Today on the More Cheese Less Whiskers podcast, I've just arrived in London, I'm at the Shangri La hotel at The Shard, the view is spectacular by the way, and we're talking with Mark Schreiber.
Mark has a company that provides market data about higher education institutions, so people looking for this information, people who are creating things like higher education software and need program and contact details for the leaders of these institutions, can find the right schools, and people to talk to.
We had a great conversation about the transition from being a legacy directory where, years ago, it was a big, physical directory, a kind of Who's Who, to what it needs to be today as times change.
When you think about it in terms of the 8-Profit Activators, what they're really doing is providing the 'Target Market' research for people. They have the market data about the institutions that can help people select their target market, and pick the right people to be in front of.
There is so much opportunity here, and you're going to enjoy how we think about this one.
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Transcript - More Cheese Less Whiskers 152
Dean: Hello, Mark.
Mark: Hello, Dean. How are you?
Dean: I am so good. How are you?
Mark: I'm doing very well. Thank you. I'm on the line with my friend in MarketingSherpa, Jill Harrington.
Dean: Hello, Jill Harrington. How are you?
Jill: I'm good, Dean. How are you?
Dean: I'm good. Okay. What a treat. This is an interesting twist here we've got. We've got a former guest-
Mark: Well, Jill is-
Dean: … with a new guest, so this is great.
Mark: Yeah, Jill is just here for when I forget something really important.
Dean: Okay, perfect. Well, Mark, how do I how do I pronounce your last name?
Mark: Schreiber.
Dean: Schreiber. Okay, great. So Mark Schreiber, and let's start off with the Mark Schreiber story here. So we can kind of set the context, and then we can shape it from there.
Mark: All right. Well, my story's not particularly interesting. So let me tell you about Higher Education Publications, the company that I work for about 35 years now. So we got some longevity going on here. Basically, we started out as an old-line directory publisher. Back in the early ‘80s the United States government stopped publishing a directory that everybody absolutely loved that contained information on all of the accredited colleges, and universities in the United States, and their chief academic, and administrative personnel. My boss and the president of the company had a brilliant idea that since the government stopped publishing that book, and there was a built-in market for it of people screaming to do it. He bought the database from the government, and went into the business of collecting the data himself, and publishing a directory.
And that is pretty much what our business was based around for many, many years. We were black ink on white paper. It was an annual directory that listed, as I said, all of the accredited colleges and universities in the United States, and also had a listing and contact information.
Dean: Private and public?
Mark: Private and public, yes.
Dean: Okay.
Mark: So that worked out very, very well for us for quite some time. It had a growing market to it because back then in the age before the internet if you wanted to contact somebody on a college and university campus, you have one or two options. You could either pick up the phone, get directory assistance, find out the number for the school, call the school, ask for the provost office, see if you could get the provost on the line, or you could go to the higher education directory, pick up the phone, dial it, and it was like a big rolodex of college and university administrator.
Dean: For the dean of admissions press one, for the dean of-
Mark: Exactly. Yes. So this would get you directly there. And that works out really, really well, for us for a number of years until this little upstart company called Google came around. And then people started asking us a very good question, well, why would I pay you for your directory when I can just go online, and look this up myself? And that was pretty much the demise of all of the directory business. You don't see yellow pages anymore. You don't see paper copies of, well, pretty much any type of directory anymore. And that was basically because of Google.
So we decided that if we were going to stay in business, we were going to have to make a pivot somehow to online, and pivot our business. So in about 2006, 2007 that's what we started to do. We put the directory online, and just to give you an idea of the size of this directory in our database, a directory currently has about 4,800 institutions in it. It's about 90,000 administrators, about 21,000 individual accreditations that it lists. The physical directory which we do, believe it or not, still do is about 1,150 pages, weighs about four and a half pounds, and it gets approved annually.
Dean: That's amazing.
Mark: But anyway, we made a pivot to the information commerce business basically. We took the names and the information that we were gathering for the directory, and moved that into a product that colleges, and universities, associations, executive search firms, companies in the enterprise software industry could use to fill their CRMs with information on whose, who, where in colleges and universities. And that's pretty much where we are now. That's what we're doing.
Dean: How was all the data gathered or updated?
Mark: Well, that's where we're different than most of the other people in the business. We still do it the old-fashioned way. We still go out every year. As a matter of fact we just started this process between June and September of each year, we actually query each one of the institutions, and we have institutional contacts there, and we send them either a paper survey or a link to an online survey depending on what they're more comfortable with, and they volunteer the information that they want to volunteer. So they review their institutional profile information and make updates to that, they review their accreditation information though we do the updates to that ourselves. They review the administrators that they want to list, and they can list as many or as few as administrators as they want to, and they can include or exclude contact information if they want to.
Dean: Okay.
Mark: We have a list of what we call manpower codes. They are numeric designators for particular job positions at colleges and universities such as president or provost or Dean of student affairs, admissions that sort of thing. We send them off that list and suggestions as to who they ought to be putting in. There about 120 of those that we track at this point.
Dean: Okay. Wow. Like athletic coaches or any… Or is it all just administrators?
Mark: We do have athletic directors, but we're mostly C and D suite type of folks. We don't get down into the professor level. We have deans and directors of programs, but not the professor level.
Dean: Okay. All right. What are people using this information for? How much does it cost, and who's your customer for this?
