So I started a software company at the beginning of 2022.
It’s a $75/month platform for home improvement and home service contractors and what it does is automate their marketing to the homes around job sites so they can pick up more work with the neighbors before leaving the area.
Here’s what is looks like in practice… They integrate our platform with their CRM, and when they change a lead status in their CRM from say “Appointment set” to “deal closed” it will trigger a direct mail blast to go out to the 10, 25, 50, 100 closest homes around that job site. (whatever they choose or they can have it go out to the whole neighborhood)
So they never touch any mailers, this is all automated for them and we fulfill it on our end through our network of printing vendors.
There’s not many other platforms like this in this niche, and when people see a demo of it they usually say stuff like “this is genius”, and we have no trouble signing people up. (70% close rate on demos)
In 2022 I was working a full time tech sales job and did this on the side, I did 16k in revenue.In 2023 I was laid off from my tech sales job and focused on this side business full time. The platform will do around 60k in revenue this year. It’s just me and my software developer. All the new sign ups have come from cold calling and cold email by me personally. No online marketing yet.
Here’s the PROBLEM…As cool as the platform is, It has had high churn The reason for that is because is so directly connected to results. If they launch a few direct mail campaigns and get results they stay, and if they launch a few and don’t get results they just cancel usually.
It being so results based makes the business pretty stressful and honestly i’m burned out and ready to move onto a new venture.
I was trying to sell the company and did have some interest but now it doesn’t look like that’s going to happen. So now I kind of feel like i’m caught in the fallacy of sunken cost. I feel like I can’t just shut it down and need some kind of payout at the end otherwise the last 2 years were just a complete waist of time.
But I also just don’t have the resources to keep the sales coming in fast and to add new features to the platform in hopes of making it stickier and overcoming the churn issue.
I feel like I have way better ideas that I can move onto but it’s a really hard to decide if I should just let this die or not. Especially since one of our competitors is doing 91m a year doing the same thing.
What are your thoughts?
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You should invest in a booth at the Ilnternational Builders Show in Las Vegas. It may not be too late to get into the show in Feb 2024. The show could bring tens of thousands of potential customers to you. You may also be able to connect with potential buyers for your company
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Try offering annual or 3 month rates to give the marketing time to take effect.
I don’t think you should give up so quickly, being an entrepreneur is not an overnight success. I also think you need to make some adjustments to your sales and retention approach. I’d be happy to chat about it, Google my name and look up my credentials, I have owned a marketing agency for 28 years. DM if you want to chat. —Rocco
I’d love to have a chat about purchase or partnership… I’m free tomorrow afternoon CST if you’re interested.
this is a very relevant platform especially in Florida. If wasn’t over leveraged in 3 other businesses I would definitely inquire partnership. I don’t want to repeat what a lot of the guys said, but if possible maybe reassess and pivot your acquisition strategy to incorporate the investor side as well. I think you can save your business, but i also understand burnout. Wishing you the best. Awesome job. Look into a company called SHARE. I spoke with the founder there a few times, I think your platforms are complimentary. I’d be happy to make a connection if interested.
You need to show them results before they’ve decided to leave. Put a program together where the 1st is a buy 1 get 1 free or similar campaign.
What does it cost you to run a campaign? Real numbers not some ‘equivalent’ bs value.
You have to look at it from your clients prospective.
Will this $75 monthly plus 25 mailers give me a ROI. Let say they pay $2 per mailer or whatever you send out ($50 bucks) so all in per month it’s $125.
Will this $125 give me jobs to make a roi on it? They would rather do PPC from google ads and from what I can tell it’s about $2.35 a click for floor installation which is 53 users visiting their landing page. If on the low end 2% convert that’s 1 legit paying customers result in hundreds of dollars roi on installing flooring.
So your software has to bring value to them to keep you. Solve that and you’ll increase your rev.