SaaS Interviews with CEOs, Startups, Founders
1235 How He's Hit 2% Gross Logo Churn in SMB SEO Tech Space
11 Dec 2018
Chapter 1: What is the main topic discussed in this episode?
Guys, have fun now. It gets harder as you get older.
Chapter 2: What is BrightLocal and how did it start?
Coming from Miles, launched the company Bright Local in 2009. Now 120 people all around the world, again, helping these folks, specifically sales and marketing folks where there's physical locations all around the world. 3,500 customers using the platform. They're bootstrapped. They've used their own money to grow it. June 2017, doing about $275,000 in pure SaaS revenue.
They have a service component on top of that. But $275,000 pure SaaS, about 50% year-over-year growth. They're now doing about $350,000 a month in SaaS revenue. These customers paying on average $100 per month. 2% gross logo churn per month, which is really impressive considering the ARPU and the SMB space.
Spending about $150 to acquire these customers for a two-month payback and a $1,000 lifetime value.
Chapter 3: What is the revenue model and growth of BrightLocal?
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to two point seven million. I had no money when I started the company.
It was one hundred and sixty million dollars, which is the size of the IPOs. We're a bit strapped. We have like twenty two thousand customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Miles Anderson.
He's the founder and CEO of a company called Bright Local. He's worked in the local search industry since 2009 and has been a contributor to the local search ranking factors study. He's written a regular column for Search Engine Land and spoken at SEO conferences in both the US and the UK. Miles, are you ready to take us to the top? Yeah, sure.
Chapter 4: How does BrightLocal maintain a low customer churn rate?
All right. Tell us about Bright Local. What do you do and how do you make money?
Yeah, so Bright Local is a SMB SaaS platform.
Chapter 5: What strategies does BrightLocal use for customer acquisition?
We help digital marketers and local businesses essentially understand how they're performing online and how they can improve their visibility so they can win customers. The thing that is We operate in a niche. That is essentially in physical space. We operate a lot in terms of businesses that want to have physical interactions with customers.
People will give them a call, they might walk into the door, or they will have some physical relationship with their customers, as opposed to, let's say, a credit card company like American Express, where their customer relationship is essentially pretty virtual. So typical businesses that our customers would work with are solicitors, plumbers, builders, accountants.
You know, that's not necessarily small businesses, you know, kind of single sort of location, local businesses. It could be large sort of, you know, kind of enterprise-scale businesses like Home Depot, for example, that will only be an enterprise-scale business, but with 2,000 local kind of locations where they interact with their kind of customers kind of walking through the door.
So our platform is primarily used by marketeers, either working for themselves, working in agencies or working in-house at multi-location businesses. And we provide them with kind of data analytics and insight where they know how they can essentially drive more physical customer interactions.
And what are these customers paying on average per month for that kind of product set?
I mean, we're an SMB platform primarily, although we do scale up to kind of enterprise. So we've kind of got customers that kind of loosely fall into kind of two brackets. We've got customers who can sign up to self-serve and use our standard plans. And then we have these kind of enterprise customers who we negotiate particular deals based on what their particular need is.
We've got around 3,500 kind of active kind of subscription-based customers at the moment. Probably the kind of average sort of monthly, you know, kind of RP per customer is around $100.
Okay, $100 per month. Yeah. Okay. So, I mean, can I take that times the $3,500? You guys are doing about $350,000 a month right now?
Last month we did $550,000 because we also have a service component to our business as well.
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Chapter 6: What are the key services offered by BrightLocal?
Yeah, that makes great sense. Okay, good. And then give me a sense of where we're, I mean, what were you doing in 2009? How'd you get the idea?
The story comes from a pain point, actually. I was working for a large SaaS product, but more consumer rather than business. I actually got made redundant. At the time, I had a couple of kids. I was thinking, you know what? This is a really painful experience and not one that I want to go through again.
I looked my kids in the eye and thought, I need to do something that gives me security and control, and also something that they'll be proud of down the line. And so I started to start my own business and I teamed up with my business partner, you know, who's kind of very long in the tooth sort of web developer. And we started looking around kind of opportunities.
We collaborated on a local marketing project before. I kind of liked the kind of industry, liked the idea about helping local businesses who are really struggling to understand how to use the internet to acquire new customers.
I had lots of friends of mine who were in various sort of businesses from building to owning pubs and bars and restaurants, for example, really kind of focusing on offline sort of marketing, really didn't understand online and struggling to get their heads around it. So there's an opportunity here.
But given our kind of background in web development, we decided to pretty kind of quickly into the sort of agency side of what we were doing, decided to go and build our own tools, looked around. There was nothing really in the kind of marketplace. Also spoke to kind of contemporaries of ours who were struggling to kind of get the data they needed to kind of really grow.
And so that's when we kind of started off building the kind of product side of what we do. And then from about probably about a year into kind of starting the business, we became kind of 100% focused on the product.
When did you sign your first customer? How long after you quit your job and you started writing code did it take you to sign them?
We started off actually with a free tool. It was designed as a sort of marketing device and a link builder back in the day. Sort of thing that actually would be considered kind of unacceptable and spammy these days, but worked back then. We probably operated like that for about six months, and that allowed us to build a very large list of potentially interested customers.
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