App für Zaunbauer zum Wachstumsmotor machen

0:00Unternehmer/Gast All right, Drew. What's up? We're cooking. Can you hear me? >> Alex, nice to meet you, man. >> Nice to meet you, too. Talk to me. What's the What's the problem? >> Reality Fence. So, >> you made this app 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. All right.

0:30>> That's right. That's right. >> 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 returns about like 8% monthly.

0:53>> Oh, that's that's high. That's high. Okay. 8% a month. All right, that's pretty high. All right, what's price? >> It's $1.99 a month. Cancel anytime. >> Okay. >> And also that's for two users. Like five users is $2.99 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.

1:18>> It's like the dream outcome on the value equation. It lets them like put it right into the >> 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 turn. 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.

1:44>> Okay. How do you get leads right now? We'll cover that in a second. How do you get leads? >> So we run Facebook ads. >> Okay. >> Uh just for an instant form. We have a couple of questions up front. Yeah. Yeah. >> And then our automation puts them right into our CRM and we reach out right away. >> Yeah. What's CAC? >> Um about $130. >> Damn. CAC, not lead, not CPL, a CAC cost to car customers.

2:10Alex >> Right now, like when we hit like a really good ad, our cost per lead is like a $150. >> That's we literally hit one that was crazy. And um >> that's insane. I would not get used to that because it will not stay there. That is insane. >> Um, >> also I personally 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, uh, I mean LTV to CAC is still fine, but you like I this is what I would encourage you to do. Do not scale your ads at all until you fix this turn issue. There's no point. You're just going to pour it out the back. There'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.

2:56>> 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? Do you charge 199 upfront for this? >> So, we do like a 10-day trial with like the credit card attached. Like we say, like, you know, this how we've always done it. Uh, if you don't like it in the first 10 days, you can cancel. >> Yeah. >> So, >> dude, I think it's a trial. That also includes Yeah, that also includes like during the trial the 8%. So it might be like lower once someone actually converts to a a client. Um yeah, I see what you're saying like the pi equation like we're not going to our hypothetical max might be too low.

3:33>> Yeah. Well, you do need to figure out what the post conversion churn is, not total churn because especially if you're smaller, like you factoring in your trials and churn is going to mess all your numbers up. >> 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 downell 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 you have to have a penalty associated with it. That's option one. Option two is that you charge them upfront and then say I will rebate you the$1.99 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 let's say they close 30%. say like, "You do three yards in the first 10 days where you put the fence in, I'll rebate you back the 199."

4:51>> And I'll tell you why I'm doing it. Because I know that if you do it, you'll stick. Let me just show you my cards because 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 do. Just saying. Totally. Okay. >> So, just make the second one free. >> Okay. So, we literally just charge $1.99 up front is if they use it two or three times, we can give them their money back right there.

5:17Alex >> Right. Well, you don't need to give them the money back. Just don't build the second month, build the third. >> Okay. Yeah, that makes sense. Okay, >> that would be it. Like, we just have to incentivize activation because if you can get your churn down to like >> because 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. I know it's got to be Yeah, it's got to be like closer to 1% a month.

5:48>> All right. I'm a man on a mission. I'll make it happen. >> And I want you to do this though. Measure the churn from tri 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 subscribers. >> Yeah. And your true CAC, I'm guessing now cuz you're it's cost you 130 bucks to sign up a trial, right? >> I got to look at it closely, but I'm pretty sure it's something like that.

6:14Yeah. >> 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 to acquire a customer, not a truck. >> I think it actually is 130. It is around 130 actually because like right now say we get a hundred leads. Yeah, I'll sign up about you know

6:40Alex >> eight of them on a trial and we'll get like three or four or something like that. >> Okay. Okay. But yeah, I would go rebate second month free. They build 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 techwise. >> 100%. As soon as we sign someone up, we like bam fam like right to an on boarding like as soon as we can, like ASAP.

7:05>> So, um, we do that. We go right into an onboarding, teach them how to use it, and then honestly, once we get them like and they place the fence like right in front of them, they >> 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%. Absolutely. >> All right. That's it. That's what we do. >> It was great to meet you, man. Thank you so much. >> Pleasure, Drew. Appreciate you.