SaaS Interviews with CEOs, Startups, Founders
WpBuffs Hits $100k in MRR Supporting Wordpress Sites Using Whitelabel Partners
25 Aug 2020
Chapter 1: What is WP Buffs and how does it operate?
Yeah, revenue right now, it's every month it's like a little bit up or a little bit down, but we're around 90 to 100K monthly recurring revenue right now. So like just over a million dollars annual revenue for the business. You are listening to Conversations with Nathan Latka. Now, if you're hearing this, it means you're not currently on our subscriber feed. To subscribe, go to getlatka.com.
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Or bootstrap founders like Vivek of QuestionPro. When I started the company, it was not cool to raise. Or Looker CEO Frank Behan before Google acquired his company for $2.6 billion. We want to see a real pervasive data culture, and then the rest flows behind that. If you'd like to subscribe, go to getlatka.com.
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He's building a very cool business called WPBuffs.com. He's also co-host at the WPMR WordPress podcast, which you should all check out. Joe, you ready to take us to the top? Yes, sir. Thanks for having me. It's going to be fun. You bet. So you described WP Buffs on IndieHackers as 24-7 WordPress site management. Now, is this consulting or SaaS?
Uh, it's not really consulting and it's not really SaaS. It's more like I, I, I put it under the category of productized service. So really a services company at core, uh, we're managing WordPress websites for entrepreneurs, small businesses, but also for agencies and freelancers. We have a white label program as well. We do white label support.
Um, but it's kind of more productized service or pretty much packaging, uh, services together, uh, and selling that, uh, to folks who need ongoing support when it comes to WordPress. what can you be specific? So I have a WordPress blog. What's something I would pay you to do with that WordPress blog? Yeah, cool. Uh, a lot of people, people need all sorts of help with WordPress.
People use WordPress, they build a site, they install everything, they get the theme set up, they get all the content on the images and then they realize, Oh goodness, there's so much ongoing stuff I have to do. I got to manage all the updates for the plugins. I got to manage backups. Uh, What happens if the website goes out on a Friday night and I'm out for the weekend?
What happens to the website then? There's the speed of the website, which also, of course, influences if you're doing SEO and other marketing stuff. You want your user experience to be good. Security for the website. Making adjustments on WordPress. All these things are...
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Chapter 2: What is the significance of white label partnerships for WP Buffs?
We usually recommend people start selling the care plans for at our direct customer base rate. So if someone gets 20% off our $197 a month, it's about $157 a month they're paying us for that white label care plan. We recommend they start by selling that care plan for $197. So it's about $500 a year in profit for that care plan if you sell it at that rate.
But we also say, once you've done that for a little while, you can always adjust pricing moving forward. If you feel like you have good relationships, you can always increase pricing a little bit if you want to. That's fine too. What prevents a white label partner coming in and undercutting your own website's pricing?
This is the biggest issue that I talk to when people have this kind of value-added reseller go-to-market strategy. Yeah, we vet all of our white label partners very carefully. Anybody who wants to sign up for our white label program has to jump on a call with us. Part of that is, yes, to sell the white label program. And we want to educate people and make sure that what...
we're doing is going to fit well into their business model, but it's also really focused on making sure that those partners are people who want to really add care plan reselling to their business model. They're serious about that, that they know our price points, that they understand
the pricing that they need to sell that in order for our program to work for them and to benefit their business and to help them, you know, make care plans profit center for the business and to grow that piece of business. So what if they, that's what I'm asking, right? Let's assume it's a good culture fit.
It's all a perfect fit, except the white little partner says like, let's say I'm a partner on where on a first call, Joe, I love what you're doing. I'm also selling though. Like, content writing services. And I know if I can just sell them your tool to get a relationship, I can make all my profits selling my content writing services. So I'd love to sell your plan at cost for me 160 bucks a month.
You obviously can't have that Joe as a business because then they're undercutting your own pricing on your own site. How do you prevent that from happening? Is it in the contract? Um, I don't, well, we give all of our white label partners a 20% discount. So all of our white label partners are paying us $160 a month for those care plans.
So if they want to sell it at cost, it just means that they're not making a profit on those care plans that they're reselling, which we have no problem with. We prefer for our YDO partners to make a profit on each care plan that they sell. But we actually have a few very successful YDO partners who work with us on 20, 30 websites. They sell the plans at cost for them.
They don't make profit on that, but it allows them to make profits on some of the other things they do for clients. So like a marketing agency, they work with us on 30 sites, don't make profit on those, but it allows them to get in the door and sell great SEO services.
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Chapter 3: What is the average customer lifetime value for WP Buffs?
And then our sales team is someone, we have someone who does sales, who works on our sales team and directs our sales team, but also one of our customer success folks also does sales. Dean, he just happens to be really good at it. So we have him doing some sales as well, but he really just jumps on calls, just get booked into his calendar. Are there quota carrying reps though, or no, no quota?