Mark: Okay. Well, the information is available still in three formats. We do, as I said still sell about 2,500 paper directories each year, and that is depending on the discounts when they order it, and that sort of thing. That's between 75 and $83 per copy.
Dean: That's an interesting model and that 80% of those are probably legacy purchases that we've always bought it for 30 years. The next one is here.
Mark: Absolutely. Frankly like me, they tend to be older folks, and they don't like that newfangled interwebs. They want to they want to stick with their book. We hear this quite… The dean likes his book. When we mentioned, well, you know it's online. No, the dean likes his book. Okay.
Dean: Right.
Mark: We still do about 2,500 of those. Then as I mentioned it's also available as an online app which is really a wonderful product for people who are using it to look up information because it's completely searchable. But we only really have about 500 clients in that area. And then it's also available in what we call a data extract which is basically a file extracted from our database based on client specifications. So a client can come to us, and say, "I need all directors of student affairs at four-year public institutions east of the Mississippi with enrollments over 5,000, and we can produce that list for them."
Dean: That's great.
Mark: And the pricing there runs from a minimum order of $500 up to 14,000 for the entire database of every school, every administrator, every bit of information we have in the data file.
Dean: Okay. Wow. Which they could get in the directory for the-
Mark: For 83 bucks.
Dean: It's all there but the-
Mark: It's all there.
Dean: Okay.
Mark: But in the directory-
Dean: So this is something that-
Mark: … around the online, they can't actually download it.
Dean: I got you. Okay. So they would have to compile it all or have somebody data enter it all if they were trying to compile a list of 500 schools that they're trying to approach around. So it's the time-
Mark: That is correct.
Dean: The time savings.
Mark: Well, it's not even so much time savings, but what really… What really saves us as far as that sort of thing is concerned, and I think most people realize this who are in that industry is the volatility that happens in higher ed. We turn about 20 to 25% of the database every year. So you can go ahead, and get a book, send it offshore, key it, but by the time you get it back, and you proof it, it's going to be out of date.
Dean: Yes, got it. Okay. And you're updating this data once a year or ongoing?
Mark: Ongoing. We do a global update.
Dean: So you also have the most up-to-date info, if I were to get an extraction from you?
Mark: We try.
Dean: Okay. Now, who is using this data like who is your… Who's your best customer for this? What does this do for them?
Mark: Okay. Our best customers tend to be higher education associations who use the data for membership and informational purposes to advertise what they do. Then also enterprise software companies. There are companies out there that have cradle-to-grave type of systems for colleges, and universities. Everywhere from the admissions through alumni. Basically from in the door to out the door, and beyond. That sort of company is quite good. Then there are other software companies that specify in one particular area, student affairs, retention, admissions. One particular area within a college or university. They're quite good.
The colleges and universities themselves use the information. Some of the larger institutions have rather large departments that conduct surveys and studies, and that sort of thing, and they use the information to do that. Also, one other interesting market for us that we're actually well penetrated in is executive search. So what they use the data for is they have a contract with an institution to find a new provost or a new president, and they use our data to contact, and research potentials at other institutions for that job.
Dean: I got you. Okay. Do you ever do like syndicated extractions where you make to do that extraction that would appeal to headhunters, and for presidents or provosts, and just single out or package that as a possibility?
Mark: We have-
Dean: Or are they individually each extract is done as you spoke kind of thing.
Mark: It's primarily the latter. We have tried a package type of things before, and a reasonable uptake on it, but really a part of our part of our niche is how flexible we can be with the data, and how we can connect to other data sources like the government Department of Education data to get even more specific because what we've noticed in the market is that early on it used to be, “Oh, give me everybody you got. I'm just gonna send stuff out to them, I'm going to mail everybody on this list. This will be great.” Now, it's more well, give me the people that are going to buy from us.
Dean: Yeah. Right.
Mark: We don't want to spend all that money. We just want a list of the people that are going to buy from us.
Dean: Right, that's interesting. All that sounds like… It's pretty interesting. What's the total revenue? What kind of revenue do you guys do?
Mark: I'm sorry. Would you repeat that?
Dean: What kind of revenue do you guys do? Give me a scope of the thing. Is it…
Mark: I don't know if I'm really comfortable about getting into dollars and cents.
Dean: No problem, I get it. I'm just trying to get a sense of the… I guess what I'm looking at is the pattern of this is revenue going up or down or is it stable. I'm just looking to see are we hanging on to the last kind of things on the arc of this kind of data, or are we looking for a new… And continuing to grow sort of your future prospects of this. That's what kind of-
Mark: We think after 36, 37 years that we have a fairly stable product as long as we're able to move around with it a bit.
Dean: How about with the sales?
Mark: What we've noticed over the years is that when sales of, for instance, directories go down, sales of data have been going up because we made the pivot. So I will tell you that 80% of our revenue now comes… 80, 85% of our revenue now comes from data.
Dean: Okay, perfect.
Mark: From the information commerce part of the business. Because obviously book sales are nowhere. And the online product which by the way is called Higher Ed Direct, that's really turned out to be a better promo tool for us than anything else, and we got into that in a bit. So what we want to do is grow our data clients. Revenue has been increasing pretty steadily in that area over the past several years, but we want to make sure that it's offsetting what we're losing in book sales.
