There’s no better opportunity to show a customer you care than the moment they buy your product. It’s at that time that they’re likely on a high from your app. They’ve just reached the point where they’re so satisfied with your trial version that they were willing to hand over their hard-earned money for a license. Further, they’ve put their trust into your company that you won’t let them down. Immediately reinforcing their feelings with a positive interaction encourages serendipity.
For two years, whenever someone in the US would purchase VirtualHostX, I’d make a point to write them a hand written thank-you note on Click On Tyler stationary and mail it to them. You wouldn’t believe how many amazing tweets and thank-you notes I’d receive back in response. It cost me time and about $0.90 per customer to do this, but it really made a big difference in how customers felt about my company.
One final tactic I’m going to be implementing this month is sending an automated followup email to users a few days or a week after they purchase. My goal is to make it as personable as possible and communicate that they can reply and start an immediate conversation with the actual developer of the app they just purchased. Previous emails I’ve sent to my mailing listing asking for product feedback have seen amazing response rates north of 60% – so I’m very optimistic that this new email will have a great effect. I do have to give credit though. While autoresponders aren’t exactly a new idea, it did take this blog post by Justin to push me over the edge into doing so.
So those are the three things I’m doing to encourage customer happiness. Your goal, with whatever actions you take, should be to find and promote positive interactions with your customers.
Even after seven years of selling my software, there are still days when I feel like I’m a fraud and have no idea what I’m doing. Those feelings are never more real than on days when I don’t make a sale. I’m lucky that they’re now few and far between compared to when I was just starting out, but when they do happen, they scare the hell out of me.
It’s hard to notice that your sales are down until they’ve already been down for a while. I’ll catch myself reviewing the day’s numbers and realize not only did nothing come through today, but it’s been a full thirty-six hours since I made a sale.
My mind immediately starts worrying. I’ll first double-check that my website hasn’t had any downtime and then walk through my checkout process to make sure all the moving parts are still connected together. Sometimes I’ll even run a few test transactions. If I’m still worried, I’ll pull out my credit card and make a real purchase. It’s only after I successfully confirm my infrastructure is working that I really start to get paranoid and impostor syndrome sets in.
I start to wonder: Is this it? Have I run out of customers? Is the app no longer working and people just aren’t telling me? Has everyone finally figured out that my app really is worthless? Have they determined I’m a fraud for even attempting to sell my software?
It’s crazy, but all those thoughts – no matter how fleeting – really do cross my mind. I’ll have to step back, take a breath, and tell myself that, no, nothing’s wrong. You just happened to have a day where no one bought your app.
I think the problem has only compounded itself now that I rely on my app income to support my family. Back when my sales were just extra income there was no real reason to worry about down days. But having a family changes all that. It adds pressure you didn’t expect.
But, then, a few hours will go by and a new sale comes through. I exhale. Everything’s fine again.
I’ve gone through this doubting/worrying process enough to know that it will always pass. I’ve found it helps to reflect back on all that I’ve accomplished with my business these last seven years. It also helps to have friends in the industry you can talk to and bounce ideas off of. There’s so much to learn about running your own software company. Learning that zero sales days are going to happen and then learning how to deal with them and avoid them is just part of the process.
My good friend Mike and I have been discussing a theory about indie developers. I call it The Trap of Your First Success. Our idea is that while it’s incredibly hard to build a successful indie product, it’s even harder to repeat that success because of a trap indie developers often fall into. Let me explain.
As I wrote about last week, while I’m not going to retire any time soon, I consider my indie business a success. For a few years it was my only job. And now that my wife isn’t working, it’s serving in place of the income she would normally bring in. Mike is even more successful. His company, Divergent Media, has been supporting him full time as long as I’ve known him.
We both happened upon our success by working hard and, perhaps most importantly, by identifying a niche market we could hammer away at until our products were the default choice. I built VirtualHostX, which is the number one (and currently only) way for Mac users wanting to create virtual hosts on their local machine. Mike built ClipWrap, which is the best choice for rewrapping video files into QuickTime movies.
We’ve both had tremendous success with these apps. But they never would have happened if we hadn’t spent years working in the industry they serve. We identified a market for our products because we had a need for them in our day to day work prior to being Mac developers.
Building a sustainable software business means spotting a niche before your competitors have noticed it, then doing everything you can to “own” it. Your app and your company need to become a household name for people who care about that niche. Aim to be the 1Password of _______.
It all sounds simple, right? Identify a niche problem. Build a solution. Iterate on your product until it becomes the best solution. Profit.
But there’s a catch. A trap really.
Over the course of building your product, if it becomes a successful and sustaining piece of your income, there’s a very real chance you’ll lose touch with your original industry. I saw it happen with my own development habits. As VirtualHostX became more and more successful, I became more and more involved with the Mac and iOS developer communities and lost touch with my web developer roots. Mike followed a similar path when he moved away from video editing and into professional development. I’d wager most full-time indies are the same way. We’ve all fallen out of the industry that gave us our first, successful idea.
And that’s the problem. That’s the trap of your first success. It disconnects you from the source of your best ideas. Without remaining a part of your original industry, how do you come up with a second successful idea?
Mike and I started looking around our community of indie developers and couldn’t come up with anyone who has had a second, major success. Brent had NetNewsWire. Gus had a couple products, but is now full-time on Acorn. In last week’s episode of Core Intuition, Daniel admits that MarsEdit is his only big time seller.
Is there anyone with a second product equally successful as their first? If there is, I’d love to know about it over Twitter or email.
So, if it’s so difficult to find success a second time, how do you correct the problem? I honestly don’t know, and I would love to see a discussion about this spring up like last week’s App Store discussion did. Mike and I joked that since we’re both firmly entrenched in the indie software business, maybe it’s time we begin building Mac and iOS developer tools instead. It certainly worked the first time around.
