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Episode Summary Introduction:
Tony Yang: I think a key part of it is really understanding what’s in it for them, the association as well as the accountants and the CPAs.
Obviously, we knew the value of proposition to accountants but understanding how the associations operate, the reasons why they exist, help us to understand “all right, how do we structure some sort of partnership program that benefits them?”
Adam O’Donnell: Boom, welcome to The One Growth Show brought to you by Growth Marketing Conference. We are the only podcast in the world that breaks down a growth experiment or delivers an actionable growth strategy.
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I’m Adam O’Donnell, here we go.
AO: Tony explains how he partnered with trade associations, created an offering that was unique for their members, and then the association sent it out on their behalf. I love how this is literally little to no cost on there in the way that they set it up. They were able to grow their business from 800,000 ARR to 4 million in two years. And Tony said this is one of their primary strategies. I learned a lot from this episode. You’re going to love it.
TY: The one that comes to mind a company that I was at a start-up with an outgoing call to detail. It was a file transfer service. So we compete against companies as YouSendIt with Trent rebranded to high tail and then it was also in the early days of cloud storage. We competed against Dropbox and Box before, you know, they explode and got really big. And the company that I was with was his bootstraps startup so we had no money. We had to be very creative. So long story short, after talking to some of our customers and noticing weird usage patterns. I noticed that a lot of CPA firms use their service, but we’re sending small files because the valley probably time sent large files that you can’t email and attach your email and business users on a setup FTP server, right?
So anyway, I talked to them and found out that look they liked it for the security and audit trail capabilities because they’re sending client confidential documents.
It was like, duh, of course in hindsight it makes a lot of sense. So fast forward, a couple of months after we’ve really honed down understanding this new market that we weren’t specifically addressed.
We went and found that every single state has a state CPA Association.
What we did was we created an affinity program.
This was in the early days where we started using Drupal, you know, some web CMSs but really a database-driven website where we created a basic limp template and customize each of these websites specifically for the California CPA Association, Maryland CPA Association, we did all the work. I had at a time a great copy, compelling value proposition, call to action: for your remembers, we’re going to give you a free account.
We were offering a free trial at the time for businessmen market and businesses, but we were gaming them, single-user, free account and that was a benefit that they provided to their members who joined them based on the membership fee. For us it was a lead gen mechanism, right? And so we started to create all these reaching out to these people at these associations who ran partnership some of them didn’t even have partnership program, but we start to get a little traction in a CPA world because we start to get more visibility.
People started to use a product more because they got free access to this and say look I can use this for my firm across the board and that’s how we started getting more. You know, not quite enterprise because I think the average selling price was like $20-30K annual but you know, it was a great program that we just created, it didn’t really cost us anything other than our investment into the time.
AO: That’s huge. You know, though. Could you give me something on in terms of the results? Could you give us any more specifics on the actual results?
TY: When I join, we were a four-person startup, we had, I want to say $800K ARR as a business again, it was a bootstrap startup. And then I was with them for about two years. By the time I left, we were around $4 million. And again, I asked the CEO when I joined, what’s my marking budget and he looked at me and said you’re it, you are the budget.
I mean that’s kind of an exaggeration, but our budget was very small, right? So to grow to that point, I think required a lot of creativity and this was the early days when “growth hacking” wasn’t really an established term and also it wasn’t a misused term as it is today.
And we tried a lot of different things like that, didn’t really require a direct budget to buy ads. For example, now we ran marketing and we ran Google search ads and stuff like that.
But yeah, I can’t remember because we had like I want to say 7 to 10 or so of these established by the time I left and of course some of them had no bearing they all have degrees of success.
AO: Can we zoom in if I was trying to go do the same approach and I wanted to go and start to select some associations to target, create a good outreach for them and then create this membership strategy that you had. Could you tell us step by step how you went about doing it?
TY: Okay. So what I would say is your mileage may vary, because obviously every business is different. And the main reason why we start to take that approach because we spent time understanding our customers when we started selling as I mentioned the product was focused on large file transfer, and we noticed this anomaly and we started seeing this trend of people using us not sending large files – why? And, really understand your customers is the first step.
Because once we start to notice this trend we were able to understand a little bit what were the commonalities and obviously for this it was, CPA firms. Understanding the unique needs of accountants and how they handle files was really critical.