Dean: I mean, I think you're going to reach a point with the book sales where it's just an ongoing level that every year people will just get to, because I imagine a lot of those are institutions and libraries, and things that are just, “Oh, we got to reorder the new directory because we've always wondered it and here it is.
Mark: Well, actually, we have a standing order program, so, yeah most of those are withstanding order.
Dean: Right. Okay. So you're not making any new sales of the directory probably.
Mark: Very few.
Dean: Right. Now, of the data and the sales that's coming with the new program… Are you familiar with the way we talk about things as a before unit, during unit, and after units?
Mark: Yes, I am.
Dean: Okay. How much as a percentage would you say the revenue this year will be from after unit sales, meaning sales to existing clients? To people who bought last year or a year before?
Mark: Oh, I see. Okay. Well, we're doing a couple of things there. Our renewal rate on data, it's a little bit difficult to track because we have different client types in there. Certain client types based on what they do will want to renew each year or decide that they're going to go somewhere else. Other data clients were sort of a one-time shot. We're going to try this new… This is for a one… And they're not coming back. I mean, overall we've got about 1,800 unique data clients over a period of several years, but we're really only renewing about 450 of those a year. So whatever that comes out to be about 30% somewhere around there. And that's okay as long as the ones who are renewing are the big ones.
Dean: That's what I'm curious about is what percentage of sales are after unit sales. Meaning in the last 12 months is it 80% legacy clients and 20% new that are fresh, new people in this year, the last 12 months or is it 50-50?
Mark: No. It's more like 40-60 legacy to new.
Dean: 60% new. Okay.
Mark: Yeah.
Dean: Okay.
Mark: Well, see that's a little difficult for me. I wasn't quite prepared for that. 60% new or did not renew in the past year, they may be somebody that we have had a relationship then before.
Dean: There's a distinction. This is what I try and look at is what I'm looking for are the opportunities in your after unit. Like if I were saying that most of the revenue is coming from returning clients one of the things we measure is return on relationship. Meaning you've done business with somebody. You've got, I think you said, 1,800 let's say people who've ordered data from you in total. Now, they may not do it every year like you said. Maybe they didn't renew this year but maybe they ordered two years ago or in the past. And those would still count as after unit because they're existing relationships that you have.
So that's one thing seeing is there an opportunity to expand relationship with the existing clients to get them to buy more. Do you have like a proactive, orchestrated kind of outreach program for existing clients to encourage them or facilitate them buying again, or is it that you send them an announcement or whatever, and they call you to buy?
Mark: Up until recently it was the latter that we basically would say, “Hey, it's been about a year, and we've updated all kinds of information, and would you like to come back?” But that was when we were still pretty much in the directory mentality. Since we switched over to an online mentality where we're updating continuously throughout the year. What we're trying to do now we're just starting it because… Another thing, yeah, we're a very small organization. So we don't have a lot of personnel to throw at this. But what we're trying to do is to educate folks that we are updating throughout the year.
The data that you got from us is getting old, and you don't want old data, and you don't want to spend the time, and effort to be having your Salesforce updating this stuff, and your CRM or having your interns do it or whatever. So why don't we take a look, and see what we can do for you for updating your data. And that's going out to the larger clients about three to four months after their original purchase. But I think what we need to do better after reading a lot of your material, I think what we really need to do better with is that immediate outreach shortly after they have made their sales. That we are not doing a good job with.
Dean: Right, okay. There's some opportunity there. How much of the potential markets do you think you're reaching with your messaging? Or how much bigger you think the market for this kind of data is? Are there a lot of competitors in this market, or are you kind of the one to go to?
Mark: Now, there are a number of competitors. Some of them quite large. Well, actually most of them quite large. We are the niche guys that are down here in the trenches picking up data from the old-fashioned way as I said, and that's our advantage too with that, and our customer service. That you're not going through a website to order this, you're talking to a person, and we'll listen to you and make suggestions, and that sort of thing. There's a great big market out there, and it's getting bigger all the time.
Colleges and universities maybe not so much. The executive search firms I think we're actually doing fairly well in that part of it. But particularly in the software area, particularly in the association area, I don't think we're nearly as many associations as we ought to be. A lot of these folks are very, very price conscious, and they don't seem to necessarily be as quality conscience as you might think they would be. And that's-
Dean: Because they just look at it as data. It's data, it's data.
Mark: Data is data.
Dean: The commodity of it, I got you.
Mark: Right. They're thinking, okay, well, I could buy her name for 10 cents or I can buy it for 39 cents. Why would I pay 39 cents for it when I can buy it for ten cents.
Dean: Because you get it with the smile.
Mark: No. Well, the answer being that the 10 cent one maybe right 25% of the time.
Dean: Yes, I got you.
Mark: So, now, how much does that actually cost you?
Dean: Yeah.
Mark: Well, that's more like 40 cents, isn't it?
Dean: Yeah. Do you offer any guarantees along that line where people are-
Mark: Oh, yeah.
Dean: Okay. So you're easing that mind for them anyway then.
Mark: Yes. Absolutely. We will refund because it helps us, and we explain that to folks too. If you let us know that something in the directory is wrong because people do move, then we're going to refund you. Thank you very much for that. And we're going to update it so it'll be right.
