From the desk:Lead Generation Platforms (Building)

Productizing the mail funnel I already run for two clients

I run direct mail for two investor clients on a flat retainer, $2,800 a month each plus mail cost pass-through. The actual work is a saved county pull, a skip trace, a mail merge, and a VA answering the callback line. Nine hours a week, maybe.

The part that keeps nagging me is that I built the pull once and I run it forever. Third client would take about two more hours a week. So I priced out a self-serve version: they log in, pick a county, pick filters (tax delinquent, 10+ year tenure, absentee), see a count, pay per record to get the skip traced numbers. $0.38 a record, minimum 500.

Costs as I have them: bulk data at $1,100 a month for four states, skip trace at $0.07 to $0.11 depending on hit rate, hosting nothing much, and a contract dev quoting me $14k for a working front end and payment. My two clients would move over and pay maybe $600 a month each in records, so I would be cutting $5,600 of retainer down to $1,200 and betting on volume.

What I cannot get comfortable with is whether the buyer for a $190 record pull is the same person who pays me $2,800. I think it isn't. I think the retainer client buys my judgment and the self-serve buyer buys a CSV they will never mail.

So the decision is whether to build the self-serve thing at all, or build an internal tool and keep selling retainers with better margin. The $14k is not the scary part. Killing the retainers is.

Answer

1ryanmck27SC2C

Why is it either one? Keep the retainers at $2,800 and let the tool be the reason your third and fourth client cost you two hours instead of nine. You don't have to sell the software to anybody.

The part I would push on is the $0.38. That's priced against your data cost, not against what the record is worth to a buyer. If a buyer needs 700 records to land one contract that nets $18k, your per-record price could be four times what you set and still look cheap. Cheap pricing on a lead product mostly signals that you don't believe the leads convert.

2 replies

1derekj19SB1B

The CSV nobody mails is the whole problem with self-serve and you already named it. I have watched two people buy list access, pull 3,000 records, mail nothing, and cancel in month two. Churn on a data-only product is brutal because the buyer's failure looks like your failure.

If you do build it, the thing that would keep me subscribed is the mail actually going out. Records plus a print-and-send button, priced per piece, so the product does the step people skip. That also puts you back in the pass-through business you already understand.

Agree with halyard that you're pricing off cost. What did the two clients say when you floated it to them? That answer probably decides this.