And only then do we realize – Okay, what are interesting ways that can we reach out to this audience? Found out that we didn’t notice at a time every state has a CPA Association. You need to be a member in order to be a certified public accountant, right? And so we thought okay, there’s built-in audiences of people that we feel like we have a very strong story to tell, strong value proposition. How do we get in front of them and tell that story, right?
A key part of it is really understanding what’s in it for them – the association as well for the accountants, the CPAs, obviously, we knew the value proposition to the accountants, but understanding how the associations operate and the reasons why they exist helps us to understand – All right, how do we structure some sort of partnership program that benefits them?
For them, they want to be able to provide benefits to their members that may be paying them an annual fee, right? And you know, some of these benefits can include things like 10% discount to your local Staples to buy office supplies and not a lot of them had access to new at the time software like this to enable them to help them do their jobs.
And a lot of times they didn’t understand, you know, the technical aspect of setting up an online web portal for file transfer and services and all that stuff.
So, you know, I think the benefit for the association was you can provide this additional benefit to you and your members, we’re going to do it for free. We’re going to give it to you for free. No cost it’s cool-branded with your logo and our site and all you have to do is you know work with us to promote this benefit for your members and we’re upfront, the benefit to us is to be able to get in front of your members so that we can build a business.
AO: Two more questions just before you go. First, what was the title of the person you are reaching out to at the association?
TY: The title is varied and a lot of times these associations are run by very small groups of people and so it wasn’t very difficult. Generally speaking, if you go to these websites you could find contact information for members benefits, someone who manages member benefits or member programs. In some associations, they did have partnership types of business development people and so we would reach out to those people and say, hey, look we’ve already built this site for your association, that was key. We did all the leg work all the hard work ahead of time and said, look, here’s it, these are all ready for you, all you guys need to do is let your members know that this is available to them.
It’s co-branded and all that stuff, right? So now that pointer like wow, this is great. There’s no cost or anything for us? We said, no. And you know, that’s how we began setting up that type of affinity program.
AO: I love it. So who’s in charge of the membership offer? And then what was this offer split for y’all, for your company? Like were you giving them 20% or something like that?
TY: No. No. So for people who actually signed up for the service, it was a free service. We didn’t offer that free service on our own website. It wasn’t widely available at that time.
We were offering a free trial and then business and you know, quote-unquote, enterprise type of subscription plans. And when we reached out and set up this affinity program, we created a special subscription plan, essentially it was a single user and we structure the products so that a single person, individual CPA could use it and find value and gets it aha moment.
Because there’s plenty of individual CPAs out there, plenty of accountant centers operate their own business and that’s fine. We want them to utilize the product because there’s also that referral built into it.
But again, CPA firms and organizations, they all have to be a part of these member associations as well.
So it was a way for us to really tap into that market. But yeah to answer your question. We basically created a whole new product subscription. The product itself was essentially the same. Of course, it was paired down in terms of features and functionality. But you know, it was made specifically for this type of program and then you know, obviously there’s upsell opportunities.
We got our sales team involved and say hey look, you know this CPA company from this organization signed up, you can proactively try to do some outreach to them.
Really uncovering a new market that we didn’t know we needed to address or that we had a strong story to tell and certainly that was one area where are also local regional associations that a lot of you know firms were part of that had a different approach, you know more of a traditional approach where we sponsor, you know, a half-day workshop.
You know, we saw because of uncovering that new market and understanding how they operate we did this campaign with the Southern Association, that’s not part of the state. The numbers that I do remember were I spent about $10K to sponsor, which basically meant I sent a couple of sales guys, we had a tabletop booth out there, half-day workshop that they have every once in a while. But we also had the ability to run a webinar where we invited one of their members that were a customer to co-present with me to talk about the business case to talk about how they’re using it and the value, and then we followed up with some, you know, quote-unquote nurture email programs and sales follow-up week.
I remember specifically $10,000 and direct investment. We won about $150K in terms of annual deals from that one program. And so that was like a 10x ROI for us.
So, you know, obviously, we would try to find other ways to replicate that it’s not always successful.
But you know, I think the key for me was really uncovering, listening to how or understanding how product users use your product perhaps in ways that you didn’t understand or foresee and
figure out there is a new market that you haven’t been addressing before and that would lead you to the different perhaps new marketing strategy that you haven’t thought of previously.
AO: That’s it. Another great episode The One Grow shows the official podcast of growth marketing conference to learn more about upcoming events.
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