Dean: That's great. Okay. So if we were to pick a single target market here, some of the potential opportunity to expand, what do you think might be the best market for this? Who would be a choice if we could just choose one? I mean, even if it's somebody that you are doing business with, if it were executive search firms or if it's associations or any of the-
Mark: I think what we're looking at is the marketing or sales directors at midsize software companies, and fairly new ones. And when I say software companies, I mean companies that-
Dean: Education software.
Mark: Yes, exactly. Because we don't sell to just anybody. That's another thing. This has got to be the product or service that you have, that you want to use our data before it got to be in the higher education area.
Dean: Okay. And then where would you get that list?
Mark: Oh, that's a great question. Well, what we have done in the past is we've gone to where they are. So we would go to education conferences, and meet with the other vendors at the education conferences because they're great leads for us. They're people that are obviously spending a great deal of money on promoting to higher education. So we would be well settled there. Basically beyond that, it's just research, just online research about the companies. Right now my marketing guy is quite good with social media, and will engage with folks on Reddit and LinkedIn. When somebody from a company we're interested in post something, he'll engage and start a conversation, and wait a while, and see if anything comes around to marketing, but he's very cheesy there, not very whiskery.
Dean: How many of these some companies do you think there are? How many software providers?
Mark: A little bit difficult to say because they keep coming and going. It's sort of amorphous. But I would say that there are probably about 150 of the larger ones and there are probably somewhere in the neighborhood of a couple of thousand of the smaller in startups, because there are new ones coming on all the time. And startups are fine with us.
Dean: So there's a pretty small universe of them when you really think about it then. And they're mostly… Would they be on LinkedIn? Would you be able to identify them as well? Or would you-
Mark: Yeah.
Dean: Yeah? Is there any other way of getting compiled data of educational software companies. Is that a MSIC code or is there some specific thing that you would be able to turn those into visible prospects?
Mark: Well, if anybody has that list, I would be very interested in finding out about it, but I haven't been able to find that.
Dean: Okay. So part of what I guess we're looking for here is to maybe think about what they would be looking for that is either a precursor or something that would lead to them needing your data because they may not even be looking for or know that that data is available perhaps. I don't know what the sophistication level of the market is. They may think that it was just the old directories that are available. They may be sitting… There may be somebody in a… So I never kind of overestimate the awareness of people because right now there could be people on a phone call talking about their educational software directory provider trying to figure out how to get in front of people who want to know about all the educational software companies. They'll never know. They're maybe somebody just like you who just painstakingly gathers all the educational software suppliers.
Mark: So we're talking about motivation of this class of prospect?
Dean: I'll tell you one of the things like using directory information which is really an interesting thing is I often tell the story, I had a client in Canada who does… They do branding and packaging, and management for hockey players. Let's say if you want to be an NHL hockey player, the best thing that can happen to you is to be born in Ontario because that's where they all come from. The parents are very… They're okay with spending all the money that they spend on these elite programs for their kids to be in the hockey program because the NHL is a viable path to be a professional hockey player.
Every team that's had somebody come through that program to make it to the NHL, and the parents ease their minds that worst case scenario is that they'll get a Us hockey scholarship. The worst thing to happen is they're going to get a free education. So they look at it as an investment there. But they may look at branding and packaging, and social media stuff as a luxury or something that isn't necessary. So they're not looking for it or on their radar. So rather than try and advertise to introduce that sort of opportunity to them, what we did was put together a directory of US hockey scholarship programs.
Mark: Oh, great idea.
Dean: Right. So advertise the US hockey scholarship directory. And that was a big hit because that is something that the parents were thinking about, and they were eager to gather that up because that seems like the goldmine. But then as soon as they get it that brings up the next question which is, well, what do I do now? Now that I've got this, how do I approach these hockey coaches, and how do I make my kids stand out against all the other kids that are going to do that?
And then they're open to the message of, well, maybe if your kid looked like a star, and was packaged like a star, and had the stats to match the star, that's going to give him an advantage over all these other people. Now, it makes sense to polish your achievements, to not just let the hockey scouts have to surmise on their own that you really are a great player, right?
Mark: Mm-hmm (affirmative).
Dean: You've got the stats, now polish it up and it gets you the attention. And that's an even better outcome. So I wonder if we start thinking about what are these software developers looking for, they may be thinking like I don't know whether there's something for the… Even if you reframed it away from data, but to the marketplace or are using market data on educational software that you bundle it along with who's buying this. That would be appealing to somebody who is an educational software developer, and then you've got now the opportunity to educate them about all the most accurate up-to-date comprehensive market of educational software, buyers.
Mark: Right, and that is… I see your point. I absolutely do. So really what would be-
Dean: You just got to make it more look like cheese, what they want.
Mark: You got to get into their head a little bit to try to figure out, okay, so I'm starting up this company… Of course there's a couple of dynamics going on here, but I'm not going to get it too complicated, but it really depends on if the person that we're dealing with is actually the startup person or if it's the marketing person for that company. So there's a bit of a difference there, but anyway let's say that they're just starting out, and something like a beginner's guide selling to colleges and universities.
Dean: Yeah. You even just have data alone. You wouldn't even necessarily position it as a beginner's guide, you position it that they stumbled on a goldmine. Like the parents see the 2019 US hockey scholarship directory feel like, “Oh, that's a treasure map. That's a goldmine that I've stumbled on here.” If there were some equivalent words that what would be the cheese that a software development marketing director or founder would be looking for that they would recognize as, wow, that would be valuable.
