Ich habe eine App gebaut, die niemand nutzt

0:00Hey Drew, what's up? We're cooking. Can you hear me? >> Nice to meet you, man. >> Nice to meet you, too. Talk to me. What's the What's the problem? >> Defense, so we made >> What's that? >> for fence contractors. >> You made an app for defense contractors? >> That's right. So, it allows them to show their client a fence right in their yard. >> Oh, fence contractors, not defense contractors. I was like, those are wildly different things. One people are blowing up fences, the other person are building them. Good to know.

0:29>> That's >> All right. >> Hey. >> [laughter] >> Yeah, we're trying to cross country lines. All right. So, uh we got fence contractors. All right, you built an app for them. All right, there's an app for that. What's revenue? >> About half a million a year. >> All right, 500k uh per year. What's revenue retention? >> Uh our churn's about like 8% monthly. >> Ooh, that's that's high.

0:55That's high. Okay. 8% a month. All right, that's pretty high. All right, what's price? >> It's 199 a month, cancel anytime. And we >> Okay. >> For two users, like five users, it's 299 a month. >> Okay, got it. And so, what does this app do? >> So, it actually allows them to show their client a fence like right in their yard. It's like the dream outcome on the value equation. >> Yeah, yeah.

1:20>> Put it right into their yard. >> Yeah, it's a sales tool. >> Yeah, yeah. Exactly. >> Okay. So, why are they churning? >> So, really like our biggest thing is if they don't use it and like sell a fence within the first 10 days, they churn. If they actually go out and we hear them sell a fence, >> Yeah. >> they literally love the product and it's very rare that they cancel. >> Okay, how do you get leads right now? We'll cover that in a second. How do you get leads?

1:47>> So, we run Facebook ads. >> Okay. >> Instant form, we have a couple of questions up front >> Yeah. >> and our automation puts them right into our CRM and we reach out right away. >> Yeah, what's CAC? >> About $130. >> Damn. CAC? Not lead not CPL like CAC cost of customers 130 bucks?

2:10>> Like when we hit like a really good ad our cost per lead is like a $1.50. Like this >> That's absurd. >> hit one that was crazy and >> That's insane. I would not get used to that cuz it will not stay there. That is insane. >> Yeah. >> Um >> So I don't know okay. >> Like I do a lot of the sales personally so like right now I'm not paying like a commission which really helps. >> Yeah, well yeah that's nice right when you do when you do things yourself. Okay. So I mean LTV to CAC is still fine but like I this is what I would encourage you to do. Do not scale your ads at all until you fix this churn issue. There's no point. You're just going to pour it out the back of it.

2:45There's no point. Zero point whatsoever. Like you want to be able to figure out what activation is. Now if you know that if they sell a fence right with the thing they stick right? We know this. >> Yeah. >> Okay. So then the question is how can we incentivize them or how can we make it easier for them to have that happen faster? So what do you do you charge $199 up front for this? >> So we do like a 10-day trial with like the credit card attached like we say like you know this is how we've always done it. If you don't like it in the first 10 days you can cancel.

3:15So >> Yeah. >> Um >> Dude I think it's a trial issue dude. >> Yeah. That also includes like during the trial the 8% so it might be like lower when someone actually converts to a a client. Um yeah I see what you're saying like the pie equation like we're not going to hypothetical max might be too low. >> Yeah. Well you do need to figure out what the post conversion churn is. Not total churn cuz especially if you're smaller like you factoring your trials and churn is going to mess all your numbers up.

3:44>> 100% yeah. >> Okay. So I'll say this. So you you you go through the Money Models book already? >> Yep. >> So the free trial with penalty would be the first improvement that you could make uh to this. That's like the the smallest operational change that you could do. The second level of it, yeah, that's free trial with penalty. You could use that as a front-end offer instead of a downsell offer. Um and just say like, "We will give it to you for free as long as you XYZ, right?"

4:13So, you have to use it. >> Right. Like, if you go out and sell someone a fence right in their yard, it's free for the first 10 days. >> Well, you're already doing that, so there's no reason for them to do it. You know what I'm saying here? >> Okay. Yeah, I see what you're saying. >> You have a You have to have a penalty associated with it. That's option one. Option two is that you charge them up front and then say, "I will rebate you the two 199 if you use the app to put it in at least two people's yards or three people's yards." What's whatever the average They probably Let's say they close 30%. Say like, "If you do three yards in the first 10 days where you put the fence in, I'll rebate you back the 199."

4:51And I'll tell you why I'm doing it, cuz I know that if you do it, you'll stick. Let me just show you my cards, cuz as soon as you use the tool, you'll make more and you'll never leave. So, I'm going to incentivize you to use it. >> I see what you're saying. Totally. Okay. >> Cool. So, just make the second month free. >> Okay. So, we literally just charge 199 up front if if they use it two or three times, we can give them their money back right there.

5:17>> Right. Well, you don't need to give them their money back. Just don't bill the second month. Bill the first. >> Okay. Yeah, that makes sense. Okay. >> Yeah? That would be it. Like, we just have to incentivize activation, cuz if you can get your churn down to like cuz you need to be at 80 plus percent per year or higher for this to be something cool. >> 100% Yeah, 100%. >> That's all you have to do. Just get it to 80% a year. So, you want to be at like less than 2% a month.

5:44I know it's got to be Yeah, it's got to be you closer to 1% a month. >> All right. I'm a man on a mission. I'll make it happen. >> Okay. And I want you to do this though. Measure the churn from try basically don't even look at churn on the front end, look at conversion rate and then post conversion rate measure churn. That's what you should be looking at. >> Okay, so like only measure the churn once they've actually converted into a >> Right. Yeah, and your true CAC I'm guessing now cuz you're it's costing you 130 bucks to sign up a trial, right?

6:11>> I got to look at it closely, but I'm pretty sure it's something like that, yeah. >> Yeah. So and then let's say it's one out of three trials convert. I don't know. >> It's something like that, yeah. >> Yeah, so your actual CAC is closer to 500, not 130. >> Okay. >> Cost you for a customer, not a trial. >> I think it actually is 130. It is about 130 that >> Okay.

6:35>> Like right now, say we get 100 leads, I'll sign about you know, eight of them on a trial and we'll get like three or four or something like that. >> Okay. Okay. >> Yeah. >> But yeah, I would go rebate, second month free, they bill, you know, you bill them up front. It'll also get them way more likely to commit to it. Also with $200 you can like be on call if they have any issues tech wise. >> 100% >> Like make sure they can see it. >> Sign someone up, we like bam fam, like right to an onboarding. Like as soon as Like right Like that.

7:04So um we do that. We go right to an onboarding, teach them how to use it and then honestly once we get them like and they place the fence like right >> Yeah. Word. So all your effort is activation, dude. That's it. All the all the effort, all the incentive goes there. Once you have that, the rest of the machine works. >> 100% …