Trust Yourself and Keep It Simple

“If you can’t explain it to a six year old, you don’t understand it yourself.” ~Albert Einstein

Simple-Pricing

Abamath Series – This is the fourth in a series of blogposts by Luke Schlangen, Founder of Abamath. (read the 1st , 2nd and 3rd)

Be Careful Who You Listen To

As a new company, you will do anything to get even a single sale. Don’t let that temptation degrade your company.

I started Abamath with the idea that people wanted something better from tutoring. I believed there was more value in tutoring as a gym-style membership. One price, unlimited tutoring. Students can come in whenever they want help, not pre-scheduled times whether they need help or not. What’s not to love?

People had never seen gym-style membership tutoring before. They kept insisting that they wanted an hourly rate like other centers. So finally, I caved. I offered hourly options. How many new customers did that net me? Zero.

Nobody actually wanted that option, they felt entitled to it. The people who suggested it weren’t potential customers, just people who thought that is how a tutoring business should be run.

We offered private tutoring for $49/hour and membership for $199/month. Just having these two products caused a lot of confusion. Did that mean $199/month and then $49/hour on top of that?

Help Customers See Your Value

If you’re still experimenting with price (and who isn’t), here is a fun experiment to run.

When someone tells you to offer something you don’t, ask them, “If we did offer that, would you buy it today?” It’s a simple test to tell the difference between serious customers and those with no intention of buying.

Unless they’re using that option with a competitor or would consider buying it today, they probably aren’t going to pay you for it. Cluttering your communication with confusing pricing destroys the clarity of your key message: your value.

After 3 months of messing with it, I was done. We took the hourly tutoring option off the brochure. When potential customers are considering our service, we offer our one-week free trial membership to see if an Abamath membership is what they want. It always is.

Keep it simple. It’s not easy when you feel potential customers are slipping through your fingers, but you need to trust your value proposition.

Simple and easy aren’t synonyms in business, but complex and difficult definitely are.

Luke Schlangen is the founder and president of Abamath: A Better Approach to Math

Luke Schlangen, Founder of Abamath
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Breaking Down The Launch

Launching the business last week had a set of ups and downs and some potent lessons learned that I spent a little time reviewing this weekend.  First, let me give you a overview of the launch.

How The Launch Played Out

My plan was to offer a 20% discount to those who enter their email address before the launch.  This allows us to contact them when the product launches and convert them to purchases.

For driving traffic to the site, I set up the scrunchie leash facebook page and twitter account and began producing content and build traffic. I also tried contacting some bloggers to try getting publicity elsewhere.

The traffic results were pretty weak. Most of the traffic came from this blog and posts to my personal facebook page. That traffic is interested in the business (not the leashes) or family and friends who are interested in what I’ve been up to (not the leashes).

After going through a few revisions on the site, I felt it really had some good converting potential, but I wasn’t getting the traffic to prove it. So, 2 days before the launch and made a BIG last ditch effort push, kickstarter style.

I messaged 10 to 15 friends/family and asked them to share the site on their facebook pages. BOOM. Traffic. To me, it was awe inspiring.

Traffic Around the 1/23 Launch

Traffic Around the 1/23 Launch

The Results

  • 112 likes on facebook
  • 450 followers on twitter
  • 1 small blog post
  • 65 signups

To me these numbers suggest there was some success considering I made the website, developed the plan and created the social media campaign from scratch in the 3 weeks leading up to the launch. Let’s take a closer look.

The facebook likes are about 50% my friends, 25% purchased likes and 25% organic.

I’m working on growing and targeting the twitter audience a little more, but I think it might be a little heavy in spam-bots and businesses. It hasn’t been very productive.

I decided to look at the few days leading up to the launch, to get a better idea on whether or not my site actually converted. Here are my findings for Jan 18 through Jan 22.