Mark: Yeah. Well, that is a good question. So-
Dean: Even if you bundle it with other market data about the… Whether there's other… I know in the franchise industry there are research companies that will do, I think called abstracts or do some kind of report independent market data about any industry like it's kind of-
Mark: Like a white paper or something like that.
Dean: Something like that, but to give you a sense of the scope of a market like if the type of franchise that you're considering is a loan service franchise that it would have a white paper or research data on the state of the home loan service marketplace, to see how big is the market, how stable is it, what's going on there. I wonder what sort of data would be available for the educational software marketplace.
Mark: I am not sure, but I'm going to find out. Let's see what we can-
Dean: You see where I'm going though, right? That sort of-
Mark: I do see. But there is one other thing that I'd like to bring up just so that you know that it's out there. What we've been having a lot of success with, I think I mentioned earlier is we have this product Higher-Ed Direct which is basically the online version of the directory, and all of those 4,800 schools, and 90,000 administrators are in there. And our website is driven towards getting somebody to get a two-week free trial of that, and it's a real free trial, there's no credit card involved. We don't bill you at the end of it. There's nothing like that. We just want you to go out there, take a look, play around in the data for a while, check out, see that how accurate it is, see the various categories, and how you can sort, and squish, and manipulate it, and that sort of thing. That seems to be a real good driver for us over to data sales. We're converting about one in 10 of those over into a data sale.
Dean: Okay.
Mark: So if we could get something. So would that be like the next step past… Okay. So let's say that the first step to get in to… Or to get a better penetration in the educational software startup market would be a market report sort of thing about something that's not available anywhere else, but that would be a great interest in value to.
Dean: Yeah. That's where you could kind of attract when you have visible prospects like that to go out to them that that starts the conversation, and they're then along with it is here's what's going on the market, plus here's access to all of the players in this, all of the data that you would need. That's all of that. That's a proactive kind of outbound strategy that you could use, but the very first thing is to maximize the people who are already searching for what you have. So if you're like on… Are you doing Google AdWords, and SEO, and the things…? And Bing, I imagine would be a good educational one too here. When people type in your search terms, are you already maximized there like in terms of SEO?
Mark: I don't know if I would say that we're maximized, but we're definitely working on it. I don't know that you can ever definitively say, yeah, we're doing the best that we can, because that's such a moving target.
Jill: And if I can-
Dean: Are you saying just SEO? Are you doing pay-per-click?
Mark: We have done pay-per-click before primarily on LinkedIn because we felt that was where our market would live more than Facebook. We were getting decent click results but we weren't getting a whole lot of results beyond that, and frankly we sort of felt that it was fairly expensive for the exposure that we were getting.
Dean: Yeah. I wonder about like Google if somebody were looking for what you have, these software developers, what would they be searching for?
Mark: I was afraid you were going ask that. I sat around for an hour and a half with our website developers having this very conversation, and it is really it is really difficult. I think Jill will back me up on this one. It's really difficult to nail down what somebody would be searching for.
Dean: Well, it's probably not that difficult.
Mark: List of deans or college and university decision-makers. That doesn't make any sense. What are you looking for?
Jill: Dean, I went and looked on like Wordtracker and just me what the search terms were, and I tried with it college and university, contact, decision-maker. I tried all kinds of things. They almost didn't register. I mean, I couldn't any search terms that had any numbers to it whatsoever. So I don't know if they just… Like just right now I just entered list of colleges and universities, and one comes up at the top, Education Corner. Then you look at that, and you search by state, blah, blah, blah. So then that was my question to Mark is are people searching? I mean, how in the heck are they finding you?
Dean: Right. You get a sense that there's… If you're very specific though to that there's a great opportunity to be what they're looking for right there, but it's an important thing to really all of this is under that. This whole more cheese less whiskers mindset and approach is really about thinking like they think. That's why it's important to narrow down to a single target market at a time. If we're thinking like a software developer whose software works is higher education software, and their clients or customers are colleges and universities, that person, they're having phone conversations like this trying to figure out how can we get to the colleges? How can we get in front of the right people?
Mark: Right. And unfortunately I think what happens there a lot, and something that we have to break through is that they go to the companies that they're familiar with which are the bigger ones of our competitors that I have mentioned to you strictly because they're ubiquitous throughout a lot of different verticals. There they are, and they're going to MDR or they're going to… Well, they're not going to data.com anymore because I guess Salesforce has given up on that. But they're going to these others. So that's kind of why it's important that we're out in front of them ahead of time. So that we're top of mind when that comes up which goes back to your point earlier is that if we provided them with something that's really valuable to them, hopefully when they have that conversation they'll know exactly where they want to go.
Dean: When you look at the things like the path of the genesis of an idea for an educational software to the product being ready for market sort of thing, or an existing one, there's probably… When you look at the different things there's probably a lot of software companies that are already kind of mature and visible that you could get in front of.
Mark: Oh, yeah.