Say again? Do yours, it sounds like you have two sales folks. Do they have a quota or is there no quota? Uh, no quota, no quota. Got it. So two folks on sales and they're just kind of did the demo, the trial, the demo, the close, and then onboarding is sort of what they focus on. I wouldn't call it a demo. We just kind of have discovery calls.
Um, and for white label partners, it's to make sure they're good fits and to explain the program to them and to get them started on things for direct customers. It's yeah. Also educational, uh, and to make sure that they, uh, They are our subscription is going to be a good fit for them. We're not a good fit for everybody. Some people just need a freelancer to do an hour work for them.
And that's fine. But we're an ongoing partner for people. We got to make sure we are adding that value to folks. And yeah, we don't have like a quota for our sales team. But yeah, we review our numbers every month and say like, oh, like here's our closing rate. And, you know, oh, where could we have done better? And we discuss things. So we're not super formal about sales, but we try to be.
formal enough that we have at least like some things in place to try and improve. And you mentioned revenue source, sometimes it's up, sometimes it's down. When you look at monthly revenue turn on average, what would you put that at? Yeah, Dean is head of customer success, and he has done a great job with churn. Churn is, earlier this year, it was probably at about 5%, 6%, 7%.
Now it's 4% to 5% pretty consistently over the past two or three months. So yeah, under 5% is a big number to hit and stay consistent. So if we can continue to do better there, that's great. Dean's big aim this quarter is net negative churn. So we want all of our
upgrades, um, from white label partners, adding new sites or current direct customers, adding new sites or upgrading from a maintained plan to protect or protect to perform. Uh, we want that revenue to eclipse the revenue that is churned out of the business called net negative churn. Uh, and that's like, yeah, Holy grail for, for, uh, subscription businesses.
So we're trying to hit that this quarter. We'll see. How do you do that? I mean, that's extremely, extremely, I actually don't think I'm sorting through my database right now from like the, you know, 2000 SaaS CEOs I've interviewed by ARPU.
There's nobody at this price point that has that negative churn because of the economics of like, there's no opportunity to upsell and add three grand to the same customer because your max plan is getting them to add another site. And then, you know, that bumps them up 50 bucks a month. Are you going to bring on a new product? That's a higher price point.
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Chapter 4: How many customers and websites does WP Buffs currently manage?
Yeah. Yeah. So you have 60 or 70 of the, of your 500 total customers paying you 60 to 70 are white label partners, but those partners make up the majority of the number of websites you manage. Correct. I see. I see. Interesting. Okay. Last question before we wrap up, what does CAC look like to get a new $200 a month customer? Say again?
What does customer acquisition costs look like to get a new $200 a month customer? Yeah, this is a hard metric for us to nail down. I don't think we have an exact number for customer acquisition. We try to look at it the way we think about it is more customer or what's the lifetime value of a specific customer. And then
what are our marketing activities in terms of trying to obviously like undercut that number pretty significantly. So we don't have a specific number for what customer acquisition cost is. But we're always trying to, you know, for sponsoring an event, we'll say, well, one new white label partners has a lifetime value of, you know, $5,000. So, you know, we can afford to spend, you know,
easily spend $5,000 on a sponsorship for this because, you know, we expect to get maybe two new white label partners from, you know, appearing in front of these 5,000 people or whatever. So, um, yeah, that's how I think about it. So you're comfortable paying sort of up to half of lifetime value for a new customer, five grand for two new white label partners. Um, I don't know if, I don't know.
I don't know. I would feel comfortable doing that. I'd also feel comfortable paying more probably off the top of my head. Um, I think that there's, we're always finding ways to increase customer lifetime value. That's actually increased like over the lifespan of the company. We're always, lifetime value continues to increase for customers.
So yeah, I mean, I probably feel comfortable spending a little more as well. All right, great. Rapid fire, famous five here. Number one, favorite business book. Favorite business book. Ooh, I have two that I really like, but I'll just go with essentialism. Number two, is there a CEO you're following or studying? Is there a what? CEO you're following or studying?
Yeah, usually it's folks around the WordPress space are the people I keep closest with. So like Corey Miller, he's probably not someone you know, but he ran iThemes and that was acquired by Liquid Web, big hosting company. So Corey Miller is someone I follow pretty closely. I'm actually pretty close with him.
Number two, is there a tool you're using a lot to build the company besides any WordPress tools? Yeah, we're big HubSpot users. So that's a big piece of our HubSpot sales CRM. So the sales CRM is a big piece where we keep all of our leads and push them through the cycle. Number four, how many hours of sleep are you getting every night? Ooh, I like, I like to get a lot of sleep.
Uh, I'm usually around, uh, at least seven, but I really try to get like eight or nine, but it's tough these days. I've got a seven month old baby boy here. So, uh, but he's sleeping pretty well. The first three months were a little tough, but I get a little situation where I sort of married one kiddo. Yes. All right. And how old are you, Joe? 31, just turned 31. Congrats. Last question.
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Chapter 5: How does WP Buffs determine pricing for their services?
Joe, thanks for taking us to the top. Hey, thanks for having me, man.