Signup-Rates

 

In that 5-day time frame, I managed an 8.27% signup rate. Then, if we look at purchases and total signups (there were some signups before this 5-day period), we see there was a 12.31% conversion to sales.

Both of these rates are good. The problem is, when you multiply the two rates, you find that only about 1% of people visiting the site are going to buy the leash. Not good.

I still think there are a few more purchases in the prelaunch group, so I’m hoping to bring those rates up, but I do think the purchase rate is a little disappointing.

Lessons Learned

  1. Social media pages are a long-term strategy. Don’t expect results in 3 weeks.
  2. Good friends more than willing to help. Use them.
  3. A facebook post can drive a small spike in traffic. 15 posts from different people can make that spike higher and wider.
  4. Conversion rates matter. Know them. They decide whether or not advertising will be profitable.

Future Work

  1. Now that launch traffic has died back down. Place targeted ads on facebook and find out what my direct purchase conversion rate is. (I think the two steps, signup and purchase, lowered my conversion rate)
  2. Test targeting different age groups and different interests.
  3. Build web presence to drive organic traffic.

As usual, hit me up with questions and comments if you have any. The purpose of this blog is to get feedback from others! :)

Is Expert Advice Worth The Price?

I follow a lot of business gurus and most of them offer consulting services for startups. Some come in the form of a direct consultation, others offer classes and communities for you to join. The question that always nags at me: Is it worth the price?

That nagging question always stopped me from signing up for anything up until this point. Then this happened on twitter.

Twitter Convo With @Pracly

Twitter Convo with @Pracly

I went to their website to check it out and found a landing page with an email input box. No other info, so I threw my email in the box. Next, they contact me and asked me to fill out a survey about what I specifically needed help with. I said “sure!” But I also informed them that my startup budget was very small and I probably wouldn’t be able to pay for their services.  I didn’t want them to waste their time on me since I had no intention of paying.

They reassured me that the first call was free with no strings attached. So I decided to give it a try. My call was last Thursday.

So How Was The Call?

The call was great. They made the expert (@faheems) aware of my business and situation before the call, so I didn’t have to waste a lot of time telling him what I was trying to do. My needs were digital marketing on a tiny budget.

My fear was that he would tell me, “you need to give engaging content to attract customers, then you can occasionally pitch to them.” I was afraid of this because I’d read it a million times online. He didn’t do that.

He actually showed me different ways to use facebook. He introduced me to facebook groups. He showed me strategies for getting other people to my page. We discussed content strategies for my website and how to launch a google adwords campaign. He gave me suggestions on tools to improve my effectiveness as well as links to some great content online. He gave me some new ideas on who to target to get my leashes out there in the public eye.

We spoke for an hour and I took notes feverishly. By the end of the call, I had a strategy in place for the next 4 to 6 weeks. All I have to do now is execute.

Will I Do Another Call?

I think the call is worth it. In a few weeks I plan to do another one. For the second call, I’ll probably only need a half hour. I want to make sure I have a chance to implement and use everything he told me before we speak again. I want to come to a new call with new questions and new roadblocks – not the same ones I was dealing with last time we spoke.

Here is how I view the value of a business consultation:

Effect of Consultation on Business Growth

Effect of Consultation on Business Growth

You could probably get there by yourself. You could probably learn all this stuff from trial and error and reading lots of business blogs. The problem with being inexperienced is it is hard to abstract the messages in blogs and advice and actually apply it effectively to your business. That’s where a consultation comes in. They’ve seen it done in many businesses and can tell you how to apply it in yours.

Good luck! and if you’re curious about it, talk to the folks at http://www.pracly.com/  (No, they aren’t paying me for this post.)

If you have any specific questions about the consultation, please leave a comment!

 

How To Make Your Customers Love You

“Your most unhappy customers are your greatest source of learning.” ~Bill Gates

Customer Love

Abamath Series – This is the third in a series of blogposts by Luke Schlangen, Founder of Abamath. (read the 1st and 2nd)

Think about building relationships, not prepping transactions.