Dean: Yeah. I think there's got to be somebody has the list of software developers that you could get in front of. And a lot of that is really just… Sometimes you all start out with the clearest articulation of what you have. If you think about how many software decision-makers you have access to in your database. That would be a clear benefit for our software developers. Sometimes all it takes is a postcard with a really clear articulation of that. And an image of the data or the report with the, “Here's what we've got for you, and get a free trial at… ” With a tracking domain name that goes right to a page specifically optimized for software developers. And follow this same… I'm using software developers as one target audience, but there's… You could then do it for any of the other target market. It's still the same process.
Mark: Our association market or the higher education market. Yeah, we're just using this one as an example. It translates to that same type of thing is to… Right. I see that.
Dean: Yep. And then the other thing that I wonder about is you mentioned that your trials are doing… What's the volume of trials that you're getting? Like how one in 10 you say convert to a trial. That’s a little low on what you would expect from a free trial. And you're doing a trial that… I do the same kind of trial with GoGoClients, and GoGoAgent that the trial is what's called an opt-in trial where it's a free trial, no credit card, and then they opt-in to continue versus an opt-out trial where they put in all their credit card information, and then if they don't cancel before the trial period, you'll bill their credit card. You'll get a higher conversion on the opt-out free trial, but you'll have fewer people take the free trial.
Mark: Right.
Dean: So I think a good benchmark for you would be around 25% of the trials. So maybe it's an opportunity to look at that experience, that people get in that 14 days.
Mark: Okay. Well, I think maybe I was a bit confusing before.
Dean: Oh, okay.
Mark: With the free trials, we're doing about 60 a month. A good month is 80, a bad month is 40, but we're averaging out at 60.
Dean: Okay.
Mark: So of those, we're actually converting about two in 10. I think our conversion rate last year, I don't have the current numbers, but our conversion rate last year was something like 22.3% or something like that.
Dean: Oh, okay. I thought you had said one in 10 earlier.
Mark: I did, but one in 10 of those… That's two in 10 actually turns into an order for the online product. One in 10 of those eventually or sometimes jumps directly to a data sale.
Dean: Oh, you mean like they will call you, and get a specifics.
Mark: They will call or they will send us the email that we'd love to see saying, “Hey, I love your product. It's got all kinds of great information, but I can't figure out how to extract the data from it.”
Dean: Right. Got you. Some will do that for you.
Mark: Yeah. I can help you with that.
Dean: Yeah.
Mark: The free trials are really working out rather well for us, I think, but I'd sure like to get more of them, and that's really I guess a matter of exposure. As far as the conversion is concerned, what we do there is… Well, what we had been doing was we had a series of three emails that would go out to somebody that was run through Constant Contact, and the first email would be just sort of a, “Hey, how you doing? I want to make sure you got your username and password.” Very unadorned, nothing to it at all, just look…
Dean: Yeah.
Mark: A few days after that we would send out an email that gave them some practical advice on how to use it, how to search for things in it, that sort of thing. And then about two days before their subscription was going to end, we'd send them out another one saying, “Hey, you only got a couple days left. We'll be happy to help you set this up for…” blah, blah. Anyway that was pretty much that.
Dean: So there's a great opportunity right there is to maybe move that up to the first thing. If somebody comes in, like somebody comes in, you've got those 14 days. Well, the number one thing that you're looking for here is, “Are these people five-star prospects?” Meaning are they willing to engage in a dialogue? Are they friendly and cooperative? They know what they want. Are they ready to get it? Would they like us to help them? That's what we're looking for, right?
Mark: Mm-hmm (affirmative).
Dean: As soon as somebody opts in, I would… It's almost like creating an experience that welcomes them as if they're walking into your office or a retail store that you've opened up for this, right?
Mark: Mm-hmm (affirmative).
Dean: You imagine somebody opts in, and they're knocking on your door saying, “Hey, I'm here about the data,” and you're immediate next thing would be about engaging with them to see what kind of data they're looking for. The interesting thing is that you probably have the ability to observe what they've been searching. If you were to go through that trial as a client like if you were to go through it, and be in the position of somebody who's taking that free trial, looking at it through their eyes, how intuitive is that experience? As soon as they put in their info, and where they land on that, if you went through it with the eyes of a software developer that you're looking for a specific kind of data, how easy is it to find what you're looking for, or to get pointed in the right direction?
Mark: Well, we do we do have a how-to video that goes along with it, an intro video sort of shows you how to do that.
Dean: I would definitely include that in the very first email that you send go can like to get people, here's your access. Everything that they would need all in one email like use your access to your-
Mark: Before they get any of that series of three emails that I was referring to, they get one, the system generated that's a welcome, here's your username, here's your password, here's a link of the video. So, yeah, we're doing that.
Dean: Right. So that one I think we could beef up.
Mark: Ah, okay.
Dean: So you told that in my email mastery program I call this our, “You're Jennifer Leathers” message. And the reason I call it Jennifer Leathers message is because it mirrors what happened when I actually went to a Jennifer Leathers furniture store. They only sell leather sofas, and when you walk into Jennifer Leathers instead of the, “Can I help you? No, thanks I'm just looking” exchange, they ask you, “Have you been to Jennifer Leathers before?” And you say no and they say, “Welcome. Let me explain how it works. All the sofas that you see in the showroom are available in any of the leathers on the back wall, and they're in stock, and available for instant delivery, and they're guaranteed for life. My name is Dean, take a look around. If you have any questions, I'll be right here.”
Mark: It's brilliant.
