SaaS Interviews with CEOs, Startups, Founders
EP 416: 4000 New SaaS Customers From Youtube On $100K Spend with Neil Patel of CrazyEgg
13 Sep 2016
Chapter 1: What is the main focus of Neil Patel's business strategies?
This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per top. Five and six million. He is hell-bent on global domination. We just broke our 100,000-unit soul mark.
And I'm your host, Nathan Latka. Okay, Top Tribe, this week's winner is Charlie Daggs. Okay, he was a middle manager at a manufacturing company. He wants to break free and he won the $100 I give out every Monday. For your chance to win, simply subscribe to the podcast on iTunes right now and then text the word Nathan to 33444 to prove that you did it.
Okay, many of you heard I made a big league acquisition of a company called SendLater. And I'm a greedy business guy. I didn't want to give away equity to a technical co-founder. So I found my coders on a website called TopTal at NathanLatka.com forward slash T-O-P-T-A-L.
I paid over $12,000 to the site to a guy named He Sheming in China, who I've never met, but we're going to build a big business together. I'm taking SendLater public by the time I turn 30. I'll tell you more about TopTal later on in this episode. Top Tribe, this is episode 416. Coming up tomorrow morning, you'll hear from Sweeney David.
He's 26-year-old, and he went from nothing to $1 million in revenue with big partnerships. Top Tribe, good morning. Our guest today is Neil Patel. Many of you may have heard of him. We had him on in episode 38, so you should go listen to that first. We're going to get an update today. Neil, are you ready to take us to the top? I'm ready. All right, let's do this.
So, hey, in episode 38, what you shared with us was first more about your story, kind of how you were making a lot of money still in high school as consulting. And then you eventually got into consulting. And then eventually you got into building four multimillion dollar software companies like Crazy Egg, Kissmetrics, etc.
Last time we spoke, you talked about how you were going to take a formula that you'd use in your content creation, actually build software tools around that. Is that still the plan? And if so, where is that today?
Yeah, so we haven't been creating as many software companies. What we've just been doing is focusing, and I've learned over the years that I don't do enough of it. And instead of trying to create new ones or acquiring new ones, I just need to grow the existing ones and make them larger and larger.
And that's what we've been doing. So where's your focus been over the past 12 months? Crazy Egg. Crazy Egg.
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Chapter 2: How has Crazy Egg evolved since its inception?
When you're looking at the total numbers from the selecting a plan to going to checkout, it ranges on the traffic source, but on the low end, it's like around 22, 23
Neil, you cut out there. Can you repeat those numbers? You said on the low end, it's around 22-ish?
Yes. And 22, 23%, somewhere around there. And on the high end, it's around 30%. It really varies on the traffic source. So paid advertising doesn't convert as well as people Googling crazy egg, right?
Yeah. So if 100 people click this page, you put in your billing information, 30 of them will actually put in their information and click next.
If they come from a premium traffic source, is what we label internally. If they don't come from a premium traffic source, you're looking at 22%. So it's somewhere in that range.
That's great. And then I assume you auto bill, right? If they don't cancel at the end of 30 days?
That is correct, yes.
So here's something a lot of, and I've had, I just had the CEO of Vidyard come on, Michael Litt, they raised 70 million bucks. They are going through the same issue. There's this issue right now people are going through versus just tracking revenue metrics versus just tracking the key KPIs that they know people have to do to stick.
So a lot of the SaaS CEOs I've had on where they do this billing information thing, they don't have a plan in place for if someone is billed, but when you go in and look at their usage metrics, the usage metrics are like close to nothing. What's your guys plan for that?
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Chapter 3: What unique features does Crazy Egg offer to its users?
We don't release our numbers, but I'll give you a range. We were greater than a million bucks, less than a billion.
Okay, great. So when you say greater than a million, you're talking about annual run rate or just total revenue added up?
total revenue either way it doesn't matter you can put either one that's greater than a million but less than a billion okay got it so so over a million dollars in revenue in 2015 and talk to us about uh talk to us about some of the economics numbers you're a data guy so this is right up your alley i think when you're talking things about managing churn your gross your gross monthly customer churn where is that at
I do not know our churn numbers off the top of my head. I have to look into the back end. I don't have the numbers on, but we have a team who just specialize in reducing our churn.
Okay. But you don't know what, okay. Well, if you don't know the churn number, how do you know what you can spend on paid acquisition? Because you don't know lifetime value, right?
We don't evaluate churn like most companies do. Most of them just look at, here's our total annual churn or monthly churn. We look at it per channel.
So if, yeah, so if you took a weighted average or if you want to focus on one channel, let's do that. That'll be the most valuable, I think, for the audience.
Sure, so with YouTube advertising, our churn, I know that number a lot because we spend like over 100 grand a month on YouTube ads. With YouTube advertising, our churn is close to like 31, 32%, which is high. So we're trying to figure out how to get that down, but I'm focusing on that a lot lately.
Annual or monthly? Okay, great. So you got about 2.5% monthly gross churn there. And then a lot of these SaaS companies, a key thing in terms of especially ones that go public, they have mastered the upsell, right? Where you can actually get to negative net revenue churn. You guys have multiple plans. I assume you have a lot of things in place to drive upsell revenue.
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