Imagine everything you hate about the companies you deal with regularly: the 2-year contract, the hidden fee, jumping through hoops, and we could all keep going. I decided Abamath would do none of this, but we made one mistake:

We put in place a pretty standard practice with free trial periods. We required customers to give us their credit card to sign up for the free trial, then if they didn’t cancel, we would charge them as though they were continuing service. This is pretty standard practice today, and we thought it made sense. What’s the harm?

The harm is three-fold:

  1. You lose potential customers. They’ve played this game before, and they don’t like it. We had a handful of customers halfway through signing up for the free trial, and they simply walked away when asked for a credit card.
  2. You hurt your brand. Think about the times you have had a mysterious fee pop up or you couldn’t return an item or cancel a service because of some stupid policy. The integrity of the brand you are dealing with disintegrates instantly. You feel lied to because you missed a detail.
  3. You create enemies instead of allies. When customers feel like you have taken money from them unfairly, they will come to demand it back. Instead of providing awesome service to your paying clients, you’re spending your time explaining arbitrary company policies to angry ex-customers.

Treat your customers with respect

The solution is easy. Don’t play games.

Creating goodwill and building relationships with potential customers is the correct way to get them coming back and paying happily. Keeping an open door with customers who decide they no longer need your service is important, and getting referrals is essential.

It’s scary going a few months losing money, but you don’t get customer love from cheap tricks. It’s ok to lose the pennies when customers abuse promotions; win the dollars that come with customer loyalty. Those are the dollars that will make your business a success.

Bonus: you don’t spend your time being told how terrible you are.

Luke Schlangen is the founder and president of Abamath: A Better Approach to Math

Luke Schlangen, Founder of Abamath

Editing Photos in Powerpoint

Often when bootstrapping a business, it is better to get things done quickly and cheaply. Perfection can be an impossible burden.

I would like to demonstrate how I make some simple photo edits in powerpoint.  If you read my last post, you will recognize the photo below.

One Leash = One Walk

If you look closely, you’ll notice some yellow tint on the left side of the photo as well as a bit of purple and red.  I took this photo with an iPhone and did all the editing with powerpoint. (You’ll notice the header for this blog has a very similar photo.)

Here’s What I Did

  1. Softened the photo using the “corrections” dropdown
  2. Increased the contrast using the “corrections” dropdown
  3. Added three circles with color gradients and transparencies (70% in center, 100% at edge)
  4. Added Text with slight shadows
  5. Added the Scrunchie logo and used the “remove background” tool to clean it up

It’s not as clean and perfect as you could get using photoshop, but it works.

Never let expensive tools be an excuse for not moving forward.

PowerPoint-Photoshop

 

How I’m Using the TOMS Shoes Strategy

TOMS shoes are nice and stylish, but we all know their earthy flair isn’t what made them so colossally popular. The give away a pair of shoes for every pair a customer buys.  And to their customers, they give meaning.

How I’m Adding Meaning To My Leash

My original plan was to give 5% of profits to local animal shelters. This is good and I’m still planning to do this, however, that doesn’t seem to have the same one-to-one connection that TOMS shoes has.  One Pair Purchased = One Pair Donated.

My wife and I have been meaning to do some volunteering at local shelters, and one of the ways you can volunteer is by talking the shelter dogs for walks.  The dogs get much needed exercise and socialization to help them get adopted.  I decided that this would be a great way to give the customer more value and more meaning.

One Leash = One Walk

One Leash = One Walk

I’ve decided that for every leash sold, we will volunteer to give a walk. In the early days of the business, this should be easy to do between my wife and I. The problem with this idea is that it isn’t as scalable as the TOMS shoes model.

I’m thinking we could utilize our network and do our best to keep up with the dog walks in the beginning. I think publicity for the local shelters could get them more walks than we could do personally. So there are some options for trying to scale this idea, but I’ll worry about that problem when we get to that point.