Dean: Yeah. So that's eight seconds it takes to say those words eliminate the three big reasons why somebody would leave without buying this sofa today. Because somebody's coming in, they've got in their mind they want to buy a red leather loveseat. But when you say, “Can I help you?” They say, “No, thanks. I'm just looking.” But they don't finish it with “I'm just looking for a red leather loveseat I can take home today.” So they're mind they've got five furniture stores on their list. They're going to walk in, scan to see if they see a red leather loveseat, and if they don't then they're going to leave, and go to the other stores. So now as soon as they know that any of the sofas are available in any of the leathers, and they can see that there's five shades of red right there, and they don't have to make a special order. That all makes sense.
So it's a good idea to have your best kind of messaging right upfront in that first exchange like if you were to identify the biggest reason that 8 out of 10 people leave without converting to a paying client, and you could somehow overcome those because it's just an awareness problem that they didn't know that you actually do what they thought you didn't do. There's some reason why the eight are leaving, and not doing it. There was something. They've never liked you more than the moment they decide they're going to sign up for this trial. And they were hopeful that you've got what they're looking for. And you just don't know.
What we need to do is get to a point where you can engage with more of these people. If that were a portal to your office, and they would magically just show up in your office, what would be the conversation that you would have with them? What kind of engaging questions would you ask them to help determine what it is that that they're looking for so that you are clear on what they want, and that you can actually help them with what they want, or let them know that you can't help them with what they want.
Mark: Right. What's your project? What's your goal? What do you want to find here.
Dean: Right.
Mark: You've come here because you think there's something here. So let's find out, let's make sure… First of all, let's make sure that it is there, and if it is let's help you find it.
Dean: Yes. So the way that we do that is first was a very like a wonderful first email that kind of gives them a little bit more warm, and fuzzy welcome right like a more personable welcome than a general like system-generated here's the link, here's this, here's that. We want them have to feel like they're kind of being guided in a way. Then the next morning, the next morning we send out a message that would be engaging with them. And we might ask them what they're looking for or what kind of business are they in. Some sort of either a sorting question or an engaging question that would help us determine, are they willing to engage in the dialogue.
It doesn't have to be how much software do you want to buy, it's how much data do you want to buy. It's something that would be a reasonable engagement question. On our real estate websites when somebody opts in, we ask them, we say, “Hey, Mark. Welcome aboard. Are you an investor or are you looking for a house to live in?” If somebody downloads our adult acne book, we'll say, “Hey, Mark. Welcome aboard. How often do you get breakouts?” Something that is just a short welcoming email. That could lead to the dialogue now..
Mark: Yeah. We'd really like to know… Well, I guess in its simplest term, but I think we'd have to be a bit more sophisticated with this, but what do you want to find here? What are you looking for? You came here for a reason. What are you looking for? And if we know if we can get you to tell us that, we can give you all kinds of help.
Dean: Yeah, is there a way to sort? Like I said are you looking for a house to live in? Are you an investor? Are you looking for a house to lie in? Or what would be a sorting question that would help you identify what category these people are in?
Mark: Well, first of all are you interested in administrators or are you interested in institutions? Because a lot of people use the data because they know it's a reliable list of accredited colleges and universities. So those people are interested in just the institutions themselves.
Dean: That's a great question right there. That's the one that I would test right away, and say are you looking for institutions or specific administrators?
Mark: I'm just jotting down a note here.
Dean: That's a great reasonable question for what their… That's related to what they're doing. That's perfect. Now, that will get them to engage, and if they say one or the other, now you're in a real conversation with them. That would make sense.
Mark: I think we'd know where to take it from there.
Dean: Yes, exactly. Just like if that's part of the thing, it's just imagining that that free trial is a portal into your office. If they knock on your door and say, “Hey, I'm here about the data,” that's really what they're saying.
Mark: Right.
Dean: Yeah. It's welcoming them, greet them, help them.
Mark: Excellent.
Dean: Then it's a matter of finding more people to take that free trial.
Mark: We definitely want to do that, and we want to work on… I think as you just said compelling prospects to come in, and grab a free trial. It don't cost nothing. Come on, give it a try.
Dean: Right, exactly. Perfect
Mark: But of course they have to have a need, or a perceived need anyway for that sort of thing. I mean, we have queried some of the folks that have just gotten the free trial, and then just dumped out on it. Sometimes it was, “Well, I was looking for some very obscure a type of professor at a college on universities. I have a book that… And I was hoping that maybe you had a list of everybody that was involved in 15th century Chinese pottery.” And, “No, that's not really what we do. If it's something a bit less obscure than that, and it's something in education, and what we'll try to do is find them a list of that somewhere. If we don't have it, maybe we can find it for you.
Dean: Right. Yup.
Mark: So there is some of that. But I have a feeling that there is a much higher percentage than that are probably bailing out because we didn't interact with them as well as we could of when we had the opportunity.
Dean: Agreed, that's why everything that first 24 hours is the most critical, and really getting that experience down so that you're finding the right test. You're finding the people who want to help without them having to take the initiative to do it. You want to be there and be the host.
Mark: We do need to do that because also as you mentioned it's a fairly limited market, and we're a very niche product, and it's a very limited market. So we can't afford to lose too many of them.
Dean: Right. Well, there you go. Exactly.
Mark: All right.
Dean: Good. Well, what's your recap then? What did you hear here?
Mark: Well, a number of very good things. The latest one that we were just talking about. I think the main thing I'm going to take away from this is the portal concept of when somebody takes you up on an offer that you're doing, let's look at that as if it's somebody walking into your office, and how does that engagement work. I think the other thing that we were talking about that's very, very important is really trying to get inside the head of your potential client, and in a couple of ways. First of all, what their decision-making process is, and second of all, what it is that they're really looking to do.
Dean: Yeah.
Mark: It's like the old Levitt quarter-inch drill thing, right?
Dean: Right, exactly. That's it.
Mark: Even though I read an article on that recently, they said nobody actually wants a quarter-inch hole, they want to hang up a shelf so they can get the-
Dean: They want a bookshelf. That's right.
Mark: Right. So they can clean out their garage, right?
Dean: That's right.
Mark: So sometimes I guess that's just to say it goes deeper than you might think it does.
Dean: That's funny.
Mark: Anyway those two items I think we're the best takeaway. It was all great, Dean. Thank you so much for chatting with me. But those are the two areas that I think we're really going to work on.
Dean: That's awesome. Jill, what's your take.
Jill: Yeah, it's interesting. There were a few times I almost spoke up, and I thought, “No, no. Mark and I can talk about that after we hang-up.”
Dean: Right.
Jill: But yes, the biggest thing is because we did have some personal emails beyond that first informational one. But your beautiful example of would you like a cookie, typically they were emailing back and saying, “What are you looking for?” Which is almost like saying, go to the kitchen with anything you want. It wasn't specific enough.
Mark: What are you doing in my refrigerator?
Jill: Right.
Dean: Right.
Jill: Versus saying are you looking for blank or blank, should get a bigger response. I don't know… There is one thing I know, one goal that Mark had on the call, I don't know if something just pops your mind, and that is the follow-up, say, for those who don't interact on the first two-week trial. Mark's point is always their business is a pretty simple one. What content do you continue to send someone to keep in front of them? Because his point is, like you said, it's basically commodity. They just do it better.
Dean: Right.
Mark: Well, we do put out a monthly type of thing called The President's Report which we really need to change the name of that. And basically what it is, is just a compilation. I don't know if you've noticed or read, seen the news recently, but there's an awful lot of turnover in college presidents. If anything goes wrong in campus, the first person to take the long knife to the back is the president. So there's a lot of turnover in there, and we have a monthly newsletter type of thing that is a synopsis of all of the presidents coming and goings, and that sort of stuff. That goes out to anybody who signed up with any of our products or services. It's okay. It's just not super compelling. It's a little bit of nice information, and what we hope it gets across is to say, “Hey, these guys are really up on this stuff.”
Dean: Right. You're saying that might be a good tool for prospects as well to have not just for existing clients, but something that… I know what Jill is asking is of the people who are coming in, but have not yet converted. What's the sort of flagships communication that you could give to them?
Jill: Right. I know you were asking me to summarize, and I brought up really what could be another whole call, but I didn't know if just anything pops into mind, Dean. I don't want to take it too long.
Dean: What may be an interesting thing is if you bring up case studies of different folks sharing data.
Jill: You just proved how genius you are. Yes, exactly. Perfect.
Dean: This is how people are using data, and that may trigger them to think, “Oh, I didn't know you could do that. That's what we need.”
Jill: Right.
Dean: There you go, Jill. I can always think quickly.
Jill: Got it. Thank you. I got it. I knew you could come up with something quickly.
Dean: Oh, there we go. All right, guys. We said it all, I think.
Jill: All right.
Mark: I think so.
Dean: This is so much though. We've just kind of scratched the surface because every one of those you can go so much deeper. It seems like you've got a really nice stable business you got. A product that is very useful in the marketplace for the right people, and just getting it in front of them, that's the challenge. The good news is you've got a good stable platform that your business kind of runs, and you're not looking out to try and gain traction here. You've got a lot of traction. You're trying to really grow now, and that's the next place to come from. You got a really good stable base. Everything is just, how can we take this and build on it, and make it better?
Mark: Exactly. How can we scale it up?
Dean: Awesome. Well, I enjoyed that. It was good. And Jill it was an extra treat to have you on with us. So-
Jill: Thank you
Dean: Thank you. Thanks, guys. I'll talk to you soon.
Mark: All right. Thank you very much.
Jill: Bye-bye.
Mark: Bye-bye.
Dean: There we have it. Another great episode. Thanks for listening in. If you want to continue the conversation, and go deeper in how the Eight Profit Activators can apply to your business, two things you can do: Right now, you can go to MoreCheeseLessWhiskers.com, and you can download a copy of the More Cheese Less Whiskers book, and you can listen to the back episodes, of course, if you're just listening here on iTunes. Secondly the thing that we talked about in applying all of the Eight Profit Activators are part of the Breakthrough DNA process.
And you can download a book, and a score card, and watch a video all about the Eight Profit Activators at BreakThroughDNA.com. That's a great place to start the journey in applying this scientific approach to growing your business. That's really the way we think about Breakthrough DNA as an operating system that you can overlay on your existing business, and immediately look for insights there. So that's it for this week. Have a great week, and we will be back next time with another episode of More Cheese Less Whiskers.