For now, bring on the walks. :)

 

If you know anybody that might be interested in buying a scrunchie leash (and giving a shelter dog a little exercise) please direct them to http://www.scrunchieleash.com

Thanks!

The Truth Shall Set Your Business Free

“The man who can keep a secret may be wise, but he is not half as wise as the man with no secrets to keep.” ~E.W. Howe

Top Secret

Abamath Series – This is the second in a series of blogposts by Luke Schlangen, Founder of Abamath. (read the 1st)

Secrecy Is a Bad Policy

Abamath is the only tutoring center that uses computers instead of worksheets (yes, it is 2014 and that was a real sentence). Math worksheets are boring for students, and computer games are awesome. It is a significant competitive advantage and I spent the first month running my business scared that someone would steal the idea.

We stuttered whenever people asked what math tutoring software we were using. This hesitation to share our methods with customers was scaring them away. It took a month, but we finally figured it out: When you’re small, your competition doesn’t care about your secrets. They have their own way of doing things, and until you start taking students from them, they don’t want to change.

Honesty Empowers Your Employees

Being honest with customers is crucial, but honesty should really be your default policy. Your employees will always know what to tell customers (the truth). When your customers ask about your pricing, your employees can tell them the truth: paying rent, paying employees and providing a high quality service costs this much.

Don’t forget to be honest with your employees. The whole truth. Not just, “We’re doing this…” but “We’re doing this because…” One silver lining to losing money for the first few months is your employees can see you working your butt off and getting paid a lot less than they are. Sharing the cash flow with my employees has also empowered them to cut costs and improve the business, because they can see the problems. As the business grows, you may want to reevaluate whether to share your multi-billion dollar salary (because obviously you’ll get there in a few years). For now, show them you’re in this together, and your company will benefit.

 

Luke Schlangen is the founder and president of Abamath: A Better Approach to Math

Luke Schlangen, Founder of Abamath

 

My Product Launch Strategy

We have worked out the kinks in the manufacturing process.  Namely, we broke the sewing machine and had to buy a new/better one. I guess that says something about the strength of the fabric we’re using.

Now that I have leashes headed my way for photographing, I am pegging down a launch date: January 23rd, 2014. Only 13 days away.  If you know any dog owners, make sure they grab the 20% pre-launch discount before the 23rd even if they don’t plan to buy. (www.scrunchieleash.com)

#123launch

Launching 1-23-14 #123launch

The Prelaunch Discount

The prelaunch discount was put in place to encourage people to give me their email address so I could inform them when the leash was ready.  I was getting NO signups before the discount, so I created the special discount so people would have the incentive.

I will be setting up a hidden page and sending the link to that page in the email to the prelaunch signups. They will be able to purchase the leash at a discount on that page, but the main page will have the leashes at full price. (Welcome to the club) I’m not locking the page in anyway because I actually WANT people to share the link with their dog-loving friends.  (Your friends are also welcome in the club)

I’m planning to make the discount link functional for 30 days.

Prelaunch Marketing 

I’ve created a facebook and twitter for the scrunchie leash, but I’m new to using social media for business. I’m not seeing the traffic I was hoping to see from it and I’m trying to find ways to expand reach. Any ideas?

Blog Coverage

I’ve contacted a couple blogs about covering the launch, but so far none have responded. :( I am going to continue trying this and HOPEFULLY I get a few to respond. Some people want to know about this leash and I need to find the blog that informs those people.  I’ll keep looking.

Media Coverage

Through reading online about how to conduct product launch marketing, I’ve realized that I did an incredibly poor job and should have really been getting serious about it months ago. I will be hustling to get media materials together to give several media outlets in hopes that they want to do a story on the launch.

Local, National, Personal

I am working in South Carolina and my mom is making the leashes in Iowa. I think we could make a great play on being a local brand in both of these areas. We are both “Handmade in Iowa” and “Based in South Carolina.” I plan to contact newspapers in both areas and ask if they would be interested in doing a piece on scrunchie leash.

Our main sales channel is, however, the internet. So, I would be wrong to ignore major urban markets all across the country. There are some websites like http://www.prnewswire.com/ that allow you to submit press releases in hopes they will be picked up by media outlets. I’m going to make some of these submissions, but my expectations are not high

I think my best option is to talk to people I know personally. Even if they don’t want to buy the leash, everybody probably knows somebody that would love this leash. My goal isn’t to push the product on people who don’t want it, but if they can help me find the person who DOES want it, then it is a win for everybody involved.

SO MUCH WORK TO DO

Lesson Learned: Proper launch work starts months before the launch.

Do you have any tips or ideas? I could really use them! Please leave a comment with your thoughts. :)

Drop Your Ego and Improve Your Ideas

Abamath Series – This is the first in a series of blogposts by Luke Schlangen, Founder of Abamath.

If you are arrogant enough to start a business, your ego is probably over-inflated… like mine. You feel so strongly that your ideas are better than others, that you have decided to go head-to-head with other competing companies.

Naming a Company

When I purchased abamath.com, I was going to call the business “Abamath: Amazingly Better At Math”. I thought it was cute and catchy. I sent the idea to a couple friends and one suggested I name it “A Better Approach to Math.” It seemed more professional, but I really thought my idea was better. Planning to prove myself right, I polled a few other friends on which name they liked better (without telling them which one was mine).  The results were a resounding “No” to my brilliant idea.

I had spent a week trying to figure out the perfect name and my friend topped it with a 10-second suggestion! I thought I was so smart, so clever, but the results showed otherwise.

Discussions at Abamath

Discussions at Abamath

Drop The Ego

We all like to think our ideas are the best, but it’s better for your business to understand that they’re not. You may be the person that started the company, but if you have 2 bright, invested employees, your ideas will only be the best ideas one third of the time (and the odds only shrink as you grow).

It’s hard to let go of your original ideas, but if you want your company to succeed, you have to get good at being wrong.

How To Pick Up Better Ideas

I’m not simply suggesting you allow employees to come to you with their ideas. Force them to criticize your ideas and have them tell you why. Requiring confrontation is the only way to let your employees know you are sincerely looking for feedback, and that you can handle the criticism. It also helps everyone (including you) understand why these decisions are being made.

A genuine critique will invite better ideas.

“Change or die” – It’s a scary mandate, but the good news is that for a small company, flexibility is your edge. Make that your advantage, not your downfall. Recognize great ideas when you see them, and don’t cling to what you thought was best. After all, you can always take credit for recognizing a great idea.

When you think about it, I came up with “better” and “math” so the name is still half-mine, right?

 

Luke Schlangen is the founder and president of Abamath: A Better Approach to Math

Luke Schlangen, Founder of Abamath

Luke Schlangen, Founder of Abamath

Rare Peek Into the Thoughts and Lessons of a New Business

I’m incredibly excited to announce that Luke Schlangen, founder of Abamath: A Better Approach to Math (a math tutoring company) is going to be doing a guest blog series.  Read this real snippet from Luke’s email to a personal friend before he started Abamath:

“I’m actually getting really nervous… typically before this point (with the wind blades or buying a house) there has been something that came along and tripped me up. Then I didn’t have to pull the trigger and I was just fine… everything is shaping up… and I couldn’t be more excited, but this is the biggest decision I’ve ever made in my entire life… so it’s a little nerve-wracking.” ~Luke’s email to a close friend.

Luke Schlangen, Founder of Abamath

Luke Schlangen, Founder of Abamath

Luke is going to share the insights and the lessons he learned in his first 6 months of business.  Having read some of the rough drafts, I can tell you these are really useful things that anybody starting a business can benefit from knowing upfront.

The first post is coming out tomorrow.

Stay tuned.